VISA INC. - Quarter Report: 2024 June (Form 10-Q)

Right to recover for covered losses()()Additional paid-in capital Accumulated income Accumulated other comprehensive income (loss): Investment securities()()Defined benefit pension and other postretirement plans()()Derivative instruments()()Foreign currency translation adjustments()()Total accumulated other comprehensive income (loss)()()Total equity Total liabilities and equity$ $

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)


	Three Months Ended June 30,		Nine Months Ended June 30,
	2024	2023	2024	2023
	(in millions, except per share data)






Net revenue	$	$	$	$

Operating Expenses
Personnel
Marketing
Network and processing
Professional fees
Depreciation and amortization
General and administrative
Litigation provision

Total operating expenses
Operating income

Non-operating Income (Expense)
Interest expense	()	()	()	()
Investment income (expense) and other
Total non-operating income (expense)				()
Income before income taxes
Income tax provision
Net income	$	$	$	$

Basic Earnings Per Share
Class A common stock	$	$	$	$
Class B-1 common stock	$	$	$	$
Class B-2 common stock(1)	$	$	$	$
Class C common stock	$	$	$	$

Basic Weighted-average Shares Outstanding
Class A common stock
Class B-1 common stock
Class B-2 common stock(1)
Class C common stock

Diluted Earnings Per Share
Class A common stock	$	$	$	$
Class B-1 common stock	$	$	$	$
Class B-2 common stock(1)	$	$	$	$
Class C common stock	$	$	$	$

Diluted Weighted-average Shares Outstanding
Class A common stock
Class B-1 common stock
Class B-2 common stock(1)
Class C common stock

(1)

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)


	Three Months Ended June 30,		Nine Months Ended June 30,
	2024	2023	2024	2023
	(in millions)
Net income	$	$	$	$
Other comprehensive income (loss):
Investment securities:
Net unrealized gain (loss)		()
Income tax effect	()		()	()


Defined benefit pension and other postretirement plans:
Net unrealized actuarial gain (loss) and prior service credit (cost)
Income tax effect			()	()
Reclassification adjustments
Income tax effect		()	()	()
Derivative instruments:
Net unrealized gain (loss)		()		()
Income tax effect	()		()
Reclassification adjustments	()
Income tax effect		()	()	()
Foreign currency translation adjustments:
Translation adjustments	()
Income tax effect	()
Other comprehensive income (loss)	()
Comprehensive income	$	$	$	$

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(UNAUDITED)



	Three Months Ended June 30, 2024
	Preferred Stock			Common Stock and Additional Paid-in Capital				Right to Recover for Covered Losses		Accumulated Income	Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares		Amount	Shares		Amount
	(in millions, except per share data)
Balance as of March 31, 2024			$			$		$	()	$	$	()	$
Net income
Other comprehensive income (loss)											()		()
VE territory covered losses incurred								()					()
Recovery through conversion rate adjustment			()										()

Conversions to class A common stock		(1)	()
Class B-1 common stock exchange offer				()			(1)
Share-based compensation
Stock issued under equity plans
Restricted stock and performance-based shares settled in cash for taxes					(1)	()							()
Cash dividends declared and paid, at a quarterly amount of $ per class A common stock										()			()
Repurchases of class A common stock				()		()				()			()
Balance as of June 30, 2024			$			$		$	()	$	$	()	$

(1)

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)


	Nine Months Ended June 30, 2024
	Preferred Stock				Common Stock and Additional Paid-in Capital			Right to Recover for Covered Losses		Accumulated Income	Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares		Amount		Shares	Amount
	(in millions, except per share data)
Balance as of September 30, 2023			$	(1)		$		$	()	$	$	()	$
Net income
Other comprehensive income (loss)
VE territory covered losses incurred								()					()
Recovery through conversion rate adjustment			()										()

Conversions to class A common stock		(2)	()
Class B-1 common stock exchange offer					()		(2)
Share-based compensation
Stock issued under equity plans
Restricted stock and performance-based shares settled in cash for taxes					()	()							()
Cash dividends declared and paid, at a quarterly amount of $ per class A common stock										()			()
Repurchases of class A common stock					()	()				()			()
Balance as of June 30, 2024			$	(1)		$		$	()	$	$	()	$

(1) million and $ million, respectively. Refer to Note 5—U.S. and Europe Retrospective Responsibility Plans.

(2)

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)



	Three Months Ended June 30, 2023
	Preferred Stock			Common Stock and Additional Paid-in Capital		Right to Recover for Covered Losses		Accumulated Income	Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares		Amount	Shares	Amount
	(in millions, except per share data)
Balance as of March 31, 2023			$		$	$	()	$	$	()	$
Net income
Other comprehensive income (loss)
VE territory covered losses incurred						()					()
Recovery through conversion rate adjustment			()

Conversions to class A common stock		(1)	()
Share-based compensation
Stock issued under equity plans
Restricted stock and performance-based shares settled in cash for taxes				()	()						()
Cash dividends declared and paid, at a quarterly amount of $ per class A common stock								()			()
Repurchases of class A common stock				()	()			()			()
Balance as of June 30, 2023			$		$	$	()	$	$	()	$

(1)

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY—(Continued)

(UNAUDITED)


	Nine Months Ended June 30, 2023
	Preferred Stock				Common Stock and Additional Paid-in Capital		Right to Recover for Covered Losses		Accumulated Income	Accumulated Other Comprehensive Income (Loss)		Total Equity
	Shares		Amount		Shares	Amount
	(in millions, except per share data)
Balance as of September 30, 2022			$	(1)		$	$	()	$	$	()	$
Net income
Other comprehensive income (loss)

VE territory covered losses incurred							()					()
Recovery through conversion rate adjustment			()

Conversions to class A common stock		(2)	()
Share-based compensation
Stock issued under equity plans
Restricted stock and performance-based shares settled in cash for taxes					()	()						()
Cash dividends declared and paid, at a quarterly amount of $ per class A common stock									()			()
Repurchases of class A common stock					()	()			()			()
Balance as of June 30, 2023			$	(1)		$	$	()	$	$	()	$

(1) million and $ billion, respectively. Refer to Note 5—U.S. and Europe Retrospective Responsibility Plans for the book value of series B and series C preferred stock.

(2)

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	Nine Months Ended June 30,
	2024	2023
	(in millions)
Operating Activities
Net income	$	$
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Client incentives
Share-based compensation
Depreciation and amortization
Deferred income taxes	()	()
VE territory covered losses incurred	()	()
(Gains) losses on equity investments, net
Other		()
Change in operating assets and liabilities:
Settlement receivable		()
Accounts receivable	()	()
Client incentives	()	()
Other assets	()	()
Accounts payable	()	()
Settlement payable	()
Accrued and other liabilities	()	()
Accrued litigation	()
Net cash provided by (used in) operating activities
Investing Activities
Purchases of property, equipment and technology	()	()
Investment securities:
Purchases	()	()
Proceeds from maturities and sales
Acquisitions, net of cash and restricted cash acquired	()
Purchases of other investments	()	()
Settlement of derivative instruments
Other investing activities	()
Net cash provided by (used in) investing activities	()	()
Financing Activities
Repurchases of class A common stock	()	()
Repayments of debt		()
Dividends paid	()	()
Proceeds from issuance of class A common stock under equity plans
Restricted stock and performance-based shares settled in cash for taxes	()	()
Other financing activities
Net cash provided by (used in) financing activities	()	()
Effect of exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents
Increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents	()
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period	$	$
Supplemental Disclosure
Cash paid for income taxes, net	$	$
Interest payments on debt	$	$
Accruals related to purchases of property, equipment and technology	$	$

See accompanying notes, which are an integral part of these unaudited consolidated financial statements.

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VISA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

countries and territories. Visa operates one of the world’s largest electronic payments networks — VisaNet — which provides transaction processing services, primarily authorization, clearing and settlement. The Company offers products, solutions and services that facilitate secure, reliable and efficient money movement for participants in the ecosystem. Visa is not a financial institution and does not issue cards, extend credit or set rates and fees for account holders of Visa products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa’s financial institution clients.

million. The Company allocated $ million of the purchase consideration to technology, customer relationships, other net assets acquired and deferred tax liabilities and the remaining $ million to goodwill.

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$ $ $

Data processing revenue

International transaction revenue

Other revenue

Client incentives()()()()

Net revenue

$ $ $ $


	Three Months Ended June 30,		Nine Months Ended June 30,
	2024	2023	2024	2023
	(in millions)
U.S.	$	$	$	$
International
Net revenue	$	$	$	$

June 30,
2024September 30,
2023(in millions)Cash and cash equivalents$ $ Restricted cash and restricted cash equivalents:U.S. litigation escrow Customer collateral Prepaid expenses and other current assets

Cash, cash equivalents, restricted cash and restricted cash equivalents

$ $

During the nine months ended June 30, 2024, right-of-use assets obtained in exchange for lease liabilities was $ million.

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$ Deposits into the U.S. litigation escrow account

Payments to opt-out merchants(1), net of interest earned on escrow funds

()()

Balance as of end of period

$ $

(1)These payments are associated with the interchange multidistrict litigation. See Note 13—Legal Matters.

Europe Retrospective Responsibility Plan

Visa Inc., Visa International and Visa Europe are parties to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory (VE territory covered litigation). Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (VE territory covered losses) through a periodic adjustment to the class A common stock conversion rates applicable to the series B and C preferred stock. VE territory covered losses are recorded in right to recover for covered losses, a contra-equity account within stockholders’ equity, before the corresponding adjustment to the applicable conversion rate is effected. Adjustments to the conversion rate may be executed once in any six-month period unless a single, individual loss greater than € million is incurred, in which case, the six-month limitation does not apply. When the adjustment to the conversion rate is made, the amount previously recorded in right to recover for covered losses is then recorded against the book value of the preferred stock within stockholders’ equity.

$ $()

VE territory covered losses incurred(1)

()

Recovery through conversion rate adjustment(2)

()()

Balance as of end of period

$ $ $()

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$ $()

VE territory covered losses incurred(1)

()

Recovery through conversion rate adjustment(2)

()()

Balance as of end of period

$ $ $()

(1)VE territory covered losses incurred reflect settlements with merchants and additional legal costs. See Note 13—Legal Matters.

$ $ $ Series C preferred stock Total Less: right to recover for covered losses()()()()Total recovery for covered losses available$ $ $ $

(1)Figures in the table may not recalculate exactly due to rounding. As-converted and book values are based on unrounded numbers.

(2)As of June 30, 2024, the as-converted value of preferred stock is calculated as the product of: (a) million and million shares of the series B and C preferred stock outstanding, respectively; (b) and , the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively; and (c) $, Visa’s class A common stock closing stock price.

(3)As of September 30, 2023, the as-converted value of preferred stock is calculated as the product of: (a) million and million shares of the series B and C preferred stock outstanding, respectively; (b) and , the class A common stock conversion rate applicable to the series B and C preferred stock outstanding, respectively; and (c) $, Visa’s class A common stock closing stock price.

As required by the litigation management deed, on June 21, 2024, the eighth anniversary of the Visa Europe acquisition, Visa, in consultation with the VE territories litigation management committee, carried out a release assessment. After the completion of this assessment, the Company released approximately $ billion of the as-converted value from its series B and C preferred stock and issued approximately shares of series A preferred stock on July 19, 2024 (Eighth Anniversary Release). Each holder of a share of series B and C preferred stock received a number of series A preferred stock equal to the applicable conversion adjustment divided by . The Company paid cash in lieu of issuing fractional shares of series A preferred stock. Each share of series A preferred stock will be automatically converted into shares of class A common stock in connection with a sale to a person eligible to hold class A common stock in accordance with Visa’s certificate of incorporation. Effective July 19, 2024, the release resulted in series B and C conversion rate reductions of and , respectively.

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$ $ $

U.S. Treasury securities

Investment securities:

Marketable equity securities

U.S. government-sponsored debt securities

U.S. Treasury securities

Other current and non-current assets:

Money market funds

Derivative instruments

Total $ $ $ $ LiabilitiesAccrued compensation and benefits:

Deferred compensation liability

$ $ $ $ Accrued and other liabilities:

Derivative instruments

Total $ $ $ $

(1)Figures in the table may not recalculate exactly due to rounding. As-converted class A common stock is calculated based on unrounded numbers.

(2)The number of shares outstanding was less than one million.

(3)The class B-1 and class B-2 to class A common stock conversion calculations for dividend payments are based on a conversion rate rounded to the tenth decimal. Conversion rates are presented on a rounded basis.

(4)No shares of class B-2 common stock were outstanding prior to the class B-1 common stock exchange offer. See class B-1 common stock exchange offer below for further details.

Series A preferred stock issuance. On July 19, 2024, the Company issued approximately shares of series A preferred stock in connection with the Eighth Anniversary Release. See Note 5—U.S. and Europe Retrospective Responsibility Plans.

Reduction in as-converted shares.

Effective price per share(1)

$ $ Deposits into the U.S. litigation escrow account$ $

(1)Effective price per share for the period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period. Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificate of incorporation.

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(1)

Effective price per share(2)

$ $ $ $

Recovery through conversion rate adjustment

$ $ $ $

(1)The reduction in equivalent number of shares of class A common stock was less than one million shares.

(2)Effective price per share for the period represents the weighted-average price calculated using the effective prices per share of the respective adjustments made during the period. Effective price per share for each adjustment is calculated using the volume-weighted average price of the Company’s class A common stock over a pricing period in accordance with the Company’s current certificates of designations for its series B and C preferred stock.

Average repurchase cost per share(2)

$ $ $ $

Total cost(2)

$ $ $ $

(1)Shares repurchased in the open market are retired and constitute authorized but unissued shares.

(2)Figures in the table may not recalculate exactly due to rounding. Average repurchase cost per share and total cost are calculated based on unrounded numbers and include applicable taxes. Shares repurchased in the open market include $ million unsettled repurchases as of June 30, 2024.

In October 2023 and 2022, the Company’s board of directors authorized share repurchase programs of $ billion providing multi-year flexibility, and $ billion, respectively. These authorizations have no expiration date. As of June 30, 2024, the Company’s share repurchase program had remaining authorized funds of $ billion. All share repurchase programs authorized prior to October 2023 have been completed.

Class B common stock. On January 23, 2024, Visa’s common stockholders approved amendments to the Company’s certificate of incorporation authorizing Visa to implement an exchange offer program that would have the effect of releasing transfer restrictions on portions of the Company’s class B common stock by allowing holders to exchange a portion of their outstanding shares of class B common stock for shares of freely tradeable class C common stock. The certificate of incorporation amendments automatically redenominated all shares of class B common stock outstanding at the amendment date as class B-1 common stock with no changes to the par value, conversion features, rights or privileges of the class B-1 common stock. All references to class B common stock outstanding prior to January 23, 2024 have been updated in this report to class B-1 common stock to reflect this redenomination. The amendments also authorized new classes of class B common stock that will only be issuable in connection with an exchange offer where a preceding class of B common stock is tendered in exchange and retired. When referred to prior to January 23, 2024, class B common stock means the Company’s legacy class B common stock, and following January 23, 2024, means the Company’s class B-1 common stock and class B-2 common stock, and to the extent issued in a subsequent exchange offer, class B-3 common stock, class B-4 common stock and class B-5 common stock, collectively.

Class B-1 common stock exchange offer. On May 6, 2024, Visa accepted million shares of class B-1 common stock tendered in the exchange offer. In exchange, on May 8, 2024, Visa issued approximately million shares of class B-2 common stock and million shares of class C common stock. The class B-1 common shares exchanged have been retired and constitute authorized but unissued shares. Future conversion rate adjustments for

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million shares of preferred stock, of which the following series have been created and authorized: million shares of series A convertible participating preferred stock, million shares of series B convertible participating preferred stock and million shares of series C convertible participating preferred stock. As of June 30, 2024, the Company was authorized to issue trillion shares of class A common stock, million shares of class B-1 common stock, million shares of class B-2 common stock, million shares of class B-3 common stock, million shares of class B-4 common stock, million shares of class B-5 common stock and billion shares of class C common stock. As of September 30, 2023, the Company was authorized to issue trillion shares of class A common stock, million shares of class B-1 common stock and billion shares of class C common stock.

Dividends. During the three months ended June 30, 2024 and 2023, the Company declared and paid dividends of $ million and $ million, respectively. During the nine months ended June 30, 2024 and 2023, the Company declared and paid dividends of $ billion and $ billion, respectively. On July 23, 2024, the Company’s board declared a quarterly cash dividend of $ per share of class A common stock (determined in the case of all other outstanding common and preferred stock on an as-converted basis), payable on September 3, 2024, to all holders of record as of August 9, 2024.

$ $

(2)

$ Class B-1 common stock $ $ $

Class B-2 common stock(3)

$ $ $ Class C common stock $ $ $ Participating securities Not presentedNot presented$ Not presentedNot presentedNet income$

The following table presents earnings per share for the nine months ended June 30, 2024:


	Basic Earnings Per Share			Diluted Earnings Per Share
	Income Allocation (A)	Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)(1)	Income Allocation (A)	Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)(1)
	(in millions, except per share data)
Class A common stock	$		$	$		(2)	$
Class B-1 common stock			$	$			$
Class B-2 common stock(3)			$	$			$
Class C common stock			$	$			$
Participating securities		Not presented	Not presented	$	Not presented		Not presented
Net income	$

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$ $

(2)

Class B-1 common stock

$ $ $ Class C common stock $ $ $ Participating securities Not presentedNot presented$ Not presentedNot presentedNet income$

The following table presents earnings per share for the nine months ended June 30, 2023:


	Basic Earnings Per Share			Diluted Earnings Per Share
	Income Allocation (A)	Weighted- Average Shares Outstanding (B)	Earnings per Share = (A)/(B)(1)	Income Allocation (A)	Weighted- Average Shares Outstanding (B)		Earnings per Share = (A)/(B)(1)
	(in millions, except per share data)
Class A common stock	$		$	$		(2)	$
Class B-1 common stock			$	$			$
Class C common stock			$	$			$
Participating securities		Not presented	Not presented	$	Not presented		Not presented
Net income	$

(1)Figures in the table may not recalculate exactly due to rounding. Basic and diluted earnings per share are calculated based on unrounded numbers.

(2)Weighted-average diluted shares outstanding are calculated on an as-converted basis and include incremental common stock equivalents, as calculated under the treasury stock method. The common stock equivalents are not material for the three and nine months ended June 30, 2024 and 2023.

(3)No shares of class B-2 common stock were outstanding prior to the class B-1 common stock exchange offer. See Note 9—Stockholders’ Equity for further details.

Class B-2 common stock(1)

Class C common stock

Participating securities:

Series A preferred stock

Series B preferred stock

Series C preferred stock

(1) No shares of class B-2 common stock were outstanding prior to the class B-1 common stock exchange offer. See Note 9—Stockholders’ Equity for further details.

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$ $ Restricted stock units $

Performance-based shares(1)

(1)Represents the maximum number of performance-based shares which could be earned.

For the three months ended June 30, 2024 and 2023, the Company recorded share-based compensation cost related to the EIP of $ million and $ million, respectively. For the nine months ended June 30, 2024 and 2023, the Company recorded share-based compensation cost related to the EIP of $ million and $ million, respectively.

% and %, respectively, and for the three and nine months ended June 30, 2023, the effective income tax rates were % and %, respectively. The effective income tax rates differ primarily due to the following:

•During the nine months ended June 30, 2024, a $ million tax benefit as a result of the conclusion of an audit; and

•During the nine months ended June 30, 2023, a $ million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

During the three and nine months ended June 30, 2024, the Company’s gross unrecognized tax benefits increased by $ million and $ million, respectively, and the Company’s net unrecognized tax benefits increased by $ million and decreased by $ million, respectively. The change in unrecognized tax benefits is related to various tax positions across several jurisdictions, including an increase in gross timing differences. Additionally, the nine months ended June 30, 2024 included the recognition of previously unrecognized tax benefits as a result of the conclusion of an audit. During the three and nine months ended June 30, 2024, the Company’s accrued interest related to uncertain tax positions increased by $ million and decreased by $ million, respectively. During the three and nine months ended June 30, 2023, there were significant changes in accrued interest related to uncertain tax positions.

The Company has an unresolved issue with the Internal Revenue Service (IRS) related to certain income tax deductions for fiscal years 2008 through 2015. In June 2024, the Company filed a complaint with the U.S. Court of Federal Claims challenging the position of the IRS. See further discussion in Note 13—Legal Matters.

In January 2024, a resolution was reached regarding India tax assessments for taxable years falling within the period from 2010 to 2019. As a result, the Company withdrew its appeals to the appellate authorities for these years.

Effective through September 30, 2028, the Company’s operating hub in the Asia Pacific region is subject to a tax incentive in Singapore which is conditional upon meeting certain requirements.

The Company’s tax filings are subject to examination by U.S. federal, state and foreign taxing authorities. The timing and outcome of the final resolutions of the various ongoing income tax examinations and refund claims are uncertain. It is not reasonably possible to estimate the increase or decrease in unrecognized tax benefits within the next 12 months.

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$ Provision for uncovered legal matters Provision for covered legal matters Payments for legal matters()()

Balance as of end of period

$ $

Accrual Summary—U.S. Covered Litigation

Visa Inc., Visa U.S.A. and Visa International are parties to certain legal proceedings that are covered by the U.S. retrospective responsibility plan, which the Company refers to as the U.S. covered litigation. An accrual for the U.S. covered litigation and a charge to the litigation provision are recorded when a loss is deemed to be probable and reasonably estimable. In making this determination, the Company evaluates available information, including but not limited to actions taken by the Company’s litigation committee. The total accrual related to the U.S. covered litigation could be either higher or lower than the escrow account balance. See further discussion below under U.S. Covered Litigation and Note 5—U.S. and Europe Retrospective Responsibility Plans.

$ Provision for interchange multidistrict litigation Payments for U.S. covered litigation()()

Balance as of end of period

$ $

During the three and nine months ended June 30, 2024, the Company recorded additional accruals to address claims associated with the interchange multidistrict litigation. The accrual balance is consistent with the Company’s best estimate of its share of a probable and reasonably estimable loss with respect to the U.S. covered litigation. While this estimate is consistent with the Company’s view of the current status of the litigation, the probable and reasonably estimable loss or range of such loss could materially vary based on developments in the litigation. The Company will continue to consider and reevaluate this estimate in light of the substantial uncertainties with respect

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$ Provision for VE territory covered litigation Payments for VE territory covered litigation()()

Balance as of end of period

$ $

actions led, respectively, by Hayley Lanning and Camp Grounds Coffee, served a motion for partial summary judgment. On January 8, 2024, defendants’ motions for summary judgment under Ohio v. American Express were granted in part and denied in part. On February 22, 2024, the district court denied defendants' motions for summary judgment based on the post-IPO conspiracy claims. On February 26, 2024, plaintiffs in the action led by Old Jericho Enterprise, Inc. served a motion for partial summary judgment. On March 11, 2024, the district court denied the Injunctive Relief Class plaintiffs’ motion for partial summary judgment. On April 2, 2024, the district court granted defendants’ motion for summary judgment on Injunctive Relief Class plaintiffs’ monopolization claims.

On March 25, 2024, Visa and Mastercard entered into an agreement to resolve the Injunctive Relief Class claims (the “Settlement Agreement”), subject to court approval. The Settlement Agreement includes, among other terms, (i) a release from class members for claims for declaratory, injunctive or equitable relief arising out of conduct alleged by the Injunctive Relief Class in the litigation that have accrued or accrue in the future during the term of the Settlement Agreement; (ii) provisions requiring reductions and caps on U.S. credit interchange rates; and (iii) provisions requiring modifications to the Company’s rules in the U.S. that, among other things, streamline requirements for merchants who wish to impose a surcharge on credit transactions. On March 26, 2024, the Injunctive Relief Class plaintiffs filed a motion for preliminary approval of the settlement, which was denied on June 25, 2024.

On May 28, 2024, the district court denied the Lanning and Camp Grounds plaintiffs’ motion for partial summary judgment, and the Lanning and Camp Grounds plaintiffs and another gasoline retailer have appealed.

Interchange Multidistrict Litigation (MDL) - Individual Merchant Actions

Visa has reached settlements with a number of merchants representing approximately % of the Visa-branded payment card sales volume of merchants who opted out of the Amended Settlement Agreement with the Damages Class plaintiffs.

On November 1, 2023, defendants served a motion to enforce the Amended Settlement Agreement, or in the alternative for summary judgment, regarding claims in the actions brought by certain plaintiffs in their capacity as

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Merchants (the capitalized term “Merchant” when used in this section, means a Merchant together with subsidiary/affiliate companies that are party to the same claim) against Visa Europe, Visa Inc. and other Visa subsidiaries in the UK and other countries primarily relating to interchange rates in Europe and in some cases relating to fees charged by Visa and certain Visa rules. As of the filing date, Visa has settled the claims asserted by over Merchants, and there are approximately Merchants with outstanding claims. In addition, additional Merchants have threatened to commence similar proceedings. Standstill agreements have been entered into with respect to some of those threatened Merchant claims, several of which have been settled.

From February 14 to March 28, 2024, a trial occurred to consider whether certain interchange rates restrict competition in violation of UK antitrust law.

In the class action claims filed before the UK Competition Appeal Tribunal (CAT), a class certification rehearing took place in April 2024. In June 2024, the CAT granted class certification in the claim regarding interchange fees on commercial credit cards.

Other Litigation

European Commission Interregional Interchange Investigation

On July 5, 2024, the European Commission acknowledged a public undertaking from Visa that will extend the interregional interchange rate limits agreed in April 2019 for an additional five years, until November 1, 2029. The rate limits apply to consumer debit and credit cards issued outside the European Economic Area (EEA), when used at merchants located within the EEA.

U.S. ATM Access Fee Litigation

On May 2, 2024, in the consumer class action naming Visa, Mastercard and financial institutions as defendants, Mackmin v. Visa Inc., et al., Visa and Mastercard entered a definitive class settlement agreement with plaintiffs in that action, subject to court approval. Plaintiffs in Mackmin filed a motion for preliminary approval of the settlement on May 29, 2024. The remaining consumer action, Burke v. Visa Inc., et al., and the National ATM Council class action, are still pending.

Pulse Network

Visa has reached a settlement with Pulse and the suit has been dismissed.

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ITEM 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis provides a review of the results of operations, financial condition and liquidity and capital resources of Visa Inc. and its subsidiaries (Visa, we, us, our or the Company) on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and related notes included in Item 1—Financial Statements of this report.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 that relate to, among other things, the impact on our future financial position, results of operations and cash flows; prospects, developments, strategies and growth of our business; anticipated expansion of our products in certain countries; industry developments; anticipated timing and benefits of our acquisitions; expectations regarding litigation matters, investigations and proceedings; timing and amount of stock repurchases; sufficiency of sources of liquidity and funding; effectiveness of our risk management programs; and expectations regarding the impact of recent accounting pronouncements on our unaudited consolidated financial statements. Forward-looking statements generally are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “projects,” “could,” “should,” “will,” “continue” and other similar expressions. All statements other than statements of historical fact could be forward-looking statements, which speak only as of the date they are made, are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond our control and are difficult to predict. We describe risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, any of these forward-looking statements in our SEC filings, including our Annual Report on Form 10-K, for the year ended September 30, 2023, and any subsequent reports on Forms 10-Q and 8-K. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future events or otherwise.

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Overview

Visa is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories among a global set of consumers, merchants, financial institutions and government entities through innovative technologies. We provide transaction processing services (primarily authorization, clearing and settlement) to our financial institution and merchant clients through VisaNet, our proprietary advanced transaction processing network. We offer products, solutions and services that facilitate secure, reliable and efficient money movement for all participants in the ecosystem.

Financial overview. A summary of our as-reported U.S. GAAP and non-GAAP operating results is as follows:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024		2023		% Change(1)		2024		2023		% Change(1)
	(in millions, except percentages and per share data)
Net revenue	$	8,900	$	8,123	10	%	$	26,309	$	24,044	9	%
Operating expenses	$	2,962	$	3,099	(4	%)	$	9,063	$	8,594	5	%
Net income	$	4,872	$	4,156	17	%	$	14,425	$	12,592	15	%
Diluted earnings per share	$	2.40	$	2.00	20	%	$	7.08	$	6.02	18	%

Non-GAAP operating expenses(2)	$	2,927	$	2,578	14	%	$	8,417	$	7,598	11	%
Non-GAAP net income(2)	$	4,909	$	4,499	9	%	$	14,964	$	13,464	11	%
Non-GAAP diluted earnings per share(2)	$	2.42	$	2.16	12	%	$	7.34	$	6.44	14	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

(2)For a full reconciliation of our GAAP to non-GAAP financial results, see tables in Non-GAAP financial results below.

Highlights for the first nine months of fiscal 2024. For the three and nine months ended June 30, 2024, net revenue increased 10% and 9% over the prior-year comparable periods, respectively, primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth. See Results of Operations—Net Revenue below for further discussion.

For the three months ended June 30, 2024, GAAP operating expenses decreased 4% over the prior-year comparable period, primarily driven by lower litigation provision. For the nine months ended June 30, 2024, GAAP operating expenses increased 5% over the prior-year comparable period, primarily driven by higher personnel and general and administrative expenses, partially offset by lower litigation provision. See Results of Operations—Operating Expenses below for further discussion. During the three and nine months ended June 30, 2024, exchange rate movements did not have a material impact on our operating expenses growth.

For the three and nine months ended June 30, 2024, non-GAAP operating expenses increased 14% and 11% over the prior-year comparable periods, respectively, primarily driven by higher general and administrative, personnel and marketing expenses.

Class B-1 common stock exchange offer. In May 2024, we accepted 241 million shares of class B-1 common stock tendered in the exchange offer. In exchange, we issued approximately 120 million shares of class B-2 common stock and 48 million shares of class C common stock. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Acquisition. On January 16, 2024, we acquired Pismo Holdings (Pismo), a global cloud-native issuer processing and core banking platform, for a purchase consideration of $929 million. See Note 2—Acquisitions to our unaudited consolidated financial statements.

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Interchange multidistrict litigation. During the nine months ended June 30, 2024, we recorded additional accruals of $140 million to address claims associated with the interchange multidistrict litigation. See Note 13—Legal Matters to our unaudited consolidated financial statements.

Common stock repurchases. During the nine months ended June 30, 2024, we repurchased 42 million shares of our class A common stock in the open market for $11.2 billion. As of June 30, 2024, our share repurchase program had remaining authorized funds of $18.9 billion. See Note 9—Stockholders’ Equity to our unaudited consolidated financial statements.

Non-GAAP financial results. We use non-GAAP financial measures of our performance which exclude certain items which we believe are not representative of our continuing operations, as they may be non-recurring or have no cash impact, and may distort our longer-term operating trends. We consider non-GAAP measures useful to investors because they provide greater transparency into management’s view and assessment of our ongoing operating performance.

•Gains and losses on equity investments. Gains and losses on equity investments include periodic non-cash fair value adjustments and gains and losses upon sale of an investment. These long-term investments are strategic in nature and are primarily private company investments. Gains and losses associated with these investments are tied to the performance of the companies that we invest in and therefore do not correlate to the underlying performance of our business.

•Amortization of acquired intangible assets. Amortization of acquired intangible assets consists of amortization of intangible assets such as technology, customer relationships and trade names acquired in connection with business combinations executed beginning in fiscal 2019. Amortization charges for our acquired intangible assets are non-cash and are significantly affected by the timing, frequency and size of our acquisitions, rather than our core operations. As such, we have excluded this amount to facilitate an evaluation of our current operating performance and comparison to our past operating performance.

•Acquisition-related costs. Acquisition-related costs consist primarily of one-time transaction and integration costs associated with our business combinations. These costs include professional fees, technology integration fees, restructuring activities and other direct costs related to the purchase and integration of acquired entities. These costs also include retention equity and deferred compensation when they are agreed upon as part of the purchase price of the transaction but are required to be recognized as expense post-combination. We have excluded these amounts as the expenses are recognized for a limited duration and do not reflect the underlying performance of our business.

•Litigation provision. Litigation provision includes significant accruals related to certain legal matters that are not covered by the U.S. retrospective responsibility plan or the Europe retrospective responsibility plan (uncovered legal matters) and additional accruals associated with the interchange multidistrict litigation which are covered by the U.S. retrospective responsibility plan (U.S. covered litigation). Litigation provision associated with these matters can vary significantly based on the facts and circumstances related to each matter and do not correlate to the underlying performance of our business. During the three and nine months ended June 30, 2024 and 2023, we have excluded these amounts to facilitate a comparison to our past operating performance.

Under the U.S. retrospective responsibility plan, we recover the monetary liabilities related to the U.S. covered litigation through a downward adjustment to the rate at which shares of our class B-1 and class B-2 common stock ultimately convert into shares of class A common stock. During the three and nine months ended June 30, 2024, there were no conversion rate adjustments. During the three months ended June 30, 2023, basic and diluted earnings per class A common stock was unchanged and during the nine months ended June 30, 2023, basic and diluted earnings per class A common stock increased $0.01 and was unchanged, respectively, as a result of the downward adjustments of the class B-1 common stock conversion rate during the period. See Note 5—U.S. and Europe Retrospective Responsibility Plans and Note 13—Legal Matters to our unaudited consolidated financial statements.

•Lease consolidation costs. During the nine months ended June 30, 2024, we recorded a charge within general and administrative expense associated with the consolidation of certain leased office spaces. We have excluded these amounts as they do not reflect the underlying performance of our business.

•Indirect taxes. During the three and nine months ended June 30, 2024, as a result of the resolution of an audit, we recognized a benefit within general and administrative expense related to the release of the

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reserve previously recognized in fiscal 2021. This one-time benefit is not representative of our ongoing operations.

•Charitable contribution. During the three and nine months ended June 30, 2024, we donated investment securities to the Visa Foundation and recognized a non-cash general and administrative expense. We have excluded this amount as it does not reflect the underlying performance of our business.

Non-GAAP operating expenses, non-operating income (expense), income tax provision, effective income tax rate, net income and diluted earnings per share should not be relied upon as substitutes for, or considered in isolation from, measures calculated in accordance with U.S. GAAP. The following tables reconcile our as-reported financial measures, calculated in accordance with U.S. GAAP, to our respective non-GAAP financial measures:



	Three Months Ended June 30, 2024
	Operating Expenses		Non-operating Income (Expense)		Income Tax Provision(1)		Effective Income Tax Rate(2)		Net Income		Diluted Earnings Per Share(2)
	(in millions, except percentages and per share data)
As reported	$	2,962	$	51	$	1,117	18.6	%	$	4,872	$	2.40
(Gains) losses on equity investments, net	—		22		5				17		0.01
Amortization of acquired intangible assets	(48)		—		13				35		0.02
Acquisition-related costs	(28)		—		3				25		0.01
Litigation provision	(10)		—		2				8		—

Indirect taxes	118		—		(29)				(89)		(0.04)
Charitable contribution	(67)		—		26				41		0.02
Non-GAAP	$	2,927	$	73	$	1,137	18.8	%	$	4,909	$	2.42


	Nine Months Ended June 30, 2024
	Operating Expenses		Non-operating Income (Expense)		Income Tax Provision(1)		Effective Income Tax Rate(2)		Net Income		Diluted Earnings Per Share(2)
	(in millions, except percentages and per share data)
As reported	$	9,063	$	298	$	3,119	17.8	%	$	14,425	$	7.08
(Gains) losses on equity investments, net	—		48		11				37		0.02
Amortization of acquired intangible assets	(131)		—		32				99		0.05
Acquisition-related costs	(75)		—		5				70		0.03
Litigation provision	(434)		—		97				337		0.17
Lease consolidation costs	(57)		—		13				44		0.02
Indirect taxes	118		—		(29)				(89)		(0.04)
Charitable contribution	(67)		—		26				41		0.02
Non-GAAP	$	8,417	$	346	$	3,274	17.9	%	$	14,964	$	7.34

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	Three Months Ended June 30, 2023
	Operating Expenses		Non-operating Income (Expense)		Income Tax Provision(1)		Effective Income Tax Rate(2)		Net Income		Diluted Earnings Per Share(2)
	(in millions, except percentages and per share data)
As reported	$	3,099	$	122	$	990	19.2	%	$	4,156	$	2.00
(Gains) losses on equity investments, net	—		(85)		(18)				(67)		(0.03)
Amortization of acquired intangible assets	(41)		—		9				32		0.02
Acquisition-related costs	(24)		—		1				23		0.01
Litigation provision	(456)		—		101				355		0.17

Non-GAAP	$	2,578	$	37	$	1,083	19.4	%	$	4,499	$	2.16


	Nine Months Ended June 30, 2023
	Operating Expenses		Non-operating Income (Expense)		Income Tax Provision(1)		Effective Income Tax Rate(2)		Net Income		Diluted Earnings Per Share(2)
	(in millions, except percentages and per share data)
As reported	$	8,594	$	(49)	$	2,809	18.2	%	$	12,592	$	6.02
(Gains) losses on equity investments, net	—		111		25				86		0.04
Amortization of acquired intangible assets	(130)		—		28				102		0.05
Acquisition-related costs	(69)		—		5				64		0.03
Litigation provision	(797)		—		177				620		0.30

Non-GAAP	$	7,598	$	62	$	3,044	18.4	%	$	13,464	$	6.44

(1)Determined by applying applicable tax rates.

(2)Figures in the table may not recalculate exactly due to rounding. Effective income tax rate, diluted earnings per share and their respective totals are calculated based on unrounded numbers.

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Payments volume and processed transactions. Payments volume is the primary driver for our service revenue, and the number of processed transactions is the primary driver for our data processing revenue.

Payments volume represents the aggregate dollar amount of purchases made with cards and other form factors carrying the Visa, Visa Electron, V PAY and Interlink brands and excludes Europe co-badged volume. Nominal payments volume is denominated in U.S. dollars and is calculated each quarter by applying an established U.S. dollar/foreign currency exchange rate for each local currency in which our volumes are reported. Processed transactions include payments and cash transactions, and represent transactions using cards and other form factors carrying the Visa, Visa Electron, V PAY, Interlink and PLUS brands processed on Visa’s networks.

The following table presents nominal payments and cash volume:


	U.S.						International						Visa
	Three Months Ended March 31,(1)						Three Months Ended March 31,(1)						Three Months Ended March 31,(1)
	2024		2023		% Change(2)		2024		2023		% Change(2)		2024		2023		% Change(2)
	(in billions, except percentages)
Nominal payments volume
Consumer credit	$	564	$	531	6	%	$	725	$	697	4	%	$	1,289	$	1,227	5	%
Consumer debit(3)	744		701		6	%	738		659		12	%	1,482		1,360		9	%
Commercial(4)	253		239		6	%	149		137		9	%	402		376		7	%
Total nominal payments volume(2)	$	1,561	$	1,471	6	%	$	1,611	$	1,493	8	%	$	3,172	$	2,963	7	%
Cash volume(5)	148		148		—	%	460		448		3	%	608		597		2	%
Total nominal volume(2),(6)	$	1,709	$	1,619	6	%	$	2,071	$	1,941	7	%	$	3,780	$	3,560	6	%

	U.S.						International						Visa
	Nine Months Ended March 31,(1),(2)						Nine Months Ended March 31,(1),(2)						Nine Months Ended March 31,(1),(2)
	2024		2023		% Change		2024		2023		% Change		2024		2023		% Change
	(in billions, except percentages)
Nominal payments volume
Consumer credit	$	1,745	$	1,650	6	%	$	2,217	$	2,078	7	%	$	3,962	$	3,728	6	%
Consumer debit(3)	2,218		2,091		6	%	2,249		1,961		15	%	4,467		4,052		10	%
Commercial(4)	771		731		6	%	457		405		13	%	1,228		1,136		8	%
Total nominal payments volume	$	4,734	$	4,472	6	%	$	4,923	$	4,443	11	%	$	9,656	$	8,915	8	%
Cash volume(5)	453		455		(1	%)	1,419		1,365		4	%	1,871		1,820		3	%
Total nominal volume(6)	$	5,187	$	4,927	5	%	$	6,341	$	5,809	9	%	$	11,528	$	10,736	7	%

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The following table presents the change in nominal and constant payments and cash volume:


	International				Visa				International				Visa
	Three Months Ended March 31, 2024 vs. 2023(1),(2)				Three Months Ended March 31, 2024 vs. 2023(1),(2)				Nine Months Ended March 31, 2024 vs. 2023(1),(2)				Nine Months Ended March 31, 2024 vs. 2023(1),(2)
	Nominal		Constant(7)		Nominal		Constant(7)		Nominal		Constant(7)		Nominal		Constant(7)
Payments volume growth
Consumer credit growth	4	%	9	%	5	%	8	%	7	%	10	%	6	%	8	%
Consumer debit growth(3)	12	%	13	%	9	%	9	%	15	%	13	%	10	%	9	%
Commercial growth(4)	9	%	12	%	7	%	8	%	13	%	14	%	8	%	9	%
Total payments volume growth	8	%	11	%	7	%	8	%	11	%	11	%	8	%	9	%
Cash volume growth(5)	3	%	4	%	2	%	3	%	4	%	4	%	3	%	3	%
Total volume growth	7	%	9	%	6	%	8	%	9	%	10	%	7	%	8	%

(1)Service revenue in a given quarter is primarily assessed based on nominal payments volume in the prior quarter. Therefore, service revenue reported for the three and nine months ended June 30, 2024 and 2023, respectively, was based on nominal payments volume reported by our financial institution clients for the three and nine months ended March 31, 2024 and 2023, respectively. On occasion, previously presented volume information may be updated. Prior period updates are not material.

(2)Figures in the table may not recalculate exactly due to rounding. Percentage changes and totals are calculated based on unrounded numbers.

(3)Includes consumer prepaid volume and Interlink volume.

(4)Includes large, medium and small business credit and debit, as well as commercial prepaid volume.

(5)Cash volume generally consists of cash access transactions, balance access transactions, balance transfers and convenience checks.

(6)Total nominal volume is the sum of total nominal payments volume and cash volume. Total nominal volume is provided by our financial institution clients, subject to review by Visa.

(7)Growth on a constant-dollar basis excludes the impact of foreign currency fluctuations against the U.S. dollar.

The following table presents the number of processed transactions:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024	2023	% Change(1)		2024(1)	2023(1)	% Change(1)
	(in millions, except percentages)
Visa processed transactions	59,318	54,034	10	%	172,247	156,615	10	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage change is calculated based on unrounded numbers. On occasion, previously presented information may be updated. Prior period updates are not material.

Results of Operations

Net Revenue

The following table presents our net revenue earned in the U.S. and internationally:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024		2023		% Change(1)		2024		2023		% Change(1)
	(in millions, except percentages)
U.S.	$	3,621	$	3,443	5	%	$	10,909	$	10,550	3	%
International	5,279		4,680		13	%	15,400		13,494		14	%
Net revenue	$	8,900	$	8,123	10	%	$	26,309	$	24,044	9	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

Net revenue increased over the three and nine-month prior-year comparable periods primarily due to the growth in nominal cross-border volume, processed transactions and nominal payments volume, partially offset by higher client incentives.

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Our net revenue is impacted by the overall strengthening or weakening of the U.S. dollar as payments volume and related revenue denominated in local currencies are converted to U.S. dollars. During the three months ended June 30, 2024, exchange rate movements lowered our net revenue growth by approximately one percentage point. During the nine months ended June 30, 2024, exchange rate movements did not have a material impact on net revenue growth.

The following table presents the components of our net revenue:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024		2023		% Change(1)		2024		2023		% Change(1)
	(in millions, except percentages)
Service revenue	$	3,967	$	3,668	8	%	$	11,915	$	10,950	9	%
Data processing revenue	4,489		4,105		9	%	13,104		11,751		12	%
International transaction revenue	3,194		2,920		9	%	9,197		8,466		9	%
Other revenue	780		597		31	%	2,228		1,735		28	%
Client incentives	(3,530)		(3,167)		11	%	(10,135)		(8,858)		14	%
Net revenue	$	8,900	$	8,123	10	%	$	26,309	$	24,044	9	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

•Service revenue increased primarily due to 7% and 8% growth in nominal payments volume over the three and nine-month prior-year comparable periods, respectively.

•Data processing revenue increased primarily due to 10% growth in processed transactions over the three and nine-month prior-year comparable periods.

•International transaction revenue increased primarily due to growth in nominal cross-border volumes of 12% and 15% over the three and nine-month prior-year comparable periods, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies.

•Other revenue increased primarily due to growth in consulting and marketing services and select pricing modifications over the three and nine-month prior-year comparable periods.

•Client incentives increased primarily due to growth in payments volume over the three and nine-month prior-year comparable periods. The amount of client incentives we record in future periods will vary based on changes in performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts.

Operating Expenses

The following table presents the components of our total operating expenses:


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024		2023		% Change(1)		2024		2023		% Change(1)
	(in millions, except percentages)
Personnel	$	1,573	$	1,481	6	%	$	4,655	$	4,333	7	%
Marketing	378		297		27	%	1,009		938		8	%
Network and processing	200		182		10	%	570		539		6	%
Professional fees	152		133		15	%	443		372		19	%
Depreciation and amortization	264		235		12	%	760		696		9	%
General and administrative	382		314		22	%	1,174		918		28	%
Litigation provision	13		457		(97	%)	452		798		(43	%)
Total operating expenses	$	2,962	$	3,099	(4	%)	$	9,063	$	8,594	5	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

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•Personnel expenses increased over the three and nine-month prior-year comparable periods primarily due to a higher number of employees and compensation, reflecting our strategy to invest in future growth, including acquisitions.

•Marketing expenses increased over the three and nine-month prior-year comparable periods primarily due to higher spend including for client marketing and the Olympic and Paralympic Games Paris 2024. The increase during the nine months ended June 30, 2024 was partially offset by spend related to the FIFA World CupTM in the prior year and absent in the current year.

•Professional fees increased over the three and nine-month prior-year comparable periods primarily due to higher consulting fees. The increase during the nine months ended June 30, 2024 also included higher advisory fees.

•Depreciation and amortization increased over the three and nine-month prior-year comparable periods primarily due to additional depreciation and amortization from our on-going investments and acquisitions.

•General and administrative expenses increased over the three and nine-month prior-year comparable periods primarily due to a charitable contribution to the Visa Foundation in the current year, higher usage of travel related card benefits, higher indirect taxes and higher unfavorable foreign currency fluctuations, partially offset by the release of the reserve on indirect taxes previously recognized in fiscal 2021. The increase during the nine months ended June 30, 2024 also included lease consolidation costs in the current year.

•Litigation provision decreased over the three and nine-month prior-year comparable periods primarily due to lower accruals related to the U.S. covered litigation. The decrease during the nine months ended June 30, 2024 was partially offset by accruals related to uncovered litigation in the current year. See Note 13—Legal Matters to our unaudited consolidated financial statements.

Non-operating Income (Expense)

The following table presents the components of our non-operating income (expense):


	Three Months Ended June 30,						Nine Months Ended June 30,
	2024		2023		% Change(1)		2024		2023		% Change(1)
	(in millions, except percentages)
Interest expense	$	(196)	$	(182)	9	%	$	(465)	$	(461)	1	%
Investment income (expense) and other	247		304		(18	%)	763		412		86	%
Total non-operating income (expense)	$	51	$	122	(58	%)	$	298	$	(49)	702	%

(1)Figures in the table may not recalculate exactly due to rounding. Percentage changes are calculated based on unrounded numbers.

•Interest expense increased during the three months ended June 30, 2024 primarily due to higher losses from derivative instruments and higher interest expense related to taxes. Interest expense increased during the nine months ended June 30, 2024 primarily due to higher losses from derivative instruments, partially offset by higher interest benefit related to taxes and lower interest expense related to lower outstanding debt.

•Investment income (expense) and other decreased during the three months ended June 30, 2024, primarily due to losses on our investments, partially offset by higher interest income on our cash and investments. Investment income (expense) and other increased during the nine months ended June 30, 2024, primarily due to higher interest income on our cash and investments and lower losses on our investments.

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Effective Income Tax Rate

The following table presents our effective income tax rates:


	Three Months Ended June 30,				Nine Months Ended June 30,
	2024		2023		2024		2023
Effective income tax rate	19	%	19	%	18	%	18	%

The effective income tax rates differ primarily due to the following:

•During the nine months ended June 30, 2024, a $184 million tax benefit as a result of the conclusion of an audit; and

•During the nine months ended June 30, 2023, a $142 million tax benefit due to the reassessment of an uncertain tax position as a result of new information obtained during an ongoing tax examination.

Liquidity and Capital Resources

Cash Flow Data

The following table summarizes our cash flow activity for the periods presented:


	Nine Months Ended June 30,
	2024		2023
	(in millions)
Total cash provided by (used in):
Operating activities	$	13,286	$	13,828
Investing activities	$	(2,510)	$	(818)
Financing activities	$	(13,564)	$	(13,192)

+Filed or furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VISA INC.

Date:

July 23, 2024

By:

/s/ Ryan McInerney

Name:

Ryan McInerney

Title:

Chief Executive Officer
(Principal Executive Officer)

Date:

July 23, 2024

By:

/s/ Chris Suh

Name:

Chris Suh

Title:

Chief Financial Officer

(Principal Financial Officer)

Date:

July 23, 2024

By:

/s/ Peter Andreski

Name:

Peter Andreski

Title:

Global Corporate Controller, Chief Accounting Officer
(Principal Accounting Officer)

VISA INC. - Quarter Report: 2024 June (Form 10-Q)

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