Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Chris, a clarification question. You mentioned Easter was mainly affecting the quarter-to-date trends. Is it fair to assume that the growth rate would be commensurate with last quarter if you adjusted for that? And then just on a related matter, did the tax refund timings have any impact later in the quarter or in the quarter or into the quarter-to-date trends?
A: Christopher Suh - Visa Inc. - CFO: Yes, thanks for the question. So April volumes, as I said on the call, through the first 3 weeks, were lower than March, in the month of March. This was due to the timing of Easter, which again, was in March this year and April of last year. And so once you factor that into March and April growth rates, the change in growth rate is not meaningful. As far as tax payments, at this point, I don't really have an update. Largely, they remain consistent at this point year-to-date.
Q: There were some helpful comments around the e-commerce strength within cross-border offsetting some of the travel weakness. When we think about the components of overall cross-border, clearly, there's the traditional travel, so card-present and card-not-present, and then there's the traditional e-commerce, right, so retail e-commerce. But there are other faster growing but smaller portions, whether it be the remittances or marketplace payouts, you gave the Thunes example earlier. I was wondering if you could maybe size, in aggregate, how large some of those other maybe faster-growing portions of cross-border have become as a part of the overall mix.
A: Christopher Suh - Visa Inc. - CFO: Yes, sure. Why don't I start? Yes, we don't have specifics to break out. As we talked about, the e-commerce business has been strong. It continues to grow above what we expected. The yields across our entire cross-border business are positive and accretive to Visa overall. And so we're happy with all flavors of cross-border, but I don't have a further breakout for you in terms of the pieces that you were asking about.
Q: I wanted to ask a question on the U.S. debit trends. April continued the trend of weakening that we've seen, that we saw also in March and basically since February. Wanted to know to what degree your guidance for both third quarter and the year embeds continued weakening in U.S debit. It seems if we look at the restaurant data released by the likes of Darden, the lower income portion of the U.S. is significantly reducing spend in certain areas, so curious on the commentary there.
A: Christopher Suh - Visa Inc. - CFO: Yes. As we talked about on the call, we see relatively stable volumes in the U.S. across credit and debit, normalizing for the things that I talked about. And so in addition, as I talked about Reg II, the impact remains stable as well. And so from our perspective, our data indicates stable volume growth in the U.S.
Q: Wanted to ask on new flows, so a nice recovery there in growth. Can you give a comment on what areas were most pronounced in the underlying growth recovery relative to what you saw last quarter?
A: Christopher Suh - Visa Inc. - CFO: Yes. Let me talk about Q2 growth, the two pieces of information that we gave you in terms of Q2 growth. We saw commercial volume growth globally, 8%, stable to Q1 and, in fact, stable over the last several quarters. And we saw very strong growth in Visa Direct transactions, growing 31% for the quarter. New flows revenue, in total, growing 14%, which was in line with our expectations that we shared with you at the start of the year. I think the recovery that you're referencing to was because Q1 growth was lower, and that was really due to some lapping issues that were onetime in nonrecurring, which we've passed at this point.
Q: A bit of a dual-part question on just some of the prior guidance you made around first half versus second half dynamics and some of the drivers of acceleration over the course of the year. And I guess specifically, I guess, incentives. You talked about a step down in the growth rate from first half to second half. Is that still your expectation despite that coming in a lot lower in the most recent quarter?
A: Christopher Suh - Visa Inc. - CFO: Yes, okay. Let me start first with incentives, the first part of your question. So as you all have seen, from quarter-to-quarter, incentive growth can vary based on a number of factors: client performance, deal timing, which is what caused half 1 to come in lower than anticipated. For our outlook for the second half of the year, our expectations remain largely unchanged. We still expect year-over-year growth to be lower in the second half than in the first half as we lap the higher incentives that we saw starting in the second half of last year. And we do expect the Q4 incentive growth rate will be the lowest growth quarter of the year. So expectations for half 2 unchanged.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
