- GAAP quarterly net income of $880 million or $1.27 per diluted class A common share
- Adjusted full-year 2011 net income of $3.5 billion or $4.99 per diluted class A common share excluding the revaluation of the Visa Europe put option
- Full-year 2011 GAAP net income, inclusive of the revaluation of the Company's Visa Europe put option, was $3.6 billion
- The Company increases its share repurchase program by $1 billion and quarterly dividend payment by 47%
Visa Inc. (NYSE: V) today announced financial results for the Company's fiscal fourth quarter and full-year 2011. For the fourth quarter ending September 30, 2011, GAAP net income was $880 million, an increase of 14% over the prior year. GAAP diluted class A common stock earnings per share were $1.27 - an increase of 20% over the prior year on a GAAP basis, or an increase of 34% over the prior year on an adjusted basis (excluding the revaluation of the Company's Visa Europe put option). The weighted-average number of diluted class A common shares outstanding was approximately 692 million.
GAAP net operating revenue in the fiscal fourth quarter of 2011 was $2.4 billion, an increase of 13% over the prior year and driven by strong contributions across all revenue categories. Currency fluctuations contributed 2 percentage points of growth towards quarterly net operating revenues.
On an adjusted basis (excluding the revaluation of the Company's Visa Europe put option), net income for the full-year was $3.5 billion, an increase of 22% over the prior year. On an adjusted basis, diluted class A common stock earnings per share were$4.99, an increase of 28% over the prior year on an adjusted basis.
GAAP net income for the full-year was $3.6 billion, inclusive of the revaluation of the Company's Visa Europe put option. Diluted class A common stock earnings per share were $5.16. The Company's adjusted quarterly and full-year net income per class A common share outstanding are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying financial tables. The weighted-average number of diluted class A common shares outstanding was approximately 707 million.
GAAP net operating revenue for the full-year was $9.2 billion, an increase of 14% over the prior year and driven by double-digit revenue growth contributions from service, data processing and international transaction revenues. Currency fluctuations contributed 2 percentage points of growth towards full-year net operating revenues.
"Visa continues to deliver strong results, with fourth quarter and full year performance reflecting a business that is both resilient and flexible enough to adapt and flourish in a changing business environment," said Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc.
"Throughout the quarter and the year, we have been diligent in our efforts to grow our core business, while successfully unlocking new revenue opportunities through strategic investments, both in our core business and into innovations that will ensure our foundation for future growth remains strong. This foundation will allow us to effectively drive transactions, pursue global growth in new markets and provide our clients with innovative ways to provide safe electronic payments to their customers."
Fiscal Fourth Quarter 2011 Financial Highlights:
Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2011, on which fiscal fourth quarter service revenue is recognized, was a positive 14% over the prior year at $941 billion.
Payments volume growth, on a constant dollar basis, for the three months ended September 30, 2011, was a positive 13% over the prior year at $970 billion.
Cross border volume growth, on a constant dollar basis, was a positive 15% for the three months ended September 30, 2011.
Total processed transactions, which represent transactions processed by VisaNet, for the three months ended September 30, 2011, were 13 billion, a positive 9% increase over the prior year.
For the fiscal fourth quarter 2011, service revenues were $1.1 billion, an increase of 21% versus the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenues rose 10% over the prior year to $925 million. International transaction revenues, which are driven by cross border payments volume, grew 23% over the prior year to $758 million. Other revenues, which include the Visa Europe licensing fee, were $171 million, a 3% increase over the prior year. Client incentives, which are a contra revenue item, were $576 million and represents 19.5% of gross revenues.
Total operating expenses on a GAAP basis were $1 billion for the quarter, a 2% increase over the prior year and included approximately $30 million in restructuring expenses.
Cash, cash equivalents, restricted cash, and available-for-sale investment securities were $6.9 billion at September 30, 2011.
Visa's GAAP effective tax rate was 35% for the quarter ended September 30, 2011.
Fiscal Full-Year 2011 Financial Highlights:
For the fiscal full-year 2011, service revenues were $4.3 billion, an increase of 22% over the prior year. Data processing revenues rose 11% over the prior year to $3.5 billion. International transaction revenues, which are driven by cross border payments volume, grew 17% over the prior year to $2.7 billion. Other revenues, which include the Visa Europe licensing fee, were $655 million, an 8% decrease over the prior year. Client incentives, which are a contra revenue item, were $1.9 billionand represent 17% of gross revenues.
Total processed transactions, which represent transactions processed by VisaNet for the 12 months ended September 30, 2011, totaled 51 billion, a 12% increase over the prior year.
Total operating expenses on a GAAP basis were $3.7 billion for the full-year, a 7% increase over the prior year.
Visa's GAAP effective tax rate was 36% for the twelve months ended September 30, 2011, excluding the revaluation of the Visa Europe put option.
Notable Events:
During the three months ended September 30, 2011, the Company repurchased approximately 5.2 million class A common shares, at an average price of $80.87 per share, for a total cost of $423 million.
As announced on October 19, 2011, the Board of Directors declared a quarterly dividend in the aggregate amount of $0.22 per share of class A common stock (determined in the case of class B and class C common stock on an as-converted basis) payable on December 6, 2011, to all holders of record of the Company's class A, class B and class C common stock as of November 18, 2011.
Today, the Company announces that its Board of Directors has authorized a $1 billion increase to its previously announced $1 billion share repurchase program. The authorization will be in place through July 20, 2012, and is subject to further change at the discretion of the Board.
Financial Outlook:
Visa Inc. affirms its financial outlook for the following metrics through 2012:
- Annual net revenue growth: high single to low double digit range; and
- Adjusted annual diluted class A common stock earnings per share growth: mid to high teens range.
Visa Inc. provides its financial outlook for the following metrics for 2012:
- Client incentives as a percent of gross revenues: 17% to 18% range;
- Marketing expenses: Under $1 billion;
- Annual operating margin: About 60%;
- Adjusted tax rate: 33% to 34% range*;
- Capital expenditures $350 million to $400 million range; and
- Annual free cash flow: Above $4 billion.
* Financial Outlook excludes impact of possible non-cash revaluation of deferred tax liabilities, which could decrease the GAAP tax rate to 30 to 31%. These deferred tax liabilities are primarily associated with indefinite-lived intangible assets recorded as part of Visa's October 2007 reorganization.
Fiscal Fourth Quarter and Full-Year 2011 Earnings Results Conference Call Details:
Visa's executive management team will host a live audio webcast beginning at 5:00 p.m. Eastern time (2:00 p.m. Pacific time) today to discuss the financial results and business highlights.
All interested parties are invited to listen to the live webcast at http://investor.visa.com. A replay of the webcast will be available on the Visa Investor Relations website for 30 days.
Investor information, including supplemental financial information, is available on Visa Inc.'s Investor Relations website athttp://investor.visa.com.
