Q2 2025 Visa Inc Earnings Call
Welcome to Visa's fiscal second quarter 2025 earnings Conference call. All participants are in a listen only mode until the question and answer session. Today's conference is being recorded if you have any objections you may disconnect. At this time I would now like to turn the conference over to your host Ms. Jennifer <unk> Senior Vice President and global head of Investor Relations.
Unknown Attendee: Welcome to Visa's fiscal second quarter 2025- All participants are in a listen-only mode until the call is concluded. conference is being recorded if you have any objections to the recording. Thank you.
Unknown Attendee: I would now like to turn the conference over to your host.
Jennifer Como: Mr. Como, Senior Vice President and Global Head of Investor Relations, Mr. Como Thank you. Good afternoon, everyone, and welcome to Visa's fiscal second quarter 2025 earnings call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer, and Chris Suh, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at Investor.Visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results could differ materially as the result of many factors.
MS Campbell you may begin.
Thank you good afternoon, everyone and welcome to Visa's fiscal second quarter 2025 earnings call.
Speaker Change: Joining us today are Ryan Mcinerney, Visa's, Chief Executive Officer, and Chris saw visas Chief Financial Officer.
Speaker Change: This call is being webcast on the Investor Relations section of our website at Investor Visa Dot Com, a replay will be archived on our site for 30 days.
Speaker Change: Slide deck containing financial and statistical highlights has been posted on our IR website.
Speaker Change: Let me also remind you that this presentation includes forward looking statements. These statements are not guarantees of future performance and our actual results could differ materially as a result of many factors.
Jennifer Como: Additional information concerning those factors is available in our most recent annual report on Form 10-K and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all of the results on a non-GAAP nominal basis unless otherwise noted. The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website.
Speaker Change: Additional information concerning those factors is available in our most recent annual report on Form 10-K, and any subsequent reports on forms 10-Q, and 8-K, which you can find on the Sec's website and the Investor Relations section of our website.
Speaker Change: Our comments today regarding our financial results will reflect revenue on a GAAP basis and all of the results on a non-GAAP nominal basis, unless otherwise noted.
Speaker Change: The related GAAP measures and reconciliation are available in today's earnings release and related materials available on our IR website.
Ryan Mcinerney: And with that, let me turn the call over to Ryan. Thanks, Jennifer. Visa is one of the world's best businesses with strong growth and leading profitability powered by a world-class brand, innovative technology, an unparalleled network, and global scale. This quarter we saw the strength of our business model, with $9.6 billion in net revenue, up 9% year-over-year, and EPS up 10%. Our key business drivers were strong, even with the lapping of leap day from last year, and consumer spending remained resilient in an uncertain and dynamic environment. In constant dollars, overall payments volume grew 8% year-over-year. U.S.
Ryan Mcinerney: And with that let me turn the call over to Ryan.
Speaker Change: Yeah.
Ryan Mcinerney: Thanks, Jennifer.
Speaker Change: Visa is one of the world's best businesses with strong growth and leading profitability powered by a world class brand innovative technology and unparalleled network and global scale.
Speaker Change: This quarter, we saw the strength of our business model with $9.6 billion in net revenue up 9% year over year and EPS up 10%.
Speaker Change: Our key business drivers were strong.
Speaker Change: With the lapping of leap day from last year.
Speaker Change: And consumer spending remains resilient in an uncertain and dynamic environment.
Speaker Change: In constant dollars.
Speaker Change: They're all payments volume grew 8% year over year.
Speaker Change: U S payments volume grew 6% and international payments volume grew 9%.
Ryan Mcinerney: payments volume grew 6% and international payments volume grew 9%. cross-border volume excluded entry Europe rose 13% in constant dollars and process transactions grew 9% year-over-year Our strategy across consumer payments, commercial and money movement solutions, and value-added services continues to resonate with our clients and we remain focused on serving our clients through our innovation and product development.
Speaker Change: Cross border volume, excluding intra Europe rose, 13% in constant dollars and processed transactions grew 9% year over year.
Speaker Change: Our strategy across consumer payments commercial and money movement solutions and value added services continues to resonate with our clients and we remain focused on serving our clients through our innovation and product development.
Ryan Mcinerney: I will start with quarterly highlights and then make a few comments on the current environment. In consumer payments, we continue to execute the fundamentals, expanding credentials and acceptance and driving user engagement in order to grow both carded and non-carded volumes. Total credentials through 7% with generally consistent growth across our regions. We added 1 billion tokens since last quarter to total 13.7 billion. And now nearly 50% of our e-commerce transactions globally are tokenized. We also crossed 1 billion tokens in Latin America and a half a billion in CEMEA. and we continue to make progress displacing cash in key markets.
Speaker Change: I will start with quarterly highlights and then make a few comments on the current environment.
Speaker Change: In consumer payments, we continued to execute the fundamentals expanding credentials and acceptance and driving user engagement in order to grow both target and non target volumes.
Speaker Change: Total credentials grew 7%.
Speaker Change: With generally consistent growth across our regions.
Speaker Change: We added 1 billion tokens since last quarter to totaled $13 7 billion and now nearly 50% of our ecommerce transactions globally or token is we.
Speaker Change: We also crossed 1 billion tokens in Latin America, and a half a billion in EMEA.
Speaker Change: And we continue to make progress displacing cash in key markets.
Ryan Mcinerney: For example, India, Mexico, and Brazil each added more than 1 million merchant locations in the last year as we have driven greater acceptance, including with smaller merchants. We recently signed an agreement with Effecty, one of the biggest cash networks in Colombia with over 30 million users. Effecty will launch 4.5 million consumer debit cards and build acceptance with their cash agents. We also convert closed loop to open loop opportunities.
Speaker Change: For example.
Speaker Change: India, Mexico, and Brazil, each added more than 1 million merchant locations in the last year, as we have driven greater acceptance, including with smaller merchants.
Speaker Change: We recently signed an agreement with effective one of the biggest cash networks in Colombia with over 30 million users.
Speaker Change: Effective will launch $4 5 million consumer debit cards and build acceptance with their cash agents.
Speaker Change: We also convert closed loop to open loop opportunities.
Ryan Mcinerney: For example, I'll highlight two transit deals in Latin America. one in Argentina with Banco de la Nacion to launch an open-loop SUBE visa card for use on public transportation. and two in Chile with Metropago to also launch an open loop Visa card and add acceptance locations at transit stops.
Speaker Change: For example, I'll highlight two transit deals in Latin America.
Speaker Change: One in Argentina, with Banco de La NASA one.
Speaker Change: To launch an open loop Soobee visa card for use on public transportation.
Speaker Change: And two in Chile with natural Pago <unk> also launched an open loop visa card and that acceptance locations at transit stops.
Speaker Change: As we mentioned at Investor Day.
Ryan Mcinerney: As we mentioned at Investor Day, what gives us confidence in our ability to grow consumer payments are our products and our solutions. They are enabling us to succeed in important high-value consumer payments use cases, innovations such as tap-to-everything, tokens, multi-currency cards, flex credentials, account-to-account solutions, and our differentiated cardholder benefits platforms. I'll note some progress this quarter. Our efforts in Tap to Everything continued, driving cash digitization and habituation. Tap to Phone added nearly 2 million transacting device terminals since last quarter, with growth primarily driven by Latin America, the U.S. and Europe. cap-to-pay penetration is now at 76% globally, with the U.S.
Speaker Change: What gives us confidence in our ability to grow consumer payments are our products and our solutions.
Speaker Change: They are enabling us to succeed and important high value consumer payments use cases.
Speaker Change: Innovations such as tap to everything tokens multi currency cards flex credentials account to account solutions and our differentiated cardholder benefits platforms.
Speaker Change: I'll note some progress this quarter.
Speaker Change: Our efforts in tap to everything continued driving cash digitization and habituation.
Speaker Change: Tap the phone added nearly 2 million transacting device terminals since last quarter with growth, primarily driven by Latin America, the U S and Europe.
Speaker Change: Tap to pay penetration is now at 76% globally with the U S passing 60% for the first time.
Ryan Mcinerney: passing 60% for the first time. Penetration at U.S. drugstores, retailers, and quick-service restaurants is now above 60% as well. Tap to Add Card continued to gain traction, and with the majority of fraud being eliminated as compared to manual entry, it's not surprising that we now have nearly 150 issuers participating globally in more than 35 countries and territories. Tap the P2P is a Visa product that leverages tokenization for enhanced security, Visa's tap kernel and SDK technology for seamless contactless data transmission between devices, and the convenience of Visa Direct's real-time money movement for funds transfers. We are soon launching our tap-to-P2P products in the U.S.
Speaker Change: Penetration at U S drugstores retailers and quick service restaurants is now above 60% as well.
Tap to add card continued to gain traction and with the majority of fraud being eliminated as compared to manual entry. It's not surprising that we now have nearly 150 issuers participating globally and more than 35 countries and territories.
Speaker Change: Tap the P to P is a visa product that leverages <unk> for enhanced security.
Speaker Change: Visa tap turtle, an SDK technology for seamless contactless data transmission between devices.
And the convenience of visa direct real time money movement for funds transfers.
Speaker Change: We are human launched a tap to PDP products in the U S with Samsung.
Ryan Mcinerney: with Samsung. Samsung Wallet will introduce this innovative P2P payments feature that will allow users to quickly send money to friends or family by just tapping a phone to a debit card or another phone, a strategy focused on enabling cross-platform functionality across mobile wallets.
Speaker Change: Samsung wallet will introduce this innovative PDP payments feature that will allow users to quickly send money to friends or family.
Speaker Change: Just tapping a phone to a debit card or another phone.
Speaker Change: Strategy focused on enabling cross platform functionality across mobile wallets.
Ryan Mcinerney: Another development is in our stablecoin offerings. We believe two important capabilities are interoperability and programmability. we have continued to expand our interoperability including with our first seven day a week stablecoin settlement recently surpassing 200 million dollars in cumulative stablecoin settlement volume On programmability, we also developed the Visa Tokenized Asset Platform to help enable banks to issue and leverage stablecoins for new types of programmable finance. Our first pilot partner, BBVA, plans to launch a stablecoin later this year on the Ethereum blockchain.
Speaker Change: Another development is in our stable coin offerings.
Speaker Change: We believe two important capabilities are interoperability and programmability.
We have continued to expand our interoperability, including with our first seven day, a week stable coin settlement recently, surpassing $200 million in cumulative stable coin settlement volume.
Speaker Change: On Programmability, we also developed the visa token sized asset platform to help enable banks to issue and leverage stable coins for new types of programmable finance.
Speaker Change: Our first pilot partner BBVA plans to launch a stable coin later this year on the Assyrian blockchain.
Speaker Change: In our focus to attract and retain the affluent and cross border traveler.
Ryan Mcinerney: In our focus to attract and retain the affluent and cross-border traveller, we continue to evolve our Infinite product and are excited about the launch of the Scotiabank Passport Visa Infinite Privilege Card, offering elite travel benefits for Canadians. The card provides travel rewards, insurance, and exclusive perks.
Speaker Change: We continue to evolve our infinite product and are excited about the launch of the Scotiabank passport visa infinite privilege card.
Speaker Change: <unk> elite travel benefits for Canadians.
Speaker Change: The card provides travel rewards insurance and exclusive perks.
Ryan Mcinerney: Moving to commercial and money movement solutions. As we drive further penetration of these opportunities, we have seen strong results in the second quarter, with commercial volume up 6% in constant dollars. Visa direct transactions up 28% and CMS revenue up 13% year-over-year in constant dollars. In Visa Commercial Solutions this quarter, we made progress on our strategy as we deepened our relationships with a number of existing clients. To capture the accounts receivable and accounts payable opportunity, we are utilizing product innovations such as embedded finance solutions to meet payers where they manage their business to drive adoption of cards.
Speaker Change: Moving to commercial and money movement solutions.
Speaker Change: As we drive further penetration of these opportunities we have seen strong results in the second quarter with commercial volume up 6% in constant dollars.
Speaker Change: These are direct transactions up 28%.
Speaker Change: And CMS revenue up 13% year over year in constant dollars.
Speaker Change: In visa commercial solutions this quarter, we made progress on our strategy as we deepened our relationships with a number of existing clients.
Speaker Change: To capture the accounts receivable and accounts payable opportunity.
Speaker Change: We are utilizing product innovations such as embedded finance solutions to meet payers, where they manage their business to drive adoption of cards.
Ryan Mcinerney: We are pleased that Lloyd's has signed a deal with Talia to issue and embed Visa virtual cards in the SAP ERP and procure-to-pay workflows of their customers. Our vertical specific strategies serve the needs of small, middle market, and large businesses.
Speaker Change: We are pleased that Lloyd's has signed a deal with telia to issuance and embed visa virtual cards in the S. E T ERP and procure to pay workflows of their customers.
Speaker Change: Our vertical specific strategies serve the needs of small middle market and large businesses.
Ryan Mcinerney: In that light, we are supporting ITAU in their Card as a Service platform, which offers credit and debit card issuance For more information, visit www.fema.gov Product Lifecycle Management, and digital accounts to businesses across agribusiness, real estate, auto and retailers. In the B2B travel vertical, we continue to see strong demand for innovative payment solutions to transact in multiple currencies while enhancing payment security, reconciliation, and operational efficiency. We expanded our agreement with Lianlian Global to launch a B2B travel solution in Hong Kong. Lianlian Global will also be utilizing Visa Direct's multi-currency capabilities to support end-to-end collections and payouts.
Speaker Change: In that light.
Speaker Change: We are supporting <unk> in their card as a service platform.
Speaker Change: Which offers credit and debit card issuance.
Speaker Change: Product lifecycle management.
Speaker Change: And digital accounts to businesses across agribusiness real estate auto and retailers.
Speaker Change: In the BTB travel vertical we continue to see strong demand for innovative payment solutions to transact in multiple currencies, while enhancing payment security reconciliation and operational efficiency.
Speaker Change: We expanded our agreement with Leon Leon Global.
Speaker Change: To launch a b to B travel solution in hard currency.
Speaker Change: We only are global will also be utilizing visa direct multi currency capabilities to support end to end collections and payouts.
Speaker Change: Continuing with visa direct.
Ryan Mcinerney: Continuing with Visa Direct. This quarter, we signed an important deal with Jack Henry to offer Visa Direct through their digital applications to facilitate rapid transfers among bank accounts and enable their community and regional financial institution clients to offer Visa Direct to their consumer account holders and SMBs. In the cross-border space, Checkout.com is the first acquirer in the UAE to launch Visa Direct's Push-to-Card solution, enhancing real-time money transfer capabilities for both cross-border and domestic transactions. And in the U.S., we expanded our agreement with Tabipay, a money movement platform serving more than 6,500 fintechs and enterprises. Visa Direct will now be enabling push-to-account and wallet in addition to push-to-card.
Speaker Change: This quarter, we signed an important deal with Jack Henry to offer visa direct through their digital applications to facilitate rapid transfers among bank accounts and enable their community and regional financial institution clients to offer visa direct to their consumer account holders and smbs.
Speaker Change: In the cross border space.
Speaker Change: Jack out Dot Com is the first acquirer in the UAE to launch visa direct push to card solution.
Speaker Change: Enhancing real time money transfer capabilities for both cross border and domestic transactions.
Speaker Change: And in the U S.
Speaker Change: We expanded our agreement with Cabot pay our money movement platform, serving more than 6500 fin techs and enterprises.
Speaker Change: Visa direct will now be enabling pushed to account and wallet. In addition to push to card.
Speaker Change: These are all examples of our strategic focus to grow our domestic and cross border business and expand with our existing customers for visa direct the largest money movement platform in the world by transactions volumes and endpoints.
Ryan Mcinerney: These are all examples of our strategic focus to grow our domestic and cross-border business and expand with our existing customers for Visa Direct, the largest money movement platform in the world by transactions, volumes, and endpoints.
Speaker Change: In value added services, we continued to deepen our relationships with our existing customers and also focused on attracting new customers with some of our recently acquired assets.
Ryan Mcinerney: In value-added services, we continued to deepen our relationships with our existing customers and also focused on attracting new customers with some of our recently acquired assets. Value Added Services revenue grew 22% in constant dollars, powered by strong growth across all portfolios. I'll share a few areas of success in the execution of our strategy. In issuing solutions, Pismo brings a holistic offering with credit, debit, prepaid and commercial issuance processing, and core bank processing. We have a strong pipeline and we are well on our way to enter five new countries across four regions this year. Some recent deals to note include First in Latin America with NECI in Colombia and Banco de la Nacion in Argentina.
Speaker Change: Value added services revenue grew 22% in constant dollars.
Speaker Change: Powered by strong growth across all portfolios.
Speaker Change: I'll share a few areas of success in the execution of our strategy.
Speaker Change: In issuing solutions.
Speaker Change: <unk> brings a holistic offering with credit debit prepaid and commercial regional processing and core bank processing.
Speaker Change: We have a strong pipeline and we are well on our way to enter five new countries across four regions. This year.
Speaker Change: Some recent deals to note include first in Latin America, with <unk> in Colombia, and Banco de La <unk> in Argentina.
Ryan Mcinerney: and in Asia Pacific with T2P in Thailand and Zenith Forex in India. Also in issuing solutions, we continue to grow our card benefits business. In Europe, Raiffeisen Bank International in Austria recently launched the Travelcentive travel platform, leveraging our solutions as well as added Visa's Priority Pass benefits to customers.
Speaker Change: And in Asia Pacific.
Speaker Change: With TTP, and Thailand, and Zenith Forex in India.
Speaker Change: Also initial solutions, we continue to grow our card benefits business.
Speaker Change: In Europe, Raw files and bank International in Australia.
Speaker Change: Recently launched the travel center travel platform, leveraging our solutions as well as added visa's priority pass benefits to customers.
Speaker Change: In acceptance solutions, we recently announced two new product offerings.
Ryan Mcinerney: In acceptance solutions, we recently announced two new product offerings. The first is a completely new version of Authorize.net, launching in the U.S. next quarter and additional countries next year. It features a streamlined user interface. AI capabilities with an AI agent, ANET Improved dashboards for day-to-day management and support for in-person card readers and tap-to-phone. It will help businesses analyze data, summarize insights, and adapt to rapidly changing customer trends. The second is the new Unified Checkout Experience, available in the U.S. and in pilot stage in additional markets in Q4. As new ways to pay continue to emerge, merchants want to integrate once to accept all payment types to decrease the likelihood of lost sales at the point of checkout.
Speaker Change: The first is a completely new version of authorized dot net.
Speaker Change: Launched in the U S next quarter and additional countries next year.
Speaker Change: It features a streamlined user interface.
Speaker Change: AI capabilities with an AI agent a net.
Speaker Change: Improved dashboards for day to day management and support for any person card readers and tap the phone.
Speaker Change: It will help businesses analyze data summarize insights and adapt to rapidly changing customer trends.
Speaker Change: The second is the new unified checkout experience.
Speaker Change: Available in the U S and in pilot stage in additional markets in Q4.
Speaker Change: As new ways to pay continue to emerge.
Speaker Change: <unk> wanted to integrate wants to accept all payment types to decrease the likelihood of loss sales at the point of checkout.
Ryan Mcinerney: Unified Checkout can be launched in a few hours with a Deploy Ready Payment Acceptance Code. is designed to deliver strong e-commerce conversion rates with an intuitive checkout experience orchestrating over 25 card and alternative payment options. Because Unified Checkout is part of the Visa Acceptance Solutions platform, customers also have access to fraud management, 3D secure authentication, and tokenization management. We also continue to grow our client relationships in acceptance solutions this quarter. For example, we have now become the payment service provider of choice for sporting goods retailer Decathlon, who has more than 2,000 stores in nearly 80 countries.
Speaker Change: Unified checkout can be launched in a few hours with a deploy ready payment acceptance code.
Speaker Change: It is designed to deliver strong e-commerce conversion rates with an intuitive checkout experience orchestrating over twenty-five card alternative payment options.
Speaker Change: Because unified checkout as part of the visa acceptance solutions platform.
Speaker Change: <unk> also have access to fraud management <unk>.
Speaker Change: Really secure authentication and Tokenism mission management.
Speaker Change: We also continued to grow our client relationships and acceptance solutions this quarter.
Speaker Change: For example.
Speaker Change: We have now become the payment service provider of choice for sporting goods retailer to Caf alone, who has more than 2000 stores and nearly 80 countries.
Ryan Mcinerney: Decathlon will be using our gateway and decision manager capabilities for their e-commerce business.
Speaker Change: The Caf one will be using our gateway and decision manager capabilities for their E Commerce business.
Ryan Mcinerney: In risk and identity solutions, since the closing of our acquisition of FutureSpace, we have been actively pursuing deals and have signed over 20 clients globally. We also now provide an enhanced holistic fraud protection solution from Featurespace. called the Adaptive Real-Time Individual Change Identification or ERIC RISC-HUB. This solution utilizes machine learning and AI solutions to enable clients to build more accurate risk profiles and more confidently detect and block fraudulent transactions, ultimately helping to increase approvals and stop bad actors in real time.
Speaker Change: In risk and identity solutions since the closing of our acquisition of feature space.
Speaker Change: We have been actively pursuing deals and have signed over 20 clients globally.
Speaker Change: We also now provide an enhanced holistic fraud protection solution from feature space.
Speaker Change: Called the adaptive real time individual change identification.
Eric: Sure Eric risk hub.
Eric: This solution utilizes machine learning and AI solutions to enable clients to build more accurate risk profiles and more confidently detect and block fraudulent transactions ultimately, helping to increase approvals and stop bad actors in real time.
Eric: In advisory and other services.
Ryan Mcinerney: In advisory and other services, our open banking platform, powered by Tink, provides payment initiation and account information services to sellers and payment providers, or PSPs, across Europe and the United States. In Germany, Tink and Audion are working with ReCharge and Vodafone to provide their customers the option to pay by bank when checking out. Tink has reached a milestone of over 10,000 merchants choosing Tink's pay-by-bank capability via our more than 10 European PSP partnerships. Across our VASP portfolio, our innovations are designed to address specific challenges in the payment ecosystem and to provide secure, efficient, and scalable solutions for businesses of all sizes.
Eric: Our open banking platform powered by Pink provides payment initiation and account information services to sellers and payment providers or P. S peers across Europe, and the United States.
Eric: In Germany, Timken audiences are working with recharge and Vodafone to provide their customers the option to pay by bank when checking out.
Eric: Pink has reached a milestone of over 10000 merchants choosing <unk> pay by bank capability.
Eric: We are more than 10 European PSP partnerships.
Eric: Across our vast portfolio. Our innovations are designed to address specific challenges in the payments ecosystem and to provide secure efficient and scalable solutions for businesses of all sizes.
Eric: At Investor Day, I spoke about the evolution of our visa as a service stack.
Ryan Mcinerney: At Investor Day, I spoke about the evolution of our Visa-as-a-Service stack. The foundation of our stack is our global connectivity and the infrastructure that Visa is built on. Our network, our network of networks, and access to our credentials and acceptance. Then we have our services architecture, which contains the specific capabilities that we think of as the building blocks for everything that we do, like risk, settlement, and more. Using these services, we create client solutions. We are taking these componentized capabilities and investing in and enhancing them to create new features and capabilities to offer them to a much broader array of customers and partners.
Eric: The foundation of our stack is our global connectivity and the infrastructure that visa is built on our network our network of networks and access to our credentials and acceptance.
Eric: Then we have our services architecture.
Eric: Which contains the specific capabilities that we think of as the building blocks for everything that we do like risk settlement and more.
Eric: Using these services, we create client solutions.
Eric: We are taking these components size capabilities and investing in and enhancing them to create new features and capabilities to offer them to a much broader array of customers and partners.
Ryan Mcinerney: and we strive to make it easier than ever for our partners and clients to access these solutions.
Eric: And we strive to make it easier than ever for our partners and clients to access these solutions.
Ryan Mcinerney: I encourage all of you to tune in tomorrow to Visa's 2025 product wrap, where we will share how we continue to evolve the Visa-as-a-Service SPAC to further our product development and lead in AI. You can watch live on our website at 10 a.m. Pacific time.
Eric: I encourage all of you to tune in tomorrow to visa 2025 product Trump, where we will share how we continue to evolve the visa as a service back to further our product development and lead in AI.
Eric: You can watch live on our website at 10, a M Pacific time.
Eric: Before I hand over to Chris.
Ryan Mcinerney: Before I hand over to Chris, I'll share some thoughts on our business performance and the current environment. Throughout our history, we have evolved our network and strategy to deliver the best innovation, serve our clients, and pioneer the future of payments. We saw the result of these efforts this quarter with our strong financial performance. Halfway through our fiscal year, consumer spending has been resilient and strong, but there's much uncertainty. Focusing on the U.S., in Q2 and through April 21st, we have not seen any signs of overall consumer spending weakening. While spending growth differs among consumer spend bans, with the most affluent growing the fastest, All spend bans remain resilient and consistent with past quarters.
Eric: I'll share some thoughts on our business performance and the current environment.
Eric: Throughout our history.
Eric: We have evolved our networking strategy to deliver the best innovation serve our clients and pioneer the future of payments.
Eric: We saw the result of these efforts this quarter with our strong financial performance.
Eric: Halfway through our fiscal year.
Eric: Consumer spending has been resilient and strong but there is much uncertainty.
Eric: Focusing on the U S in Q2 and through April 21, we.
Eric: We have not seen any signs of overall consumer spending weakening.
Eric: While spending growth differs among consumer spend bands with the most affluent growing the fastest.
Eric: All spend bands remained resilient and consistent with past quarters.
Eric: Within spend categories. There are some select areas such as in travel with airlines in lodging where growth has decelerated.
Ryan Mcinerney: Within spend categories, there are some select areas, such as in travel, with airlines and lodging, where growth has decelerated, but overall discretionary and non-discretionary spend remains strong. Outside the U.S., we see similar stable trends. Within cross-border, volume growth was in line with Q4 2024 levels. We have seen some impacts from currency weakness and travel to specific countries, but the overall growth was above the pre-COVID trend.
Eric: But overall discretionary and non discretionary spend remains strong.
Eric: Outside the U S. We see similar stable trends.
Eric: Within cross border volume.
Eric: Volume growth was in line with Q4 2024 levels.
Eric: We have seen some impacts from currency weakness and travel the specific countries.
Eric: But the overall growth was above the pre COVID-19 trend.
Eric: To wrap up.
Ryan Mcinerney: To wrap up. While we are certainly not immune to the macroeconomic impacts, our incredibly diverse business model has proven to be resilient in the face of a variety of environments, most recently in Q2. and we see this resilience playing out in our financial outlook which Chris will cover in a moment. For the rest of the year and beyond, what I, our leadership team, and our more than 31,600 employees are focused on is serving our clients and capturing the enormous opportunities ahead. We focus on what we can control and stand ready to make thoughtful adjustments when necessary.
Eric: While we are certainly not immune to the macroeconomic impacts are incredibly diverse business model has proven to be resilient in the face of a variety of environments. Most recently in Q2.
Eric: And we see this resilience playing out in our financial outlook, which Chris will cover in a moment.
Eric: For the rest of the year and beyond what are our leadership team and our more than 31600 employees are focused on is serving our clients and capturing the enormous opportunities ahead.
Eric: We focus on what we can control and stand ready to make thoughtful adjustments when necessary.
Eric: I am confident that our business model strategy and employees will continue to keep visa operating from a position of strength well into the future.
Ryan Mcinerney: I am confident that our business model, strategy, and employees will continue to keep Visa operating from a position of strength well into the future.
Chris Suh: And with that, I'll turn it over to Chris to review the financial results, discuss what we have seen so far in April, and provide our expectations for the rest of the year. Thanks, Ryan. And good afternoon, everyone. Our second quarter results reflected strength in our business. In constant dollars, global payments volume was up 8% year-over-year, and cross-border volume, excluding intra-Europe, was up 13% year-over-year. Total process transactions grew 9%. Adjusting for the lapping of leap year, our trends were generally stable. Fiscal second quarter net revenue was up 9% year over year in nominal dollars and 11% in constant dollars.
Eric: And with that.
Eric: I'll turn it over to Chris to review the financial results discuss what we have seen so far in April and provide our expectations for the rest of the year.
Chris Saw: Thanks, Ryan and good afternoon, everyone.
Chris Saw: Our second quarter results reflected strength in our business.
Chris Saw: In constant dollars global payments volume was up 8% year over year and cross border volume, excluding intra Europe was up 13% year over year.
Total processed transactions grew 9%.
Chris Saw: Adjusting for the lapping of leap year, our trends were generally stable.
Chris Saw: Fiscal second quarter net revenue was up 9% year over year in nominal dollars and 11% in constant dollars.
Chris Suh: Helped by resilient consumer spending, lower-than-expected incentives, and better-than-expected value-added services revenue. EPS was up 10% year-over-year and 11% in cost of dollars. Better than expected, primarily due to stronger operating performance and a lower tax rate than expected.
Speaker Change: Helped by resilient consumer spending lower than expected incentives.
Chris Saw: And better than expected value added services revenue.
Chris Saw: EPS was up 10% year over year, and 11% in constant dollars better than expected primarily due to stronger operating performance.
Chris Saw: And a lower tax rate than expected.
Chris Suh: Let's go into the details. Total international payments volume was up 9% year-over-year in constant dollars in Q2, relatively consistent with Q1 when adjusted for leap year. U.S. payments volume was up 6% with e-commerce growing faster than face-to-face spend. Credit was up 5% and debit was up 7%. When we look on a monthly basis in the US, we had a strong January, a dip in February, primarily due to the lapping of leap year, and a relatively strong March, even with the fact that Easter was in March last year, and in April this year, which resulted in Q2 year over year growth being below Q1, but better than Q3 and Q4 of 2024.
Chris Saw: Let's go into the details.
Chris Saw: Total international payments volume was up 9% year over year in constant dollars in Q2 <unk>.
Chris Saw: Relatively consistent with Q1, when adjusted for leap year.
Chris Saw: U S payments volume was up 6% with e-commerce growing faster than face to face spend.
Chris Saw: Credit was up 5% and debit was up 7%.
Chris Saw: When we look on a monthly basis in the U S. We had a strong January a dip in February primarily due to the lapping of leap year and a relatively strong March even with the fact that Easter was in March last year and in April this year.
Chris Saw: Which resulted in Q2 year over year growth being below Q1, but better than Q3, and Q4 of 2020 for us.
Chris Suh: For more information, please visit www.cemea.org. When looking further at quarterly spend category data in the U.S. adjusted for leap year, we saw travel and entertainment growth decelerate, restaurant growth remained stable, and retail and fuel growth improved. with strong and stable total discretionary and non-discretionary spend growth, reflecting resilience in consumer spending.
Chris Saw: When looking further at quarterly spend category data in the U S. Adjusted for Leap year, we saw travel and entertainment growth decelerate.
Chris Saw: Restaurant growth remained stable and retail and fueled growth in print.
Chris Saw: With strong and stable total discretionary and non discretionary spend growth, reflecting resilience and consumer spending.
Chris Saw: Now the cross border volume, which I'll speak to in constant dollars and excluding intra Europe transactions.
Chris Suh: Now to cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Before going into the detailed results, I wanted to spend a moment to discuss the makeup of our cross-border business. From a geographic mix perspective, our total cross-border volume is fairly well distributed, with no reported region comprising more than 25% of total cross-border issued volume. Both e-commerce and travel issued volume reflect a broad distribution as well. You may also recall that our total cross-border issued volume mix is about 40% e-commerce and 60% travel, so there is diversity by region and by spend type.
Chris Saw: Before going into the detailed results I wanted to spend a moment to discuss the makeup of our cross border business.
Chris Saw: From a geographic mix perspective, our total cross border volume is fairly well distributed.
Chris Saw: With no reported region, comprising more than 25% of total cross border issued volume.
Chris Saw: Both E Commerce and travel issued volume reflect a broad distribution as well.
Chris Saw: You May also recall that our total cross border issued volume mix is about 40% e-commerce and 60% travel.
Chris Saw: So there is diversity by region and by spend type.
Chris Saw: Keep in mind that just as our cross border volumes are distributed so are the associated revenues.
Chris Suh: Keep in mind that just as our cross-border volumes are distributed, so are the associated revenue.
Chris Saw: Now onto the results.
Chris Suh: Now on to the results. Total cross-border volume was up 13%. e-commerce was up 14% and travel was up 12%. There were several factors that contributed to the growth moderation from Q1 to Q2, including the lapping of leap year, the timing of Ramadan and Easter, weaker currencies in certain countries, and Softer Canada to U.S. Travel. Some of these factors impacted our intra-quarter trends, which varied slightly for U.S. payment volume trends. While we saw a strong January and a February impacted by leap year, we did see a somewhat softer mud. Even with these factors, as Ryan mentioned, the total cross-border volume growth was in line with Q4 2024 levels and above the pre-COVID trend.
Chris Saw: Cross border volume was up 13%.
Chris Saw: E Commerce was up 14% and travel was up 12%.
Chris Saw: There were several factors that contributed to the growth moderation from Q1 to Q2, including the lapping a leap year.
Chris Saw: The timing of Ramadan and Easter.
Chris Saw: Weaker currencies in certain countries.
Chris Saw: And softer Canada to U S travel.
Chris Saw: Some of these factors impacted our intra quarter trends, which varied slightly for U S payment volume trends.
Chris Saw: While we saw a strong January and February impacted by leap year, we did see a somewhat softer much.
Ryan Mcinerney: Even with these factors as Ryan mentioned, the total cross border volume growth was in line with Q4 2024 levels and above the pre COVID-19 trends.
Speaker Change: With that as a backdrop I'll move to discuss our financial results, which were strong.
Chris Suh: With that as a backdrop, I'll move to discuss our financial results, which were strong. starting with the revenue component. Service revenue grew 9% year-over-year versus the 9% growth in Q1 constant dollar payments volume. Data Processing Revenue grew 10% versus 9% process transaction growth, primarily due to value-added services and pricing. international transaction revenue was up 10% below the 13% increase in constant dollar cross-border volume excluding intra-europe but in line with nominal volume growth reflecting the impact of FX In addition, while we had higher volatility in Q2, this was offset by a number of factors, including client mix and hedging.
Ryan Mcinerney: Starting with the revenue components.
Ryan Mcinerney: Service revenue grew 9% year over year versus the 9% growth in Q1 constant dollar payments volume.
Ryan Mcinerney: Data processing revenue grew 10% versus 9% processed transaction growth.
Ryan Mcinerney: Primarily due to value added services and pricing.
Ryan Mcinerney: International transaction revenue was up 10%.
Ryan Mcinerney: Below the 13% increase in constant dollar cross border volume, excluding intra Europe, but in line with nominal volume growth, reflecting the impact of FX.
Ryan Mcinerney: In addition, while we had higher volatility in Q2. This was offset by a number of factors, including client mix and hedging.
Ryan Mcinerney: Other revenue grew 24%, primarily driven by growth in advisory and other value added services and to a lesser extent pricing.
Chris Suh: Other revenue grew 24%, primarily driven by growth in advisory and other value-added services, and to a lesser extent, pricing. Client incentives grew 15%, lower than expected, primarily due to factors related to deal timing.
Ryan Mcinerney: Client incentives grew 15% lower than expected primarily due to factors related to deal timing.
Ryan Mcinerney: Now to our three growth engines.
Chris Suh: Now to our three growth engines. Consumer payments revenue was driven by strong payments volume. cross-border volume, and process transaction growth. Commercial and money movement solutions revenue grew 13% year-over-year in constant dollars driven by commercial payment volume growth of 6% year-over-year in constant dollars consistent with last quarter and Visa direct transaction growth of 28% year-over-year to 3 billion transactions, below Q1 growth primarily due to the lapping of our initial ramp in Latin America for interoperability among P2P apps and the lapping of LeapYear. CMS revenue growth in Q2 moderated from the first quarter primarily due to lower cross-border volume growth and the absence of the lapping benefit of one-time items. Value-added services revenue growth accelerated to 22% in Cotsen dollars to $2.6 billion with strength across all portfolios led by issuing solutions and advisory and other and inclusive of feature space.
Ryan Mcinerney: Consumer payments revenue was driven by strong payments volume.
Ryan Mcinerney: Cross border volume and processed transaction growth.
Ryan Mcinerney: Commercial and money movement solutions revenue grew 13% year over year in constant dollars driven by commercial payment volume growth of 6% year over year in constant dollars consistent with last quarter.
Ryan Mcinerney: And visa direct transaction growth of 28% year over year to 3 billion transactions below Q1 growth primarily due to the lapping of our initial ramp in Latin America for inter Operability among P to P apps and the lapping of leap year.
Ryan Mcinerney: Yeah.
Ryan Mcinerney: CMS revenue growth in Q2 moderated from the first quarter, primarily due to lower cross border volume growth and the absence of the lapping benefit of onetime items.
Ryan Mcinerney: Value added services revenue growth accelerated to 22% in constant dollars to $2 $6 billion with strength across all portfolios led by issuing solutions and advisory and other and inclusive of feature space.
Ryan Mcinerney: Operating expenses grew 7%, primarily driven by increases in personnel marketing and depreciation and amortization.
Chris Suh: Operating expenses group 7%, primarily driven by increases in personnel, marketing, and depreciation and amortization. This was lower than we expected, primarily due to a more favorable FX impact from balance sheet remeasurement and some marketing campaigns and advisory services related expenses being shifted to Q3. Our tax rate for the quarter was 16.9%, lower than expected due to several items, including a change in our geographic mix of earnings. EPS was $2.76, up 10% over last year, with an approximately one and a half point drag from exchange rates and an approximately half point drag from acquisitions.
Ryan Mcinerney: This was lower than we expected primarily due to a more favorable FX impact from balance sheet, Remeasurement and some marketing campaigns and advisory services related expenses being shifted to Q3.
Ryan Mcinerney: Our tax rate for the quarter was 16, 9% lower than expected due to several items, including a change in our geographic mix of earnings.
Ryan Mcinerney: EPS was $2 76 up 10% over last year within approximately one and a half point drag from exchange rates and an approximately half point drag from acquisitions.
Ryan Mcinerney: In Q2, we bought back approximately $4 $5 billion in stock and distributed $1 $2 billion in dividends to our stockholders.
Chris Suh: In Q2, we bought back approximately $4.5 billion in stock and distributed $1.2 billion in dividends to our stockholders. At the end of March, we had $4.7 billion remaining in our buyback authorization.
Ryan Mcinerney: At the end of March we had $4 7 billion remaining in our buyback authorization and.
Chris Suh: And in April, the Board of Directors authorized a new $30 billion multi-year share repurchase program.
Ryan Mcinerney: And in April the board of directors authorized a new 30 billion dollar multiyear share repurchase program.
Ryan Mcinerney: Now, let's move to what we've seen so far in Q3.
Chris Suh: Now let's move to what we've seen so far in Q3. Through April 21st, driver trends have been strong, with some benefit from Easter and Ramadan timing. U.S. payment volume was up 8%, with debit up 9% and credit up 7% year-over-year. Process transactions grew 12% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total travel and e-commerce cross-border volume each grew 13% year-over-year.
Ryan Mcinerney: Through April 21st driver trends have been strong with some benefit from Easter and Ramadan timing.
Ryan Mcinerney: U S payment volume was up 8% with debit up 9% and credit up 7% year over year.
Ryan Mcinerney: Processed transactions grew 12% year over year.
Ryan Mcinerney: For constant dollar cross border volume excluding transactions within Europe.
Ryan Mcinerney: Total travel and E Commerce Cross border volume each grew 13% year over year.
Ryan Mcinerney: Now onto our expectations remember that adjusted basis as defined as non-GAAP results in constant dollars and excluding acquisition impacts you.
Chris Suh: Now on to our expectations. Remember that adjusted basis is defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. As we've said many times, we are not economic forecasters. The potential impacts from tariffs have led to higher levels of economic uncertainty. That being said, what we've seen thus far in our results is relative resilience in consumer spending. So with that as a backdrop, let me cover some of our key assumptions that are incorporated. For cross-border volume, our assumption is that Q3 and Q4 volumes are in line with the average of March and April, which normalizes for Easter and Ramadan timing, as well as accounts for other factors I referenced when describing Q2 results.
Ryan Mcinerney: You can review these disclosures in our earnings presentation for more detail.
Ryan Mcinerney: As we said many times, we are not economic forecasters the.
Ryan Mcinerney: The potential impacts from tariffs have led to higher levels of economic uncertainty.
Ryan Mcinerney: That being said, what we've seen thus far in our results is relative resilience and consumer spending.
Ryan Mcinerney: So with that as a backdrop, let me cover some of our key assumptions that are incorporated.
Ryan Mcinerney: For cross border volume, our assumption is that Q3 and Q4 volumes are in line with the average of March and April, which normalizes for Easter and Ramadan timing.
Ryan Mcinerney: As well as accounts for other factors I referenced when describing Q2 results.
Ryan Mcinerney: This puts Q3 and Q4 cross border volume growth slightly below Q4 2024 levels.
Chris Suh: This puts Q3 and Q4 cross-border volume growth slightly below Q4 2024 levels. For volatility, we have seen high FX volatility thus far in April, but assume this will moderate starting in May and remain level for the remainder of Q3 and Q4. This puts Q3 just above Q2 and Q4 more in line with Q2. For incentives, as a result of some client performance adjustments and deal timing, we are assuming that the year-over-year growth in incentives in the back half will be higher than the first half, with sequential step-ups in Q3 and Q4. Pulling it all together, we expect third quarter adjusted net revenue growth in the low double digits, essentially in line with Q2.
Ryan Mcinerney: For volatility we have seen high FX volatility thus far in April but assume this will moderate starting in may and remained level for the remainder of Q3 and Q4.
Ryan Mcinerney: This puts Q3, just above Q2 and Q4 more in line with Q2.
Ryan Mcinerney: For incentives as a result of some client performance adjustments and deal timing, we are assuming that the year over year growth in incentives in the back half will be higher than the first half with sequential step ups in Q3 and Q4.
Ryan Mcinerney: Putting it altogether, we expect third quarter adjusted net revenue growth in the low double digits essentially in line with Q2.
Ryan Mcinerney: Moving to operating expenses as we had some timing impacts of expenses in the second quarter. We now expect those to occur in the third quarter with adjusted operating expense growth in the low double digits relatively consistent with adjusted revenue growth.
Chris Suh: Moving to operating expenses. As we had some tiny impacts of expenses in the second quarter, we now expect those to occur in the third quarter with adjusted operating expense growth in the low double digits, relatively consistent with adjusted revenue growth. Non-operating income in the third quarter is expected to be approximately $150 million, which includes a benefit from the reversal of accrued interest expense due to the resolution of a tax banner. and our tax rate in the third quarter is expected to be between 17 and 17.5 percent. As a result, we expect third-quarter adjusted EPS growth to be in the high teens.
Ryan Mcinerney: Non operating income in the third quarter is expected to be approximately $150 million, which includes a benefit from the reversal of accrued interest expense due to the resolution of a tax matter.
Ryan Mcinerney: And our tax rate in the third quarter is expected to be between 17 and 17, 5%.
Ryan Mcinerney: As a result, we expect third quarter adjusted EPS growth to be in the high teens.
Chris Suh: For acquisition impacts, we expect a minimal benefit to net revenue growth, an approximately one-point contribution to operating expense growth, and an approximately half-point headwind to EPS growth in the third quarter.
Ryan Mcinerney: The acquisition impacts, we expect a minimal benefit to net revenue growth and approximately one point contribution to operating expense growth and an approximately half point headwind to EPS growth in the third quarter.
Ryan Mcinerney: Moving now to the full year.
Chris Suh: Moving now to the full year. Our full year guidance for adjusted revenue growth, adjusted operating expense growth, non-operating income, tax rate, and adjusted EPS growth remains unchanged.
Ryan Mcinerney: Our full year guidance for adjusted revenue growth adjusted operating expense growth non operating income tax rate and adjusted EPS growth remains unchanged.
Ryan Mcinerney: In summary, we delivered another strong quarter in Q2, and our business remains steady.
Chris Suh: In summary, we delivered another strong quarter in Q2, and our business remains steady. As Ryan said, throughout our history, we've managed through different economic cycles, and we're confident we'll manage through this period as well.
Ryan Mcinerney: As Ryan said throughout our history, we've manage through different economic cycles, and we're confident we'll manage through this period as well.
Jennifer Como: Now Jennifer, it's time for some Q&A. Thanks, Chris. And with that, we're ready to take questions.
Speaker Change: Now Jennifer it's time for some Q&A.
Jennifer: Thanks, Chris and with that we're ready to take questions.
Speaker Change: If you would like to ask a question. Please press star and one and clearly you record your name will be announced prior to asking your question to ensure all questions I heard we ask that you. Please limit yourself to one question again to ask a question. Please press star one to withdraw your question Press Star two.
Jennifer Como: If you would like to ask a question, please press star and one and clearly record your You will be announced prior to asking your To ensure all questions are heard, we ask that you please limit yourself to one question. Again, to ask a question, please press star 1. To withdraw your question, press star 2.
Tianjin Wang: Our first question comes from Tianjin Wang from JPMorgan.
Unidentified Moderator: First question comes from Tien Tsin Huang from JP Morgan. Please go ahead.
Tianjin Wang: Please go ahead. Hey, thanks a lot. Good results here. Looks like the consumer is pretty resilient.
Speaker Change: Thanks, a lot good results here it looks like the consumer is pretty resilient. So beyond volumes I wanted to ask if you've seen any noticeable change in.
Ryan Mcinerney: So beyond volumes, I wanted to ask if you've seen any noticeable change in tone on client decision making, pipelines, backlog. I'm definitely curious about international clients and maybe if they're changing the speed with which they're working with Visa. Thanks.
Unidentified Moderator: And cone on client decision, making pipeline backlog and.
Speaker Change: That's a curious out international clients and.
Unidentified Moderator: And maybe if they are changing the speed with which they are working with with visa.
Speaker Change: Hi, Tien tsin.
Ryan Mcinerney: Hi, Tim Jin. The bulk of the time we've been spending with clients over the last several months has been sharing our data, sharing our products and solutions, working with our advisory teams, really helping them to navigate this environment. That's been the bulk of what we've been doing. I mean, this is the time when we try to be at our best with our clients. I talk to our teams every week to make sure they're out in the offices of our clients, leaning in to work with them. And that's been the bulk of how we've been spending time with our clients, helping them make sure they have all the data and information and tools and solutions they need to run their business most effectively, which many of them run very, very complicated businesses.
Speaker Change: The bulk of the time, we've been spending with clients over the last several months has been sharing our data sharing our products and solutions working with our advisory teams really helping them to navigate this environment.
Speaker Change: That's been the bulk of what we've been doing I mean this is this is the time when we try to be at our best with our clients.
Speaker Change: We I talked to our teams every week to make sure they're out in the offices of our clients' leaning in to work with them and that's been the bulk of how we've been spending time with our clients, helping them make sure. They have all the data and information and tools and solutions they need to run their business, most effectively which you know many of them run very very complicated businesses.
Speaker Change: Yes over time, there could be conversations about partnership arrangements and deals and those types of things, but that's not been the bulk of that we've been spending our time today.
Ryan Mcinerney: Over time, there could be conversations about partnership arrangements and deals and those types of things, but that's not been the bulk of how we've been spending our time today.
James Faucette: Next question. Next we'll go to the line of James Faucette from Morgan Stanley. Please go ahead. Thank you so much. Wanted to ask about what you're seeing around out bookings around international travel and travel generally, you highlighted there been a little of slowing growth there maybe domestically but overall still remain good and maybe impacted by FX etc but we've seen a lot of FX moves so just wondering how you're feeling about the travel outlook on a go-forward basis and anything you Hi, James. Yeah, we covered a number of moving parts in our travel and cross-border business as it impacted Q2 and gave some assumptions about what we anticipated going into the back half of the year.
Next question.
Speaker Change: Next we'll go to the line of James Faucette from Morgan Stanley. Please go ahead.
James Faucette: Thank you so much wanted to ask about what you're seeing around our bookings around international travel and travel generally you highlighted there'd been a little bit of.
James Faucette: Slowing growth there maybe domestically, but overall, it's still remain good.
James Faucette: And may be impacted by FX et cetera, but we've seen a lot of FX moves. So just wondering how you're feeling about the travel outlook on a go forward basis and anything you can glean from from early bookings et cetera. Thanks.
Speaker Change: Hi, James.
Speaker Change: Yes, we covered a number of moving parts in our travel and cross border.
Speaker Change: As it impacted Q2.
Speaker Change: And gave some assumptions about what we anticipated going into the back half of the year.
Ryan Mcinerney: I think I'll make two points. One is I think I'll make two points. One is Obviously, the situation is quite fluid. And we're monitoring the data very closely. And we're really relying on facts and facts and the results as we see them. But the second point maybe is even more important is that, you know, when we look across our business, you know, we talked about the diversity of our business across in many dimensions, regional is one of them. But certainly, when we look at our cross border business, whether that's issued or acquired, we also benefit from that diversity.
Speaker Change: I'll make two points one is.
Speaker Change: Obviously the situation is quite fluid.
And we're monitoring the data very closely and we're really relying on facts and facts and the results as we see them.
Speaker Change: But the second point, maybe is even more important is that you know when we look across our business. We talk about the diversity of our business across many dimensions regional is one of them, but certainly when we look at our cross border business, whether thats issued or acquired we also benefit from that diversity and.
Ryan Mcinerney: And when it comes to inbound travel into the US, the US specifically, actually, is one of the smaller regions, as measured by cross border inbound travel volume, even though it does have strong yields. And so, you know, we just keep that in mind, we'll have to watch how the data comes in. But we have great diversification in our cross border business.
Speaker Change: When it comes to inbound travel into the U S. The U S. Specifically actually is one of the smaller regions as measured by cross border inbound travel volume, even though it does have strong yields and so we just keep that in mind, we will have to watch how the data comes in but but we have great diversification in our cross border business and.
Sanjay Sakhrani: And we anticipate that we'll be able to navigate this period Next question.
Speaker Change: We anticipate that we'll be able to navigate this period.
Speaker Change: Next question.
Sanjay Sakhrani: Next we'll go to the line of Sanjay Sakhrani from KBW. Please go ahead. Thank you. Chris, just to follow up on your point just now on the corridors and the U.S. Obviously, we're hearing a lot of travel information, how things are falling off coming into the US, especially from Canada. Maybe you could just talk about what kind of assumptions for the remainder of this year. Because I know that has an impact on sort of the economic return from each of those corridors. So maybe you could just help us with that. And then just curious, inside of the volumes that you saw intra quarter and even early in April, did you see any evidence of a pull forward of spending?
Speaker Change: Next we'll go to the line of Sanjay Sock Ronnie from K B W. Please go ahead.
Speaker Change: Thank you Chris just a follow up on your point just just now on the core doors in the U S. One specifically, obviously, we're hearing a lot of travel information how things are falling off coming into the U S, especially from Canada, maybe you could just talk about what kind of assumptions you've made for the remainder of this year because I know that has an impact.
Speaker Change: Act on sort of.
Speaker Change: The economic return from each of those quarters. So maybe you can just help us with that and then just curious inside of the volumes that you saw intra quarter uneven early in April did you see any evidence of a pull forward of spending.
Speaker Change: Got it <unk> too.
Sanjay Sakhrani: Got it.
Sanjay Sakhrani: Hi, Sanjay. Two part question. Let me address actually the second one first, because that's a quick one. There was some evidence of pull forward in certain categories. Electronics is one of them. And it was mostly in sort of the first part of April, and we shared with you the data through the 21st. And actually, while I'm speaking about April, you know, I just saw the data through the 28th, just this morning. And that's, you know, relatively unchanged as well. And so there's no meaningful differences even as we get further into April. And so from a pull forward standpoint, you know, we may have seen a little bit in the first part of April, but all by and large, not a meaningful impact to our total growth.
Speaker Change: Two part question, let me address actually the second one first because that's a quick one there was some evidence of pull forward.
Speaker Change: Certain categories electronics is one of them and it was mostly in sort of the first part.
Speaker Change: April and we shared with you the data through the 'twenty, one and actually while I'm speaking about April I just saw the data through the 28th just this morning, and that's relatively unchanged as well and so there's no meaningful differences, even as we get further into April and so from a cohort stand.
Speaker Change: We may have seen a little bit in the first part of April but.
Speaker Change: By and large not a.
Speaker Change: Meaningful impact to our total growth.
Sanjay Sakhrani: And then going back to cross border assumptions. So I shared a number of them, and I went through, you know, in my prepared comments, the number of the items that impacted the cross-border numbers in the month of March and as it pertained also to the month of April. Ramadan and Easter were two that had timing differences that impacted March and April. But then I spoke to two other factors. One, a broader category around currency weaknesses. And currency weaknesses have an impact on purchasing power, obviously, abroad. We had the U.S. dollar weakening, but we also had currency weaknesses in L.A.C., in Mexico, in different countries throughout Asia.
Speaker Change: Then going back to cross border assumptions, so I shared a number of them.
Speaker Change: Through in my prepared comments the number of the items.
Speaker Change: That impacted the cross border numbers in the month of March and as it as it pertained also to the month of April.
Ramadan and Easter, we're too that that had timing differences that impacted March and April, but then I spoke to two other factors one a broader category around currency weaknesses and Kirsten currency weaknesses have an impact on purchasing power obviously abroad.
The U S dollar weakening, but we also had currency weaknesses in L. A C in Mexico in different countries throughout Asia and so that's also impacting the results that we saw in March and April and then the last one of course is Canada and I referenced it on the call I could give a little bit more color I mean, we did.
Sanjay Sakhrani: And so that's also impacting the results that we saw in March and April.
Sanjay Sakhrani: And then the last one, of course, is Canada. And I referenced it on the call. I could give a little bit more color. I mean, we did see a meaningful slowdown in the Canada to U.S. border. But again, keep in mind the diversification of our business. And so, you know, the fact that, you know, as I just mentioned in the last question, the fact that the U.S. is one of the smaller regions as measured by cross-border travel inbound volumes. And so when you add that up, it's really not a – it's a very small percentage of our global travel volume and the revenue impact shouldn't be meaningful.
Speaker Change: See a meaningful slowdown in the Canada U S border, but again keep in mind the diversification of our business.
Speaker Change: And so the fact that as I can.
Speaker Change: As mentioned in the last question. The fact that the U S is one of the smaller regions as measured by cross border travel inbound volumes and so when you add that up it's really not it's a very small percentage of our global travel volume and the revenue impact shouldn't be meaningful and so what we did in terms of assumptions as we took the average of March and April.
Sanjay Sakhrani: And so what we did in terms of assumptions is we took the average of March and April, which we think accounts for all of those items, and we extended that through the remainder of the fiscal year. And that would put cross-border at just below what we finished FY24 at in Q4.
Speaker Change: Which we think accounts for all of those items.
Speaker Change: And we extended that through the remainder of the fiscal year and that would put cross border at just below what we finished.
Speaker Change: FY 'twenty four.
Speaker Change: In Q4.
Andrew Schmidt: Next question.
Speaker Change: Next question.
Speaker Change: Next we'll go to the line of Andrew Schmidt from Citi. Please go ahead.
Andrew Schmidt: Next we'll go to the line of Andrew Schmidt from Citi, please go ahead. Hi Ryan, hey Chris, thanks for taking the question. um maybe get dig into value-add services a good to see the robust growth there uh maybe you just unpack that just talk about your viewpoint of how that performs through the cycle obviously there's a range of revenue models and their transaction-based project-based and recurring services but if you don't pack that'd be great and then any detail on how you're thinking about that services growth in the back half would also be great. Yeah, why don't I just talk a little bit about the business.
Speaker Change: Hey, Brian Hey, Chris Thanks for taking the questions evening.
Speaker Change: Maybe just dig into value added services are good to see the robust growth. There maybe you can just unpack that just talk about your viewpoint on how that performs through the cycle, obviously theres a range of revenue models and their transaction based project based and recurring subscription.
Speaker Change: But if you could unpack that would be great and then any detail on how youre thinking about that services growth in the back half would also be helpful. Thanks, So much.
Speaker Change: Yeah, why don't you talk a little bit about the business and then Chris I'll, Let you talk about some of the financial aspects of the question. Both in terms of what drove the strong performance in the quarter and also.
Ryan Mcinerney: And then Chris, I'll let you talk about some of the financial aspects of the question, both in terms of what drove the strong performance in the quarter and also where things are headed. Yeah, we just we feel really good about the strategy, our execution, our products. You know, I highlighted some some really exciting new products in my prepared remarks. And, you know, I was just going to go back to some of the things we shared with you at yesterday about our execution approach. You know, we're you know, we've got you asked a little bit about some of the business drivers of what happens there.
Speaker Change: Where things are headed.
Speaker Change: Yeah, we just we feel really good about the.
Speaker Change: Our strategy our execution our products.
Speaker Change: I highlighted.
Speaker Change: Some really exciting new products in my prepared remarks.
Speaker Change: And I was just going to go back to some of the things we shared with you at Investor day about our execution approach.
Speaker Change: Got you.
Speaker Change: You asked a little bit about some of the business drivers of what happens there and we said about 65% of our revenue is really about enhancing visa payments.
Ryan Mcinerney: And we've said, you know, about 65% of our revenue is really about enhancing visa payments. But we've been really making a lot of progress on the incremental opportunities to enable all different types of payments, not just visa payments, and the services that then go beyond payments. If I, you know, kind of go back to an example in my prepared remarks, you know, I talked about the authorized.net platform that we've relaunched and we're relaunching. That's a great example of enabling all different types of payments. And that's going to be, we think, a really positive impact in the market specifically focused on growing our share in small business checkout.
Speaker Change: We've been really making a lot of progress on the incremental opportunities to enable all different types of payments not just visa payments.
And the services that then go beyond payments.
Speaker Change: Hi.
Speaker Change: Go back to an example in my prepared remarks I talked about.
The authorized dot net platform that we've relaunched and we're relaunching that is a great example of enabling all different types of payments and that's going to be we think a really positive impact in the market specifically focused on growing our share in small business checkout.
Chris Suh: You go back to what I mentioned in terms of our unified checkout experience that will impact all different sizes of sellers on our platforms. You know, those are two examples, obviously, in the acceptance business. But if you go back to our issuing solutions business, we're having great progress with Pismo and a lot of our other solutions there as well. Our risk and security solutions business, really excited about the progress in market we've made since we acquired feature space. And then, you know, in our advisory and other business, we've been having some really strong success as well.
Speaker Change: Go back to what I mentioned in terms of our unified checkout experience that will impact all different sizes of sellers.
Speaker Change: On our platforms. Those are two examples obviously and the acceptance business, but let me go back to our issuing solutions business, we're having great progress with Pismo and a lot of our other solutions there as well our risk and security solutions business are really excited about the progress in market. We've made since we acquired feature space.
Speaker Change: Then.
Speaker Change: Advisory and other business, we've been having some really strong success as well so thanks.
Chris Suh: So thanks for that question.
Chris Suh: Chris, you want to hit a couple of the financial parts of it? Sure, I'll just add on top of that. You know, I think, Andrew, I think the heart of your question is, you know, how, in addition, obviously, Ryan covered all the, you know, sort of the highlights of the business performance, I won't reiterate those. But I think, you know, part of your question was what could potentially happen to VAS in different sorts of cycles. And the way that I would, you know, think about it, the way we think about it is obviously, you know, a lot could happen, we're monitoring the, you know, sort of the macro situation, we're not economic forecasters.
Speaker Change: Thanks for that question, Chris you want to hit a couple of the financial parts of Asia or I'll, just add on top of that.
Speaker Change: I think Andrew I think the heart of your question is how in addition, obviously Ryan covered all the sort of the highlights of the business performance.
Speaker Change: Reiterate those but I think part of your question was what what could potentially happen to vas and different sorts of cycles and the way that I would think about it the way we think about it is obviously.
Speaker Change: A lot could happen we're monitoring.
Speaker Change: Sort of the macro situation, we were not economic forecasters.
Chris Suh: But the thing I'll say about our business, you know, I made the point about diversity previously, you know, what does that mean, you know, with a little bit more color, you know, we have, for example, our business today, you know, if I compare it to previous economic cycles, we have more exposure to everyday spending, we have a bigger debit business, we have more e-commerce spend, we're more diverse geographically. And so, you know, you got to think about sort of how the business might get impacted today, and it might be different from previous cycles, and we do have, you know, greater diversification broadly.
Speaker Change: The thing I'll say about our business and I made the point about diversity.
Speaker Change: Previously what does that mean.
Speaker Change: With a little bit more color. We have for example, our business today, if I compare it to previous economic cycles, we have more.
Ryan Mcinerney: Exposure to everyday spending we have a bigger debit business, we have more e-commerce spend we're more diverse geographically and so you've got to think about sort of how the business might get impacted today and it might be different from previous cycles, and we do have greater diversification broadly and then as it comes to that specifically as Ryan.
Chris Suh: And then as it comes to VAS, specifically, as Ryan said, there's a, you know, 65% of the business has a close correlation to visa transactions. And so that part, you know, depending on how the business would respond, could have a closer relationship, but there's a great diversification there as well, as we have a good portion of the VAS business that is independent of visa transactions. And so, you know, when I think about that in total, I think there's a good resilience and diversification there as well.
Speaker Change: There is a.
Speaker Change: 65% of the business has a close correlation to visa transactions.
Speaker Change: And so that part depending on how the business would respond could have a closer relationship but there is a great diversification there as well as we have.
Speaker Change: A good portion of the Vas business that is.
Speaker Change: Independent of visa transactions and so.
Speaker Change: When I think about that in total I think there's a good resilience in diversification there as well.
Will Nance: Next question. Next we'll go to the line of Will Nance from Goldman Sachs. Please go ahead. Hey guys, appreciate you taking the question. Chris, I was wondering if you could double click again on some of the comments you shared around the incentives outlook. I think you've been talking about a pretty front loaded renewal schedule. I thought I heard, but Craig, if I'm wrong, the outlook is for modest increases in the growth rate over the next two quarters, but I may have misheard that. But if that was the case, can you just talk through cadence and some of the drivers, kind of help square that with the front loaded renewals.
Unidentified Moderator: Next question.
Unidentified Moderator: Next we'll go to the line of will Nance from Goldman Sachs. Please go ahead.
Will Nance: Hey, guys I appreciate you asking the question Chris I was wondering if you could double click again on some of the comments you shared around the incentive outlook I think you've been talking about a pretty front loaded renewal schedule I thought I heard but correct me if I'm wrong. The outlook is for modest increases in the growth rate over the next two quarters, but I may have misheard that.
Will Nance: Can you just talk through cadence and some of the drivers kind of help square that with the Frontloaded materials I appreciate it. Thank you.
Chris Suh: Appreciate it.
Chris Suh: Thank Sure will. Thanks, Christian. You did hear correctly. And let me try to add a little bit of color and clarify. Q2 incentives grew 15% came in lower than we had anticipated, primarily due to factors related to deal timing. I covered that on the call. In terms of what we expect for the full year, and into the second half of the year, we've updated the expectation that in the back half of the year, our growth will be slightly higher than originally expected, due to two factors. That we called out. One is client-related performance adjustments. And the second is deal timing, which means specifically anticipated early renewals.
Speaker Change: Sure well. Thanks Christian you did hear correctly, and let me try to add a little bit of color and clarify.
Speaker Change: Q2 incentives grew 15% came in lower than we had anticipated primarily due to factors related to deal timing I covered that on the call in terms of what we expect for the full year.
Speaker Change: And into the second half of the year and we've updated the expectation that in the back half of the year our growth to be slightly higher than originally expected due to two factors that we called out one is client related performance adjustments and the second is deal timing, which means.
Speaker Change: <unk> anticipated early renewals and so when we re forecast the second half of the year, we do expect the second half to grow a.
Chris Suh: And so when we re-forecast the second half of the year, we do expect the second half to grow higher than the first half of the year. And we do expect that sequentially to be Q3 a little higher than Q2, and Q4 to be a little higher than Q3.
Speaker Change: Higher than the first half of the year and we do expect that sequentially. It could be Q3, a little higher than Q2, and Q4 to be a little higher than Q3, and then maybe the final thing I'll say is when you look at the volume of payment volume that was impacted by renewals. We still believe that we have the same expectation that we started the year, which is.
Chris Suh: And then maybe the final thing I'll say is, when we look at the volume of payment volume that was impacted by renewals, we still believe that we have the same expectation that we started the year, which is 20% of the payment volume is being impacted.
Speaker Change: 20%.
Speaker Change: The payment volumes being impacted.
Timothy Chiodo: Next question.
Speaker Change: Next question.
Speaker Change: Next we'll go to the line of Timothy Toyota from UBS. Please go ahead.
Timothy Chiodo: Next we'll go to the line of Timothy Chiodo from UBS, please go ahead. Great, thank you, Chris. I want to dig in a little bit more on the delta between nominal cross-border volumes and nominal international revenue. I think you did a great job going through the items, but to recap, there's the FX volatility, there's the corridor and client mix, There's a pricing aspect. And then of course, there's the hedging, which impacts the revenue, but not the volumes. I think you touched on the FX volatility, meaning not assuming in the guide that the high levels will persist, which is a good conservative approach.
Timothy Toyota: Great. Thank you, Chris I wanted to dig in a little bit more on the delta between nominal and cross border volumes and nominal international revenue I think you did a great job going through the items, but to recap there is the FX volatility there is the quarter in client mix. There is a pricing aspect and then of course, there is the hedging which impacts the revenue, but not the <unk>.
Timothy Toyota: <unk> I think you touched on the FX volatility, meaning not assuming in the guide at the high levels were persists, which is a good conservative approach you talked around quarter mix and the yields being higher for U S. Inbound. The one I was hoping you could drill in a little bit more as pricing because I know previously the guidance talked a little bit about pricing being a second half of this fiscal year.
Timothy Chiodo: You talked around quarter mix and the yields being higher for US inbound. The one I was hoping you could drill in a little bit more is pricing, because I know previously, the guidance talked a little bit about pricing being a second half of the fiscal year event. So whether it be specific to cross border or for the whole business, maybe you could just touch a little bit on that pricing topic.
Timothy Toyota: <unk> event, so whether it be specific to cross border or for the whole business, maybe you could just touch a little bit on that pricing topic.
Speaker Change: Sure Hi, Tim.
Timothy Chiodo: Sure. Hi, Tim. Yeah, let me parse those apart a little bit. You covered, you know, my points on international transaction revenue, as you pointed out, we grew 10%, which was in line with the nominal volume growth, but below the 13% constant currency, that's the impact of FX. And, and I covered a number of items that that impacted that in addition to FX, higher volatility and some offsets there that you mentioned. Happy to give you more color on those. But let me hit to your second point, which is the our expectations on the full year on pricing.
Speaker Change: Yes, let me parse those apart a little bit you covered my points on international transaction revenue as you pointed out are we grew 10% which was in line with the nominal volume growth, but below the 13% constant currency, that's the impact of FX and I covered a number of items.
Speaker Change: That that impacted that in addition to FX higher volatility and some offsets there that you mentioned I'm happy to give you more color on those but let me hit to your second point, which is the our expectations on a full year on pricing just to remind everyone. At the start of the year. We said, we would anticipate that the pricing contribution to growth in the full year.
Timothy Chiodo: Just to remind everyone, at the start of the year, we said we would anticipate that the pricing contribution to growth in the full year would be similar to the previous year. But the timing would be a little bit different where we'd have more back end loaded pricing. That's still our expectation. We don't have a different view. We do believe that pricing will benefit in the second half more than it did in the first half.
Speaker Change: Or would be similar to the previous year, but the timing would be a little bit different where we'd have more backend loaded pricing. That's still our expectation. We don't have a different view, we do believe that pricing will benefit in the second half more than it did in the first half of this year.
Darrin Peller: Next question.
Speaker Change: Next question.
Darrin Peller: Next we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead. Hey guys, thanks. You know, if you don't mind just going a little deeper into the FX vol offset by what you just said, customer mix and hedging, I guess it's just if you can explain a little more, I know that corridor and mix on corridor could be a factor. As you said, US volume, you know, inbound could have a higher yield. We haven't necessarily heard you call out hedging much before in the business. would assume that FX vol benefits would have been more of an offset.
Speaker Change: Next we'll go to the line of Darrin Peller from Wolfe Research. Please go ahead.
Darrin Peller: Hey, guys. Thanks.
Darrin Peller: If you don't mind, just going a little deeper into the FX vol offset by what you just said customer mix and hedging I guess, it's just if you could explain a little more I know that that car.
Speaker Change: Card or in mix on quarter could be a factor as you said U S volume inbound can have a higher yield, but we haven't necessarily heard you call out hedging much before in the business and would assume that FX vol benefits would have been more of an offset so maybe just explain a little more of the hedging or the mixed dynamic and what exactly happened and then just a quick add on would be de minimis.
Darrin Peller: So maybe just explain a little more of the hedging or the mixed dynamic and what exactly happened. And then just a quick add-on would be de minimis and whether or not from an e-com standpoint. Cross-Border Ecom. It's something that you're factoring and are thinking about having any way to think about how to factor that into the model going forward. Got it. I got both those questions down. So let me give a little bit more color. Again, just to just to give dimensionalize again, the 10% growth in transaction revenue, which is in line with the nominal growth.
Darrin Peller: And whether or not from an E com standpoint.
Darrin Peller: Cross border E Com is something that you're factoring in or thinking about having any any way to think about how to factor that into the model. Okay got.
Darrin Peller: Got it.
Darrin Peller: I got both those questions there so let me.
Darrin Peller: Give a little bit more color again, just to just to Dimensionalize again, the 10% growth in transaction revenue, which is inline with a nominal.
Darrin Peller: And so you know, that three point delta, you could think the big portion of that is FX. And then to your point, higher volatility, which we said in April was was with higher in Q2 and you know, throughout April. The two items, which I could give a little bit more color on, I called out client mix and hedging. So client mix, we obviously have different clients throughout the portfolio there, and different clients have different pricing and different yield dynamics. And so it really depends on specific client performance, and which clients are growing and where, and that can have an impact on our revenue yield.
Darrin Peller: Growth and so that three point Delta.
Darrin Peller: You could think the big portion of that is FX and then to your point higher volatility, which we set in April.
Darrin Peller: <unk>.
Darrin Peller: Higher in Q2 and throughout April.
Darrin Peller: The two items, which I could give a little bit more color on it called out client mix and hedging so client mix, we obviously have different clients throughout the portfolio, there and different clients have different pricing and different yield dynamics and so it really depends on specific client performance.
Darrin Peller: Which clients are growing and where and that can have an impact on our revenue yield and in this case it was a bit of a drag against the.
Darrin Peller: And in this case, it was a bit of a drag against against, you know, relative to the 13% constant currency volume growth. And then on hedging, we hedge a portion of our cash flow exposures. This quarter, we did have a gain in Q2. We had a year-over-year gain related to that hedging, but it was lower than the gain that we recognized a year ago in Q2. And so that became, even though there was a gain, it was a drag again. It was a offset, the higher volatility that we recognize in international transaction revenue. And then your second question, Darren, on de minimis, you know, if we look at, if we look at, you know, sort of the whole situation with China, so far, we're not seeing a material impact from tariffs related to China, and specifically spend associated with the de minimis exemption.
Darrin Peller: Against relative to the 13% constant currency volume growth and then on hedging we hedge a portion of our cash flow exposures. This quarter. We did have a gain in Q2, we had a year over year gain.
Darrin Peller: <unk> to that hedging, but it was lower than the gain that we recognized a year ago in Q2, and so that became even though there was again it was a it was a drag again it was a reconciling item between the two the 13 and the 10%. So those are the two items that primarily offset the higher volatility that we recognized in international transaction revenue.
Speaker Change: And then your second question Darren on de Minimis.
Speaker Change: If we look at if we look at sort of the whole situation with China. So far we're not seeing a material impact from tariffs related to China, and specifically spend associated with the de Minimis exception. It's just not a material portion of our volumes and we wouldn't expect any material impact.
Darrin Peller: It's just not a material portion of our volumes, and we wouldn't expect any material impact.
Jason Kupferberg: Next question.
Speaker Change: Next question.
Jason Kupferberg: Next we'll go to the line of Jason Kupferberg from Bank of America. Please go ahead. Thank you, guys. I wanted to ask about US volume growth. I know we went from 6% in the March quarter to 8% month to date. So I'm just curious if you normalize for effects of Easter. And I know, Chris, you mentioned a little bit of pull forward to spend ahead of the tariffs. Should we be just assuming some moderation off the April levels of 8% given those factors? Just want to make sure we've got the, you know, the modeling square there so we don't over extrapolate from a few weeks of data.
Speaker Change: Next we'll go to the line of Jason Kupferberg from Bank of America. Please go ahead.
Thank you guys I wanted to ask about U S volume growth I know, we went from 6% in the March quarter to 8% month to date. So I'm just curious if you normalize for effects of Easter and I know, Chris you mentioned, a little bit of pull forward of spend ahead of the tariffs.
Speaker Change: Should we be just assuming some moderation off the April levels.
Speaker Change: 8% given given those factors just wanted to make sure we've got the.
Speaker Change: The modeling square there so we don't over extrapolate from a few weeks of data.
Chris Suh: Thanks. Yeah, good question, Jason. I, you know, it The overall environment, I'll go back to some of the comments Ryan made, the overall comment, the overall environment remains stable, healthy, and steady. You know, whenever we give the month to date data, I always disclaim it by saying, you know, two or three weeks or three weeks, in this case, don't make a trend, we'll have to see how the rest of the quarter plays out. The 8% in the month to date does reflect some benefits from the timing of Easter. I called that out earlier in the comments, we'll have to see how the quarter comes together.
Speaker Change: Yeah. Good question Jason.
Speaker Change: It's.
Speaker Change: The overall environment I'll go back to some of the comments Ryan made the overall comment.
Speaker Change: The overall environment remains stable healthy and steady.
Speaker Change: Whenever we give the month to date data I always disclaim it by saying you know two or three weeks or three weeks in this case don't make a trend we will have to see how the rest of the quarter plays out the 8% in the month to date does reflect some benefits from the timing of Easter I called that out earlier in the comments, we'll have to see how the quarter comes together, but I think the overall message.
Chris Suh: But I think the overall message that I would convey is that, you know, it's stable, and consumer remains resilient. And I wouldn't read too much into the six versus eight at this point.
Speaker Change: I would convey is that it's stable and consumer remains resilient.
Speaker Change: And I wouldn't read too much into the six versus eight at this point.
Bryan Keane: Next question.
Speaker Change: Next question.
Ryan Mcinerney: Next we'll go to the line of Bryan Keane from Deutsche Bank. Please go ahead. Hi guys, thanks for taking the question. Just want to ask about the entertainment weakness, where you saw that exactly, and do you expect that to continue going forward? And was just thinking about the different affluent group maybe growing faster versus other bands, and just the outlook there. Thanks. Yeah, a couple things I'd point to one is You know, trying to sort of triangulating around the data, you know, the most important thing I think to keep in mind is that when we see when we talked about discretionary versus non discretionary, they were both quite strong and healthy relative to the previous quarter.
Speaker Change: Next we'll go to the line of Bryan Keane from Deutsche Bank. Please go ahead.
Bryan Keane: Hi, guys. Thanks for taking the question just wanted to ask about the entertainment weakness.
Speaker Change: Where you saw that exactly do you expect that to continue going forward.
Speaker Change: Just thinking about the different affluent group, maybe growing faster versus other bands.
Speaker Change: And just the outlook there thanks.
Speaker Change: Yes.
Speaker Change: A couple of things I'd point to one is.
Speaker Change: Trend sort of triangulating around the data the most important thing I think that keep in mind is that when we see when we talked about discretionary versus non discretionary they were both quite strong and healthy relative to the previous quarter and so within that.
Ryan Mcinerney: And so within that, we did have some puts and takes, you know, I mentioned some travel and entertainment, but also offset by retail goods as an example. And so, you know, there are puts and takes, there are some moving parts within that, but overall, health the stable volumes, whether it's discretionary or non discretionary. And as Ryan pointed out, even as we look across spend bands, the consistency of the performance in previous quarters, while obviously higher spend bands are growing faster, and they have been for several quarters, the quarter on quarter performance remains stable and consistent.
Speaker Change: We did have to puts and takes.
Speaker Change: Mentioned, some travel and entertainment, but also offset by retail goods as an example.
Speaker Change: No.
Speaker Change: There are puts and takes there are some moving parts within that but overall healthy stable volumes, whether it's discretionary or non discretionary and as Brian pointed out even as we look across spend bands.
Speaker Change: The consistency of the performance in previous quarters, well, obviously, a higher spend bands are growing faster than they have been for several quarters. The the quarter on quarter performance remains stable and consistent.
Dan Perlin: Next question.
Speaker Change: Next question.
Ryan Mcinerney: Next we'll go to the line of Dan Perlin from RBC Capital Markets. Please go ahead. Thanks. You know, just given the geopolitical backdrop, I'm just wondering, Ryan, if it changes in any way your views of how you're placing like your investment bets, I'm not the long term ones, but maybe more near term. So like risk on your payback period, specific geos that maybe you were thinking were kind of more short duration in nature, but now you want to throttle back or even M&A opportunities that you might see that potentially could be created in this in this backdrop.
Unidentified Moderator: Next we'll go to the line of Dan Perlin from RBC capital markets. Please go ahead.
Speaker Change: Thanks.
Dan Perlin: Just given the geopolitical backdrop I'm just wondering Brian if it changes in any way your views of how you're placing like your investment bets I mean, not the long term ones that maybe more near term so like risk on your payback period specific geos that maybe you were thinking were kind of more short duration in nature, but now you want to throttle back or even M&A opportunities that you might see that.
Speaker Change: It could be created in this in this backdrop. Thank you.
Ryan Mcinerney: Thank Yeah, Dan, maybe I'll back up one step and just kind of talk about the macro environment a little bit. And and then and then kind of zone in what you're saying. I mean, you know, there's obviously more uncertainty today among consumers and businesses than there was several months ago. You see that in the consumer confidence metrics. It's not surprising. But I think what you've heard from us in our prepared remarks today and from the many questions that Chris has answered, if you look at the facts, you know, in what we can add to the conversation in terms of spending, it remains strong and resilient.
Dan Perlin: Yes, Dan maybe ill.
Dan Perlin: Back up one step and just kind of talk about the macro environment a little bit.
Dan Perlin: And then and then kind of zone in what you're saying I mean.
Dan Perlin: There's obviously more uncertainty today, among consumers and businesses than there was several months ago, you'll see that in the consumer confidence metrics, it's not surprising.
Dan Perlin: But I think what you've heard from us in our prepared remarks today and from the many questions that Christmas answered if you look at the facts.
Dan Perlin: And what we can add to the conversation in terms of spending it remains strong and resilient you add to that.
Ryan Mcinerney: You add to that, you know, just looking in the US, employment remains strong, wage growth remains steady, inflation is moderated, consumer balance sheets remain relatively healthy. So, you know, we're kind of balancing the uncertainty that, you know, we all have with the facts, and the facts show a lot of resiliency in what we're seeing. And so when we look at all of that, we remain very committed to our product roadmap, our investment roadmap. We are as confident today as we've ever been in the opportunities that we're going after across all three of our growth levers, consumer payments, value-added services, and commercial and money movement solutions.
Dan Perlin: Looking in the U S.
Dan Perlin: Employment remains strong wage growth remains steady inflations moderated consumer balance sheets remain relatively healthy.
Dan Perlin: So you know we're kind of balancing the uncertainty that we all have with the facts and the facts show or.
Dan Perlin: A lot of resiliency and what we're seeing.
Dan Perlin: And so when we look at all of that we.
Dan Perlin: We remain very committed to our product roadmap our investment roadmap.
Dan Perlin: We are as confident today as we've ever been.
Dan Perlin: In the opportunities that we're going after across all three of our growth levers.
Dan Perlin: <unk> payments value added services, and commercial and money movement solutions, but as I mentioned on the call.
Ryan Mcinerney: But as I mentioned on the call, we're constantly looking at scenarios. We are very kind of dialed in to what could happen. And if and when we see facts that lead to changes, we'll be ready to make, you know, changes in our investment profile and our product pipeline. And then, you know, you mentioned M&A. I think if anything, from the position of strength that we operate, I'm optimistic that the current situation, as I described it, could create more opportunities for us around the world than might otherwise have happened. But we'll obviously have to just wait and see how that all plays out.
Dan Perlin: We're constantly looking at scenarios.
Speaker Change: We are very kind.
Speaker Change: Kind of dialed into what could happen and if and when we see facts that lead to changes we'll be ready to make.
Speaker Change: Changes in our investment profile and our product.
Speaker Change: Pipeline and then you mentioned M&A I think if anything from the position of strength that we operate.
Speaker Change: I'm optimistic that.
Speaker Change: The current situation as I described it could create more opportunities for us around the world than might otherwise have happened, but we'll obviously have to just wait and see how that all plays out.
Adam Frisch: Next question.
Speaker Change: Next question.
Chris Suh: Next we'll go to the line of Adam Frisch from Evercore ISI, please go ahead. Hey, thanks for squeezing me in. My extrapolation of your guidance is if there's a little bit of weakness, kind of just more related to cyclicality, as opposed to anything more crazy, you guys can absorb that. Correct me if I'm wrong on that assumption. But if macro conditions shift materially and much more quickly than expected, can you remind us where your key levers are in terms of revenue, like pricing or cost management in terms of marketing and stuff that would allow you to keep pace with the rate of change if it were to be faster and protect your margins?
Speaker Change: Next we'll go to the line of Adam Fresh from Evercore ISI. Please go ahead.
Adam Fresh: Hey, Thanks for squeezing me in my Extrapolation of your guidance is if there's a little bit of weakness kind of just more related to cyclicality as opposed to anything more crazy.
Adam Fresh: You guys can absorb that correct me, if I'm wrong on that assumption, but if macro conditions shift materially and much more quickly than expected can you remind us where your key levers are in terms of revenue like pricing or cost management in terms of marketing and stuff that would allow you to keep pace with the rate of change if it were to be faster and protect your margins.
Adam Fresh: Thanks.
Adam Fresh: Hi, Adam.
Chris Suh: Hi, Adam. You know, I touched on some of these points a little bit ago, but let me just expand on them. Because I think, you know, it's sort of an interesting way to think about it. You know, obviously, every recession is different. But over, you know, the course of time and over history, Visa has proven to be quite resilient, even during these economic downturns. We don't know what's going to happen. You know, we're not economic forecasters. But the management team here is ready to move decisively, should the need arise. Now, you know, our business is resilient.
Speaker Change: I touched on some of these points a little bit ago, but let me just expand on them because I think.
Speaker Change: It's sort of an interesting way to think about it obviously every recession is different.
Speaker Change: But over the course of time and over history visa has proven to be quite resilient. Even during these economic downturn, we don't know what's going to happen, we're not economic forecasters.
Speaker Change: But the management team here is ready to move decisively should the need arise now.
Speaker Change: Our business is resilient.
Chris Suh: I talked about the diversification of the business, more exposure to everyday spend, more exposure to debit. Even our cross-border volume is more e-commerce today than travel than it was, if I think about, you know, pre-COVID levels. And so that diversification helps us. And so, you know, if there was a downturn, I think our performance during this potential economic slowdown, we would be resilient. And it can impact our business. If you think about it, you know, between volumes and revenue, volumes historically grown faster than PCE. Even if PCE slows, we're confident that we can continue to grow faster than that, for all the reasons I spoke about.
Speaker Change: <unk> talked about the diversification of the business more exposure to everyday spend more exposure debit even our cross border volume as more e-commerce today than travel than it was if I think about you know pre COVID-19 levels and so that diversification helps us and so if there was a DAU.
Speaker Change: <unk> I think our performance during this potential economic slowdown, we would be resilient and it can impact our business. If you think about it between volumes and revenue.
Speaker Change: <unk> historically grown faster than PC, even if PC slows we're confident that we can continue to grow faster than that for all the reasons I spoke about.
Chris Suh: And then the one other thing I'd add is on the revenue front, remember that incentives are largely variable. And so to the extent that volume growth does get impacted, there could be an offset on incentives. On the expense side, you know, I think we've also historically shown we could flex our expenses. We obviously want a balance between short and near-term and long-term priorities. We don't want to overreact to anything. We want to be thoughtful about making sure that we're investing in the right areas to ensure the visa is successful over the long-term. But we do have levers.
Speaker Change: And then the one other thing I'd add is on the revenue front remember that incentives are largely variable and so to the extent that volume growth does get impacted there could be an offset on incentive.
Speaker Change: On the expense side.
Speaker Change: I think we've also historically shown we could flex our expenses.
Speaker Change: We obviously want a balance between short and near term and long term priorities, we don't want to overreact to anything we want to be thoughtful about making sure that we're investing in the right areas to ensure the visa successful over the long term, but we do have levers and this is a management team that stands ready to ready to act next question.
Chris Suh: And this is a management team that stands ready to act.
Ramsey El: Next question.
Speaker Change: Next we'll go to the line of Ramsey Ourself from Barclays. Please go ahead.
Ryan Mcinerney: Next, we'll go to the line of Ramsey Elisal from Barclays, please. Hi, thanks for taking my question. Stablecoins seem to be having their moment, maybe helped along by clear regulations. I know you called out your strategy there, including this reaching $200 million of settlement flows. What are your latest thoughts on the demand for those stablecoin settlements or other stablecoin payments? Are you seeing or expecting an inflection? What are your thoughts? It's still early. But we do see real potential, which is why, you know, we've been investing in the crypto space broadly in the stablecoin space specifically for many years now, we've built up a team of real experts that I think are very well respected among the ecosystem.
Speaker Change: Hi, Thanks for taking my question.
Speaker Change: Stable coin seem to be having there a moment may be helped along by a clear regulations I know you called out your strategy there, including this reaching $200 million of of settlement first what are your latest thoughts on the demand for those stable quite settlements or other stable point payments are you seeing or expecting an inflection and what are your what are you.
Speaker Change: I'm, saying.
Speaker Change: It's still early.
Speaker Change: But we do see real potential which is why we've been investing in the crypto space broadly and the stable space specifically for many years now we've built up a team of real experts that I think are very well respected among the ecosystem.
Ryan Mcinerney: But it's early. You know, on the one hand, $200 million is a great kind of milestone. On the other hand, it's still a relatively very small portion of our overall settlement volume. I guess I'd say a couple of things. One is, you know, we are optimistic about the, you know, kind of the U.S. government passing more clear and pragmatic regulations, I think, not just in the U.S., but hopefully other countries as well. We are continuing to push forward with the settlement work that you mentioned, but we're also exploring, you know, kind of a broader set of product opportunities and partnerships in the stablecoin space.
Speaker Change: But it's early.
Speaker Change: On the one hand $200 million is a great.
Speaker Change: Kind of milestone on the other hand, it's still a relatively very small portion of our overall settlement volume.
Speaker Change: I guess I'd say a couple of things one is we are.
Speaker Change: We are optimistic about the.
Speaker Change: Kind of the U S government.
Speaker Change: <unk> seen more clearer and pragmatic regulations I think not just in the U S, but hopefully other countries as well.
Speaker Change: We are continuing to push forward with the settlement work that you mentioned, but we're also exploring.
Speaker Change: Kind of a broader set of products product opportunities and partnerships and the stable coin space I might use that as a little bit of a pitch to join.
Ryan Mcinerney: I might use that as a little bit of a pitch to join our product drop tomorrow, which I mentioned in my prepared remarks, but, you know, our team will talk about some of those things as well. So, as you said, there's a lot of activity and discussion about the stablecoin space right now. I think the tipping point will be more clear and pragmatic regulations. But I do think in the big scheme of things, certainly as it relates to our broader business, it's still very early in the development.
Speaker Change: Our product drop tomorrow.
Speaker Change: Which I mentioned in my prepared remarks, but our team will talk about some of those things as well. So as you said there is there is a lot of.
Speaker Change: A lot of activity and discussion about stable corn space right now I think the tipping point.
Speaker Change: We'll be more clear and pragmatic regulations, but I do think in the big scheme of things certainly as it relates to our broader business.
Speaker Change: Still very early in the development.
Harshita Rawat: Last question, please.
Speaker Change: The last question please.
Speaker Change: And for our last question will go to the line of Hershey to ever walk from Bernstein. Please go ahead.
Ryan Mcinerney: And for our last question we'll go to the line of Harshita Rawat from Bernstein. Please go ahead. Good afternoon, Ryan. Visa has managed government nationalism risk for decades as a company. How do you think about navigating that risk in the current environment, being a US-based company operating globally? Thanks. If I heard your question right, around how are we navigating all of this? You know, we regularly engage with governments and regulators in every country where we operate. We have like a world-class government engagement team in all of our regions and all of our major countries, but it's also our country managers, day in and day out.
Speaker Change: Good afternoon.
Hershey: And visa has managed government nationalism desk for decades as a company how do you think about navigating that risk in the current environment.
Speaker Change: S based company operating globally.
Hershey: Thank you.
Hershey: Thanks, If I heard your question right around how do we navigating all of this.
Speaker Change: We regularly engage with governments and regulators in every country, where we operate we have like a world class government engagement team in all of our regions and all of our major countries, but it's also our country managers day in and day out they are deeply engaged with the governments of the countries in which we operate.
Ryan Mcinerney: They are deeply engaged with the governments of the countries in which we operate because we are an extraordinarily important partner and company in every country we operate around the world. And our engagement now it's important. It's as important as it's ever been given the challenging and uncertain environment that you mentioned. What I would say is nationalism is nothing new, you know, as long as we are permitted to operate in a country or territory, even if it's been more difficult for us to operate there than it has historically, we have a proven track record of being successful.
Speaker Change: We are an extraordinarily important partner in company in every country, we operate around the world and.
Speaker Change: And our engagement now is it's important.
Speaker Change: As important as it's ever been given the challenging and uncertain environment that you mentioned.
Speaker Change: What I would say is nationalism is nothing new.
Speaker Change: As long as we are permitted to operate in a country or territory, even if it's been more difficult for us to operate there than it has historically, we have a proven track record of being successful.
Ryan Mcinerney: you know we're used to operating in highly regulated markets and environments around the world we've got tailored strategies which we've tested in other markets with similar conditions and you know we tailor those to the unique needs of our clients and our partners in every one of these markets and we're working with you know our clients and partners to regularly educate the governments and the regulators and the elected officials in those countries about not just what matters most kind of domestically in their market but the complexities of the global payments market and you know what we need to be doing together to help them in their market so it is as complicated as I remember it but we have the experience the people the products the services to put to work in these countries around the world and we feel good about our ability to navigate it.
Speaker Change: He used to operating in highly regulated markets and environments around the world, We've got tailored strategies, which we've tested in other markets with similar conditions and we tailor those to the unique needs of our clients and our partners. In every one of these markets and we're working with our clients and partners to regularly educate the gov.
Speaker Change: <unk> and the regulators and the elected officials in those countries about not just what matters, most kind of domestically in their market, but the complexities of that global payments market.
Speaker Change: And what we need to be doing together to help them in their market. So.
Speaker Change: It is complicated as I remember it but we have the experienced the people the products and services to put to work in these countries around the world and we feel good about our ability to navigate it.
Unknown Attendee: And with that we'd like to thank you for joining us today. If you have additional questions, please feel free to call or email our investor relations team. Thanks again and have a great day.
Speaker Change: With that we'd like to thank you for joining US today. If you have additional questions. Please feel free to call or E Mail, our investor Relations team. Thanks, again and have a great day.
Speaker Change: Thank you all for participating and visa fiscal second quarter 2025 earnings Conference call that concludes today's conference you may disconnect at this time and please enjoy the rest of your day.
Unknown Attendee: Thank you all for participating in Visa's fiscal second quarter 2025 earnings conference call.
Unknown Attendee: That concludes today's conference. You may disconnect at this time and please enjoy the rest of your day.