Visa Inc. Files 10-Q for Period Ending December 31, 2023

TL;DR

<b>Visa Inc. submitted its Q1 2024 10-Q filing detailing financial positions as of December 31, 2023.</b>

AI Summary

VISA INC. (V) filed a Quarterly Report (10-Q) with the SEC on January 26, 2024. Visa Inc. filed its 10-Q report for the quarterly period ended December 31, 2023. The filing covers the period from October 1, 2023, to December 31, 2023. Key financial statement elements such as retained earnings and accumulated other comprehensive income are detailed as of September 30, 2023, and December 31, 2023. The report includes data on various classes of preferred and common stock. The filing was made on January 26, 2024.

Why It Matters

For investors and stakeholders tracking VISA INC., this filing contains several important signals. This 10-Q provides investors with the latest quarterly financial performance and position of Visa Inc., crucial for understanding the company's operational health and strategic direction. The detailed breakdown of stock classes and financial reserves offers insights into the company's capital structure and potential liabilities or assets.

Risk Assessment

Risk Level: low — VISA INC. shows low risk based on this filing. The filing is a standard 10-Q, providing routine financial disclosures without immediate red flags, indicating a low level of immediate risk.

Analyst Insight

Monitor future filings for trends in revenue growth, net income, and any changes in debt-to-equity ratios to assess ongoing financial health.

Key Numbers

• 2023-12-31 — Period End Date (Quarterly period)
• 2023-10-01 — Period Start Date (Quarterly period)
• 2024-01-26 — Filing Date (Date of submission)
• 0930 — Fiscal Year End (Company's fiscal year end)

Key Players & Entities

• VISA INC. (company) — Filer name
• 0001403161 (company) — Central Index Key
• 20231231 (date) — Conformed period of report
• 20240126 (date) — Filed as of date
• 2023-10-01 (date) — Quarterly period start date
• 2023-12-31 (date) — Quarterly period end date
• SAN FRANCISCO (location) — Business address city
• DE (location) — State of incorporation

FAQ

Industry Context

Visa Inc. operates in the financial services sector, specifically in payment processing and network services.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial reports.

What Investors Should Do

1. Review the full 10-Q document for detailed financial statements and management's discussion and analysis.
2. Compare the reported figures with previous quarters and the same quarter last year to identify performance trends.
3. Analyze any disclosed risk factors or legal proceedings that could impact future operations.

Key Dates

• 2023-12-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-01-26: Filing Date — Date the 10-Q was officially submitted to the SEC.

Year-Over-Year Comparison

This filing represents the first 10-Q for fiscal year 2024, following the 10-K for fiscal year 2023.

Key Financial Figures

• $0.0001 — stered Class A Common Stock, par value $0.0001 per share V New York Stock Exchange 1.

Filing Documents

• v-20231231.htm (10-Q) — 1375KB
• vex311123123.htm (EX-31.1) — 12KB
• vex312123123.htm (EX-31.2) — 12KB
• vex321123123.htm (EX-32.1) — 9KB
• v-20231231_g1.gif (GRAPHIC) — 151KB
• 0001403161-24-000016.txt (&nbsp;) — 7847KB
• v-20231231.xsd (EX-101.SCH) — 56KB
• v-20231231_cal.xml (EX-101.CAL) — 85KB
• v-20231231_def.xml (EX-101.DEF) — 248KB
• v-20231231_lab.xml (EX-101.LAB) — 679KB
• v-20231231_pre.xml (EX-101.PRE) — 429KB
• v-20231231_htm.xml (XML) — 1152KB

Financial Information

PART I. Financial Information 3

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Balance Sheets—December 31, 2023 and September 30, 2023 3 Consolidated Statements of Operations—Three Months Ended December 3 1 , 2023 and 2022 4 Consolidated Statements of Comprehensive Income—Three Months Ended December 3 1 , 2023 and 2022 5 Consolidated Statements of Changes in Equity—Three Months Ended December 3 1 , 2023 and 2022 6 Consolidated Statements of Cash Flows— Three Months Ended D ecem ber 3 1 , 2023 and 2022 8

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 31

Controls and Procedures

Item 4. Controls and Procedures 31

Other Information

PART II. Other Information 32

Legal Proceedings

Item 1. Legal Proceedings 32

Risk Factors

Item 1A. Risk Factors 32

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 33

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 33

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 33

Other Information

Item 5. Other Information 33

Exhibits

Item 6. Exhibits 34

Signatures

Signatures 35 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements (Unaudited)

ITEM 1. Financial Statements (Unaudited) VISA INC. CONSOLIDATED BALANCE SHEETS (UNAUDITED) December 31, 2023 September 30, 2023 (in millions, except per share data) Assets Cash and cash equivalents $ 13,591 $ 16,286 Restricted cash equivalents—U.S. litigation escrow 1,616 1,764 Investment securities 5,005 3,842 Settlement receivable 2,525 2,183 Accounts receivable 2,506 2,291 Customer collateral 3,164 3,005 Current portion of client incentives 1,572 1,577 Prepaid expenses and other current assets 2,753 2,584 Total current assets 32,732 33,532 Investment securities 2,809 1,921 Client incentives 3,941 3,789 Property, equipment and technology, net 3,472 3,425 Goodwill 18,120 17,997 Intangible assets, net 26,739 26,104 Other assets 3,596 3,731 Total assets $ 91,409 $ 90,499 Liabilities Accounts payable $ 348 $ 375 Settlement payable 3,724 3,269 Customer collateral 3,164 3,005 Accrued compensation and benefits 816 1,506 Client incentives 8,034 8,177 Accrued liabilities 5,077 5,015 Accrued litigation 1,471 1,751 Total current liabilities 22,634 23,098 Long-term debt 20,703 20,463 Deferred tax liabilities 5,275 5,114 Other liabilities 3,064 3,091 Total liabilities 51,676 51,766 Commitments and contingencies (Note 13) Equity Series A, Series B and Series C convertible participating preferred stock (preferred stock), $ 0.0001 par value: 25 shares authorized and 5 (Series A less than one, Series B 2 , Series C 3 ) shares issued and outstanding as of December 31, 2023 and September 30, 2023 1,615 1,698 Class A, Class B and Class C common stock and additional paid-in capital, $ 0.0001 par value: 2,003,341 shares authorized (Class A 2,001,622 , Class B 622 , Class C 1,097 ); 1,836 (Class A 1,582 , Class B 245 , Class C 9 ) and 1,849 (Class A 1,594 , Class B 245 , Class C 10 ) shares issued and outstanding as of December 31, 2023 and September 30, 2023, respectively 20,490 20,452 Right to recover for covered losses ( 139 ) ( 140 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note 1—Summary of Significant Accounting Policies Organization. Visa Inc., together with its subsidiaries (Visa or the Company), is a global payments technology company that facilitates global commerce and money movement across more than 200 countries and territories. Visa operates one of the world's largest electronic payments networks — VisaNet — which provides transaction processing services (primarily authorization, clearing and settlement). The Company offers products, solutions and services that facilitate secure, reliable and efficient money movement for participants in the ecosystem. Visa is not a financial institution and does not issue cards, extend credit or set rates and fees for account holders of Visa products. In most cases, account holder and merchant relationships belong to, and are managed by, Visa's financial institution clients. Consolidation and basis of presentation. The accompanying unaudited consolidated financial statements include the accounts of Visa and its consolidated entities and are presented in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The Company consolidates its majority-owned and controlled entities, including variable interest entities (VIEs) for which the Company is the primary beneficiary. The Company's investments in VIEs have not been material to its unaudited consolidated financial statements as of and for the periods presented. Intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements are presented in accordance with U.S. Securities and Exchange Commission (SEC) requirements for Quarterly Reports on Form 10-Q and, consequently, do not include all of the annual disclosures required by U.S. GAAP. Reference should be made to Visa's Annual Report on Form 10-K for the year ended September 30, 2023 for additional disclosures, inclu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued) Note 3—Revenues The nature, amount, timing and uncertainty of the Company's revenues and cash flows and how they are affected by economic factors are most appropriately depicted through the Company's revenue categories and geographical markets. The following tables disaggregate the Company's net revenues by revenue category and by geography: Three Months Ended December 31, 2023 2022 (in millions) Service revenues $ 3,915 $ 3,511 Data processing revenues 4,356 3,827 International transaction revenues 3,019 2,797 Other revenues 692 587 Client incentives ( 3,348 ) ( 2,786 ) Net revenues $ 8,634 $ 7,936 Three Months Ended December 31, 2023 2022 (in millions) U.S. $ 3,645 $ 3,567 International 4,989 4,369 Net revenues $ 8,634 $ 7,936 Remaining performance obligations are comprised of deferred revenues and contract revenues that will be invoiced and recognized as revenues in future periods primarily related to value added services. As of December 31, 2023, the remaining performance obligations were $ 3.2 billion. The Company expects approximately half to be recognized as revenues in the next two years and the remaining thereafter. However, the amount and timing of revenue recognition is affected by several factors, including contract modifications and terminations, which could impact the estimate of amounts allocated to remaining performance obligations and when such revenues could be recognized. Note 4—Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents The Company reconciles cash, cash equivalents, restricted cash and restricted cash equivalents reported on the consolidated balance sheets that aggregate to the beginning and ending balances shown in the consolidated statements of cash flows as follows: December 31, 2023 September 30, 2023 (in millions) Cash and cash equivalents $ 13,591 $ 16,286 Restricted cash and restricted cash equivalents: U.S. litiga

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued) Note 5—U.S. and Europe Retrospective Responsibility Plans U.S. Retrospective Responsibility Plan Under the terms of the U.S. retrospective responsibility plan, the Company maintains an escrow account from which settlements of, or judgments in, certain litigation (U.S. covered litigation) are paid. The accrual related to the U.S. covered litigation could be either higher or lower than the U.S. litigation escrow account balance. See Note 13—Legal Matters . The following table presents the changes in the restricted cash equivalents—U.S. litigation escrow account: Three Months Ended December 31, 2023 2022 (in millions) Balance as of beginning of period $ 1,764 $ 1,449 Deposits into the U.S. litigation escrow account — 350 Payments to opt-out merchants (1) , net of interest earned on escrow funds ( 148 ) ( 94 ) Balance as of end of period $ 1,616 $ 1,705 (1) These payments are associated with the interchange multidistrict litigation. See Note 13—Legal Matters . Europe Retrospective Responsibility Plan Visa Inc., Visa International and Visa Europe are parties to certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory (VE territory covered litigation). Under the terms of the Europe retrospective responsibility plan, the Company is entitled to recover certain losses resulting from VE territory covered litigation (VE territory covered losses) through a periodic adjustment to the class A common stock conversion rates applicable to the series B and C preferred stock. VE territory covered losses are recorded in the contra-equity account right to recover for covered losses within stockholders' equity before the corresponding adjustment to the applicable conversion rate is effected. Adjustments to the conversion rate may be executed once in any six-month period unless a single, individual loss greater than 20 million

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued) Three Months Ended December 31, 2022 Preferred Stock Right to Recover for Covered Losses Series B Series C (in millions) Balance as of beginning of period $ 460 $ 812 $ ( 35 ) VE territory covered losses incurred (1) — — ( 8 ) Recovery through conversion rate adjustment (2) ( 7 ) ( 7 ) 15 Balance as of end of period $ 453 $ 805 $ ( 28 ) (1) VE territory covered losses incurred reflect settlements with merchants and additional legal costs. See Note 13—Legal Matters . (2) Adjustment to right to recover for covered losses for the conversion rate adjustment differs from the actual recovered amount due to differences in foreign exchange rates between the time the losses were incurred and the subsequent recovery through the conversion rate adjustment. The following table presents the as-converted value of the preferred stock available to recover VE territory covered losses compared to the book value of preferred stock recorded within the Company's consolidated balance sheets: December 31, 2023 September 30, 2023 As-converted Value of Preferred Stock (1),(2) Book Value of Preferred Stock (1) As-converted Value of Preferred Stock (1),(3) Book Value of Preferred Stock (1) (in millions) Series B preferred stock $ 1,875 $ 419 $ 1,676 $ 441 Series C preferred stock 2,979 798 2,635 801 Total 4,854 1,217 4,311 1,242 Less: right to recover for covered losses ( 139 ) ( 139 ) ( 140 ) ( 140 ) Total recovery for covered losses available $ 4,715 $ 1,078 $ 4,171 $ 1,102 (1) Figures in the table may not recalculate exactly due to rounding. As-converted and book values are based on unrounded numbers. (2) As of December 31, 2023, the as-converted value of preferred stock is calculated as the product of: (a) 2 million and 3 million shares of the series B and C preferred stock outstanding, respectively; (b) 2.903 and 3.625 , the class A common stock conversion rate applicable to the series B

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued) Note 6—Fair Value Measurements and Investments Assets and Liabilities Measured at Fair Value on a Recurring Basis Fair Value Measurements Using Inputs Considered as Level 1 Level 2 December 31, 2023 September 30, 2023 December 31, 2023 September 30, 2023 (in millions) Assets Cash equivalents and restricted cash equivalents: Money market funds $ 10,316 $ 13,504 $ — $ — U.S. government-sponsored debt securities — — 28 — U.S. Treasury securities 95 301 — — Investment securities: Marketable equity securities 397 339 — — U.S. government-sponsored debt securities — — 1,580 1,108 U.S. Treasury securities 5,837 4,316 — — Other current and non-current assets: Money market funds 28 23 — — Derivative instruments — — 154 293 Total $ 16,673 $ 18,483 $ 1,762 $ 1,401 Liabilities Accrued compensation and benefits: Deferred compensation liability $ 221 $ 175 $ — $ — Accrued and other liabilities: Derivative instruments — — 287 396 Total $ 221 $ 175 $ 287 $ 396 Level 1 assets and liabilities. Money market funds, U.S. Treasury securities and marketable equity securities are classified as Level 1 within the fair value hierarchy, as fair value is based on unadjusted quoted prices in active markets for identical assets. The Company's deferred compensation liability is measured at fair value based on marketable equity securities held under the deferred compensation plan. Level 2 assets and liabilities. The fair value of U.S. government-sponsored debt securities, as provided by third-party pricing vendors, is based on quoted prices in active markets for similar, not identical, assets. Derivative instruments are valued using inputs that are observable in the market or can be derived principally from or corroborated by observable market data. U.S. Government-sponsored Debt Securities and U.S. Treasury Securities The amortized cost, unrealized gains and losses and fair value of debt se

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued) September 30, 2023 Amortized Cost Gross Unrealized Fair Value Gains Losses (in millions) U.S. government-sponsored debt securities $ 1,109 $ 1 $ ( 2 ) $ 1,108 U.S. Treasury securities 4,697 — ( 80 ) 4,617 Total $ 5,806 $ 1 $ ( 82 ) $ 5,725 Debt securities with unrealized losses for less than 12 months and 12 months or greater were as follows: December 31, 2023 Less Than 12 Months 12 Months or Greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in millions) U.S. government-sponsored debt securities $ 424 $ ( 1 ) $ — $ — U.S. Treasury securities 646 ( 2 ) 2,056 ( 41 ) Total $ 1,070 $ ( 3 ) $ 2,056 $ ( 41 ) September 30, 2023 Less Than 12 Months 12 Months or Greater Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses (in millions) U.S. government-sponsored debt securities $ 412 $ ( 2 ) $ 50 $ — U.S. Treasury securities 1,360 ( 12 ) 2,128 ( 68 ) Total $ 1,772 $ ( 14 ) $ 2,178 $ ( 68 ) The unrealized losses were primarily attributable to changes in interest rates. The stated maturities of debt securities were as follows: December 31, 2023 (in millions) Due within one year $ 4,731 Due after one year through five years 2,809 Total $ 7,540 Equity Securities The Company's non-marketable equity securities include

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