[ad_1]
Shares of Visa Inc. (NYSE: V ) rose 3% on Friday, a day after the company reported strong results for the first quarter of 2023. Revenue and earnings exceeded expectations and the company saw good trends in its business. Here are three factors that are relevant to this digital payment leader:
Revenue and profit growth
Visa reported strong revenue and profit for the first quarter of 2023, which exceeded consensus targets. Net income of $7.9 billion increased 12% year-on-year, driven by stable payment volumes and growth in processed transactions as well as continued recovery in cross-border travel.
Total payment volume increased 7% in the first quarter compared to the same period last year, helped by 9% growth in US payment volume and 15% growth in international volume, excluding Russia and China. Cross-border volume, excluding intra-Europe, grew 31% YoY. Transactions processed grew 10% YoY.
In Q1 2023, GAAP EPS rose 8% to $1.99 while adjusted EPS rose 21% to $2.18. For the second quarter of 2023, Visa expects to see a stable trend in the volume of domestic payments and transactions processed along with a continued recovery in cross-border travel. The company expects revenue growth in the high single digits for Q2.
Favorable growth trends
During the second quarter, Visa experienced strong revenue growth in each of its growth areas – consumer payments, net flows, and value-added services. In consumer payments, credentials grew 8%, with double-digit growth in the US, India and Brazil. Excluding Russia, growth was 11%. Touch-to-pay face-to-face transactions are 72% worldwide, excluding the US and Russia. In the US, transactions exceed 30%.
Net flow revenue increased more than 20% in constant dollars, driven by strong growth in B2B payment volumes and Visa Direct transactions. Visa Direct transactions grew 39% YoY to 1.9 billion in Q1, excluding Russia. Value-added services generated $1.7 billion in Q1, up over 20% in constant dollars.
A valuable partnership
Visa has entered into several strategic and valuable partnerships that can help further growth. In Q1, renewed partnerships with Bank of America and Commerce Bank in the US as well as payment solutions provider Cuscal in Australia and Kiwibank in New Zealand. The company signed a new agreement with one of the largest banks in Panama, Banco Nacional de Panama.
In Latin America, it renewed its ties with ICBC Argentina and Banco do Brasil while also striking a new deal with fintech platform Tigo Money. This partnership, along with many others, provides Visa with significant opportunities for additional growth and expansion.
Click here to read the full transcript of Visa’s Q1 2023 earnings conference call
[ad_2]
Source link