Visa Offers Consistent Revenue Growth

Visa (V) has recorded consistent revenue growth over the last few quarters. Net operating revenue in the fiscal 2Q15 was $3.4 billion, an increase of 8% nominally or 10% on a constant dollar basis year-over-year. The revenue growth was driven by growth in service revenues, data processing, and international transaction revenues.

The company’s revenues have grown at a CAGR (compound average growth rate) of 12% since 2010.

The above graph shows growth in Visa’s revenues and net income over five quarters. The strengthening of the US dollar impacted net operating revenues by ~2.5% of negative growth during the quarter.

Fiscal 2Q15 service revenues were $1.6 billion, an increase of 8% year-over-year. Data processing revenues rose 9%, international transaction revenues grew 11%, and other revenues increased 12% over the previous year.

Client incentives, which are deducted from gross revenues, were $676 million and represent 16.5% of gross revenues.

Personnel and marketing expenses are the company’s biggest expense items. Other key expenses include network and processing, professional fees, depreciation and amortization, and general and administrative expenses.

Network and processing expenses mainly include expenses for the operation of the company’s processing network, including maintenance, equipment rental, and fees for other data processing services.

Total operating expenses were $1.1 billion for fiscal 2Q15, a 1% increase over the prior year. The increase was primarily related to increased personnel and general and administrative expenses. Additional depreciation from ongoing investments in technology assets and infrastructure also contributed to the increase.