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Visa’s Operating Expenses and Fiscal 2018 Expectations

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Total operating expenses declined

Visa (V) incurred total operating expenses of $6.2 billion in fiscal 2017 compared to $7.1 billion in fiscal 2016. That reflects a 14% fall, mainly due to the Visa Europe Framework Agreement loss of $1.9 billion incurred in fiscal 2016.

Compared to fiscal 2016, all other components of its operating expenses rose in fiscal 2017. It incurred personnel expenses of $2.6 billion in fiscal 2017 compared to $2.2 billion in fiscal 2016, which reflects an 18% rise. It incurred marketing expenses of $922 million in fiscal 2017 compared to $869 million in fiscal 2016, a rise of 6%.

On an LTM (last 12-month) basis, Visa’s return on assets stood at 10.15x. Consumer financial companies (XLF) Total System Services (TSS), Vantiv (VNTV), and Fiserv (FISV) posted 6.1%, 4%, and 8.9%, respectively.

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Expenses in fiscal 2018 and other components

Visa is expected to incur total operating expenses of $6.3 billion in fiscal 2018, which reflects a marginal rise from fiscal 2017. The company incurred professional fees of $409 million in fiscal 2017 compared to $389 million in fiscal 2016. That implies a rise of 5%.

Visa saw network and processing expenses of $620 million in fiscal 2017 compared to $538 million in fiscal 2016, which implies a rise of 15%. In fiscal 2017, it incurred expenses related to litigation provision, general and administrative, and depreciation and amortization of $19 million, $1 billion, and $556 million, respectively.

Next, let’s take a look at Visa’s assets and liabilities, excluding equity.

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