VISA Q3 Revenue Report: Revenue Exceeds Expectations

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The third quarter of 2022 was the most successful for VISA in the last year and a half. On July 26, the world-renowned payment system released its quarterly earnings report, which was much better than analysts’ forecasts.

Let’s take a look at highlights from the company’s Q3 2022 earnings report:

Earnings beat 19% revenue growth

“Amid macroeconomic uncertainty, significant exchange rate headwinds and the suspension of our Russian operations, Visa had a very strong quarter, with net revenue up 19%, GAAP EPS up 36% and non-GAAP EPS up 33%”, CEO Alfred F. Kelly, Jr. commented

Company representatives say that the previously chosen VISA business model contributes to sustainable growth in all key financial indicators. It should be noted that for the last four financial quarters, the company has shown better results than experts had expected.

One of the main reasons for the growth of revenues and profits of VISA is the increase in the number of payment transactions using the bank cards of this payment system. Most likely, the number of tourists from different parts of the world increased in the quarter under review, which influenced payment card activity. The commission on VISA card payment transactions is the main source of income, so it is not surprising that the lifting of COVID-19 restrictions in other countries has had a positive effect not only on tourism, but also on VISA’s financial performance.

In addition, the Company’s Board of Directors has declared a quarterly cash dividend of $0.375 per Class A common share, payable September 1 to all holders of record as of August 12. It was another factor in the growing demand for the company’s stock.

What to expect from VISA shareholders

VISA stock trading chart, July 2022.

Although the economic outlook is unclear, many companies remain confident in their ability to execute with discipline and expand their role at the center of currency movements. Nevertheless, spring and summer are the most active periods of travel and payment activity among the population. It is likely that in the last fiscal quarter of 2022, the results could be slightly worse. Quarantine restrictions due to the risk of a new wave of COVID-19, which will limit the activity of users of VISA banking products, may have a negative impact on this.

Either way, the company has a resilient business model that didn’t suffer even after exiting the Russian market. This means that investors can expect the stock to rise in the future.

Summary

  • Visa reports third-quarter earnings beat 19% revenue growth.

  • Revenue grew 19% year over year (or 21% in constant dollars) to $7.3 billion.

  • EPS rose to $1.98, which is above the consensus estimate of $1.74.

  • Although the economic outlook is unclear, companies remain confident in their ability to execute with discipline and expand their role at the center of currency movements.

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