The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Tim Chiodo - UBS - Analyst
: All right. Great. Let's get into some of the topics here. We've got a great list. So we're going to start with a little bit of an update on recent trends
just to tackle that.
So coming out of the recent earnings season, five very large incredible companies that we cover gave an update around October being pretty
strong. So Visa, Mastercard, Square, Fiserv and [GPN], it was pretty consistent across the board. So now that we're a little bit deeper into the quarter
and into the holiday season, maybe you could update us on trends.
Question: Tim Chiodo - UBS - Analyst
: Right. Thank you, Chris. That's a great way to start things off. Let's go to the next topic, clearly, a very topical one, value-added services. So now
Question: Tim Chiodo - UBS - Analyst
: All right. Great. Thank you, Chris. Let's do one more on value-added services. So a topic that's been coming up more often, which is valuing kind
incentives.
So maybe just talk about how this has been supportive of value-added services revenue growth. There's maybe also an element there of
experimentation from some of your clients. And I would just note that this performance obligation that's in the 10-K, the most recent number was
around $4.1 billion, and you referenced that -- you expect to recognize about half of that over the next two years.
Question: Tim Chiodo - UBS - Analyst
: Excellent. Thank you for running through the mechanics as well. I'm sure everyone appreciates that. Let's hit another topic that is coming up in
investor discussions. So FX volatility. So we talked a little bit about this last year at this conference as well, but it's an impact that can either -- well,
it can be a positive or a negative to the international revenue line. This was a headwind in fiscal 2024 and expected to be a slight tailwind in fiscal
2025.
So with that as a backdrop, maybe you could talk a little bit about the impacts and the mechanics. And then if you don't mind, Chris, when we think
about the difference between nominal international revenue growth and nominal cross-border volume growth, it's not just this FX factor. It's a
large one, but maybe just touch on the others, meaning quarter mix and pricing.
Question: Tim Chiodo - UBS - Analyst
: Thank you, Chris. A minor follow-up is for the fiscal 2025 guide, I believe that the underlying assumption was that the FX volatility would be in a
level that was more representative of the average of the fiscal Q4 rather than as of the date of earnings, it was more the average of fiscal Q4.
Question: Tim Chiodo - UBS - Analyst
: Thank you, Chris. I'm glad you made that mention because investors do ask about that often. All right. Let's move on to the next topic, which is
operating expenses, and we'll touch on tax rate as well. So on operating expenses for fiscal 2025, you talked about an expectation for growth in
the high single digit to low double-digit range.
You talked about some investment behind new flows, value-added services and then some of the sales efforts that you're building out in some
specific countries, specific initiatives, et cetera. So maybe let's stay at OpEx and then we'll circle back on tax rate.
Question: Tim Chiodo - UBS - Analyst
: Excellent. Thank you, Chris. A brief one just on tax rate. But Visa did confirm that any potential impact associated with Singapore's potential adoption
of [Pillar Two] has already been in the guide. Your tax rate guidance was 18% to 18.5% for the year.
And again, it implies there was some degree of mitigating action taking place. And maybe you could just make a quick comment on the Pillar Two
topic.
Question: Tim Chiodo - UBS - Analyst
: Excellent. Thank you, Chris. I'm sure investors appreciate that. Let's move on to Visa Flexible Credentials. So you mentioned on the last earnings
call, there was a stat you gave that there's already more than 100 issuers that are looking to use this offering. So let's just talk maybe about what
that means for those issuers and for Visa.
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DECEMBER 03, 2024 / 3:55PM, V.N - Visa Inc at UBS Global Technology and AI Conference
Question: Tim Chiodo - UBS - Analyst
: Excellent. Let's hit on something you mentioned, which is Pismo. So you closed that acquisition in January of 2024, and there's already been some
disclosure about some of the large bank clients, Citi being one of them. Maybe you could just talk a little bit about the business there and some of
the traction you're seeing now that we're roughly at the one-year anniversary.
Question: Tim Chiodo - UBS - Analyst
: All right. Great. Well, with the time we have left, why don't we just touch on 1033? So the recent draft from the CFPB around account access rules
and standards. Maybe talk around Visa's potential role here, whether it be Tink or other aspects of the company.
Question: Tim Chiodo - UBS - Analyst
: Great. Well, Chris, Jennifer, on behalf of everyone at UBS, we just want to thank you for taking the time to be with us here in Arizona. It's a pleasure
hosting you. It was a great conference.
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DECEMBER 03, 2024 / 3:55PM, V.N - Visa Inc at UBS Global Technology and AI Conference
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