Visa Inc at Wolfe Research FinTech Forum Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : It's great to have you again. Let's just start there. I mean, post-Investor Day reaction, Chris, what are some of the most important incremental points or takeaways from the Investor Day, which I know takes a lot of work and thought for the company to set up? So just from your perspective, to ensure investors understand about Visa going forward, we'll just start there.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : It was nice to come away from that day, with a company of your size, five years later and still having that, call it, 10% or 9% to 12% algorithm from a top-line standpoint in terms of what you can achieve, from a growth rate standpoint, medium term, which, just impressive, given the magnitude and the size of the business. But, look, before we go further down the down the focus on the Investor Day and key takeaways in the strategy, just quick update on recent trends, given so much noise from a macro standpoint, both policy-driven and some just economic questions. And so your recent quarter and your even January 28 data obviously showed some decent trends accelerating. I think you accelerated, actually, about 1 point even into January across the US. Cross-border, international was still strong. So maybe just help us understand what you're seeing in the state of the consumer now, the health of the consumer. Any comment you can give us on recent trends even since then would be helpful.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. So it sounds like -- I mean, you're calling out obviously the February impact from leap year. You're calling out what could be, obviously, the timing on Easter being an impact. I mean, outside of that, the consumer sounds, is it similar to what you'd expect?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. Chris, we're getting a lot of questions on inflation potential and what it could be for the -- mean for the business. So maybe just remind us a bit, if you can on how sensitive you've seen consumers to the inflation expectations. And more importantly than that, I mean, just how inflation impacts your business? Obviously, there's the volume-based aspect of it and then there's the demand aspect of it.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. Okay. Another key driver obviously is cross-border, right? It's one of the most important variables for your business model. And so if you could just revisit what you're seeing. I mean, obviously, it's been holding up extremely well. So is e-com actually for that matter, so cross-border e-com, regular travel cross-border. What are you embedding in your outlook from a cross-border standpoint? And maybe just help us understand what's driving that strength.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Right. And on that note, I mean, it's maybe related to cross-border, but FX volatility, obviously, has been getting -- it's getting higher, right? It's been higher now for some time, although albeit it was a headwind quite a bit of the year last year and even into this year. Where are we now on it? And what's embedded on the FX vol side relative to your guidance? Any maybe conservatism in your outlook for that?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. Let's shift to a little bit of a bigger picture question now in terms of your outlook and your medium-term targets. And starting off with the fact that we just did exit a quarter where your growth rate on US volume was 7% to 8% on US. You had 10% to 11% international volume. But you're guiding medium term to consumer payments volume growth of 5% to 7%. So just help us understand and reconcile the trajectory we're in right now versus the 5% to 7% embedded in your outlook.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : All right. So it's almost like you're putting it in as a placeholder that you're going to outperform the market. And even with whatever that number is outperforming the market, you're going to show us that double-digit given value-added services and new flows, and the other pieces of the pie are really that strong.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Very quickly, just short term for a minute again. There is some business that you had -- that had shifted over the last year, a couple of contracts that I know went to a competitor. And so your -- it was impacting US volume growth rate this year. That's lapping, I think, in your calendar second quarter. That should obviously have a slight tailwind to US volume. I just want to make sure we're right about that.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Second half. Right, in second -- of really calendar second half, right?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. Okay. All right. And then just shifting gears a little more. I mean, you completed, I think, 60% of your full year planned renewals in fiscal first quarter. And so maybe just touch on how you view the current landscape for portfolio renewals between large and small deals right now and really what you're seeing in the market.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Can I ask -- I mean, from a competitive standpoint, there was a perception among investors at least that with higher rebates, and incentives that things were kind of tougher from a competitive standpoint. And it looks like we've maybe gotten a little more rational, again, at least from a pricing standpoint. Can you just give us a sense of what you're seeing? I mean, do you think competition is any different today than it was over the past couple of years, whether it's versus other large payments companies that you compete with or other local networks or anything else?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Right. If I'm not mistaken, I mean, you did a lot of your incentives and rebates, as you said, in Q1. And Q2 has a tough comp, but then it really should be an easier growth from a year-over-year standpoint in the second half, right, just given how much you've already done, obviously, on rebates.

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. Yeah, that makes sense. And then quickly on local networks. This came up with a call -- actually, I was in a meeting with Oliver Jenkyn at your Investor Day, having lunch actually. And at the end of the day, I mean, he was really excited about local networks still being an opportunity and a source of share gains for you guys. Is that -- where does that -- what do you see there, I guess, in terms of European or other [local] network opportunities versus perhaps do you see any of the opposite extreme where governments are trying to do more on their own? Is that shaping up anywhere like Russia did years ago anywhere else?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : But are you seeing any other governments try to pivot to that direction of doing more on their own or trying to move away from multinational companies?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Yeah. I mean, I think the Visa as a service strategy kind of addresses that, right? You now can offer even those companies if I don't know, take Pix in Brazil or other markets, you could offer them value-added services, right? That may wrap around what they're doing and make it more secure. So maybe we just shift for a moment to VAS, in general. I mean, you have issuing, acceptance, risk and ID, advisory and open banking or kind of the main categories, all of them growing double digits. And so -- and you guided to a strong growth rate. I think you said, what, mid- to high teens or high teens. When we think about the potential for that, where are you investing most of your incremental dollars now? And how much of it is organic versus M&A-driven going forward?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Okay. Maybe just one last question for me, and then maybe we'll have time for just one quick one. But just from a policy standpoint, a lot of noise in the market, obviously, right now. And so what policy changes are you most focused on within this current administration? Maybe just comment on how tariffs have impacted the consumer in the past. And then any outlook or anything that's changed post-election in terms of expectations from the DOJ suit or regulated debit changes or anything else worth mentioning at the moment?

Question: Darrin Peller - Wolfe Research, LLC - Analyst : Any quick ones? We have about 30 seconds, I guess. Okay. Why don't we leave it there, guys? Thank you so much, Chris. [Thanks] for being with us.