Management optimistic for FY23 with mid-teens net revenue growth
- Visa’s 4Q net revenue and adjusted EPS came in at $7.79b and $1.93, above street expectations of $7.56b and $1.87
- Double-digit growth across key business drivers
- Management remains confident in Visa’s long term growth trajectory
- Return to shareholders through higher dividends and a share buyback program
Visa’s 4Q net revenue and adjusted EPS came in at $7.79b and $1.93, above street expectations of $7.56b and $1.87. Full year net revenues came in at $29.3b, +22% yoy and non-GAAP earnings per share of $7.50 grew +27%. The net revenues was mainly driven by a growth in payment volume, cross-border volume, and processed transactions. The strong full year results was on the back of resilience in e-commerce and consumer payments, as well as a recovery in cross border travel.
Double-digit growth across key business drivers. Full year payments volume, cross border volume, and processed transactions all seen double digit growth of 15%, 38%, and 17%. On a quarterly basis, the growth figures stood at 10%, 36%, and 12% respectively. Key business drivers should continue to remain stable on resilience in consumer payments and travel recovery.
Management remains confident in Visa’s long term growth trajectory. At this moment, Visa assumes no recession in 2023 and assumes low double digit growth rates for payment volumes and processed transactions through FY23. As such, Visa is expecting a mid-teens constant dollar net revenue growth, implying top line-growth at high single digits which is slightly below consensus forecast of 10%. We note that there could be further changes to Visa’s assumptions should there be a recession. Visa however remains adaptable and is “prepared to act fast should circumstances change” and optimize OPEX to protect the bottom line. In the long term, Visa would continue to benefit from the shift from cash towards digital payments. Moreover, Visa is also expecting volume growth through new flows while increasing yields through value-added services.
Return to shareholders through higher dividends and a share buyback program. For the full year, Visa has returned $14.8b to investors through dividends and share buybacks. A new share repurchase program of $12b has been authorized and the quarterly cash dividend grew 20% to $0.45 per share.