Visa's Q2 Net Revenues Up 25% to $7.2 Billion

Visa Inc. (V) reported that its Q2 of fiscal 2022 revenue climbed 25% to $7.2 billion annually, topping analysts' estimates. Visa shares are up by 5.18% in premarket following the report.

In other crucial numbers, GAAP net income rose 21% YoY to $3.6 billion, while GAAP earnings per share (EPS) increased 23% to $1.70. Visa also said in its report that it returned $3.7 billion of capital to shareholders in the form of share repurchases and dividends.

Card payments continued its post Covid recovery, so their volume rose 17% YoY in “constant” dollars with cross-border volume up 38% and process transactions also up 19%. Q2 total operating expenses came in at $2.39 billion rising from $2.28 billion in Q1 and $2.15 billion in the year-ago quarter.

The company disclosed in March a total of 5% of net revenues in 2021 were exposed to both Russia and Ukraine. The company further added that the February spending rebounded from January, most notably with travel, entertainment and fuel up more than 8 points each.

Even with aggravation of the geopolitical environment and lingering impacts of Omicron, volumes, transactions and credentials drove strong second quarter performance. So it's important to note that travel-related cross-border rose to 82% versus 3 years ago, up 5 percentage points from Q1. Processed transactions were higher 138% versus 3 years ago.

In the U.S., payments volume index to 2019 was 144 in the quarter. Volume growth relative to 3 years ago has been stable and strong now for 4 quarters in a row. When looking at specific spend categories for credit cards, Visa Inc. saw greater than a 10 percentage point improvement in the 3-year index from Q1 to 2Q – Q2 in travel, retail goods, food and drug, restaurant, QSR and fuel.

"While the geopolitical environment remains uncertain, we expect continued growth driven by a robust travel recovery and through the enablement of traditional and newer ways to pay globally," said Alfred F. Kelly Jr., Chairman and CEO of Visa Inc. during the conference call.

Indeed, Visa Inc.’s business remains as strong as ever and, to some degree, investing in Visa stock with a price target of around $230 may be viewed as a countercyclical move eyeing a rising possibility of recession.