Visa announced financial results for the second quarter 2015. Net income was $1.6 billion. Earnings per share was $0.63 (adjusted for the company’s four-for-one class A common stock split on March 19, 2015).
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This is flat over the prior year period and reflective of the one-time favorable tax benefit of $201 million recognized in that period. All references to earnings per share assume fully-diluted class A share count unless otherwise noted.
Net operating revenue in the fiscal second quarter of 2015 was $3.4 billion, an increase of 8% nominally or 10% on a constant dollar basis over the prior year, driven by solid growth in service revenues, data processing and international transaction revenues. The strengthening of the U.S. dollar impacted net operating revenues by approximately 2.5 percentage points of negative growth during the quarter.
Payments volume growth, on a constant dollar basis, for the three months ended December 31, 2014, on which fiscal second quarter service revenue is recognized, was 11% over the prior year at $1.2 trillion.
Payments volume growth, on a constant dollar basis, for the three months ended March 31, 2015, was 11% over the prior year at $1.2 trillion.
Cross-border volume growth, on a constant dollar basis, was 8% for the three months ended March 31, 2015.
Total processed transactions, which represent transactions processed by VisaNet, for the three months ended March 31, 2015, were 17.0 billion, an 11% increase over the prior year.
Fiscal second quarter 2015 service revenues were $1.6 billion, an increase of 8% over the prior year, and are recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity.
Data processing revenues rose 9% over the prior year to $1.3 billion. International transaction revenues grew 11% over the prior year to $964 million.
Other revenues, which include the Visa Europe licensing fee, were $204 million, an increase of 12% over the prior year. Client incentives, which are a contra revenue item, were $676 million and represent 16.5% of gross revenues.
Total operating expenses were $1.1 billion for the quarter, a 1% increase over the prior year, primarily related to increased personnel, general and administrative expenses and additional depreciation from our ongoing investments in technology assets and infrastructure, partially offset by the absence of marketing campaigns related to prior year events such as the 2014 Sochi Winter Olympics and 2014 FIFA World Cup.
The effective tax rate was 32.1% for the quarter ended March 31, 2015.
Cash, cash equivalents, and available-for-sale investment securities were $7.3 billion at March 31, 2015.
The weighted-average number of diluted shares of class A common stock outstanding was 2.5 billion for the quarter ended March 31, 2015. ■