Visa Inc. (V)_ Key Takeaways from F3Q22 EPS_ Cross border recovery offsets FX headwinds to drive 3Q beat(1)

The quarter: V reported F3Q22 EPS of $1.98 vs VA consensus of $1.75. Gross revenue for the quarter was $9.8bn, up ~19% yoy and above Visible Alpha consensus of ~$9.7bn, despite the relatively in line gross payment volume of $2.9tn, with cross-border growing 40% yoy (3pts higher than VA consensus of 37%). Card Services and Data Processing grew 13% and 8% yoy, respectively, with International Transaction Fees growing over 50% as a result of the uptick in cross-border volumes. Client Incentives came in at $2.6bn, resulting in total net revenues of $7.3bn, or 3% above VA consensus of ~$7.1bn. Operating expenses were in line with street expectations (~$2.4bn) as the 3% sequential growth was driven primarily driven by Personnel (+6% QoQ) and Professional/consulting fees (+4% QoQ), partially offset by the lower than expected Network and Communication fees (-6% QoQ). Operating expenses for the quarter grew roughly 15% yoy, with roughly 300bps increase from Currencycloud and Tink, partially offset by 200 bps of FX and 300 bps from ceasing Russia operations. The modest topline beat, combined with relatively in line operating expenses resulted in EBITDA of $5.1bn (4% above consensus of $4.9bn) and adjusted Net Income of $4.2bn (13% above consensus of $3.7bn due to tax benefit from litigation related expenses). Total Volume: Total GPV came in at $2.9tn, growing 8% YoY, in line with nconsensus. Overall we observed credit volume YoY growth rates outperforming debit: specifically, credit/debit GPV of $1.5tn/$1.4tn growing 16%/1% YoY respectively. Credit also outperformed vs consensus, with credit/debit GPV 5%/-1% vs consensus, respectively. Processed transactions grew 16% YoY, coming in at 49.3bn, 3% above consensus. US Volume Trends: Volume trends were mixed, with US debit coming in at n$760bn, 2% below consensus, while US credit of $728bn was 2% above consensus. Overall US volume of $1.5tn grew 12% YoY, in line with consensus. International Volume Trends: Rest of World Debit came in at $688bn, 4% above nconsensus, while Rest of World Credit came in at $762bn, 8% above consensus. Overall International volume of $1.5tn grew 4% YoY, and came in 1% below consensus. Cross Border Trends: Overall cross-border volume growth outperformed nconsensus expectations, coming in at 40% CC vs 29% consensus, with ex intra-Europe volume growth of 48% vs 39% consensus. XB Travel volume Will Nance +1(212)357-7438 will.nance@gs.com | Goldman Sachs & Co. LLC Alex Toepfer +1(801)884-4313 alex.toepfer@gs.com | Goldman Sachs & Co. LLC Rajul Bothra +1(917)343-6326 rajul.bothra@gs.com | Goldman Sachs & Co. LLC Jack Evans +1(212)357-3560 jack.evans@gs.com | Goldman Sachs & Co. LLC Katie Huffert +1(801)744-0801 katie.huffert@gs.com | Goldman Sachs & Co. LLCVisa Inc. (V): Key Takeaways from F3Q22 EPS: Cross border recovery offsets FX headwinds to drive 3Q beat26 July 2022 | 10:47PM EDT Goldman Sachs does and seeks to do business with companies covered in its research reports. As a re