The call welcomes participants to Visa's fiscal second quarter 2025 earnings conference, introducing the CEO and CFO who will discuss financial highlights and forward-looking statements, with a reminder about the availability of the webcast replay and financial documents on the company's website.

Despite a dynamic and uncertain environment, Visa reports a 9% year-over-year increase in net revenue, with strong growth in payments volume and processed transactions globally.

The company emphasizes its focus on innovation and product development in consumer payments, commercial services, and money movement solutions, highlighting growth in credentials, tokenization, and expanding acceptance globally. Key developments include significant advancements in tap-to-pay technologies, partnerships for open-loop transit cards, and the launch of stablecoin settlements, alongside enhancements in commercial and B2B travel verticals.

This quarter, significant deals were signed to offer Visa Direct through digital applications for rapid bank account transfers, enhancing real-time money movement capabilities domestically and cross-border. Partnerships with Jack Henry, Checkout.com, and Tabae highlight the strategic focus on growing the business and expanding with existing customers, driving a 22% growth in value-added services revenue.

The company successfully executes its strategy, entering five new countries across four regions, securing deals with notable banks and retailers. Key innovations include a new AI-powered version of Authorized.net, a unified checkout experience, and enhanced fraud protection solutions utilizing machine learning and AI. Additionally, the open banking platform, powered by Tink, reaches a milestone of serving over 10,000 merchants across Europe.

At Investor Day, the speaker discussed the evolution of Visa's service stack, emphasizing global connectivity, infrastructure, and a services architecture that enables the creation of client solutions. Despite macroeconomic uncertainties, Visa reported strong financial performance halfway through its fiscal year, with resilient consumer spending and stable trends in cross-border volumes. The company is focused on innovation, serving clients, and leveraging its diverse business model to capture future opportunities, as demonstrated by its resilience in various environments.

The company reported robust Q2 results with global payments volume increasing by 8% YoY, cross-border volume (excluding intra-Europe) up by 13%, and total processed transactions growing by 9%. Net revenue rose by 9% YoY in nominal dollars and 11% in constant dollars, driven by resilient consumer spending, lower incentives, and better-than-expected value-added services. International payments volume grew by 9% YoY, while US payments volume increased by 6%, with e-commerce outpacing face-to-face spend. Cross-border volume showed a 13% increase, with e-commerce and travel segments up by 14% and 12%, respectively, demonstrating a well-distributed geographic mix and revenue diversity.

Growth moderation between Q1 and Q2 was attributed to leap year effects, Ramadan and Easter timing, currency depreciation in some countries, and reduced travel from Canada to the US. Despite these challenges, cross-border volume growth matched Q4 2024 levels and surpassed pre-Covid trends.

The company experienced robust financial results, marked by a 9% year-over-year increase in service revenue, 10% growth in data processing revenue, and a 24% surge in other revenue primarily due to advisory and value added services. International transaction revenue rose by 10%, influenced by FX impacts. Client incentives grew by 15%, lower than anticipated due to deal timing factors. Key drivers included strong payments volume and cross-border transactions.

Revenue increased by 13% year-over-year, driven by a 6% growth in commercial payment volume and a 28% rise in direct transactions. Value-added services revenue grew to $2.6 billion, with operating expenses up 7% primarily due to increases in personnel, marketing, and depreciation costs. The tax rate was lower than expected at 16.9%, contributing to an EPS of $2.76, up 10% over the previous year. The company bought back $4.5 billion in stock and distributed $1.2 billion in dividends, with a new $30 billion repurchase program authorized in April.

Driver trends showed strength through April 21, with payment volume up 8% year over year, debit up 9%, and credit up 7%. Cross-border transactions excluding Europe grew 12%, while travel and e-commerce volumes increased 13% year over year.

The company outlines its financial expectations for Q3 and Q4, emphasizing adjusted net revenue growth, operating expenses, non-operating income, tax rates, and EPS growth, while accounting for factors like tariffs, FX volatility, and acquisition impacts.

During a Q&A session, a company representative emphasizes the focus on supporting clients through data sharing, product solutions, and advisory services amidst economic challenges, rather than pursuing immediate partnership deals.

The speaker discusses the effects of foreign exchange movements on the travel and cross border business, noting a slight slowdown in growth, particularly domestically. They emphasize the importance of monitoring the situation closely and highlight the business's diversity, especially in cross border transactions, as a key factor in navigating this period.

The speaker discusses the effects of currency weaknesses and a slowdown in travel, particularly from Canada to the US, on cross-border transactions. They note that while there has been a notable decrease in this corridor, the overall impact on global travel volume and revenue is small due to business diversification. Assumptions for the remainder of the fiscal year are based on the average of March and April data, projecting cross-border transactions to remain slightly below the FY24 Q4 levels.

The discussion focuses on the robust growth in value add services, with inquiries about its performance through the cycle and the varying revenue models. Additional insights are sought on the projected growth for the latter part of the year.

The company reports strong performance attributed to its strategy, execution, and product portfolio. About 65% of revenue comes from enhancing Visa payments, with growing efforts in enabling diverse payment types and services. Notable progress includes relaunching the authorized do net platform for small business checks and developing unified checkout experiences for sellers of all sizes. Financial successes are also seen in issuing solutions, risk and security solutions, and advisory services. Further financial insights are expected from Chris regarding the quarter's performance and future outlook.

The speaker discusses the company's preparedness for various economic cycles, highlighting increased exposure to everyday spending, a larger debit business, more e-commerce spend, and geographical diversification as key factors. They emphasize the resilience and diversification of the business, noting that 65% of the operations have a close correlation to visa transactions, with the remainder independent of these transactions, offering a buffer against potential economic impacts.

The speaker clarifies that despite Q2 incentives growing 15% lower than expected due to deal timing, the outlook for the full year shows modest growth rate increases. Anticipated early renewals and client-related performance adjustments are expected to drive higher growth in the second half of the year, with Q3 and Q4 growth projected to be sequentially higher than previous quarters.

The discussion highlights the factors affecting the discrepancy between nominal cross-border volumes and international revenue, including FX volatility, client mix, pricing, and hedging impacts. Speakers delve into the specifics of these elements, emphasizing the conservative approach to FX volatility, the yield dynamics of US inbound transactions, and the timing of pricing benefits. Additionally, they address questions regarding hedging effects and the minimal impact of de minimis and China-related tariffs on volumes.

The discussion highlights the query regarding the normalization of US volume growth considering the effects of Easter and potential spend pull-forward due to tariffs. The responder emphasizes the stable and healthy environment, cautioning against over-extrapolation from short-term data and the need to observe the quarter's progression for a clearer trend.

The discussion highlights the observed weakness in travel and entertainment sectors among affluent groups, contrasting with strength in retail goods. Despite some fluctuations, overall volumes remain healthy and stable across discretionary and non-discretionary spending, with higher spend bands showing faster growth than in previous quarters.

Despite increased geopolitical uncertainty affecting consumer and business confidence, the speaker emphasizes resilience in spending, strong employment, steady wage growth, moderated inflation, and healthy consumer balance sheets. They remain committed to their investment and product roadmap, while staying vigilant for potential adjustments and seeing opportunities for M&A in the current environment.

The discussion highlights Visa's historical resilience during economic downturns, emphasizing diversification in business, exposure to everyday spend and eCommerce, and the ability to adjust revenue and expenses to maintain margins.

The discussion highlights the growing interest and investment in the stablecoin space, noting a $200 million milestone in settlement flows. Despite this, stablecoin usage remains a small portion of overall settlement volume. Optimism is expressed regarding potential clearer and more pragmatic regulations from the US government and other countries, which could signify a tipping point for stablecoin adoption. The company is actively exploring broader product opportunities and partnerships within the stablecoin sector, emphasizing the early stage of development in relation to their broader business operations. Additionally, navigating global risks, especially in the context of trade disputes, is recognized as a significant consideration for a US-based company operating globally.

The company emphasizes its deep engagement with governments and regulators worldwide, leveraging a dedicated team and country managers to navigate challenging environments. Despite increasing nationalism and regulations, the company boasts a successful track record in operating within highly regulated markets, utilizing tailored strategies tested across similar conditions. Collaboration with clients and partners plays a crucial role in educating governments about the global payments market's complexities, ensuring mutual success.