While consumers have been wrestling with soaring costs of living and unprecedented inflation, Visa reported a jump in revenue that topped growth estimates for the quarter.
Payments volume increased by 10% in the fiscal fourth quarter and transactions increased by 12%. As a result, Visa’s revenue rose from $6.56 billion to $7.79 billion — more than a 3% increase from the $7.55 billion expectation. Furthermore, the company earned $1.93 per share, after adjustments, which surpassed analysts’ expectations of $1.87 per share.
“If you just looked at our numbers and didn’t look at what people are writing or saying in the media, you wouldn’t think there’s all this anxiety or uncertainty out there,” said Chief Financial Officer Vasant Prabhu.
While many companies struggle, Visa stocks are holding relatively strong. This is not the first time the company has defied market expectations.
During the Great Recession of 2008, “despite increasing economic turbulence worldwide, Visa posted strong revenue and earnings gains while diligently taking steps to capitalize on the continuing secular trend toward electronic payments,” said Joseph Saunders, executive chairmen and former CEO of Visa.
Since the 2008 recession, Visa has grown into a very different business by expanding into global markets — including emerging ones like Brazil and South Africa — and entrenching itself in online retail.
Economic watchdogs, such as InvestorPlace, have often called Visa a “recession-proof” stock. However, there is a growing fear that as money moves from cash to digital assets, such as Ethereum and Bitcoin, Visa will one day be usurped by blockchain-supported assets.
For the moment, Visa seems to be ahead of digital assets, which have often failed to meet the hopes of its investors or be accepted as a widespread form of currency.
For instance, the Bitcoin price has fallen by 4%, as reported by The Dallas Express. More dramatically, Terra Luna, an experimental cryptocurrency, dropped from a market share of $40 billion to almost nothing last May.
Having outperformed cryptocurrency and showing strong quarterly growth, Visa remains cautiously optimistic that the San Francisco-based company will emerge from the economic downturn relatively unscathed.
“Clearly, there’s a risk of recession,” said Prabhu. However, Visa is “assuming no recession… for internal planning purposes.”
Despite the company’s optimism, Prabhu assured stockholders that there are “contingency plans in place should we have an economic or geopolitical shock that impacts our business.”
Chief Executive Al Kelly added, “we have a very heavy debit portfolio, which tends to perform better during these downturns.”
This year, shares of Visa have lost 10% compared to the Dow Jones which has fallen 12%.