Visa beats earnings expectations

Fintech Headlines for April 25, 2023: Visa beats earnings expectations, Nubank's customer base surpasses 80 million mark, Fiserv raises full-year revenue guidance

April 26, 2023

Hi!

Yesterday was a brutal day in the markets, and First Republic Bank's stock price was cut in half after the earnings release. Nevertheless, Alphabet and Microsoft, which reported their results after the market close, beat expectations, so stock futures suggest a better day ahead. Let’s look into:

  • Visa beating earnings expectations on strong payments volume growth

  • Nubank's customer base surpassing the 80 million mark, and

  • Fiserv raising its full-year 2023 revenue guidance

Visa Beats Earnings Expectations on Strong Payments Volume Growth

Visa (NYSE: V) reported its Fiscal Q2 2023 results after the market close beating analysts’ estimates. Net revenue increased 11% YoY to $7.99 billion, driven by the growth in payments volume, cross-border volume, and processed transactions. GAAP Net income increased 17% YoY to $4.26 billion or $2.03 per share, and non-GAAP Net income increased 14% YoY to $4.38 billion or $2.09 per share.

Payments volume for the quarter increased 6.4% YoY (10.1% YoY on a constant-dollar basis) to $2.96 trillion. Payments volume growth was driven by International and U.S. credit card spending (up 15.2% YoY and 10.5% YoY on a constant-dollar basis respectively). Cross-border volume increased 19% YoY (24% YoY on a constant-dollar basis), and Total processed transactions increased 12% YoY to 50.1 billion.

Visa’s stock price is up 10.51% for the year and rose another 1.33% in the after-hours trading following the earnings release. During the quarter, Visa continued buying back its stock, repurchasing 10.0 million shares at an average cost of $222.09 per share for $2.2 billion. The Company had $11.8 billion of remaining authorized funds for share repurchase.

Data source: Visa, Operational Performance Data

Nubank's Customer Base Surpasses 80 Million Mark

Brazilian Fintech company Nubank (NYSE: NU) announced that it has reached a milestone of 80 million customers in Latin America. The company, which offers digital banking, credit, and investment products, has seen explosive growth in recent years and has become one of the region's most valuable startups. Nubank operates in Brazil, Mexico, and Colombia, and gained popularity by offering an innovative and hassle-free banking experience to its customers, who can access its services through its user-friendly mobile app.

At the end of Q1 2023, the company had 79.1 million customers, which represents a 33% compared to Q1 20222. “We added around 5 million customers to our base in just over a quarter, always with a great contribution from the Brazilian operation and increasing adherence by Mexicans and Colombians,” commented David Vélez, CEO and founder of Nubank in the company’s press release. Nubank will report its Q1 2023 results on May 15, 2023, after the market close.

Fiserv Raises Full-Year Revenue Guidance

Fiserv (NASDAQ: FISV) reported its Q1 2023 results yesterday before the opening bell. GAAP revenue increased 10% YoY to $4.55 billion, and GAAP earnings per share declined 13% YoY to $0.89. Adjusted revenue increased 10% YoY to $4.28 billion, while adjusted earnings per share increased 13% YoY to $1.58.

Revenue growth in the first quarter was driven by the Merchant Acceptance segment, which delivered a 12% YoY growth in adjusted revenue to $1.85 billion, and the Payments and Network segment, which delivered an 11% YoY growth in adjusted revenue to $1.64 billion. Adjusted revenue from the Financial Technology segment increased by 2% YoY to $0.79 billion.

Fiserv raised its full-year 2023 outlook and now expects GAAP revenue growth of 6% to 7% YoY and adjusted revenue growth of 5% to 6% YoY. The company also guided for adjusted earnings per share of $7.30 to $7.40, representing a 12% to 14% growth compared to 2022.

Chart of the Day

Mastercard will report its Q1 2023 results on Thursday before the market opens. This year, Visa’s stock is outperforming its counterpart, advancing 10.72% YTD, compared to a 6.32% YTD growth for Mastercard. Will this change after Mastercard releases its Q1 2023 earnings?

Chart made with Koyfin

Jobs in Fintech

That’s it for today! Thank you for reading and see you tomorrow!

Jevgenijs

Cover image source: Visa

Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.