Visa’s Free Cash Flow Generation Remains Phenomenal

Image: Visa continues to translate a high percentage of revenue into free cash flow generation.

By Brian Nelson, CFA

On April 29, Visa (V) reported better than expected second quarter fiscal 2025 results with non-GAAP earnings per share and revenue coming in higher than expected. Net revenue increased 9% in the quarter, or 11% on a constant dollar basis, while non-GAAP net income came in at $5.4 billion or $2.76 per share, the latter up 10% from the same quarter a year ago. The board of directors authorized a new $30 billion multi-year share repurchase program. Management had the following to say about the quarter:

Visa’s strong 9% fiscal second quarter net revenue growth was driven by healthy trends in payments volume, cross-border volume and processed transactions. Consumer spending remained resilient, even with macroeconomic uncertainty. Our strategy across consumer payments, commercial and money movement solutions and value-added services, our diversified business model, and our focus on innovation position us well for the rest of the fiscal year and beyond.

Visa’s payments volume increased 8% in the fiscal second quarter, while cross border volume increased 13%. Processed transactions increased 9% from the same period a year ago. For the six months ended March 31, net cash provided by operating activities came in at $10.1 billion, up from $8.2 billion over the same period last year. Capital expenditures were $672 million over the six month period, up from $548 million in the year-ago period. Free cash flow for the six months ended March 31 was $9.4 billion, or 49.3% of total revenue. We continue to be fans of Visa’s business model and strong free cash flow generation.

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