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Visa’s Q1 Fiscal 2023 Solid, Puts Up 64%+ Operating Margin

publication date: Jan 30, 2023
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Image: Visa is a free cash flow generating powerhouse and is insulated from rising delinquency and charge offs, unlike others in the credit card space. Image Source: Visa. 

Visa is a capital-light entity, meaning that its capital expenditures are quite small relative to its revenue and cash flow from operations. We love these types of companies as they are able to generate a significant amount of free cash flow, which for Visa, came in at $3.92 billion during the quarter, about 49% of total revenue. Visa’s business model is so cash-rich that for every $1 generated in revenue, roughly half of that turns into free cash flow. Very few companies have the operating margin and free cash flow profile as that of Visa, and we remain huge fans of this Best Ideas Newsletter portfolio holding. Shares yield 0.8%.


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