Investing

Here Is How Much Money Visa Makes Every Minute

Trey Thoelcke

Published: April 9, 2024 2:10 pm

Last Updated: April 10, 2024 7:05 am

The Visa credit card is one of the most popular in the world, accepted in more than 200 countries and territories. Visa Inc. (NYSE: V) operates one of the world’s most advanced payment processing networks, and it recently began offering AI tools for users. Also, its stock is a longtime holding of famed investor Warren Buffett.

Our focus here is on how much money Visa makes every minute. Let’s take a look.

How Does Visa Make Its Money?

This payment technology company was founded in 1958 and went public in the spring of 2008. It provides financial institutions with Visa-branded payment products that they then use to offer credit, debit, prepaid, and cash access programs to their customers. Visa is one of the world’s most valuable companies, and it is headquartered in San Francisco. (Here are six reasons to avoid Mastercard immediately.)

Out of Visa’s $32.7 billion in revenue last year, about $16 billion came from data processing, while almost $15 billion came from services in support of Visa payments. Its three biggest markets are the United States (57.1%), the United Kingdom (13.9%), and Australia (6.5%).

Here is a look at annual revenue and revenue per minute for the past five years:

How Much Does Visa Really Make?

Revenue is not the full picture, of course. Net income, also called profits or earnings, is what is left after expenses such as cost of goods sold, taxes, and interest are subtracted. In other words, it is the bottom line (of the income statement), as opposed to revenue, the top line.

As Visa’s top line has mostly grown in the past decade, so too have its operating expenses. At the end of 2014, quarterly operating expenses totaled about $1.1 billion. That came in at almost $2.7 billion most recently, though that was less than the $3.0 billion or so in the prior two quarters. In addition, note that Visa paid about $3.2 billion in client incentives last year. So how has all of that affected the bottom line?

Here is a look at annual net income and net income per minute for the past five years:

How Has Visa Stock Fared?

The stock traded for around $50 per share a decade ago. It is up more than 444% since then (split adjusted), easily outperforming the broader markets. The share price hit an all-time high of $290.96 last month. Shares are also about 6% higher than at the beginning of this year, underperforming the S&P 500 since then.

The $303.84 consensus price target indicates that analysts see over 10% additional upside in the coming year. The high price target is up at $335. All but four out of 39 analysts who follow the stock recommend buying shares now.

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