VVisa Inc.

To avoid giving undue prominence to your non-GAAP results, please revise to present and discuss your non-GAAP results after your discussion and analysis of GAAP results. Refer to Item 10(e)(1)(i)(A) of Regulation S-K and Corporation Finance Interpretations 102.10(a).

We will revise our future filings to move the discussion of our non-GAAP results after the discussion of our Results of Operations. Read in the reply ↗

Increases in each component of net revenue appear to be primarily volume related. This factor appears to recur annually as the primary factor impacting your net revenue. Please discuss to the extent identifiable factors, such as macro-economic conditions and others, are the cause for the increased volume. To the extent there are known trends in the factors that materially impact future results, discuss such.

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Refer to the introductory paragraph of Item 303(b) and 303(b)(2)(ii) of Regulation S-K and Section III.B.3 and 4 of SEC Release No. 33-8350.

As disclosed in our Management’s Discussion and Analysis (“MD&A”), net revenue is primarily generated from payments volume on Visa products for purchased goods and services, as well as the number of transactions processed on our network. In future filings, we will supplement our MD&A disclosure to discuss identifiable or known factors impacting volumes and those that could materially impact future results.

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An illustrative example is set forth below (new text underlined).

Net revenue increased in fiscal 2025 over the prior year primarily due to the growth in processed transactions, nominal cross-border volume, and nominal payments volume, partially offset by higher client incentives. During fiscal 2025, volume growth was driven primarily by continued resilience in consumer spending and ongoing expansion in digital commerce. Payments volume grew 7%, supported by broad-based growth across both credit and debit spending. Ecommerce continued to grow faster than face-to-face spend. Cross-border volume growth was supported by cross-border ecommerce and travel-related activity.

We expect that the ongoing shift toward digital commerce and electronic payments will continue; however, the extent to which these trends support volume increases will depend on a number of factors, including consumer spending levels and broader macroeconomic conditions. In addition, foreign exchange rate movements and volatility have contributed to periodic variability in our results, and may continue to do so in the future.

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Increases to your value-added services appear to represent about 50% of the respective period over period increases to your net revenue. Please revise to provide discussion of the factors underlying the increases. Further, your disclosure attributes the growth to your "Issuing Solutions, Advisory and Other Services and Acceptance Solutions" portfolios.

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However, you do not appear to quantify within the filing the revenues attributed to these portfolios, and your disclosure does not include quantification of the period over period increases to the respective portfolios to fully understand the impact of the growth from each. Refer to the applicable guidance noted above as well as Item 303(b)(2)(i) of Regulation S-K and section III.D of SEC Release No. 33-6835 (501.04 of our Codification of Financial Reporting Policies).

We will supplement our disclosure in future filings by expanding the discussion to include additional information. An illustrative example is set forth below (new text underlined).

For fiscal 2025, 2024, and 2023, revenue from value-added services was $10.9 billion, $8.8 billion and $7.2 billion, respectively.

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Value-added services revenue in fiscal 2025 increased 24% over the prior year primarily due to growth in Issuing Solutions, Advisory and Other Services and Acceptance Solutions driven by increases in pricing and underlying business drivers, which included processed transactions, number and mix of payment credentials, and client engagements. Processed transactions grew 10% and payment credentials grew by 6% over the prior year. The number of client consulting engagements grew 35% in fiscal 2025 and demand for marketing services increased primarily related to sponsorships, including FIFA.

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Please clarify for us whether you consider your measure of free cash flow to be a performance measure or a liquidity measure. In this regard, we note that you reconcile this measure to net income, which indicates that this may be a performance measure.

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If so, explain how this is a performance measure given the nature of the adjustments you are excluding, specifically, the cash adjustments for capital expenditures, litigation settlements and taxes paid. Please also tell us your consideration of providing disclosure clarifying why you believe this measure is useful for investors. Refer to Item (b) of Regulation G and Item 10(e)(1)(i)(C) of Regulation S-K.

Since Visa’s IPO in 2008, the Company has had a clear capital allocation strategy of first investing cash to grow our business organically and through acquisitions, and then returning excess cash to shareholders through stock buybacks and cash dividends. Management has consistently messaged this strategy to investors in quarterly earnings calls.

Visa considers free cash flow the best performance metric to measure the Company’s generation of net income available to first re-invest in the business and then return excess cash to shareholders.

Free cash flow represents the portion of net income

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that translates into cash that we can return to our shareholders. As such, our reconciliation begins with net income adjusted to reflect capital investments made in the business, as our first call on cash, then further adjusts for Visa-specific financing arrangements such as litigation settlement payments funded by the U.S. retrospective responsibility plan. The remaining adjustments are made to remove the effects of accrual accounting.

The Company believes its presentation of free cash flow is compliant with Item (b) of Regulation G, as all information required to make the presentation not misleading has been provided. Management has consistently messaged Visa’s intent to return excess cash to shareholders, and supplemental presentation of free cash flow enables investors to compare free cash flow to the amount of stock buybacks and cash dividends.

Having reflected on the Staff’s comment regarding Item 10(e)(1)(i)(C) of Regulation S-K, we propose to enhance our disclosure going forward to better explain why we believe this metric is useful to investors. Specifically, we propose to include the following statement in our free cash flow schedule in future periodic filings:

“Management believes that presentation of free cash flow is useful to measure the Company’s generation of net income available to first re-invest in the business and then return excess cash to shareholders through stock buybacks and cash dividends. During the (six) months ended (March 31, 2016), we generated free cash flow of $X.X billion, and returned $X.X billion to investors through stock buybacks of $X.X billion, and dividends paid of $XXX million. Free cash flow is a non-GAAP performance measure and should not be relied upon as a substitute for measures calculated in accordance with U.S. GAAP. The following table reconciles as-reported net income to non-GAAP free cash flow.”

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The disclosure on page 10 indicates that customer relationship intangibles are indefinite lived assets because, historically, there were no material losses. Please tell us what portion of the $17 billion acquired intangible you anticipate allocating to customer relationships.

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Additionally, in your earnings call held on November 2, 2015, you acknowledge there is competition in the marketplace, and that there are “agreements in place . . . that stay intact and [that you will] work commercially beyond that.” Thus, it appears there is market competition present and customers of Visa Europe may not be obligated to remain customers of the combined company subsequent to the acquisition. As such, please tell us the factors considered when concluding that the customer relationship intangibles generated from this acquisition are indefinite lived pursuant to ASC 350-30-35-3.

The Company is in the process of determining the final allocation between customer relationships and reacquired rights. However, our preliminary analysis indicates that the majority of the value will be allocated to customer relationships.

To determine the useful life of these intangible assets, the Company performed an analysis of historical Visa Europe customer attrition for the 5-year period April 1, 2010 to March 31, 2015, the most recent date for which customer information is available.

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This analysis indicated that the rate of customer attrition has been de minimis (e.g., less than 1% by revenue).

This result is consistent with our experience in 2007 when indefinite-lived intangible assets were acquired as part of Visa Inc.’s reorganization. At that time, the Company completed the same analysis over 10-years of customer attrition in the “acquired regions” of Latin America; Asia Pacific; and, Central Europe, Middle East and Africa. As in Europe today, that analysis indicated that historical attrition amongst our clients had been de minimis, which supported the assignment of an indefinite life to these assets. In the nine years since, the Company has continually observed a de minimis attrition rate in its customer base, and as such, these assets continue to be classified as indefinite-lived.

The Company acknowledges that there has always been, and will continue to be, significant competition in the payments industry in Europe. Furthermore, Visa Europe’s customers are not obligated in any way to remain customers of the combined company subsequent to the acquisition. However, as demonstrated by the analysis performed, both Visa Inc. and Visa Europe have demonstrated a long and successful history of retaining our clients, which we expect to continue going forward, and which we believe fully supports an indefinite life.

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Visa acknowledges that:

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The Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to the disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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Please refer to our prior comment 1. It remains unclear how you concluded that your measure of free cash flow should be characterized as a performance measure. In this regard, based on your response and the revised disclosures included in the Form 8-K filed on April 21, 2016, you appear to use this measure to present information related to cash generated and available for specified purposes such as stock buybacks

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and cash dividends. There is no indication that you use this measure to evaluate your ability to generate income or profits. Please provide additional analysis to support your conclusion that this measure is useful as a performance measure and that net income is the most directly comparable GAAP measure. Alternatively, revise your future filings to include a reconciliation to your cash flows from operations. In addition, as “free cash flow” is typically defined as cash flow from operations less capital expenditures, please consider renaming this measure (e.g., adjusted free cash flow) to avoid confusion.

Upon further reflection on the Staff's comment, we agree to present in our future filings "Adjusted Free Cash Flow" as a liquidity measure reconciled to net cash provided by (used in) operating activities as reported in our consolidated statement of cash flows in accordance with U.S. GAAP. We will continue to disclose that we believe this non-GAAP metric is useful to investors so that they may understand our ability to generate cash to first re-invest in the business, and then return excess cash to shareholders through stock buybacks and cash dividends.

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Visa acknowledges that:

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The

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Company is responsible for the adequacy and accuracy of the disclosure in the filing;

Staff comments or changes to the disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and

The Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

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