Visa Q3 2021 financial report: Third-quarter revenue exceeded expectations, cryptocurrency purchases stimulated a 56% increase in online consumption

Visa released its third-quarter 2021 financial report today, with the company's revenue and earnings per share exceeding analysts' expectations.

The company reported quarterly earnings of $1.49 per share, beating the consensus estimate of $1.33 per share. This compares to earnings of $1.06 per share a year ago.

The earnings surprise for the quarter was 12.03%. A quarter ago, it was expected that this global payment processor would post earnings of $1.26 per share when it actually produced earnings of $1.38.

Over the last four quarters, the company has surpassed consensus EPS estimates four times.

Visa's third-quarter revenue surged 27% year-on-year to $6.13 billion, beating analysts' expectations of $5.86 billion. By comparison, revenue was $4.84 billion in the same period last year.

Visa shares have risen about 14.4% since the beginning of the year while the S&P 500 has risen 17.7%.

The current consensus estimate is for earnings of $1.46 per share on revenue of $6.31 billion for the coming quarter, and $5.62 per share on revenue of $23.54 billion for the current fiscal year.

The financial report shows that overseas consumption in the third quarter soared by 47% year-on-year, and online cross-border consumption increased by 56% year-on-year, 12 percentage points higher than in the second quarter. It is worth noting that most of this came from cryptocurrency purchases.

Amid the global epidemic, cryptocurrency consumption drove Visa's overall transaction volume in the third quarter to grow 34% year-on-year to US$2.72 trillion.

Visa Chief Financial Officer Vasant Prabhu said the company has noticed a slowdown in cryptocurrency purchases. “Especially in April and May, there was a pretty big increase in cryptocurrency purchases, but it has started to fall back in June,” Prabhu said.

The financial report shows that data processing revenue increased 32% to $3.3 billion in the third quarter. International transaction revenue increased 54% to $1.7 billion.

Payment volumes grew 34%, up from 11% in the previous quarter. Cross-border volumes, excluding intra-European transactions, grew 53%. Total transactions processed climbed 39% to 42.6 billion, driven by domestic transactions.

In a statement, CEO Alfred Kelly attributed the gains to a "reopening-driven recovery."

"This is best demonstrated by the rebound in credit and in-person consumption, while debit cards and e-commerce remain strong due to the pandemic-induced acceleration of cash digitization. In addition, cross-border travel spending has improved as vaccination rates increase and more borders open," he said.

Visa shares rose after the company announced a partnership with payment processor Global Payments (GPN) and leading North American financial partnership group Desjardins to offer Visa Installments to participating Canadian merchants and eligible credit card holders.

Visa shares closed up 0.3% at 250.93 today after hitting an intraday all-time high of 252.67, and were down 0.3% in late trading.