Welcome to Visa Inc. Fiscal Q3 20 10 Earnings Conference Call. Today's conference is being recorded. If you have any objections, you may disconnect at this I would now like to turn the conference over to your host, Mr. Jack Karski, Head of Global Investor Relations.
Mr. Karski, you may begin.
Good afternoon, and welcome to Visa Inc. Fiscal 3rd quarter 20 10 earnings conference call. With us today are Joe call on behalf of Aetna's Chairman and Chief Executive Officer and Byron Pollitt, Aetna's Chief Financial Officer. This call is currently being webcast over the Internet. Can be accessed on the Investor Relations section of our website at www.investor.visa.com.
A replay of the webcast will also be archived on our site for 30 days. A PowerPoint deck containing highlights of today's Let me also remind you that this presentation may include forward looking statements As a result of a variety of factors, actual results could differ materially from such statements. Additional information concerning these factors is available in the company's filings with the SEC, which can be accessed through the SEC's website and the Investor Relations section of the Visa website. For historical non GAAP or pro form a related financial information disclosed in this call, the related GAAP measures and other information required by Regulation G of the SEC are available in the financial and statistical summary accompanying our fiscal Q3 earnings This release can also be accessed through the Investor Relations section of our website. With that, I'll turn the call over
to Joe. Thanks, Jack, and thanks everyone for joining the call. Visa once again delivered strong earnings results. Against the backdrop of a recovering global economy, we posted net operating revenues of just over $2,000,000,000 a 20 3% increase over the year ago period. Revenues were driven by double digit growth in payments volume, cross border volume And Visa process transactions coming from all areas of the globe.
Net income on a GAAP basis was 7.60 $1,000,000 a 45% increase over the prior year. Overall, we more than delivered on guidance with fiscal 3rd quarter earnings on a GAAP are in the range of $100,000,000 stock repurchase, while continuing to invest in newer initiatives that will fuel our future growth. On today's call, I'm going to leave the more detailed view of our financials to Byron, while I address a few items I'm sure are at the top of your mind. Let me begin by providing color on recent events that have unfolded in Washington. It's clear that the Wall Street Reform and Consumer Protection Act that was signed into law last week will reshape the U.
S. Debit landscape. However, precisely how the law will impact Visa's business and that of our financial institution clients is yet to be determined. As you may know, the Federal Reserve has embarked upon a rule making process to verify the details of the legislation and how and when it will be implemented. We have an opportunity to inform and strategies that will enable us to compete effectively in the new environment once the details of the law become clear.
So until the Fed finalizes the rules and until we finalize our mitigation response, it's not possible to In the timeframes outlined in the legislation, our business should not begin to feel the effects of the legislation until this time next year. Therefore, I do not anticipate any impact in the FY 'ten. And looking ahead to 2011, I expect the impact will will be modest and contained to our 4th fiscal quarter. With that, I feel confident reiterating our earnings per share guidance for fiscal 2011 Better than 20% growth. And for past practice, we will be updating other guidance metrics for 2011 on our October call.
We do know that we are working with the best set of assets in the industry. We are the lowest cost provider of debit services. We have deep Debit expertise and we have a powerful brand. We also know that Debit delivers tremendous value As evidenced by the growing appetite of consumers, governments and others to use the product and by merchants who accept it. Given our continuing discussions with our clients and the preliminary business strategy options that we have already developed, I'm very confident We will effectively adapt to the new environment and continue to lead growth in this segment of the business.
And as you think about In the U. S. Remain, our growth is increasingly likely to come from outside the U. S. Borders regardless of the domestic environment.
Today, Our non U. S. Revenues make up approximately 40% of our business and one of our stated 2015 goals is to generate half of our revenues from operations in the rest of the world. So when I step back And take a global view of our existing business and future opportunities, I'm reminded how strongly I feel that I would rather be Visa are being published at last March's Investor Day. Turning to the legal front, we have 2 topics to update you on.
We have made progress on our are ongoing engagement with the U. S. Department of Justice regarding its investigation into the payment card industry and its key players. We have been cooperating with the to satisfy the civil investigative demand filed in late October 2008 concerning the major payment The department has indicated that it is considering filing a civil lawsuit challenging rules prohibiting surcharging on credit and Differential discounting between networks similar to the claims that have been included within the merchant interchange litigation that's litigation or payment of monetary damages and in a way that proactively addresses concerns in the covered litigation. Regarding the covered litigation, it is proceeding on its normal course and we continue to be actively are involved in settlement discussions.
As a reminder, this litigation is covered by our U. S. Financial Institutions are under our retrospective responsibility plan. That being said, I remain highly confident in Visa's strategic
plan introduced,
excuse me, earlier this year, In particular, we remain intensely focused on innovation, which is critical to accelerating growth To that end, Visa completed the acquisition of CyberSource are right on schedule. CyberSource enables us to expand our capabilities and competitive position in e commerce, one of the fastest growing segments of the payment There is also tremendous opportunity for us to expand CyberSource globally, leading to new customers Another innovation priority for Visa is mobile payments. And on that front, among other mobile initiatives, we built Additionally, in May, we were selected by the State Bank of India to execute a joint venture in India in partnership with Elavon to help drive the growth of digital currency in this important emerging economy by increasing acceptance We also continue to successfully win new contracts and expand our relationships with issuers, merchants and governments around the globe. For instance, we just signed a 5 year credit and debit deal with Bradesco, one of our most important partners in Brazil. It is the largest contract we have ever closed in our Latin American region.
And finally, I'm pleased we were able to continue delivering on our strategy to return excess are in the Q3, via the funding of our litigation escrow, which has the same effect as a $500,000,000 share This brought our fiscal year to date share repurchase totaled to almost $1,200,000,000 and we'll continue to be opportunistic in this regard over the next quarter. Let me now turn the call over to Byron to take
I will then conclude with updates on our Q4 and full year guidance. Global payment volume growth for the March quarter In constant dollars rose to 13% from a positive 8% in the December period. We witnessed meaningful growth In every region of the globe. In the U. S, payment volume growth was 13% in the March quarter, up from 7% in the December quarter.
Debit continued its strong recent trend delivering 21% growth compared to 15% growth in the December quarter. Credit accelerated to a positive 3% growth in the March are in the quarter from a negative 1% rate in the December period. On a constant dollar basis, rest of world payment volume grew at 14% in the March quarter, are up from a 10% rate in the December quarter. These results recognize continued secular growth posting a 17% growth rate on a constant dollar basis from the 12% rate in the March period. Growth in the month of June totaled $11,700,000,000 in the fiscal third quarter, an increase of 14% over the similar period a year ago and are on par with the 14% growth rate we saw in the March quarter.
Turning to the income statement. In our fiscal third quarter, Gross revenues of $2,400,000,000 were up 22% from the similar period in 2,009. Volume and support incentives as a percentage of gross revenues came in at 16%, below the prior year level of 17% and below our expectation. The expected rate of 18% was predicated on the signing of certain contracts during the quarter, which carry a high level of one time contra revenue incentives. While timing is still uncertain, we project these contracts will be signed in 4th fiscal quarter, which would elevate the support and incentive lines into the range of 17% to 18% of gross revenue Net operating revenues in the quarter were just above $2,000,000,000 A 23% increase over the operating revenues recorded for the 3rd fiscal quarter of 2,009, revenue line items.
Service revenue was $873,000,000 up 13% over the prior year period and reflecting Reflective of accelerating payment volume growth in the quarter ending March. The growth rate for the June quarter should mirror the March quarter's results. Data processing revenue was $792,000,000 up 31% over the prior year based on strong process transaction growth of 14% and the final quarter of previously enacted pricing actions. In contrast, our final fiscal quarter will see data processing revenue driven by process transaction growth, which will be partially offset by yield compression due to 2 factors. 1st, recent contract wins and conversions And second, more clients exceeding volume thresholds, which qualify them for lower prices.
International transaction revenues were up a solid 25 percent to $574,000,000 due to continuing improvement in cross border are in the range of 1% as a result of continued currency volatility combined with our hedging activities. For the full fiscal We continue to expect the foreign exchange impact on revenue growth to be slightly positive. Our operating margin was are 50 6%, in line with our guidance of mid to high 50s. Total operating expenses for the 3rd were $892,000,000 representing a year over year increase of $68,000,000 or 8% driven Including about $15,000,000 in CyberSource related acquisition costs, but Excluding any CyberSource operating expenses incurred subsequent to the acquisition on July 21. On a sequential quarter basis, we saw moderately higher expenses in marketing and advertising given our higher spending on the FIFA World Cup event.
We also saw higher professional fee expenses as a result of costs associated with the CyberSource transaction and higher investment in product initiatives We expect to see a further sequential increase in professional fees in the 4th fiscal quarter as a result of closing and integration costs associated with the CyberSource transaction and continued investments in product and infrastructure. Capital expenditures were $65,000,000 in the quarter and $144,000,000 year to date, representing on For all of fiscal 2010, we now expect capital expenditures to be moderately higher than $200,000,000 Moving on to the balance sheet. We ended the 3rd quarter in great shape with negligible debt and cash, cash equivalents, restricted Cash and available for sale investments of $7,400,000,000 Of this total, dollars 2,000,000,000 is restricted cash, As you recall, in May, we placed $500,000,000 into the escrow account, which had the effect of a 6.7 As of the end of fiscal Q3, Visa's outstanding share count is now 731,000,000 Now let me comment on the June quarter's payment volume data and our early read on July. Then I'll cover our updated financial expectations for the balance of the year. Global payment volume growth for the June quarter in constant dollars rose to 14% from 13% in the March quarter.
We experienced meaningful growth In every one of our global regions. In the U. S, payment volume growth was 14% in the June quarter, up slightly from 13% in Debit continued its strong recent trend delivering 21% growth same as the March quarter. Credit accelerated to 6% growth in the June quarter from 3% in the March period. More recently, Through the 21st July, U.
S. Payment volume grew at 13%, 1 percentage point below Debit grew at 20%, while credit grew at 6%. On a constant dollar basis, rest of world payment volume grew at 14% in the June quarter, same as the March quarter. These results recognize continued secular growth and a strong and healthy diversified country base outside the U. S.
As mentioned earlier, identified country base outside the U. S. As mentioned earlier, global cross border volume grew at 17% in the June quarter on a constant dollar basis. Growth in the month of June was a strong 18%. July cross border volume growth on a constant basis sustained the strong rate we saw in June, posting an 18% rate of growth through the 21st of the month.
Process transactions through the 21st actions through the 21st grew at 15% over the prior year period, up slightly from the 14% growth posted for the 3rd fiscal full year for operating performance and the resulting impacts on our full year guidance. We continue to be comfortable with a net revenue growth target at the high end of the 11% to 15% range. Despite our year to date growth of 18%, we anticipate a couple of dynamics in the 4th quarter. First, the data processing fee increase we implemented in July 2009 lapsed in June This will contribute to a significantly lower growth rate in fiscal Q4 for reasons described earlier. 2nd, we expect volume and support incentives to increase in the 4th quarter for two reasons.
1st, higher earn out rates tied to the higher payment volumes we're experiencing. And second, as mentioned earlier, we anticipate signing certain contracts, which if concluded would for full year 2010 operating margin remains in the mid to high 50s. Increased marketing, Advertising and new initiative spending in the second half combined with the CyberSource transaction Fiscal year 20 10 tax rate to a range of 37% to 38% in spite of the year to date run rate of approximately 36%. The true up of our state tax rate and the related adjustments to our deferred tax liabilities recorded
As a
part of our October 2007 reorganization. Taken together, we anticipate that these factors will Our fiscal 4th quarter effective tax rate to be closer to 40%. The full year 2010 tax rate keeps us on track We continue to target better than 20% earnings per share growth in 2010 On a GAAP basis, excluding the VisaNet Brazil gain and a 2011 earnings per share growth goal of better than 20%. Both years include the addition of CyberSource. Regarding the CyberSource impact on fiscal 2010 earnings, We expect the Q4 impact on EPS to be 0 point 0 $3 to 0 point 0 $4 of which approximately $0.01 is from transaction costs and is already included in our full year operating expense guidance and an additional $0.02 to $0.03 from combined operations largely driven by the amortization of intangible assets arising from the transaction's purchase accounting.
We still expect this transaction to be slightly dilutive in fiscal year 2011. Turning to capital expenditures, we are adjusting our expectation around CapEx to be moderately higher than $200,000,000 And lastly, our projection of free cash flow for the year remains north of $2,000,000,000 Which is net of the $682,000,000 prepayment we made on the previously settled retailer's litigation, but before The $2,000,000,000 spent on the CyberSource acquisition. That concludes my comments. So I'll turn the call back over to Joe.
Thanks, Byron. In summary, I want to underscore my confidence in Visa's future and our ability to drive continued growth both in the United States and internationally. Visa remains at the forefront of this highly competitive dynamic industry after more than 50 years in the business because we have a track record of innovating, are adapting and successfully navigating challenges. And we will continue to take concrete steps to achieve our strategic
are very
comfortable executing on those goals. With that, I'll open the floor to questions.
Thank Our first question comes from Julio Quinteros, Goldman Sachs. Your line is open.
Great, guys. Hey, real quickly, looking at Both the gross revenue yield and the net revenue yield in your model, seeing some pretty decent upticks there. Kind of taking some of the commentary are talking about the higher rebates and thinking about some of the puts and takes in pricing as we think about the forward quarters. Can you talk specifically The pricing levers that you guys would have left in the forward quarters as we roll into fiscal 2011 both in the U. S.
Versus
on to the pricing opportunities, pretty much what we have said before that we have behind Holding legislation that we have in the United States. Once the legislation is clarified, then that will give us an opportunity
The next question comes from Bob Napoli, Piper Jaffray. Your line is open.
Thank you. Good afternoon. Joe, the payment system is somewhat of a mess, I guess. If you look at the changes, some of the big ones, banks less than $10,000,000,000 are excluded from the bill, prepaid cards are excluded, you have the debit exclusivity. I mean, how do you as you look at some of those challenges and managing that system, do you think it is how do you think that will work?
I mean, is it too early to tell? I mean, do you think it's feasible to That the smaller banks get excluded in practice. And what are your thoughts around How banks will respond with prepaid cards?
Well, look, the answer is that I can't specifically answer that question until I get a little bit more clarity in the rulemaking process from the Fed. Now As I mentioned, be a positive part of that, but until that happens, it's a little difficult to the issue does not lie with Visa alone. It lies with several different parties in the chain, as you know. And so it's not totally in our control. We will, of course, do Everything in our power to adhere to the law of the land.
And we're just going have to see what kind of effort that takes and how other people respond to the same challenge.
The next question comes from David Hoxton, Buckingham Research Group. Your line is open.
Yes, I wonder could you give us a sense How much account customer account conversions might have attributed to the debit growth in the U. S. And process transactions card interchange proposals relating to government cards. I wonder if you have any color on that?
On the first part, the The second part of the question?
The government. As it relates to the proposal that Durbin just made, It has it would have very little effect on interchange in total. I mean,
You guys made some changes with regards to the dynamic currency inversion outside the U. S. Just wondering, can you give us an update there and is that signal maybe a future additional revenue opportunity
We have rules in place that govern direct currency conversion. We have Some of the globe operating under those rules, some of them have been grandfathered based on practices on direct currency conversion while we study this situation. And so in the months to come, expect to hear more from us on this
are open.
Hi, thanks so much. I thought I'd maybe ask about share repurchases, just your appetite, Joe, to buy back stock given what's going on. I guess as a follow-up, how much freedom do you have to do something like the $500,000,000 synthetic
Yes. So the appetite remains. So I'll just use this as an opportunity to once again reaffirm that management's intent to return excess cash to shareholders in the form of both dividends and purchases of the outstanding authorizations that we have today, we have $336,000,000 unutilized and we will be looking for opportunistic moments over the next several months to use that authorization. And then, of course, we are never hesitant at
are from Adam Friesch, Morgan Stanley. Your line is open.
Thanks. Good afternoon. The next 12 to 18 months is a more uncertain And I just wanted to ask 2 questions about that uncertainty, whether it be legislative or macro related. One, has it impacted your plans rated your 20% EPS growth for next year. Have you incorporated additional scenarios and contingency planning and And how firm is that guide?
I don't think that at This time, I don't have any reason to back off anything we talked about at our March Investor Day. We're moving forward are in the range of 2,000,000,000. And as it relates to reaffirming the guidance, we're reaffirming the guidance. And I mean, I think that that speaks for And we didn't do it without thinking about it. I mean, we didn't do it without looking at What was going on in the economy, we didn't do it without understanding what was happening legislatively.
We didn't We just didn't do it without being cautious and prudent and thoughtful. And so we're confident
The next question
I mean, that came across pretty comp. I know it's legalese, but is it a surcharge issue or a credit interchange issue? Just maybe kind of big
Well, there isn't an interchange issue with the there is not an interchange issue with the DOJ. The primary issue is their concern over surcharging and it's on it relates to Credit cards, this is a dialogue that we've had with them for a lengthy period of time. The current conversations are dovetailing With the litigation conversations that we're in the midst of. So I I think this is just part of the same fabric and I think that things are moving are in a direction that we have anticipated. And so we're not unhappy with where we
The next question comes from Rod Bourgeois, Bernstein, your line is open.
Yes, guys.
I don't think you want to talk anymore about the Durbin Amendment, but if multiple Or experienced some pricing pressure. And then I guess a part B to that, have you changed anything in your customer engagement strategies in light of the Durbin Amendment.
Well, you made some specific statements Congressionally as it relates to intent, we've looked are to the situation that you're referring to. And I think that when everything is said and done and all the smoke is cleared We'll continue to do well. What that specifically means, I can't speak to right now. And as it specifically relates to InterLink, it may I mean, we have a PIN debit business and a signature debit business and maybe there's less distinction between the 2, maybe there isn't.
The next question comes from Jason Kupferberg, UBS. Your line is open.
Thanks guys. I was hoping you could compare for us your conviction in the quarter, if you will, now versus a quarter ago, just in terms of this volume recovery in your business being sustainable and not just mostly a function of easy year over have a sense of kind of how you're leaning now versus a quarter ago in terms of sustainability?
So let me take that one, Jason. Let me share a few more granular numbers to give A little bit of perspective, I would say overall, our view is that we are in recovery. What we're seeing Balance suggests maybe a lower probability of a double dip than what we might have suspected a quarter ago. But we also believe that the recovery is going to be protracted. When you look at it on a month by month basis, the numbers are certainly good given the numbers are certainly good given the prior year comps, but you're going to have some bumps along the way and hence the notion of a recovery without turbulence doesn't our guess is not in the cards.
Let me give you a quick snapshot of what we saw the last increased 16%, then went to 15% in April, then it went to 15% in May, then it dropped to 12% in June, still Good number, but a little turbulent. And July through 21st July, it's positive 13. So All suggesting recovery, but whether it will be consistently upward sustaining
The next question comes from Craig Maurer, CLSA. Your line is open.
Yes, good evening. Regarding your marketing budget, you've guided to under $1,000,000,000 The number hasn't strayed that far from there over the last few years. I was wondering if you view that number as
We will look to give you an update on annual guidance going forward at the next earnings call. That's our are welcome to guide at the beginning of the year. It has been around $1,000,000,000 for the last couple of years. And in light of the are holding recovery in the economy, where we stand in the environment, hopefully clarified by in the U. S, we'll take a very hard look at where the marketing dollars yield the most return and then on a bottoms up basis come do a total and give you some reference points at the next earnings call.
The next question comes from Don Fandetti, Citigroup. Your line is open.
Hi, good evening. Joe, certainly understandable that There's going to be some time before you can really assess the risk around Durbin and Debit. But is there any scenario I mean, are we talking about just a risk to growth rates or is there a scenario where you could have to reduce your And are you feeling any pressure from the banks as they look at their different bull and bear scenarios?
I don't think that there's any pressure that we're Right now that we haven't been feeling for quite some time. I think we've been in a competitive environment for a while. This probably exacerbates it to a certain extent. I mean, I obviously can't get into talking about any of Our contract specifically, I think that we have thoughtfully taken our relationship with our clients On that, there isn't much I can say. I mean, look, there are different things that can happen as a result of the I believe in my heart of hearts that it's going to stop the electronic payments from growing in the United States.
And really believe that Visa will be a significant part of that in the future as we are What that means, what form that takes, what how that changes our business model is not I'm just not able to specify that at this particular point in time. But you should will come into play. So but to specify that publicly right now is just not possible.
The next question comes from Tom MacRohan with Janney. Your line is open.
Yes. Two quick questions on The growth in payment transactions, they grew $1,000,000,000 sequentially primarily due to the U. S. Debit card. So if it was not
I mean, some of it was Wamu and some of it was I mean, we did have some And if I'm I think that Chase started putting out Visa cards last
The I
would just add to that, that in addition to the conversions, we are seeing are in recovery. These are remember, we are comping off of a pretty Low volume last year that relatively, we had actually negative payment volume growth last year. So we are are ramping up. And then in addition to that, you have your conversions that are contributing to that. So it On top of that, you have an extra increment associated with the wins that we've experienced and conversions.
The next question comes from Chris Brendler, Stifel Nicolaus. Your line is open.
Hi, thanks.
Good Lots of questions on Durbin. I have one as well. The one area that I can't put my hands around and I was hoping Joe you could give me some color You've been in the business for so long is the prospects of merchant discounting, is that a significant risk? I mean, it seems That could be a pretty big impact on payments volumes if discounting for cash or pin debit becomes a big part of U. S.
Payment
We've allowed discounting for a number of years. The definition of how someone can discount has A significant risk. I mean, we've always been okay with the notion of discounting. We've had a little
The next question comes from Tim Willi, Wells Fargo. Your line is open.
Thank you. Good afternoon. A question about CyberSource and maybe the longer term implications of markets developing both domestically and overseas that would have any kind of secular shift on the revenue yield in terms of purchase volume or revenue per transaction, again, as you advance that strategy, which I think you said
We have not looked at it so much from the yield side as just the raw Which is one of the, if not our fastest growing source of transactions, many of which are cross border. So from that in the e commerce space that we are seeking, yes, the yields could be significantly higher. But you focus specifically on mobile. And in our view, there are going to be particularly in the developing and emerging countries where a U. S.
Type infrastructure is simply Not in the cards. There is a significant opportunity for mobile to be the plastic of the are in
the range of the 2nd quarter.
Our first question comes from the line of John Franzreb with Deutsche Bank. Please go ahead. Our first question comes
from the line of John Franzreb with Deutsche Bank. Please go ahead. Our first question comes from the line
of John Franzreb with Deutsche Bank. Please go ahead. Have a good match with the infrastructure that will be cost effective for that enormous
Thanks guys. Thanks for taking my question. Byron, could you put a little bit of an order of The service fee yield this quarter, that's been ongoing. Could you comment just on what's going on there?
So, let me talk about The data processing first. The biggest dynamic as you transition from 3 to 4 in terms of And from a modeling perspective, the way you might think about the data looking at data processing, as I described in my opening remarks, is that if is building. A lot of that volume is going to clients that are already in are lowest pricing tier or we're putting more of the volume in lower pricing tiers. And that is a that's The natural outgrowth of the healthy growth in the business and what happens when you who have increasing economies of scale, we share that with our clients. And so that's basically the dynamic It's a more complicated dynamic.
I wouldn't read too much into month to month shifts. And so hard to comment Surgically on that. I would just say there's no material call out today on service fee trending.
The next question comes from David Parker, Lazard Capital Markets. Your line is open. Thank you. Good afternoon. During the quarter, you released a new e commerce product PayClick in Australia that stacks up better with PayPal than RightClick did.
Can you just comment on your strategy with that product and how you might use the CyberSource acquisition to get closer to the merchant and penetrate that channel? Thanks.
On PayClick, literally in June, We just launched a pilot. And as you pointed out, that was done in Australia. So it is very, very early are in the early days in that. We'll have much more to talk about that going forward, but early days on that pilot just underway. Stay tuned.
The next question comes from Sanjay
I just had a quick question on pricing changes. I seem to recall there was a pricing change that would begin in July. 1, I wanted to make sure that was the case and 2, just want to make sure that was incorporated into the revenue guidance. Thank you.
The answer is There was a price increase pricing action that took effect in July, but because of the quarter lag in are reporting of service fees. That won't actually show up until the 1st fiscal quarter of next year. Yes. And on the second part of your question, it is incorporated in the guidance that we have
Chris Mamone, Deutsche Bank. Your line
is open. Thanks. Good afternoon. I guess the one area on revenues that sort of Marcus, as far as where we were modeling with international transaction fees, especially given the easy comp with flat shares, anything to call out there and then as a follow-up just on the incentive line. Was there any recurring themes on why a lot of these deals got pushed out beyond the Q3 and I guess what are the chances that you don't get some of those signed until fiscal 2011?
Thanks.
No call out on the international. It is somewhat impacted are by currency, but basically, we just outperformed during the quarter. And this has been a Significant upside for us during the year. Just to give you all a little color, In April, month of April, in constant dollars, cross border volume was up 15, May 19, June 2018, July through the 1st 21 days 2018 and that compares With regards to timing of contracts, this is always hard. It's just hard to pick the quarter and so nothing to read into this other than the pace has probably slowed a bit because of with our U.
S. Banks given the dramatic tension that Washington has commanded did over the last two quarters. Other than that, I would say nothing in particular to read in.
The next question comes from Bruce Harding, Barclays Capital. Your line is open.
I'd be curious, it's hard to differentiate over these last few months of underperformance between fears of double dip or the things that have happened in the legislation, But I would just be curious your view on the feedback you get, what is weighing more heavily on the stock, is it implications from the Durbin amendment Or just fears of a double dip, but Joe, your comment that Durbin won't impact till this time next year, so therefore, might have impact on Q4 Next year, thus 20% EPS growth is still in place is very reassuring new guidance today, which thank you. But in the past, The precedent of Australia suggested there wouldn't be an impact on Visa. So I'm just wondering, are you implying that there may be Is that a change in the view from Australia that the Durbin amendment may indeed impact you? And Is it too simplistic to simply divide to get to per card debit spend, I get About $2,500 if I just take total cards by annual debit spend, couldn't the bank simply that's about $25 a year of income at a 1% average debit fee, couldn't the bank simply replace that with some other form a fee in their bundled checking account structure and recoup what they lose in debit interchange.
So Sort of another reason I'm wondering why you it seems like you might suggest post-twenty 11 there
I also said I wasn't sure of all the implications And I wasn't sure of exactly how we would position ourselves in response to some of the implications, but
I if I indicated to you that I thought
there was a storm on
the
I'm just not going beyond 2011 at this As it relates to your question about our stock, you guys have more to say about that than I do. You tell me That's not my job. My job is to tell you who we are, how we're performing and how We see our performance in the future and that's what we're doing.
Jose, at this point, we have time for one
The last question does come from Jamie Friedman, Susquehanna.
Hi. Thank
you for taking my question. So just as we tune the model Byron, Personnel expenses were somewhat lower than what we had modeled, but the professional consulting fees were higher. I You said the professional consulting fees were related to CyberSource. Will those sunset as we move into fiscal 2011? And is the reduction
are in pro fees in the Q3. We will have much more in the 4th because we closed out the transaction during that quarter. And so most of the direct CyberSource costs that are specifically deal related will hit in the 4th and of will not reoccur. We could easily have some integration costs that will stretch over into the early part of fiscal year 2011. But The CyberSource piece pretty much goes away at the end of this quarter.
Personnel, we will We're not going to talk about that specifically, but what we will do on the next earnings call is give you a sense as to where we see revenue growth and where we see margins operating margins which will encompass personnel and don't be surprised if
Well, that concludes the call. Thank you everybody for joining us here today. If anybody