The world is moving steadily away from cash and toward digital forms of payment.

Visa (NYSE:V), however, would like to accelerate this trend. The largest credit card processor is offering businesses as much as $10,000 to use toward "going cashless" activities, as part of its Cashless Challenge.

A credit card reader attached to a mobile device, with several credit cards

Image source: Getty Images.

Efforts like this -- combined with the general rise in electronic transactions here in the U.S. and across the world -- are helping to drive Visa's revenue and profits higher, as can be seen in the company's fiscal fourth-quarter results.

Visa results: The raw numbers

Metric

Q4 2017

Q4 2016

Year-Over-Year Change

Revenue

$4.855 billion

$4.261 billion

14%

Net income

$2.140 billion

$1.931 billion

11%

Earnings

$0.90

$0.79

14%

Data source: Visa Q4 2017 earnings press release.

What happened with Visa this quarter?

Net operating revenue increased 14% year over year to $4.9 billion, as the number of Visa cards in use worldwide rose to 3.2 billion, up from 2.5 billion in the year-ago quarter.

Service revenue, which is recognized based on payment volume in the prior quarter, jumped 20% to $2.1 billion, as payments volume leapt 39% on a constant dollar basis to $1.9 trillion. And in the past three months (ending Sept. 30), payments volume -- which slowed in the U.S. due to the lapping of last year's major partnership wins -- increased 10%.

Data processing revenue rose 16% to $2.1 billion, as the number of transactions processed on Visa's network increased 13% to 29.2 billion. International transaction revenue grew 20% to $1.8 billion, while constant dollar cross-border volume increased 10%. And client incentives, which are a contra revenue item, were $1.3 billion. That represented 21.7% of gross revenues, compared to 18.9% in the year-ago period.

Notably, Visa's operating leverage was once again on display in the fourth quarter, with adjusted operating expenses rising only 8% year over year. That helped adjusted operating margin improve to 66% from 64% in the prior-year quarter.

All told, net income increased 11% to $2.1 billion. And earnings per share -- which were boosted by the $6.9 billion in share repurchases Visa conducted in fiscal 2017 -- leaped 14% to $0.90.

Looking forward

Visa's financial forecast for fiscal 2018 includes:

  • "High single digits" net revenue growth
  • Operating margin in the "high 60s"
  • "High end of mid-teens" growth in adjusted earnings per share

"Visa ended our fiscal year as we began, with strong growth across payments volume, cross-border volume and processed transactions, which was bolstered by the addition of Visa Europe," CEO Alfred Kelly said in a press release. "As we look ahead to fiscal 2018, we are positioned for sustained growth and remain confident in our ability to continue delivering strong shareholder value."

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Visa. The Motley Fool has a disclosure policy.