Visa (NYSE:V) reported fiscal fourth-quarter results on Nov. 2. The global payments technology company delivered impressive increases in revenue and profits, but the big news came when it announced a deal to acquire former subsidiary Visa Europe.

Revenue rose 11% (and 13% excluding the effects of foreign exchange rate fluctuations) year over year to $3.6 billion, driven by solid growth in service, data processing, and international transaction revenues.

Service revenues grew 9% to $1.6 billion. Data processing revenues rose 6% to $1.4 billion, and international transaction revenues jumped 16% to $1.1 billion. Other revenues stood at $216 million, an increase of 3% over the fourth quarter of 2014.

Client incentives, which are a contra revenue item, were $802 million. That represented 18.4% of gross revenues, down from 19.2% in the prior-year period.

Payments volume, which is the primary driver of service revenue, increased 11% on a constant dollar basis to $1.3 trillion. And cross-border volume, again on a constant dollar basis, rose 5%.

Total processed transactions, the primary driver of data-processing revenue, were 18.4 billion, an 8% increase over the prior-year period.

Visa's operating leverage was on full display during the fourth quarter, with total operating expenses increasing only 5% on an adjusted basis to $1.3 billion, primarily due to higher personnel and marketing expenses and ongoing investments in technology.

That helped fourth-quarter adjusted net income rise 12% to $1.5 billion and 14%, on a per-share basis, to $0.62.

"Visa's fiscal fourth quarter was a strong finish to an equally strong fiscal full-year 2015 in terms of revenue and earnings-per-share growth in the face of a continued challenging global economic environment," said CEO Charlie Scharf in a press release. "The underlying growth of our franchise continued as evidenced by our strong payments volumes as well as new and renewed partnerships during the year. Most importantly, we continued to build our capabilities at the physical point-of-sale as well as in the digital space."

Cash flow, capital returns, and a blockbuster acquisition
Visa earns a small fee from every transaction that passes through its payment network, and its tollbooth-like business model produces enormous amounts of free cash flow, including more than $6 billion in full-year fiscal 2015. That's allowed the company to maintain a fortress-like balance sheet -- with cash and investments totaling $9.3 billion at the end of the quarter -- while also retuning cash to shareholders in the form of steadily rising dividends and share buybacks. In fact, it announced a new $5 billion share repurchase program in its fourth-quarter earnings press release, to be implemented along with its recent 17% dividend increase.

Visa will also be putting that cash to work in a blockbuster deal to acquire its former subsidiary, Visa Europe, for more than $23 billion. The long-awaited merger should allow the combined company to reduce costs and raise fees, and should help to solidify Visa's place as the dominant global payment-processing network.

Looking forward
Visa also provided a financial outlook for full-year fiscal 2016. Management expects constant dollar annual revenue growth in the "high-single-digit to low-double-digit range" with foreign currency likely to lower revenue growth by 3 percentage points.

Management also projects full-year constant dollar adjusted earnings-per-share growth at the "low end of the mid-teens range" with an expectation of about 4 percentage points of negative foreign currency impact. And annual free cash flow is forecasted to be about $7 billion.

Looking even further ahead, Scharf added, "Although fiscal 2016 reported growth rates will be negatively affected by a strong US dollar and an uneven global economy, we are well positioned for strong success in 2017 and well beyond."