Enterprise Value to EBITDA (EV/EBITDA)
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Visa Inc., EBITDA calculation
US$ in millions
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
A review of the financial data reveals consistent growth in the profitability measures over the reported periods, with some fluctuations attributable to external factors impacting specific years.
- Net income
- Net income shows an overall upward trajectory from 6,699 million US dollars in 2017 to 14,957 million US dollars in 2022. A notable increase occurred between 2017 and 2019, peaking at 12,080 million US dollars. There was a slight decline in 2020 to 10,866 million US dollars, likely reflecting challenging conditions experienced during that year. The net income rebounded strongly in 2021 and continued to rise in 2022, achieving the highest value in the series.
- Earnings before tax (EBT)
- EBT also exhibits a steady increase over the period, rising from 11,694 million US dollars in 2017 to 18,136 million US dollars in 2022. After a peak in 2019, a modest dip is observed in 2020 corresponding with the same period of reduced net income. However, subsequent periods show a clear recovery and growth beyond previous highs.
- Earnings before interest and tax (EBIT)
- The EBIT values follow a similar pattern to EBT, starting at 12,257 million US dollars in 2017 and increasing to 18,674 million US dollars in 2022. A decline is noticeable in 2020 from 15,417 million US dollars in 2019 to 14,306 million US dollars, before reaching new peaks in 2021 and 2022. This indicates resilient operational profitability despite short-term challenges.
- Earnings before interest, tax, depreciation, and amortization (EBITDA)
- EBITDA reflects the broadest measure of operational performance and shows steady growth from 12,813 million US dollars in 2017 to 19,535 million US dollars in 2022. The data similarly show a decrease in 2020 to 15,073 million US dollars, following which there was a strong recovery. The upward trend suggests effective cost management and robust core earnings capability.
Overall, the financial indicators demonstrate a healthy growth trend from 2017 to 2022 despite a temporary decline in 2020, highlighting the company's resilience and capacity to rebound from adverse economic conditions. Profitability ratios, including net income and EBITDA, confirm ongoing strength in earnings quality and operational efficiency.
Enterprise Value to EBITDA Ratio, Current
Visa Inc., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 471,736) |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 19,535) |
| Valuation Ratio | |
| EV/EBITDA | 24.15 |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | 12.24 |
| Adobe Inc. | 17.56 |
| AppLovin Corp. | 90.85 |
| Cadence Design Systems Inc. | 54.64 |
| CrowdStrike Holdings Inc. | 446.55 |
| Datadog Inc. | 196.29 |
| International Business Machines Corp. | 27.07 |
| Intuit Inc. | 31.30 |
| Microsoft Corp. | 24.36 |
| Oracle Corp. | 33.82 |
| Palantir Technologies Inc. | 876.41 |
| Palo Alto Networks Inc. | 73.68 |
| Salesforce Inc. | 21.40 |
| ServiceNow Inc. | 81.78 |
| Synopsys Inc. | 42.43 |
| Workday Inc. | 53.01 |
| EV/EBITDA, Sector | |
| Software & Services | 47.19 |
| EV/EBITDA, Industry | |
| Information Technology | 46.36 |
Based on: 10-K (reporting date: 2022-09-30).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
Visa Inc., historical EV/EBITDA calculation, comparison to benchmarks
| Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | Sep 30, 2018 | Sep 30, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 435,704) | 431,122) | 449,223) | 394,738) | 316,920) | 257,478) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | 19,535) | 17,380) | 15,073) | 16,073) | 14,031) | 12,813) | |
| Valuation Ratio | |||||||
| EV/EBITDA3 | 22.30 | 24.81 | 29.80 | 24.56 | 22.59 | 20.10 | |
| Benchmarks | |||||||
| EV/EBITDA, Competitors4 | |||||||
| Accenture PLC | 14.25 | 23.31 | 17.46 | — | — | — | |
| Adobe Inc. | 22.32 | 35.44 | 43.06 | 41.16 | — | — | |
| AppLovin Corp. | 14.17 | 30.05 | — | — | — | — | |
| Cadence Design Systems Inc. | 42.11 | 39.61 | 45.75 | — | — | — | |
| CrowdStrike Holdings Inc. | — | — | — | — | — | — | |
| Datadog Inc. | 1,785.61 | 1,949.67 | 1,224.54 | — | — | — | |
| International Business Machines Corp. | 22.17 | 12.53 | 12.28 | — | — | — | |
| Intuit Inc. | 36.22 | 51.96 | 35.70 | — | — | — | |
| Microsoft Corp. | 20.17 | 24.59 | 21.74 | — | — | — | |
| Oracle Corp. | 17.12 | 13.78 | 11.54 | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | — | |
| Palo Alto Networks Inc. | 515.19 | — | 349.99 | — | — | — | |
| Salesforce Inc. | 38.88 | 33.83 | 49.45 | — | — | — | |
| ServiceNow Inc. | 104.30 | 147.45 | 220.91 | — | — | — | |
| Synopsys Inc. | 36.73 | 53.43 | 42.24 | 26.98 | — | — | |
| Workday Inc. | 147.90 | 670.04 | — | — | — | — | |
| EV/EBITDA, Sector | |||||||
| Software & Services | 22.68 | 26.04 | 23.49 | — | — | — | |
| EV/EBITDA, Industry | |||||||
| Information Technology | 18.33 | 20.59 | 19.76 | — | — | — | |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
3 2022 Calculation
EV/EBITDA = EV ÷ EBITDA
= 435,704 ÷ 19,535 = 22.30
4 Click competitor name to see calculations.
- Enterprise Value (EV) Trend
- The enterprise value demonstrated a consistent upward trajectory from 2017 through 2020, increasing from $257,478 million to a peak of $449,223 million. Following this peak, the value showed a slight decline in 2021 to $431,122 million, before stabilizing with a minor increase to $435,704 million in 2022.
- EBITDA Performance
- EBITDA exhibited steady growth throughout the period under review. Starting at $12,813 million in 2017, EBITDA rose each year except for a dip in 2020, where it decreased to $15,073 million from $16,073 million in 2019. After this decline, EBITDA rebounded significantly to $17,380 million in 2021 and further grew to $19,535 million in 2022, indicating recovery and enhanced operational earnings.
- EV/EBITDA Ratio Analysis
- The EV/EBITDA ratio increased from 20.1 in 2017 to a high of 29.8 in 2020, reflecting rising enterprise value relative to EBITDA, which may suggest heightened market expectations or valuation premiums during that year. This ratio then declined to 24.81 in 2021 and further to 22.3 in 2022, indicating a normalization in valuation multiples as EBITDA increased more significantly in these latter years relative to enterprise value changes.
- Summary Insights
- Overall, the data indicates an enterprise value growth until 2020 with some stabilization afterward, while EBITDA experienced a brief downturn in 2020, likely linked to exceptional circumstances, followed by robust growth. The EV/EBITDA multiple peaked in 2020, suggesting market valuation peaked relative to earnings that year, before declining in the subsequent years, reflecting either improved earnings performance, a moderation in valuation, or both.