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Visa Inc. reported strong fiscal third-quarter results for 2025, surpassing analyst expectations with an earnings per share (EPS) of $2.98 compared to the forecasted $2.84. The company’s revenue reached $10.2 billion, exceeding the anticipated $9.84 billion. According to InvestingPro analysis, Visa maintains a "GREAT" financial health score and appears slightly overvalued at current levels. Despite a slight decline in stock price during regular trading hours, Visa saw a minor uptick in after-hours trading, reflecting investor confidence in the company’s performance.
Key Takeaways
- Visa’s Q3 EPS of $2.98 topped forecasts by 4.9%.
- Revenue increased by 14% year-over-year, reaching $10.2 billion.
- Global payments volume grew by 8% in constant dollars.
- Visa launched innovative products like Visa Intelligent Commerce.
- After-hours trading showed a slight stock price increase.
Company Performance
Visa demonstrated robust growth across all business segments in Q3 2025, with a 14% year-over-year revenue increase and a 23% rise in EPS. The company’s strong performance was driven by a global payments volume growth of 8%, with the U.S. and international markets contributing significantly. InvestingPro data reveals an impressive 97.77% gross profit margin and a strong return on equity of 52%, underlining Visa’s operational efficiency. The company’s strategic focus on innovation and digital transformation continues to pay off, positioning it well against competitors in the digital payments space.
Financial Highlights
- Revenue: $10.2 billion, up 14% year-over-year.
- Earnings per share: $2.98, up 23% year-over-year.
- U.S. payments volume growth: 7%.
- International payments volume growth: 10%.
- Cross-border volume (excluding intra-Europe): Up 11%.
Earnings vs. Forecast
Visa’s Q3 EPS of $2.98 exceeded the forecast of $2.84 by 4.9%, while actual revenue of $10.2 billion surpassed the expected $9.84 billion by 3.66%. This positive surprise reflects Visa’s ability to outperform market expectations consistently, highlighting its strong operational execution.
Market Reaction
Visa’s stock closed at $355.47, down 1.18% during regular trading. However, in after-hours trading, the stock price increased slightly to $356.49, up 0.29%. This movement suggests cautious optimism among investors, considering Visa’s consistent growth and strategic initiatives. InvestingPro highlights Visa’s impressive 17-year streak of dividend increases, with a current yield of 0.67%. Analysts maintain a strong buy consensus, with price targets ranging from $305 to $425.
Outlook & Guidance
Visa maintained its full-year guidance, expecting Q4 adjusted net revenue growth in the high single to low double digits. The company anticipates strong performance in fiscal year 2026, driven by continued investments in AI, stablecoins, and digital payment technologies.
Executive Commentary
CEO Ryan McInerney highlighted Visa’s role as a "hyperscaler" enabling global access to its network. CFO Chris Suh emphasized the "tremendous opportunity across our three growth engines," underscoring Visa’s focus on innovation and market expansion.
Risks and Challenges
- Economic conditions: Potential impacts on consumer spending.
- Regulatory changes: Possible shifts in financial regulations affecting operations.
- Competitive pressure: Increasing competition in the digital payments space.
- Currency fluctuations: Impact on international revenue and profits.
- Technological disruptions: Rapid changes in payment technologies.
Q&A
During the earnings call, analysts inquired about Visa’s stablecoin initiatives and cross-border payment strategies. Executives addressed pricing dynamics and incentive strategies, providing insights into Visa’s approach to maintaining competitive advantage and navigating economic challenges.
Full transcript - Visa Inc Class A (V) Q3 2025:
Conference Operator: Welcome to the Visa’s Fiscal Third Quarter twenty twenty five Earnings Conference Call. All participants are in a listen only mode until the question and answer session. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host, Ms.
Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin your conference.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Thank you. Good afternoon, everyone, and welcome to Visa’s fiscal third quarter twenty twenty five earnings call. Joining us today are Ryan McInerney, Visa’s Chief Executive Officer and Chris Suh, Visa’s Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for thirty days.
A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward looking statements. These statements are not guarantees of future performance and our actual results could differ materially as a result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10 ks and any subsequent reports on Forms 10 Q and eight ks, which you can find on the SEC’s website and the Investor Relations section of our website. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all other results on a non GAAP nominal basis unless otherwise noted.
The related GAAP measures and reconciliation are available in today’s earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan.
Ryan McInerney, Chief Executive Officer, Visa: Thanks, Jennifer. This quarter, our financial performance once again demonstrated the power of Visa’s diverse business model, global scale, commitment to innovation and relentless focus on our clients. We delivered net revenue of $10,200,000,000 up 14% year over year and EPS up 23% year over year. Our key business drivers were strong. In constant dollars, overall payments volume grew 8% year over year.
U. S. Payment volume grew 7% and international payments volume grew 10%. Cross border volume, excluding intra Europe, rose 11% in constant dollars and process transactions grew 10% year over year. We are obsessed about serving our clients and wake up every morning thinking about what we can do to help them be successful today and in the future.
We recently completed our annual global client engagement survey, where Visa again received a Net Promoter Score of 76, a tangible sign of how our clients feel about Visa and our capabilities, services and products. And as I’m sure you all saw, we hosted our product drop on April 30. We shared how we are continuing to evolve the Visa as a Service stack to advance our product developments and lead in a number of areas, including AI and Stablecoins across consumer payments, commercial and money movement solutions and value added services. Now let’s look at some of the specific innovations and progress across our growth pillars this quarter. In consumer payments, we continued to grow through a focus on solutions to address both carded and non carded volumes across the globe.
Total credentials were up 7% year over year, marking the ninth consecutive quarter of at least 7% growth. We are nearing 15,000,000,000 tokens and now more than 50% of our e commerce transactions are tokenized globally, getting closer to our ultimate goal of reaching 100% penetration. As we continue to transform Visa cards for a more digital future, our Flex credential is an important solution. We have seen interest across various use cases such as buy now pay later, small business, multi currency and more. This quarter, we announced that Klarna will be launching a Klarna card powered by our Flex credential in both The U.
S. And Europe. We also expanded Flex credential geographically with inaugural clients in Vietnam, The Philippines and Bangladesh. And we have a pipeline of more than 200 client opportunities. Another way that we are advancing a more digital future is with Visa Intelligent Commerce, which enables consumers to shop and buy with AI agents.
It combines a suite of integrated APIs, including AI ready cards with tokenization and authentication, together with a commercial partner program for AI platforms, enabling developers to deploy Visa’s AI commerce capabilities securely and at scale. We are excited to announce that we have more than 30 partners testing in our live sandbox, and we will soon enter the live transaction pilot phase with general availability to follow later this year as we see AgenTik commerce becoming a reality. In the face to face environment, we continue to drive cash digitization and habituation through our tap to everything use cases. Tap to pay penetration is now at 78% of face to face transactions globally. As a result of our efforts to increase issuance and acceptance, especially transit, which drives habituation, we now have 75 U.
S. Cities at 60% penetration or higher, up from 30 cities just last year, and New York City and San Francisco have now surpassed 8580% respectively. Tap to Phone added a record 3,000,000 transacting devices this quarter and Tap to Add Card continues to expand with more than two seventy five issuers participating globally, almost doubling from last quarter. For affluent consumers, we are excited to launch Visa Infinite Privilege in Brazil, a new super premium offering with personalized exclusive experiences enabled by dedicated lifestyle managers for each affluent user. Itau, Unicred and XP International are inaugural issuer partners.
In Canada, our Visa Infinite affluent offerings for FinTech Wealthsimple has been their most requested product with tens of thousands of cards issued in just two months and hundreds of thousands on the waitlist. Throughout all these innovations, we have continued to deepen our relationships with our clients across the globe. We renewed our partnership with Absa, a leading pan African bank in consumer and commercial issuance, consulting and cyber source across nine countries. And in India, we renewed our consumer credit agreements with HDFC and Axis Bank this quarter, two of the country’s top five credit card issuers. Our consumer payment strategy is also focused on non carded solutions like Visa A2A in The UK.
With this offering, we bring together Visa’s brand, consumer protections, technology and risk management capabilities to enable simpler, safer and more secure account to account payments. We released APIs on the Visa developer platform a few months ago, and we now have several partners on board and even more in our pipeline with a formal launch soon. Also in the A2A space, we’re making a very deliberate effort to focus on open banking in the markets that have the greatest potential, such as Europe and Latin America. As an example, in Brazil, we have developed Visa Connecta, a payment initiator that connects with PICCs to facilitate open banking payments through Tink technology, both in the face to face environment, but more specifically in e commerce, where conversion is a challenge due to the current customer experience. Now moving to Commercial and Money Movement Solutions or CMS, where we continue to pursue new use cases and verticals, domestic and cross border flows and develop unique products.
This quarter, commercial payments volume was up 7% in constant dollars, Visa Direct transactions grew 25% and CMS revenue rose 13% year over year in constant dollars. In Visa Commercial Solutions, one of our key strategies is addressing the day to day challenges of small and large businesses through our vertical specific solutions. In the healthcare and benefits vertical, we are very active, including providing solutions for employee benefits to more than half of the top HSA providers in The U. S. A recent example of our activity in the benefit space is with Sunny, a healthcare FinTech that will issue Visa prepaid disbursement cards to their millions of U.
S. Consumers to spend integrated health benefits and rewards. In the travel vertical, checkout.com will begin using Visa Virtual Cards for online travel agencies or OTAs in The UK and Europe. In addition, client already an important issuing partner across numerous verticals in Europe will be expanding into The U. S, bringing their virtual card as a service offerings with spend management capabilities to OTAs, travel management companies and others in the travel vertical.
And in the fleet and fuel vertical, we continue to make progress with our fleet two point zero solution, providing key visa enhancements, such as EMV chips, digital wallet provisioning and contactless payments. In Europe, Octopus Energy is one of the region’s largest energy suppliers, and they selected Visa as their partner as they start issuing cards to fleet managers seeking a single payment solution to manage mobility expenses. In Visa Direct, we have made some important progress in facilitating cross border flows to further our positioning as the largest money movement platform by transactions, volumes and endpoints. One of the biggest banks in The UAE with over 60 branches serving over 1,000,000 customers ADIB will use Visa Direct to power Remit, their newly launched remittances program by offering access to cards, accounts and wallets across all corridors. In Bangladesh, we have signed our first four partners to enable Visa Direct, MagnaBank, Trust Bank, Midland Bank and Brack Bank, specifically for outbound cross border payments.
And in The U. S. And Canada, Paysend, who we have discussed before is an important Visa Direct remittance client with 10,000,000 customers is now expanding to add more cross border use cases, such as gig economy worker payouts, payroll disbursements, and accounts payable flows as a reseller to third parties. Before I go to value added services, I think it is important to touch on a topic that has had a lot of interest lately stable. We are supportive of the Genius Act and we believe that it marks a key milestone on the path to regulatory clarity for stablecoins.
We have been active in this space for almost a decade and believe that stablecoins can solve important payments problems for certain use cases. We believe that Visa’s role is to do what we always do, provide trust, standards, connectivity, billions of endpoints, scale and interoperability to the payments ecosystem. Beyond capital markets use cases, we see product market fit for stablecoins in two important areas. One, in emerging markets where the local fiat currency is volatile and or where consumer not have easy or affordable access to U. S.
Dollars. And two, in cross border money movement, both B2B payments and consumer remittances. Our in market solutions, partnerships, market activity and product roadmap reflect our commitment to this space. For example, we have deployed stablecoin linked cards in many markets around the world with partners such as Bridge, RAIN and banks. In the emerging market use case I mentioned earlier, consumers and businesses are using Stablecoins to save money in U.
S. Dollars, but they also want easy and safe ways to spend that money. And there’s no better way to do that than using a Visa card. Stablecoin linked Visa cards are an extension of what we have been doing in the crypto space for years. Since 2020, we have enabled crypto users to spend more than $25,000,000,000 in Bitcoin, Ethereum, array of other cryptocurrencies and now stablecoins.
We are also enabling cross border money movement capabilities for P2P and B2B in certain emerging markets, And we are piloting and partnering with stablecoin payments companies who specialize in these markets as we build out our stablecoin treasury stack for settlement and money movement flows. A recent example is with Yellow Card in Sub Saharan Africa. Together, we are working to streamline treasury operations, improve liquidity management and enable quick and more cost efficient cross border transactions. Additionally, we are also helping banks issue their own stablecoins and realize the benefits of programmable money through our Visa tokenized asset platform. And we offer multi chain and multi coin stablecoin settlement on the Visa network.
We recently expanded our capabilities by adding a Euro backed stablecoin, EURC, and through a partnership with Paxos two additional regulated stablecoins USDG and PYUSD. We are also adding support for two additional blockchains, Stellar and Avalanche, enabling us to support four stablecoins running on four unique blockchains, representing two currencies that we can then accept and convert to over 25 traditional fiat currencies across the world for our clients within our settlement infrastructure. There is so much more to come in this space and we are excited about enabling commercial and money movement flows globally across networks, currencies and form factors. Now to value added services, which had one of our strongest revenue growth quarters, up 26% year over year in constant dollars. Let me walk through some of the highlights in our four portfolios.
In issuing solutions, PISMO continues to expand, benefiting from Visa’s deep client relationships and trusted partner status. We have now entered Europe with ABN AMRO’s neobank boot in The Netherlands, and have also partnered with Lunar, who serves over 1,000,000 consumers and business users for the first PISMO powered Visa card across Denmark, Sweden and Norway. This quarter, we signed with EML Payments in Australia to deploy PISMO for their global issuance strategy, enabling them to consolidate their multiple processing platforms to one across Australia, North America, The UK and Europe. In Acceptance Solutions, we continue to grow through both direct relationships with merchants as well as with acquirers. I’ll give two examples of each.
First, direct with merchants. We renewed our agreement with Shopee Pay, a leading digital payments platform serving 10s of millions of users and expanded geographically from Singapore, Malaysia and Vietnam to include The Philippines, Indonesia and Thailand, and also expanded with additional products such as tokenization. Karim Pay, part of super app Karim that serves over 50,000,000 customers across Middle East and North Africa will utilize several value added services, including CyberSource and account verification. On the acquiring side, in Saudi Arabia, Arab National Bank has selected Visa as their new partner for our CyberSource and risk solutions to offer to their merchant clients. We also signed with Bach, the largest acquirer in Central America to provide cyber source and tokenization to their merchant clients.
In risk and security solutions, our feature space capabilities continue to resonate with our clients. This quarter, TSYS, an existing and important partner of feature space will begin transitioning their 10s of billions of transactions to our next gen SaaS platform, so they can benefit from continued innovation in our advanced AI scoring models in a scalable way. Moving on to advisory and other services, where our payments, consulting and marketing experience, data and analytics capabilities and sponsorships help us to deepen our relationships with our clients. For example, E. ON Financial Service, one of our largest clients in Japan, renewed their credit relationship and add consulting, managed services and marketing services to help them grow.
I’ll call out two other examples of our consulting and marketing services at work. In Brazil, our consulting and technical teams are working with Caixa to help develop a super app for their over 40,000,000 customers, enhancing digital engagement and loyalty. In The U. S, FinTech Chime utilized our marketing services capabilities to support their brand campaign during the NBA playoffs this past quarter. With each of these four portfolios growing at strong levels, value added services remains a powerful engine of revenue growth for our business.
In conclusion, our third quarter results were strong. In Q3 and through July 21, even with the continued uncertainty, consumer spending remains resilient. Within The U. S, while spending growth differed among consumer spend bands, all spend bands in Q3 remained resilient and consistent with past quarters. Within spend categories in The U.
S, we saw relative stability to Q2 when adjusted for leap year impacts. Both U. S. Discretionary and non discretionary spend growth remained strong, and we see no meaningful impact from tariffs. For cross border, total volume growth excluding Intra Europe remains strong and above pre COVID levels, even with continued impacts from currency weakness and travel to specific countries.
While we’re not immune to macroeconomic impacts, our business has proven to be diverse, resilient and well positioned to capture the significant opportunities ahead. We all know that as commerce evolves, so do buyer and seller preferences. We have proven our ability to anticipate these changes and deploy solutions that enable our expanding network of partners to meet and exceed the needs of their users. Visa has become a hyperscaler that enables anyone around the world to access the breadth, scale and resiliency of our network across more than 200 countries and territories, 150 currencies and nearly 5,000,000,000 credentials. Anybody that wants to be in the money movement business or the payments business can build on top of the Visa stack.
And as we connect billions of buyers and sellers through seamless, secure digital payments, we’re very excited about how that’ll help us enable innovative commerce as we drive Visa’s growth forward well into the future. Now I’ll hand it over to Chris.
Chris Suh, Chief Financial Officer, Visa: Thanks, Ryan, and good afternoon, everyone. Visa reached a record $10,200,000,000 in quarterly net revenue in our third quarter, up 14% year over year, better than expected, driven by lower incentives, a lower FX headwind and higher value added services revenue. Net revenue was also up 14% year over year in constant dollars. Underlying business drivers remained strong. In constant dollars, global payments volume was up 8% year over year and cross border volume excluding intra Europe was up 11% year over year.
Total process transactions grew 10% year over year. EPS was up 23% year over year in nominal and constant dollars, better than expected, primarily due to the strength in net revenue growth. Let’s go into the details. Total international payments volume was up 10% year over year dollars in Q3, relatively consistent with Q2 when adjusted for leap year. U.
S. Payments volume was up 7% with e commerce growing faster than face to face spend. Credit was up 6% and debit was up 7%. When we look at U. S.
Payments volume year over year growth on a monthly basis, April was stronger than March, primarily due to Easter timing and some portfolio loss lapping that continued throughout the quarter. May was relatively in line with April and June was softer, primarily due to the impact of both days mix and bill pay timing. Putting it all together, total Q3 U. S. Payments volume growth was generally consistent with Q2 adjusted for leap year.
Now to cross border volume, which I’ll speak to in constant dollars and excluding intra Europe transactions. You may recall that we expected Q3 total cross border volume growth to moderate from Q2 and be slightly below Q4 of FY24, primarily due to the impacts of weaker currencies in certain countries and the Canada to U. S. Travel corridor. In Q3, those impacts generally played out as we expected, with total cross border volume year over year growth at 11%, e commerce up 13% and travel up 9%, even with some monthly variability.
April benefited from Easter and Ramadan timing, and May moderated from April without this timing benefit. In June, we saw the growth step down from May, primarily due to further weakening of the U. S. Dollar and a few smaller factors that largely reversed in July. As Ryan said, Visa’s Q3 total cross border volume growth was strong and remained above the pre COVID trend.
With that as a backdrop, I’ll move to discuss our financial results, starting with the revenue components. Service revenue grew 9% year over year versus the 8% growth in Q2 constant dollar payments volume, helped by pricing and card benefits that more than offset the exchange rate drag. Data processing revenue grew 15% versus 10% in process transaction growth, primarily due to pricing. International transaction revenue was up 14%, above the 11% increase in constant dollar cross border volume, excluding intra Europe, helped by elevated currency volatility and exchange rates, partially offset by hedging and mix. Other revenue grew 32, primarily driven by advisory and other value added services and pricing.
Client incentives grew 13%, lower than expected primarily due to two factors. First, deal timing, as we saw some expected deals shift out of Q3. Second, we expanded several client relationships, which led to updated incentive terms and one time reductions in the associated accruals. Now to our three growth engines. Consumer payments revenue was driven by strong payments volume, cross border volume and process transaction growth.
Commercial and money movement solutions revenue grew 13% year over year in constant dollars. Commercial payments volume grew 7% year over year in constant dollars, accelerating slightly from Q2 adjusted for leap year, primarily due to the lapping of certain portfolio losses. Visa Direct transactions grew 25% year over year to 3,300,000,000 transactions with strength in both domestic and cross border P2P. Value added services revenue was $2,800,000,000 with growth accelerating to 26% year over year in constant dollars. This was driven by strength across all portfolios and pricing.
Operating expenses grew 13% higher than expected primarily due to a lower than expected FX benefit and higher than expected personnel expenses. Non operating income was $191,000,000 helped by investment income from higher cash balances. Our tax rate for the quarter was 17.3% in line with expectations. EPS was $2.98 up 23 over last year with minimal impacts from both exchange rates and acquisitions. During the quarter, we issued EUR 3,500,000,000.0 of fixed rate senior notes with maturities ranging between three and nineteen years and interest rates from 2.25% to 3.875.
In addition, we bought back approximately $4,800,000,000 in stock and distributed $1,200,000,000 in dividends to our stockholders. At the June, we had $29,800,000,000 remaining in our buyback authorization. Now let’s move to what we’ve seen so far in Q4. Through July 21, U. S.
Payment volume was up 9%, with debit up 10% and credit up 9% year over year. Even when adjusting for lapping the weather and technology outages impacts from last July, we saw strong growth primarily due to the timing of July 4, the days mix impact I mentioned for June now helping July and the timing of promotional shopping events. Processed transactions grew 11% year over year. For constant dollar cross border volume, excluding transactions within Europe, total volume grew more than 10% year over year, with e commerce up 13% and travel up 9%. July total cross border volume growth accelerated more than a point from June as we saw improvement in both e commerce and travel, primarily due to strong retail spend in e commerce, the dollar strengthening versus certain currencies and the reversal of a few smaller factors that impacted June.
Now on to our expectations. Remember that adjusted basis is defined as non GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. For Q4, when we take the latest trends for business drivers and volatility, as well as our current view of deal timing, our adjusted net revenue expectations are unchanged in the high single digits to low double digits. On a nominal basis, this puts Q4 net revenue growth generally in line with first half of FY 2025 nominal net revenue growth, which was about 10%.
Moving to adjusted operating expenses, which we expect to grow in the high single digits to low double digits. Non operating income in the fourth quarter is expected to be minimal. And our tax rate in the fourth quarter is expected to be between 18.519%. As a result, we expect adjusted fourth quarter EPS growth to be in the high single digits. For acquisition impacts, we expect a minimal benefit to net revenue growth and approximately 1.5 contribution to operating expense growth and an approximately zero five point headwind to EPS growth in the fourth quarter.
Pulling it all together for the full year, we have no changes to our full year adjusted guidance except for non operating income, which we expect to be about two fifty million dollars as a result of the third quarter. However, it is important to note that when you incorporate our performance year to date with our Q4 guidance, even though the full year guidance ranges are unchanged, we now expect our net revenue growth and EPS growth to be stronger than previously anticipated. It’s also a good reminder of the strength of Visa’s diverse business model, where in the face of changing conditions throughout the year, we still expect to deliver strong growth and leading profitability. As we look ahead and plan for 2026, while we’re contemplating a variety of economic scenarios, the strength and diversity of our business model that I just mentioned, the resilience of the consumer and our clear and effective strategy together give us the confidence as we make investment decisions to build the future payments and drive long term growth. And now Jennifer, time for some Q and A.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Thanks Chris. And with that, we’re ready to take questions.
Conference Operator: Thank To ensure all questionnaires are heard, we ask that you please limit yourself to one question. Our first question comes from Harshita Rawat with Bernstein. You may go ahead.
Harshita Rawat, Analyst, Bernstein: Hi, good afternoon. Chris, I want to follow-up on the fourth quarter guide, if you can provide more color. Can you maybe help us kind of bridge the kind of deceleration from the third quarter? I know you talked about kind of FX volatility, to some extent, incentives, but anything else to call out, also, I think, with regards to gross profit? Thank you.
Chris Suh, Chief Financial Officer, Visa: Good. Hi, Harshita. So let’s talk about q four. We’re expecting a fundamentally strong q four with strong drivers and continued resilient consumer spending. Now the guide reflects reported growth in q four that is being impacted by the lapping of some items that we spoke about last q four.
Specifically, there were onetime impacts that reduced incentives, the lowest growth quarter of last year. If you recall, q four last year grew 6% incentive. And also, had a very strong vast quarter related to the Summer Olympics again last q four. If you normalize for those lapping items that those onetime lapping items for last year, q four growth digits. So that’s sort of the absolute description of q four.
Now versus q three, which was your specific question, q three was a very strong quarter driven by strong drivers, higher currency volatility, strong VAS, and lower incentives as we as we talked about. And if I compare the two quarters, really, the big differences are gonna be currency volatility, which was high in q three, especially early in the quarter, has settled down, and and that’s our assumption through the rest of q four. And the second one is incentives, where, again, q three benefited from one time incentives that we talked about that I talked about in my prepared comments, and q four is anniversarying the benefits that we saw incentives from a year ago. So normalize for those two things. Q three is a strong quarter.
Q four is a strong quarter. And when you add it up, we’re gonna finish, very strong f y twenty five higher than we thought, entering the quarter.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Next question, please.
Conference Operator: Thank you. Our next caller is Tien Tsin Huang with JPMorgan. You may go ahead.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Hi, Tien Tsin.
Conference Operator: Are you there?
Tien Tsin Huang, Analyst, JPMorgan: I am. Can you hear me, Jennifer? I’m sorry.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Yes. Now we can. Now we can.
Tien Tsin Huang, Analyst, JPMorgan: Okay. No. Thanks. And my name is the hard one. Just want to maybe I’ll ask on investment priorities if that’s okay.
I’m I’m just curious if that’s changing at all given I know, Ryan, you talked a lot about AI and stable coin to us here in the quarter. So I’m I’m just curious if priorities have changed because it does look like OpEx is running a little bit higher and and fourth quarter reported implies, not not much operating leverage. So I’m just curious if if you’re changing some of your investments there given given some of news, genius act, etcetera.
Ryan McInerney, Chief Executive Officer, Visa: Hi, Jinjin. Let me talk about your question around priorities, and then I’m actually gonna have Chris just talk briefly about OpEx because I think there’s a very clear explanation that’ll be helpful to you. Sure. In terms of priorities, no change from what I’ve been talking about publicly. You know, we have a a deep and rich product pipeline.
We feel great about the products that we put out into market, both the ones that we’ve deployed and the ones that we announced at our product drop in April. And, you know, we’re always nipping and talking in certain markets and adjusting, you know, kinda where we’re gonna go launch in in in this country versus that country. But, no, overall, priorities remain the same. We feel great about the the momentum that we have in market and, you know, continue to drive that forward. But, Chris, I think he was teed off a little bit by the OpEx Sure.
Part of his question. You wanna just address the OpEx? Yeah. I don’t know
Chris Suh, Chief Financial Officer, Visa: if you address that. So I’ll talk about q three and q four. So q three OpEx did come in a little higher than we anticipated. There was a couple of things. One was the FX benefit was less than expected.
And then the second one, which I mentioned on the call, was higher personnel costs. And just to click into that, specifically, the overage came from higher costs related to the mark to market of, the deferred compensation liability. But just for clarity, that’s EPS neutral is because we record the equivalent gain on that mark to market in NOI, and that contributed part to the NOI over performance. As far as q four goes, as Ryan talked about, we’re investing in many things across our broad business to drive growth, and we’re anticipating, to grow OpEx in the high single digits to low double digits. We’re doing all that investment, and growing OpEx, in line with revenue for q four.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Next question, please.
Conference Operator: Thank you. Our next caller is Trevor Williams with Jefferies. You may go ahead, sir.
Trevor Williams, Analyst, Jefferies: Great. Thanks very much. I wanted to go back to the spread between international transaction fees and the nominal cross border volume. I think this quarter that spread was less than one point, even though, Chris, you called out currency vol being up pretty significantly year over year. And I think hedging and mix were the main offsets that were also mentioned.
If you could just expand on both of those. And then especially on mix, you guys have been clear about U. S. Inbound travel having slowed. I’m just curious how much of an impact that’s having overall on the yield dynamic there.
Thanks very much.
Chris Suh, Chief Financial Officer, Visa: Yeah. Sure, Trevor. Let’s, let’s go into all the different components, as you called out. Well, the two numbers that I’ll that I’ll reference is the 11% growth in total cross border versus the 14% international. And as you point out, the spread, shrinks on on a nominal basis.
So the three factors were higher currency volatility. We we’ve talked about that at length. And then the the other two items, hedging, which is in line with our strategy to mitigate cash flow impacts of FX movements. And in this quarter, we had a hedging loss that offset a portion of the favorable impact of the weaker US dollar. And then the third one being mix.
You mentioned Canada to US. That that is a a variable in here. So across our business, the composition of our yields does can and does vary, different clients, different regions. And that’s an example I’ll use. The US inbound is one of our higher yielding corridors, and that’s being impacted by the Canada to US volume.
So the mix can certainly be an offset to the higher volatility. Those are the puts and takes, for the quarter specifically. But, you know, all in all, we’re pleased again that revenue, whether it’s in international or in data processing or service fee, we’re outgrowing volumes, in in all three categories.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Next question, please.
Conference Operator: Timothy Chioda with UBS. Please go ahead.
Timothy Chioda, Analyst, UBS: Great. Thank you for taking the question. I wanna see if we can dig in a little bit to Visa Direct. So on our estimates, it’s becoming a more important part of the volume growth algorithm and particularly for debit. I want to see if we could hit two topics.
One is some of the newer or faster growth use cases. One in particular that you mentioned earlier in the prepared remarks around banks signing up to use Visa Direct as their cross border platform. And then the second item I was hoping we could touch on is some of the pricing dynamics. At the Investor Day, there was a slide that showed the roughly $09 to $0.10 yield on Visa Direct. I was hoping you could talk a little bit about the pricing strategy there and to the extent that that may or may not be evolving to maybe add some ad valorem fees and whether or not that might have contributed at all to any of the strength in data processing.
Thank you.
Ryan McInerney, Chief Executive Officer, Visa: It’s Ryan. I’ll try to to hit the high points of what you’re asking there. Thanks for the, question on Visa Direct. Love talking about Visa Direct. Coming back to the top of, of your comments, you know, and and we shared this at Investor Day as well.
You know, we now crossed the the 10,000,000,000 transaction mark, at least on a rolling, twelve months, which we’re very excited about. So I think, you know, Visa Direct has, really scaled in a meaningful way. As I mentioned in my prepared remarks, it is the largest at scale money movement, platform in the world, you know, however you wanna measure it, whether it’s endpoints or transactions or volumes or partners or what have you. And, you know, the investments that we’ve made in that platform over time are are what are helping our sales teams and client teams around the world sell into a lot of these new and exciting use cases. You mentioned, the banks enabling and embedding Visa Direct as their cross border money movement platform.
That’s something we’ve been very focused on, and we’re having, you know, good success. And I believe there’s a big opportunity here. I think there’s a big opportunity for banks around the world to play a more direct role in money movement. You know, when we’re when we’re sitting and and talking to our bank partners around the world, they often recognize that a lot of their users are leaving their bank app and maybe going to another fintech or another money movement platform to send remittances, for example. And they view that as a lost opportunity.
And so they’re using Visa Direct to power a remittance platform and a money movement platform and embed that in their in their app so that they can deepen their relationship with their users. Their users are getting more value from their financial institutions and ultimately driving more value as well. In terms of the pricing and the yield dynamics, it really differs. You know, we price to value as we always talk about on this call. The competitive dynamics are different in every vertical, in every use case, in every country around the world.
We’re going up against different competitors in CEMEA than we are in Latin America than we might be in Europe. And the pricing has different components to it as well. Just because we talked about the yield in cents per transaction, don’t necessarily assume that reflects all the different pricing, whether it’s the remittance topic that you asked about specifically or just Visa Direct in general. We talked about it in that way because that’s generally the right way that we think to think about the revenue dynamics is kinda what are we earning in cents per transaction. And, you know, as we said during investor day, it’s similar yields to what we’re seeing in the debit business globally.
So feeling good about all those, on all those fronts and the the momentum that we have in the Visa Direct business.
Conference Operator: Next question, please. Thank you. Gus Gallo with Monness Crespi Hardt. You may go ahead, sir.
Gus Gallo, Analyst, Monness Crespi Hardt: Hey, Chris. Hi, Erin. Thank you for letting me on for the call. Street is currently looking for an acceleration of volume transactions, fiscal twenty six. If we think of the macro kind of persisting from June July levels kind of there and bank activity level kind of staying where it is.
Is that kind of a realistic expectation? And then on the comments on the lower there was large peer Pfizer commented on lower bank activity levels. You mentioned deal timing being moved back in prep remarks. Any part of the stack or transaction where that’s maybe happening within that or parts of that where that’s more acute? And granted you guys still accelerate in the quarter, but just any color around that would be very helpful.
Thanks.
Ryan McInerney, Chief Executive Officer, Visa: Why don’t I take the second part of the question on that? And then you can address the the first part of the question, which I think was a question. You’re going a little in and out, so sorry I think it was a question around 2026. We we really feel great about, the momentum in the the value added services business. As you heard in both my and and Chris’s prepared remarks, you know, firing on all cylinders across all of the different businesses.
Maybe just as a a reminder in terms of how we’re thinking about the overall vast strategy, because I think you’re seeing the results of that strategy now. You know, we’ve been we’ve been focusing on our vast business for a long time about enhancing Visa transactions, making Visa payments safer, simpler, easier, more reliable. And, you know, that has been historically, how we’ve generated most, the the the most of the vast revenue that we’ve generated. Where we’ve really seen a lot of success is in the two additional strategic late, levers that we talked about. The second is putting our vast to work, enabling all different types of payments, other card payments, account to account payments, digital wallet payments, partnering with RTP networks around the world and digital wallet players.
You know, I mentioned in my prepared remarks, the the partnership that we have in Brazil, to power Pix payments. So, you know, we’re really starting to see a lot of momentum in this second leg of the strategy by putting our vast to work to enable all different types of payments. And then the third area, which is really going beyond payments and helping our clients with a whole range of things from marketing to managed services, to strategy, to analytics, to data. And there too, in my prepared remarks, you heard a lot of great examples, from all around the world of the success we’re having in that area. So, you know, good progress, good momentum, and and you’re starting to see kind of the strategy that we talked about a couple years ago really start to come through in the performance in the numbers.
And then, Chris, I think there was a question about 2026.
Chris Suh, Chief Financial Officer, Visa: Yeah. Let me comment on ’26. Obviously, we’re focused on closing q four and finishing f y twenty five strong, but but we are also in the planning phases for f y twenty six. And broadly, we see tremendous opportunity across our three growth engines, consumer payments, CMS, and BaaS. And as we think about 2026, we’re evaluating several drivers and parameters including various macroeconomic scenarios, expected client renewals, and pricing in both the card present and card not present environment, as well as the investments we wanna make to build the future payments.
Now we’ll have a lot more to say about ’26, in our next, earnings call.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Next question, please.
Conference Operator: Will Nance with Goldman Sachs. Please go ahead.
Timothy Chioda, Analyst, UBS: Hey, guys. You got all the way to me here without getting the stablecoin question. So I’ll ask one on the remittance space, which you guys called out as a potential use case. Could you talk a little bit about how you see what the role of stablecoins in that space? Is it on the pricing side, the settlement side?
And do you expect the value of, the role that stablecoins play to accrue to the service providers in that space? Or do you expect it to accrue to the consumers in the form of lower pricing? Thank you.
Ryan McInerney, Chief Executive Officer, Visa: Thanks, Will. Lot in there. And as you know, it’s early days, but we see a lot of opportunity, specifically in remittances. And as I said in my prepared marks remarks, more broadly in cross border, whether it’s, you know, p two p or b two b. So let me hit a couple points.
First is, you know, Visa Direct. Visa Direct, as you know, is our remittance platform, and it it is a network of networks that enables money movement all around the world in lots of different currencies. You know, we’re able to to push money and and, you know, to to think it’s 14,000,000,000 different endpoints now, whether it’s cards, wallets, or or bank accounts. And for some of those use cases and some of those corridors, the money movement and transactions are near instant. But sometimes, you know, for example, sending money from a a Visa card to a bank account in an emerging market, we’re reliant on local banking infrastructure.
So in these types of use cases, stablecoins could enable us to have faster cross border transactions. That’s by the way, that’s true for consumers or for businesses. And we’ve been testing that out and having some good results. You know, we’ve been testing a series of corridors, and putting stable coins to work directly versus the fiat currency money movement options that we’re able to deliver to, you know, our clients and their users today. And at this point, we’ve got a pretty good sense, on which corridors we can provide faster money movement, cheaper money movement, which ultimately is, you know, value, I think, that’ll accrue both to end users and to our clients.
So, you know, we’re working through all of those things. I I I do think, as I said in my prepared remarks, that, you know, there is real product market fit for stablecoins in remittances for certain corridors. And, you know, as the the largest money movement platform around the world, we’re gonna be an early adopter of a lot of those things on behalf of our clients and their end users.
Conference Operator: Next question, please. Thank you. Dan Deleb with Mizuho. You may go ahead, sir.
Dan Deleb, Analyst, Mizuho: Thank you. And, just tying the two things together, really strong vast growth and stablecoins. Have you been is the growth been helped by your services and consulting that you’re providing on stablecoins? And are you monetizing that? If I could squeeze in one housekeeping question on sort of the right way to think about incentives, you know, mid twenties in the fourth quarter and heading into the ’26, if if you can answer it.
Thank you.
Ryan McInerney, Chief Executive Officer, Visa: Okay. I’ll, I’ll let Chris answer the question on, incentives. Thanks for your question on advisory. Our advisory business has been doing, strong growth, all around the world, for a while now. And as you alluded to, and I and as you I think you would expect, the most complicated, most impactful topics that are happening around the world in money movement are the ones where we’re engaging with our clients.
So, yes, on stable coins and crypto more broadly. We launched our crypto advisory, practice several years ago. I can’t remember now. When our clients, both, issuers and, people on the seller side of the ecosystem have really come to rely on our team of experts around the world to help them inform their strategies. And also, you know, that leads to opportunities for us to put our products and services to work.
So for example, the Visa tokenized asset platform is a platform that we built to help financial institutions, issue and mint and burn stable coins. And when we’re working with them on their stable coin strategies, that’s a natural opportunity for us to kind of embed a platform like that. We’re also, you know, having a lot of, success working with our clients on AgenTic, both AI broadly in terms of how they’re running their companies, but specifically, as you’d imagine, the implications and the products and services that they’re gonna need to bring to market to win kind of in the agentic space. And those are just a couple examples. But just wanna say take the opportunity to say thank you to our teams all around the world that have been working with our clients on all those tough topics and and really helping them and serving our clients in a meaningful way.
Chris, I think I got a question about incentives. Yep.
Chris Suh, Chief Financial Officer, Visa: Q four incentives, was the question. So I I wanna provide a little bit of context. You know, a lot of what I’m gonna say is things that were in my prepared comments, but also reminding you of some of the things that we said in previous quarters. As we’ve communicated all this year and and earlier in my comments, we expect q four we expected incentives to step up sequentially into q three and into q four. And as a result, we have always consistently expected q four to be the highest growth quarter, of f y twenty five from an incentive, point of view, in part because of the lapping that I talked about in in the q four number when we talked about the lapping of the onetime items.
But also what I spoke about last quarter, was, the impact of performance adjustments, some deal timing that occurred prior to q three. And so when you add that all up, q four was gonna be the high point for incentives. But that all said, again, I’ll just reiterate, you know, our guidance today, our view of adjusted net revenue for q four is unchanged, from the view that we had a quarter ago even after contemplating all the re estimation of, the current volatility outlook drivers and our latest view of deal closures into q four. It’s gonna be a fundamental strong q four to cap off a strong f y twenty five.
Conference Operator: Next question, please. Darrin Peller with Wolfe Research. Please go ahead.
Gus Gallo, Analyst, Monness Crespi Hardt: Hey, thanks guys.
Ryan McInerney, Chief Executive Officer, Visa: Can we just touch
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa0: on number one the pricing dynamic that we’re seeing in data processing and the spread between growth on revenue and volume was obviously strong. Just maybe explain a little more of what’s going on behind it, where you’re seeing the value on raising price there and just the timing on it, is it sustainable? And then just to revisit incentives also on timing also, because I think this year fiscal twenty twenty five was supposed to be a higher year of renewals. I think you had talked about 20% of the book or something along those lines versus a normal like 15. So is that still the case?
And would we expect that to be more normalized next year? Thanks, guys.
Chris Suh, Chief Financial Officer, Visa: Okay. I’ll take both of these, Darren. So pricing, you know, again, I’m gonna go back to some of the things that we said earlier in this year. When we entered this year, we said the pricing benefit in f y twenty five is gonna be similar to f y twenty four, but the timing would be more back half weighted. And if you recall in q one and q two, you know, when we were having these conversations about revenue versus yield, pricing was less benefit than we might typically see in half one consistent with that timing of pricing.
And so now, pricing back back half loaded, we’re having a more concentrated impact in q three and and q four, and that’s really sort of what’s happening. And so it’s great that we see, you know, revenue outperforming volumes on data processing and and a number of other, spots. In terms of your second part of your question around the amount of volume of deals and deal timing, you you are correct. ’25 is a bigger year for renewals than ’24. You quoted the 20% number.
We still believe, 20% of our PV is impacted this year above the above the 15% last year. It’s just more deal activity. And, know, as you know, the deals are long in duration, increasingly more expansive, which inherently brings the level of complexity. These are important deals, and so sometimes they take a long time to get right, and we’re gonna take the time to get them right. The good news is we feel really good about the success we’re having renewing and expanding our client partnerships.
But as you can see, the timing can vary a bit from quarter to quarter.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: Next question, please.
Conference Operator: Fahad Khunwar with Rothschild and Co. Redburn. You may go ahead.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa1: Hi, both. Thanks for all the answers to the question. Super helpful. I had one more on incentives, if you don’t mind. If I go back a little further, incentive growth as a percentage of revenue has been going up about one percentage point a year for the best part of ten years.
It does feel like in the last kind of one years, point it has stabilized or at least in last year, that 28% level. I know you talked about renewal cycles now, but is this an inflection point? Do we think that incentive growth now broadly runs in line with revenues and that kind of trend line up has kind of inflected to be flat? Or is there something else that we’re missing with some other change as as to why we might see an inflection back upwards to that old growth rate? Thanks.
Chris Suh, Chief Financial Officer, Visa: Sure. I’ll take this one as well. No. I mean, it’s just honestly not the way that we think about our business. I I you know, this is consistent with the way we’ve we’ve been talking about net revenue growth, and that’s our focus.
We’re growing volumes. We’re growing net revenues along with our partners, and incentives are simply a tool for us to achieve mutual goals. And it does get impacted, of course, by the volume of expirations and renewals, and and it can vary from year to year. But I but I certainly, am not gonna comment on sort of the relationship between those two. We’re we’re driving net revenue growth and and driving volumes, and and that’s the most important thing.
Conference Operator: Next question, please. Nate Svensson with Deutsche Bank. Please go ahead.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa2: Hi, guys. Thanks for the question. I wanna talk a little more about cross border trends, especially travel. I know you gave some color in the prepared remarks, but looks like we’ve had a couple of soft months here in June, maybe a little bit of recovery in July month to date. Hoping you can give an update on what you’re seeing specifically in international travel your book of business, maybe what bookings look like, what impact recent FX moves are doing to consumer demand, etcetera.
And then anything to call out on specific corridors? I know we talked about inbound US from Canada, but anything like Europe to US or any other changing dynamic you’ve seen maybe over the past three months or July month to date.
Chris Suh, Chief Financial Officer, Visa: Sure. Okay. Let’s talk cross border. And this one, you know, we’ll we’ll sort of try to break into a a fair level of detail, so bear with me. Just starting from the top, just so we have sort of a complete picture, cross border growth in q three, as we reported 11%, that’s exiting intra Europe in constant dollar, largely in line with the directional expectations that we had set, at the beginning of the quarter.
We did see variation from month to month for the factors that we talked about, holiday, timing of Easter, Ramadan, weakness in currency, US to Canada, all those things that we had anticipated to the to happen in q three, you know, much of it did play out. We did see the US dollar weaken further, which may have impacted the June month as well. And then, obviously, in July, you referenced this as well, we’ve seen it accelerate more than a point from June. And we’ve seen that improvement in both travel and ecommerce, related, we believe, to the dollar strengthening again, in July versus certain currencies. But also, we see strong retail spend in ecommerce and the reversal of some of the few of the smaller, factors that, that we referenced in June.
So, obviously, the growth rates month to month, it’s a little bit fluid, and and we’re likely to see it continue to be fluid as long as we continue to see currency exchange movements, at the speed and and pace that we’re seeing it. But we also don’t believe circumstances like the current Canada, The US quarter are permanent structural changes either. And so we could see, some strengthening there, or we could see further, you know, sort of impact from sentiment around the world. In specific to corridors, which is the second part of your your, I’ll give a few examples. We’ve talked extensively about Canada to US.
That’s remaining relatively consistent. US outbound, you know, historically, that’s been very sensitive to the strength of the or weakness of the US dollar. And, with the recent weakening US outbound, we believe has been impacted in a correlated way. AP currency has remained weak as well, and has continued to remain weak, and across a number of markets in AP, and that’s impacting, travel there as well. And then, of course, the timing of various, holidays, Easter, which had a larger impact in Europe, and Ramadan, of course, had a larger impact in Samia.
Those are some of the things that we’re seeing from a, from a a corridor standpoint. But, if we zoom out of the month to month and we look at cross border and total, the overall level, the data, the trends, and, you know, we understand sort of the currency impacts that that can have, that can be that can show up. Cross border volume, we think, in total, has remained strong and above pre COVID levels.
Conference Operator: Last question, please, Michelle. Thank you. Sanjay Sakhrani with KBW. You may go ahead, sir.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa3: Thank you. Had a bigger picture of stablecoin question. Totally understand that Visa can add stablecoins to its suite of payment methods, link it to its products and services and acceptance network. But I guess if we pull up on the long runway to tap into the large revenue TAM and payments, Ryan, do you think stablecoins dilute that? Or do you think it keeps it the same?
Does it add to it? When does it become a material contributor in your view? And by the way, those Chime ads during the NBA playoffs are pretty good. Thanks.
Ryan McInerney, Chief Executive Officer, Visa: I’m jaded fast. I think you go back to the product market fit that I described. If if you, agree with that, which clearly I do, I think it’s a lot of opportunity for us. And why do I say that? The first, on the emerging markets use cases, the bulk of those markets around the world are very cash rich markets.
The bulk of those markets around the world are markets where we haven’t been as successful digitizing cash as we have in more mature markets. And so to the extent that stablecoins get adopted in in a broad based way by both consumers and businesses, and, assuming that we are able to continue to have success with our playbook of making Visa cards the preferred way for people who have stable coins in those markets to pay for things, I think that could accelerate our progress digitizing consumer payments and business, small business and commercial payments in those markets. The second, you know, product mark area of product market fit that I mentioned was cross border. And as you know, well, the cross border TAM, in terms of whether it’s remittances or, b to b money movement, those are enormous TAMs that we’re still relatively low in terms of our penetration of those as well. And so I think to the extent that we can do the types of things I was mentioning in in the question that Will asked earlier for remittances on our Visa Direct platform, you know, that’s gonna be an opportunity for us to continue to expand and accelerate our growth in remittances.
So, you know, I’m genuinely optimistic about what, Stablecoins could do to accelerate our progress digitizing flows, whether it’s consumer payments or, you know, opportunities in in CMS, and, you know, we’ll continue to update you as we as we learn more.
Jennifer Como, Senior Vice President and Global Head of Investor Relations, Visa: And with that, we’d like to thank you for joining us today. If you have additional questions, please feel free to call or email our investor relations team. Thanks again, and have a great day.
Conference Operator: Thank you all for participating in Visa’s fiscal third quarter twenty twenty five earnings conference call. That concludes today’s conference. You may disconnect at this time, and please enjoy the rest of your day.
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