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01/09 22:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate strong financial performance with 23% revenue growth and 11% cross-border volume increase. Visa's strategic focus on agentic commerce and AI integration shows innovation and potential for future growth. The lack of significant changes in consumer spending habits and strong holiday sales outlook further support a positive sentiment. While there are some uncertainties in agentic commerce timelines, the overall outlook remains robust, suggesting a positive stock price movement in the short term.
Fiscal Fourth Quarter Net Revenue Grew 12% year-over-year to $10.7 billion. Reasons for growth include strong performance in value-added services revenue, commercial and money movement solutions revenue, and a benefit from FX.
Earnings Per Share (EPS) for Q4 Increased by 10% year-over-year. This was primarily due to better-than-expected net revenue.
Full Year Net Revenue Grew 11% year-over-year to $40 billion. Reasons for growth include strong payments volume, cross-border volume, and process transaction growth.
Full Year EPS Increased by 14% year-over-year to $11.47. This was driven by strong net revenue growth and operational efficiencies.
Total Full Year Payments Volume Reached $14 trillion, up 8% year-over-year in constant dollars. Growth was driven by increased consumer spending and new portfolio wins.
Processed Transactions for Full Year Totaled 258 billion, up 10% year-over-year. Growth was attributed to increased transaction volumes globally.
Visa Direct Transactions for Full Year Reached 12.6 billion, up 27% year-over-year. Growth was driven by strength in both domestic and cross-border transactions.
Commercial Payments Volume for Full Year Grew 7% in constant dollars to $1.8 trillion. Growth was supported by targeting specific segments, including business owners and online travel agencies.
Value-Added Services Revenue for Full Year Grew 23% in constant dollars to $3 billion. Growth was driven by issuing solutions, advisory and other services, and pricing.
Cross-Border Volume for Q4 Increased by 11% year-over-year in constant dollars, with e-commerce up 13% and travel improving to 10%. Growth was supported by increased commercial volumes and holiday timing effects.
VisaNet Deployment: Visa has begun deploying the next generation of VisaNet, a cloud-ready microservices distributed modular architecture, which uses open languages and technologies for easier scaling and faster feature deployment.
Visa Flex Credential: Visa Flex Credential has expanded to 15 European markets and has over 20 signed clients in more than 20 countries, including its first announcement in Latin America.
Visa Accept Solution: Visa Accept Solution launched in Sri Lanka, targeting 7 million sellers, with plans to expand to 25 countries.
Visa Trusted Agent Protocol: Introduced a framework for safer agent-driven checkout, helping merchants verify agents and avoid malicious bots.
Stablecoin Expansion: Visa expanded stablecoin-linked card issuing programs to over 40 countries, with spend quadrupling year-over-year. Monthly volume surpassed a $2.5 billion annualized run rate.
Visa Pay Solution: Visa Pay is now live in 4 markets, including the Democratic Republic of Congo, with plans to expand to over 70 clients in 2026.
Transit Initiatives: Enabled over 100 new transit systems globally, contributing to 19% year-over-year growth in transactions.
Tokenization: Visa increased the number of tokens to over 16 billion globally, aiming for 100% e-commerce transaction tokenization.
AI in Development: Over half of the new VisaNet code base was developed using generative AI, improving speed, security, and maintainability.
Fraud Prevention: Visa scam disruption dismantled over 25,000 scam merchants, preventing more than $1 billion in fraud attempts.
Partnerships: Renewed long-term relationships with Barclays, Southwest Airlines, and China Merchants Bank, among others.
Commercial Solutions: Launched new premium business cards with Chase and Truist, targeting business owners and small businesses.
Cross-Border Money Movement: Visa Direct transactions grew 27% year-over-year, with new partnerships in East Africa, Malaysia, and Saudi Arabia.
Regulatory hurdles: Visa's operations are subject to regulatory scrutiny and compliance requirements, which could impact its ability to innovate and expand, particularly in areas like stablecoins and cross-border money movement.
Economic uncertainties: Visa's performance is tied to consumer spending, which could be affected by macroeconomic conditions, including inflation, interest rates, and global economic instability.
Competitive pressures: Visa faces competition from other payment networks, fintech companies, and alternative payment methods, which could impact its market share and pricing power.
Supply chain disruptions: Although not directly mentioned, Visa's reliance on technology and network infrastructure could make it vulnerable to supply chain issues affecting hardware or software components.
Strategic execution risks: Visa's ambitious plans for innovation, including AI integration, stablecoin capabilities, and new product launches, carry execution risks that could impact timelines and financial outcomes.
Fraud and security risks: Despite advancements in fraud detection and risk management, Visa remains exposed to fraud attempts, particularly in cross-border transactions and emerging payment methods.
Geopolitical risks: Visa's global operations expose it to geopolitical tensions and regulatory changes in different regions, which could impact its business activities.
Net Revenue Growth: Visa expects full-year adjusted net revenue growth to be in the low double digits for fiscal year 2026. On a nominal basis, net revenue growth is expected to be consistent with fiscal 2025, which was 11%.
Quarterly Revenue Growth: Q1 of fiscal 2026 is expected to have the highest year-over-year net revenue growth rate due to the timing impact of fiscal 2025 pricing actions. Q3 is expected to have the lowest year-over-year growth rate due to strong volatility and lower-than-expected incentives in Q3 of 2025.
Operating Expense Growth: Visa plans to grow adjusted operating expenses in the low double digits for fiscal 2026, consistent with net revenue growth. Q2 and Q3 are expected to have the largest year-over-year growth rates due to marketing expenses related to the Olympics and FIFA.
Tax Rate: The non-GAAP tax rate for fiscal 2026 is expected to be between 18.5% and 19%, up from fiscal 2025 due to the absence of one-time benefits.
Non-Operating Income: Visa expects non-operating expense to range between $125 million and $175 million for fiscal 2026, based on current interest rate forward curves.
Capital Return: Visa intends to return excess free cash flow to shareholders through buybacks and has increased its quarterly dividend by 14%.
Key Business Drivers: Visa assumes no material change in the macroeconomic environment or key business drivers from Q4 2025 levels in fiscal 2026. Consumer spending is expected to remain resilient.
Value-Added Services Revenue: Revenue from value-added services is expected to grow throughout fiscal 2026, driven by client utilization during events like the Olympics and FIFA World Cup.
Commercial and Money Movement Solutions: Visa plans to focus investments in specific commercial vertical opportunities and build out new Visa Direct product capabilities focused on cross-border money movement.
AI and Innovation Investments: Visa will continue significant investments in AI and innovation, with every leader at the company having AI targets to drive efficiencies and reinvest in the business.
Dividend Increase: The Board has declared an increase to our quarterly dividend by 14%.
Dividend Distribution: In Q4, Visa distributed $1.1 billion in dividends to shareholders.
Share Buyback Program: In Q4, Visa repurchased approximately $4.9 billion in stock.
Remaining Buyback Authorization: At the end of September, Visa had $24.9 billion remaining in its buyback authorization.
The earnings call summary and Q&A indicate strong financial performance with 23% revenue growth and 11% cross-border volume increase. Visa's strategic focus on agentic commerce and AI integration shows innovation and potential for future growth. The lack of significant changes in consumer spending habits and strong holiday sales outlook further support a positive sentiment. While there are some uncertainties in agentic commerce timelines, the overall outlook remains robust, suggesting a positive stock price movement in the short term.
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