Visa — 2026Q3 earnings

“GAAP net income in the fiscal third quarter was $5.6 billion or $2.97 per share, an increase of 7% and 10%, respectively, over prior year’s results. Current year's results included special items of $563 million for severance costs, $237 million for a litigation provision associated with the interchange multidistrict litigation ("MDL") case and $18 million for a deferred tax benefit recognized due to a change in the U.S. taxation of certain foreign earnings. Current year's results also included $9 million of net losses from equity investments and $78 million from the amortization of acquired intangible assets and acquisition-related costs. Prior year's results included a special item of $615 million for a litigation provision associated with the MDL case and other legal matters, $35 million of net losses from equity investments and $73 million from the amortization of acquired intangible assets and acquisition-related costs. Excluding these items and related tax impacts, non-GAAP net income for the quarter was $6.3 billion or $3.32 per share, increases of 8% and 11%, respectively, over prior year’s results (refer to Non-GAAP Financial Measures for further details).”

“Net revenue in the fiscal third quarter was $11.6 billion, an increase of 14%, driven by the year-over-year growth in payments volume, cross-border volume and processed transactions. Net revenue increased 13% on a constant-dollar basis.”

“Cross-border volume excluding transactions within Europe, which drives our international transaction revenue, for the three months ended June 30, 2026, increased 12% on a constant-dollar basis over the prior year. Total cross-border volume on a constant-dollar basis increased 13% over the prior year. Total processed transactions, which represent transactions processed by Visa, for the three months ended June 30, 2026, were 71.7 billion, a 10% increase over the prior year.”

“Fiscal third quarter service revenue was $4.9 billion, an increase of 14% over the prior year, and is recognized based on payments volume in the prior quarter. All other revenue categories are recognized based on current quarter activity. Data processing revenue rose 17% over the prior year to $6.0 billion. International transaction revenue grew 6% over the prior year to $3.9 billion. Other revenue of $1.5 billion rose 45% over the prior year. Client incentives were $4.7 billion, up 18% over the prior year.”

“Severance costs. For the three and nine months ended June 30, 2026, and nine months ended June 30, 2025, we recorded severance costs within personnel expense resulting from actions taken to drive operational efficiencies and reinvest in high-growth opportunities. These costs have been excluded as they are not representative of our ongoing operations.”

“GAAP operating expenses were $4.8 billion for the fiscal third quarter, a 19% increase over the prior year's results, primarily driven by an increase in personnel expenses. GAAP operating expenses included the special items as well as the amortization of acquired intangible assets and acquisition-related costs in the current and prior year. Excluding these items, non-GAAP operating expenses increased 17% over the prior year, primarily driven by increases in marketing and personnel expenses.”

“On June 25, 2026, Visa deposited $250 million into its litigation escrow account, which was previously established under the Company’s U.S. retrospective responsibility plan to insulate the Company and class A common stockholders from financial liability for certain litigation cases. This deposit has the same economic effect on earnings per share as repurchasing the Company's class A common stock as it reduced each of the as-converted class B-1 common stock, class B-2 common stock and class B-3 common stock share counts at a volume-weighted average price of $333.42. During the three months ended June 30, 2026, Visa repurchased approximately 14.5 million shares of class A common stock at an average cost of $330.71 per share for $4.9 billion. The Company had $28.4 billion of remaining authorized funds for share repurchases as of June 30, 2026.”

“As a result of the unlocks we can realize with this new tooling, we are reforming our product development teams that used to be ten or more into smaller and more nimble agentic squads of two to four. And the results are meaningful for those teams that are using the agentic toolchain, with 80% more code commits and an 80%-plus improvement in requirement definition from 30 days to 5 days, which has translated to 65%-plus faster feature development.”

“Changes in the way we work and where we invest also impact how we operate the company. Today, we announced that we are eliminating roles, with the majority being in our technology and product teams, to ensure that we are continuing to position Visa for future growth.”

“In our GAAP results, we had $563 million in severance costs related to changes to our workforce, including those that Ryan discussed, as we continue to focus on driving efficiency across the company and reinvest those savings in our highest potential growth opportunities.”

“Hey, it's Ryan. Let me just start, and then Chris, feel free to add or correct or not. The investments that we have in front of us are enormous. I think what we've shown over the last couple years is that we can drive efficiencies. We can take the savings that we generate from those efficiencies, and we can invest those savings against the strategic levers that we laid out and our strategy at our Investor Day and deliver accelerated performance as a result. And we continue to feel good about the opportunities ahead of us.”

“International transaction revenue was up 6%, below the 12% increase in constant dollar cross-border volume growth, excluding intra-Europe, primarily due to lapping the currency volatility peak last year and mix.”

“Value-added services revenue grew 34% year-over-year in constant dollars to $3.8 billion, primarily due to three factors: one, underlying business drivers, which included strength in marketing services engagements related to FIFA; two, pricing; and three, the acquisition of Prisma.”

“For our advisory and other portfolio, in addition to the strong marketing services revenue growth, we've also increased the velocity of our consulting projects through the help of AI. Just this past quarter alone, for over 700 clients across 100-plus countries and territories, we delivered 1,200 consulting projects, which is more than we delivered for all of 2019.”

“As we move to our guidance, let me remind you that it is on an adjusted growth basis defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more detail. Now, moving to Q4 and the full-year financial expectations. We expect Q4 net revenue growth in the high end of low-double-digits, similar to Q3 on an adjusted basis. For drivers, we are assuming that the broader consumer spend stability continues from a macro perspective and our overall drivers remain resilient and strong. On volatility, we are assuming that current levels which are generally in line with Q1, persist, implying more of a drag than was incorporated previously.”

“We expect full-year net revenue growth to now be in the low end of low-teens. We expect full-year operating expense growth in the low end of low-teens. Non-operating expense for the full year is expected to be about $165 million. Our tax rate for the full year is expected to be between 18% and 18.25%. As a result, we expect full-year EPS growth to now be in the low end of mid-teens.”