Visa Inc. Earnings Call Highlights Durable Growth Momentum

Visa Inc. ((V)) has held its Q1 earnings call. Read on for the main highlights of the call.

Visa Inc.’s latest earnings call projected a broadly upbeat tone, with management underscoring strong operational momentum and solid financial performance. Double‑digit growth in revenue and earnings, resilient payment volumes, and especially rapid expansion in value‑added services and commercial solutions all pointed to a business still firmly in growth mode. While executives acknowledged headwinds from unusually low FX volatility, higher expenses tied to marketing around major global events, and some client‑driven volume shifts, they framed these as manageable and largely offset by product strength and new capabilities. With guidance reaffirmed and tax assumptions improved, the overall message to investors was one of confidence rather than caution.

Strong Top-Line Growth

Visa delivered another robust quarter on the top line, with net revenue up 15% year over year to $10.9 billion. Management highlighted that this performance was broad‑based across products and regions rather than reliant on any one market or category. That breadth matters for investors because it signals durability in the face of uneven macro data and regional variability. The core payments engine remains healthy, providing a solid base for funding aggressive investment in new services and technology.

Earnings and Capital Returns

Earnings kept pace with revenue, with EPS rising 15% year over year to $3.17. Visa paired that profit growth with substantial capital returns: about $3.8 billion in share repurchases and $1.3 billion in dividends during the quarter. Notably, the company still has $21.1 billion left under its buyback authorization, giving management ample firepower to continue returning cash to shareholders. The combination of consistent EPS growth and an aggressive repurchase program remains a key part of the equity story for long‑term investors.

Payments Volume and Transaction Resilience

Underlying activity across the network showed steady consumer and business engagement. Payments volume rose 8% year over year to nearly $4 trillion, while processed transactions increased 9% to 69 billion. Management framed these numbers as evidence of resilient spending despite macro uncertainty. For investors tracking the health of the global consumer, Visa’s data points suggest continued willingness to spend and transact digitally, reinforcing the secular shift toward electronic payments.

Value-Added Services Powering Growth

One of the standout themes of the call was the outperformance of value‑added services (VAS). Constant‑dollar VAS revenue surged 28% year over year to $3.2 billion and accounted for roughly half of Visa’s overall revenue growth in the quarter. These services—spanning areas such as risk, data, and consulting—are becoming a central growth engine rather than a side business. The higher‑margin, stickier nature of VAS revenue is increasingly important for the company’s long‑term growth and valuation narrative.

Commercial and Money Movement Momentum

Visa’s commercial and money movement solutions also delivered strong growth, underscoring progress beyond traditional consumer credit and debit. Constant‑dollar revenue in this segment grew 20% year over year, supported by a 10% increase in commercial payments volume. Visa Direct, the company’s push‑payments platform enabling real‑time transfers, saw transactions climb 23% to 3.7 billion. These trends suggest Visa is steadily expanding its role in B2B payments and alternative money flows, a large addressable market that remains underpenetrated.

Tokenization Scale and Checkout Improvements

Tokenization has reached massive scale on Visa’s network. The company has issued more than 17.5 billion tokens globally—over three times the number of physical cards—significantly boosting security and authorization rates. This has translated into tangible improvements in online checkout behavior: guest checkout has fallen from 44% of Visa e‑transactions in 2019 to about 16% today, with the top 25 digital sellers seeing guest usage under 4%. For investors, this signals Visa’s ability to improve conversion rates and reduce fraud for merchants, reinforcing the strategic value of its technology investments.

Credential and Tap-to-Pay Adoption

Visa’s credential base continues to grow, now exceeding 5 billion credentials worldwide. At the point of sale, Tap to Pay has become the dominant form factor, crossing 80% penetration of face‑to‑face transactions globally, with the U.S. nearing 70%. Tap‑to‑phone acceptance—turning smartphones into payment terminals—has surpassed 175 million locations, with transactions more than doubling versus last year. These adoption metrics highlight how Visa is deeply embedded in everyday commerce and positioned to benefit from the shift to faster, contactless payments.

Visa Flex and Next-Generation Credentials

Visa Flex, the company’s new multi‑use credential that can draw on debit, credit, installments, and rewards, has reached about 20 million credentials. Management positioned Flex as a flexible funding “container” that can be tailored by issuers and fintechs for different use cases. Expansion to more than 20 additional issuers is planned this year, which should widen the product’s reach. While still small relative to Visa’s 5‑billion‑credential base, Flex illustrates how the company is re‑architecting cards into programmable, multi‑function payment tools.

Stablecoin and Blockchain Initiatives

Visa detailed continued progress in stablecoin and blockchain‑based solutions. Stablecoin card issuance now spans more than 50 countries, and stablecoin settlement, including flows into the U.S., has reached an annualized run rate of $4.6 billion. The company has also launched advisory services and pilots exploring stablecoin payouts through Visa Direct. Management emphasized that these initiatives are still early-stage and limited in scale, but they signal Visa’s intent to stay at the forefront of digital currency infrastructure as the space matures.

Product and Platform Partnerships

The call highlighted a growing ecosystem of platform partnerships. Visa’s AgenTik Commerce initiative now counts over 100 partners, with more than 30 actively building in its sandbox environment. The company is also extending reach through availability on AWS Marketplace and integrations with Cloudflare and Akamai, making it easier for developers and enterprises to tap Visa’s capabilities. On the issuer‑processing front, PISMO is rolling out with clients such as Banco Bisse and FinanceNow, while fraud‑prevention tools like FeatureSpace continue to gain traction. Collectively, these partnerships deepen Visa’s role as a foundational payments and risk platform.

FX Volatility and International Transaction Pressures

One of the few clear headwinds was currency-related. FX volatility was much lower than Visa had anticipated, weighing on international transaction revenue in Q1 and expected to be a larger drag as the year progresses. International transaction revenue grew 6% year over year—well below the 11% constant‑dollar cross‑border volume growth (excluding intra‑Europe). Management attributed the gap to low volatility, mix shifts, and hedging dynamics. For investors, this creates a near‑term revenue constraint even as cross‑border activity remains healthy underneath.

Expense Growth and Marketing Spend

Operating expenses rose 16% year over year, above internal expectations. The increase was driven by unfavorable FX remeasurement impacts and elevated marketing and related spending, including major global events such as the Olympics and FIFA‑linked activities. While this pressured margins in the quarter, management portrayed the spending as strategic, aiming to reinforce brand strength and support future volume growth. Investors will watch whether these heavier expense levels translate into stronger revenue and share gains over time.

Incentives, Timing Effects, and Near-Term Expense Step-Up

Client incentives, which function as contra‑revenue, grew 12% year over year but came in lower than expected due to one‑time true‑downs and deal timing. Management cautioned that this is temporary, with incentive growth expected to step up in Q2 and Q3, creating a higher near‑term expense drag. This timing nuance is important for modeling: investors should expect some compression from incentives in the middle of the year even as underlying business trends remain intact.

U.S. Volume Headwinds and Client Movements

In the U.S., payments volume growth moderated slightly, with U.S. payments volume up 7% year over year. Several idiosyncratic factors played a role, including a Visa Direct client shifting volume to its own solution, the loss of some interlinked volumes tied to a Capital One debit migration, and severe weather disruptions. Management presented these as isolated issues rather than signs of weakening consumer demand. Still, they underscore that client‑specific decisions and one‑off events can create noise in Visa’s domestic growth profile.

Regional Variability and Timing Effects

Performance across regions showed some timing‑driven variability. Asia Pacific grew in the low single digits, while the CEMEA region (Central and Eastern Europe, Middle East, and Africa) came in a couple of points below Q4 growth, partly due to changes in the timing of promotional campaigns and tax payments. Management framed these dynamics as temporal rather than structural. For investors, the message was that regional performance can be lumpy quarter to quarter, but the broader international growth story remains intact.

Scaling New Products and Long Sales Cycles

Visa devoted time to emphasizing that several newer initiatives are still small relative to the company’s vast scale. Visa Flex’s ~20 million credentials compare to 5 billion total, and stablecoin settlement volumes, while growing, are modest in the context of trillions in annual payments. Similarly, issuer‑processing and core modernization wins via PISMO come with multi‑year sales and migration cycles. This means the addressable markets are large, but meaningful revenue contributions will be gradual, requiring patience from investors expecting quick monetization.

Tokenization and Guest Checkout Work Still Ahead

Despite impressive progress in tokenization and checkout improvements, management stressed that there is more work to do. Around 16% of Visa e‑transactions still involve guest checkout, and continued merchant integration and consumer enrollment remain priorities. The company sees further room to boost conversion rates and security through deeper token adoption and better digital credential experiences. For the equity story, this underscores that even in mature segments like e‑commerce, Visa still has levers to drive incremental growth and value creation.

Guidance and Financial Outlook

Visa reaffirmed its full‑year outlook, signaling confidence in the trajectory of the business. The company continues to expect both adjusted and nominal net revenue growth in the low double digits and adjusted operating expense growth in the low double digits as well. Full‑year non‑operating expense is now projected at roughly $101–$125 million, and tax rate guidance has been improved to 18.0%–18.5%, slightly below its long‑term range. Taken together, these assumptions imply adjusted EPS growth in the low double digits, with the range nudged slightly higher versus prior expectations. For the second quarter specifically, management guided to low double‑digit adjusted net revenue growth, mid‑teens adjusted operating expense growth (about a point above Q1), non‑operating expense of about $30 million, a tax rate around 16.5%, and EPS growth at the high end of the low‑double‑digit range. Key assumptions include a stable macro backdrop, pricing benefits weighted to the back half of the year, a step‑up in incentives in Q2 and peaking in Q3, and FX volatility remaining at currently low levels, which will be a more significant drag in the second half.

Visa’s earnings call painted a picture of a company balancing short‑term headwinds with strong structural tailwinds. Core payments volumes and transactions remain healthy, value‑added services and commercial solutions are emerging as powerful incremental growth drivers, and innovations in tokenization, credentials, and digital assets position the network well for the future. While low FX volatility, elevated expenses, and timing‑related noise around incentives and client volumes will weigh on reported metrics in the near term, management’s decision to maintain revenue and EPS guidance—paired with a more favorable tax outlook—reinforces a constructive long‑term view. For investors, the call underscored Visa’s enduring strengths as a global payments leader with multiple levers to drive continued growth and shareholder returns.