Q3 2025 Visa Inc Earnings Call
Welcome to the thesis fiscal. Third quarter 2025 earnings conference. Call all participants are in a listen-only 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, Miss Jennifer Como senior vice president and Global head of investor relations.
Miss Como, you may begin your conference.
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 Gap 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.
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 10.2 billion dollars up 14% year-over-year.
And EPS up 23% year-over-year.
In constant dollars, overall payments volume grew 8% year-over-year.
And grew 7% in international payments. Volume grew 10%.
Cross-border volume, excluding entry into Europe, rose 11% in constant dollars, and process transactions grew 10% year-over-year.
We are obsessed with 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 30th.
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 stable coins. This includes 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-card volumes across the globe. Total credentials were up 7% year-over-year marking the 9th consecutive quarter of at least 7% growth.
We are nearing 15 billion 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.
various use cases such as buy now pay later, small business, multicurrency and more
This quarter, we announced that CLA will be launching a klarna card powered by our Flex. Credential in both the US 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.
To 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 agentic Commerce, becoming a reality
In the face-to-face environment, we continue to drive cache 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 US cities at 60% penetration or higher up from 30 cities just last year.
And New York City and San Francisco have now surpassed 85% and 80%, respectively.
Tap to phone added a record 3 million, transaction devices this quarter, and tap to add card continues to expand with more than 275 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.
Unicred and XP International are inaugural issuer partners.
In Canada, our Visa Infinite affluent offerings for fintech wealth, Simple, has been their most requested product, with tens of thousands of cards issued in just 2 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 CyberSource across 9 countries.
And in India, we renewed our Consumer Credit agreements with HDFC and Access Bank. This quarter, 2 of the country's top 5 credit card issuers.
our consumer, payment strategy is also focused on non-card Solutions, like Visa a to a, 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 Ada 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, Kinecta, a payment. Initiated that connects with pics 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 for domestic and cross-border flows and develop unique products.
This quarter commercial payments volume was up 7% 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 US.
A recent example of our activity in the benefits space is with Sunny.
A healthcare fintech will issue Visa prepaid disbursement cards to millions of U.S. consumers to spend integrated health benefits and rewards in travel. VerticalCheckout.com will begin using Visa virtual cards for online travel agencies, or OTAs, in the UK and Europe.
In addition, the 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 offering 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 2.0 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 transaction volumes and endpoints.
One of the biggest banks in the UAE, with over 60 branches and serving over 1 million customers, ADIB will use Visa Direct to power its newly launched remittance program by offering access to card accounts and wallets across all corridors.
In Bangladesh.
We have signed our first 4 Partners to enable Visa Direct.
Mega Bank, Trust Bank, Midland bank, and BRAC Bank specifically for outbound cross border payments.
And in the US and Canada, pay, send, who we have discussed before is an important Visa direct remittance client with 10 million 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 stable coins 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 end points, scale, and interoperability to the payments ecosystem.
Beyond Capital markets, use cases.
We see product Market fit for stable coins in 2 important areas.
In emerging markets, where the local fiat currency is volatile and consumers do not have easy or affordable access to US dollars,
And 2 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.
Stable coin, 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 billion in Bitcoin, Ethereum, and an array of other cryptocurrencies, including stablecoins.
Border money, movement capabilities for P2P and B2B in certain emerging markets. We are piloting and partnering with stablecoin payments companies that specialize in these markets. As we build out our stablecoin treasury stack for settlement and money movement flows,
A recent example is with a 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 multicoin, stablecoin settlement on the Visa network.
We recently expanded our capabilities by adding a Euro-backed stablecoin, EURC.
and through a partnership with Paxos, to additional regulated stablecoins USDG and PY USD.
We are also adding support for 2 additional blockchains, Stellar and Avalanche, enabling us to support 4 stablecoins running on 4 unique blockchains, representing 2 currencies that we can then accept and convert to over 25 traditional fiat currencies across the world for our clients within our settlement infrastructure.
Sure, 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 1 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, Ambrose Neo Bank, boot in the Netherlands, and have also partnered with Lunar, which serves over 1 million 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 2 examples of each.
First Direct with Merchants. We renewed our agreement with Shopee, a leading digital payments platform serving tens of millions of users.
And expanded geographically from Singapore, Malaysia, and Vietnam to include the Philippines, Indonesia, and Thailand. We also expanded with additional products such as tokenization.
Kareem pay part of super app. Kareem that serves over 50 million customers across Middle East. And North Africa, will utilize several value added services, including cyber source, and account verification.
On the acquiring side in Saudi Arabia, Arab National Bank has selected Visa as their new partner for CyberSource and Risk Solutions to offer to their merchant clients.
We also signed with Bach, the largest acquirer in Central America, to provide CyberSource and tokenization to their merchant clients.
In risk and Security Solutions.
Our feature, space capabilities continue to resonate with our clients.
This quarter, Jesus in existing and important part partner of feature space will begin transitioning their tens 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, Eon Financial Service.
One of our largest clients in Japan renewed their credit relationship and will be adding consulting managed services and marketing services to help them grow.
I'll call out 2 other examples of our Consulting and marketing services at work.
Engagement and loyalty.
In the U.S. fintech, Shine 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 remain a powerful engine of revenue growth for our business.
In conclusion.
Our third quarter results were strong.
in Q3 and through July 21st, even with the continued uncertainty consumer spending remains resilient,
Within the us. While spending growth differed among consumer spend bands, all spend bands in Q3 remain 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 on both U.S. discretionary and non-discretionary spend growth remain strong, and we see no meaningful impact from tariffs.
For cross border.
Total volume growth, excluding 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 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 billion credentials.
Anyone that wants to be in the money movement business or the payment business can build on top of the Visa stack.
As we connect billions of buyers and sellers through seamless, secure digital payments, we're very excited about how that will help us enable innovative commerce as we drive Visa's growth forward well into the future.
Now, I'll hand it over to Chris.
Thanks, Ryan, and good afternoon, everyone.
Visa reached a record $10.2 billion 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, remain 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.
To process transactions grew 10% year-over-year.
As was up 23% year-over-year in nominal and constant dollars, better than expected primarily due to the strength and net revenue growth.
Let's go into the details.
Total international payments volume was up 10% year-over-year in constant 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 the leap year.
Now, to cross-border volume, which I'll speak to in constant dollars and excluding intake, 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.
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 of the 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 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 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 2 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 approvals.
Now, to our three growth engines.
Consumer payments revenue was driven by strong payments volume.
Crossborder 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 3.3 billion transactions, with strength in both domestic and cross-border P2P.
Value added Services. Revenue was 2.8, billion dollars 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 million 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 €3.5 billion of fixed-rate senior notes with maturities ranging between 3 and 19 years, and interest rates from 2.25% to 3.875%.
In addition, we bought back approximately, 4.8 billion dollars in stock and distributed 1.2 billion dollars in dividends to our stockholders.
At the end of June, we had $29.8 billion remaining in our buyback authorization.
Now, let's move to what we've seen so far in Q4.
Through July 21st, U.S. payment volume was up 9%, with debit up 10% and credit up 9% year-over-year.
And technology outages impacted us. From last July, we saw strong growth primarily due to the timing of July 4th.
The days mixed impact dimension for June, now helping July and the timing of promotional shopping events.
Process transactions, grew 11% year-over-year.
For constant dollar, cross, ber volume, excluding transactions within Europe. Total volume grew more than 10% year-over-year with e-commerce up 13% and travel at 9%.
July total cross-border volume grew, with growth accelerating 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, onto 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 below, double digits on a nominal basis. This puts Q4, net revenue growth. Generally in line with first half of fy2 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.
In our tax rate in the fourth quarter is expected to be between 18.5% and 19%.
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 and a half Point contribution to operating expense growth and an approximate. We half Point headwind. DPS growth, in the fourth quarter,
Calling 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 $250 million 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 there were contemplating a variety of economic scenarios, the strength and diversity of our business model that I just mentioned, the resilience of the consumer and are clear and effective strategy together, give us the confidence. As we make investment decisions to build the future of payments and drive long-term growth
And now, Jennifer signed for some Q&A.
Thanks, Chris. And with that, we're ready to take questions.
Thank you. If you would like to ask a question, please press star 1 and clearly record your name. You will be announced. Prior to asking your question, to ensure all questionnaires are heard, we ask that you please limit yourself to one question. Once again, to ask a question, please press star 1. To withdraw your question, please press star 2. Our first question comes from Harshita Wallet with Bernstein. You may go ahead.
Hi, good afternoon. Uh, Chris, I want to follow up on the fourth quarter that if you can provide more color, uh, 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 incentive, but anything else to call out? Um, also I think it's with regards to cross water. Thank you.
Okay, good. Hi Harsha. Uh, yeah. So let's talk about Q4. We're expecting a fundamentally strong Q4 with strong drivers and continued resilient consumer spending.
Now the guide reflects reported growth in Q4 that is being impacted by the lapping of some items that we spoke about last Q4. Specifically, there were one-time impacts that reduced incentives to the lowest growth quarter of last year. If you recall, Q4 last year grew 6% in incentives, and also we had a very strong vast quarter related to the Summer Olympics. Again, last Q4, if you normalize for those lapping items, those one-time lapping items for last year, Q4 growth.
You add it up. We're going to finish, uh, very strong FY25, higher than we thought, uh, entering the quarter.
Next question, please.
Thank you. Our next caller is from Wolfe Research.
Twisting tongue with JPMorgan? You may go ahead.
hi, tingen
are you there?
I am. Can you hear me, Jennifer? I'm sorry. Yes. Now we can. Now we can. Okay, no thanks. Uh, yeah, no. My name is a hard one. Just wanted to maybe ask about investment priorities, if that's okay. I'm just curious if that's changing at all, given...
I know Ryan, you talked a lot about Ai and stable coin, uh, to us here intro quarter. So I'm just curious to hear if you're a priority to have changed because it does look like objects is running a little bit higher and and fourth quarter reported implies.
Uh not not much operating and leverage so I'm just curious if if you're changing some of your Investments that are given given some of the news genius attack Etc.
Heightening. Um, let me talk about your question around priorities, and then I'm actually going to have Chris just talk briefly about OpEx because I think there's a very clear explanation that will be helpful to you.
Um, in terms of priorities, uh, no change from what I've been talking about publicly. Um, you know, we have a, a deep and Rich product pipeline. Uh, 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, uh, in April and, you know, we're always nipping and tucking in certain markets and adjusting, you know, kind of where we're going to go launch in, in, in this country versus that country. Um, but no. Overall, priorities remain the same. We feel great about the, the momentum that we have in market and um, you know, continue to drive that forward. Um, but Chris, I think he was cheated off a little bit by the Opex part of his question. You want to just address? Let me address that. So I'll talk about Q3 and Q4 so Q3 Opex. Did come in a little higher than we anticipated, there was a couple things. Uh 1 was the FX benefit was less than expected and then the second 1 which I mentioned on the call was higher Personnel costs and just to click into that specifically the
The overage came from higher costs related to the mark-to-market of, uh, 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. Uh, as far as Q4 goes, as Ryan talked about, we're investing in many things across our broad business to drive growth, uh, and we're anticipating uh, to grow Opex uh, in
The high single digits to low double digits. We're doing all that investment, and growing OpEx in line with revenue for Q4.
Next question, please.
Thank you. Our next caller is Trevor Williams with Jefferies. You may go ahead, sir.
Great, thanks very much. Um, 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 1 point, even though Chris, you called out Currency Vault 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 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.
Yeah.
Uh, sure Trevor. Let's, uh, let's go into all the different components. Uh, as you called out, uh, well, the 2 numbers that, that I'll reference is the 11% growth in total cross border versus the 14% International. And as you point out the, the spread, uh, shrinks on, on the nominal basis. Uh, so the 3 factors were higher currency volatility. We've talked about that at length, uh, and then the, the other 2 items hedging.
Which is in line with our strategy to mitigate cash flow impacts of FX movements. In this quarter, we had a hedging loss that offset a portion of the favorable impact of the weaker U.S. dollar.
And then the third 1 being mixed. Uh, 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, uh, different clients, different regions. And that's the example, I'll use the US inbound is 1 of our higher yielding corridors and that's being impacted by the candidate. The US volume. So the mix can certainly be an offset to the higher volatility. Those are the puts and takes, uh, for the quarter within that line specifically. But, you know, all in all, we're pleased again that Revenue whether it's in international or in data processing or outgoing volumes, uh, in in all 3 categories,
Next question, please.
Timothy Toyota with UBS please.
All right. Thank you for taking the question. I want to 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. 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 $0.09 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 add-on fees and whether or not that might have contributed at all to any of the strength in data processing. Thank you.
Hi. It's Ryan. Um, I'll try to to hit the high points of what you're asking there. Thanks for the um, uh, question on Visa direct. Love talking about Visa direct, um, coming back to the top of of your comments, uh, you know, and we shared this with investor day as well. You know, we now crossed the the 10 billion transaction Mark, at least on a rolling, uh, 12 months, uh, which we're very excited about. Um, so I think, you know, these are direct has, um, really scaled in a meaningful way. Uh, as I mentioned, in my prepared remarks, uh, it is the largest that scale money movement, uh, platform in the world. Um, you know, however, you want to measure it whether its end points or transactions, or volumes, or
Partners and what have you? And um, 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. Um, you mentioned, uh, the banks enabling and embedding Visa direct as their cross-border money Movement platform. That's something we've been very focused on um 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? And we're, when we're sitting in in talking to our bank Partners around the world, uh, they often recognize that a lot of their users are leaving their Bank app, and maybe going to another fintech or another 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 institution and ultimately driving more value as well, in terms of the pricing and the yield Dynamics, it really differs. Um, you know, we priced the value. As we always talk about on this call, uh, the competitive Dynamics are different in every vertical and every use case. And every country around the world, we're going up against different competitors and
Samia. Then we are in Latin America then we might be in Europe. Um, and the pricing has different components to it as well. Uh just because we talked about the yield in um cents per transaction, don't necessarily assume that reflects all the different pricing whether it's the remittance uh 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 kind of 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 school. So uh, feeling good about all those, um, on all those fronts and the the momentum that we have in the Visa Direct business. Next question, please.
Thank you. Go with Maness, crispy heart. You may go ahead, sir.
Hey Chris, how are you? And thank you for letting me on to the call. Uh, Street is currently looking for an acceleration in volume in terms of action with this little $26.
Um, we think of the macro conference listing from June and July levels kind of there, and bank activity level staying where it is.
Is that kind of a realistic expectation? And then on the comments on uh the lower there was a large peer uh by sort of commented on Lower Bank, activity levels. You mentioned deal time and being moved back and 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. Um, and granted you guys still accelerating in the quarter, but just any call around that would be very helpful. Thanks.
The value added Services business. Uh, as you heard in both my and and Chris's prepared remarks, um, 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 our vast business for a long time about enhancing Visa transactions, making Visa payments safer, simpler easier, um, or reliable. And, you know, that has been historically, um, how we've generated most, um, the, the, the most of the vast Revenue that we've generated, or we've really seen a lot of success is in the 2, additional strategic. Um, levers that we talked about the second is putting our vas 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, um, the the partnership that
We have in Brazil, uh, two power picks payments. Um, so, you know, we're really starting to see a lot of momentum in this second leg of the strategy by putting our VAS 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 and the success we're having in that area.
So, um, you know, good progress, good momentum, and you're starting to see kind of the strategy that we talked about a couple of years ago really start to come through in the performance and the numbers.
And then Chris, I think there was a question about 2026. Yeah, let me comment on 2026. Obviously, we're focused on closing Q4 and finishing FY 2025 strong, but we are also in the planning phases for FY 2026. Broadly, we see tremendous opportunity across our three growth engines: consumer payments, CMS, and Vast. 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 environments, as well as the investments we want to make to build the future of payments. Now, we'll have a lot more to say about 2026 in our next earnings call.
Next question, please.
Will Nance with Goldman Sachs. Please go ahead.
Hey guys. Uh you got all the way to me here without getting disabled going questions. So I'll ask 1 on the remittance space which you guys call that as a potential use case, could you talk a little bit about just how you see what the role of stable coins in that space? Is it on the pricing side? The settlement side? And do you expect the value of, uh, the role that stable coins play to acrew to the service providers in that space? Or do you expect it to acrew to the consumers and the
The form of lower pricing. Thank you.
Thanks will um lot in there. Uh and as you know, it's early days but we see a lot of opportunity. Um specifically in remittances and as I said, in my prepared marks remarks more broadly in crossborder, whether it's, you know, P2P or B2B. Um,
So let me hit a couple points. First is, you know, Visa direct Visa direct as you know is our remittance platform. Um and it it is a network of networks that enables money movement, all around the world and lots of different currencies. Um, you know, we're able to to push money and and you know to to I think it's 14 billion different end points. Now whether it's cards wallets or, or bank accounts,
Um, and for some of those use cases and some of those corridors, the money movement and transactions are near instant. But sometimes, um, you know, for example, sending money from a Visa card to a bank account in an emerging market where we are 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, true for consumers and for businesses, um, and we've been testing that out and having some good results. You know, we've been testing a series of corridors um, and putting stablecoins to work directly versus the fiat currency money movement options that we're able to deliver to, you know, our clients.
Their users today. 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.
In remittances for certain corridors, and you know the largest money movement platform around the world. We're going to be an early adopter of a lot of those things on behalf of our clients and their end users.
Next question, please.
Thank you, Dan Dolev, with Meizuo. You may go ahead, sir.
Thank you, and, um, just tying things together really strong. Vast growth. Um,
And stablecoins. Have you been, uh, is the growth been helped by your, uh, service and consulting that you're providing on stablecoins?
And are you monetizing that? If I could squeeze in one, uh, housekeeping question on sort of the right way to think about incentives. Um, you know, mid-20s in the fourth quarter and heading into the 26th. If you can answer it, thank you.
Okay. I'll, uh, I'll let Chris answer the question on, uh, incentives. Um, thanks for your question. On advisory, our advisory business has been doing, uh, strong growth, uh, all around the world, um, for a while now. And as you alluded to, and as you, I think, would expect, the most complicated, most impactful. Um.
Topics that are happening around the world and money movement are the ones where we're engaging with our clients. So yes. On stable coins, um, and crypto more broadly, um, we launched our crypto advisory, um, practice several years ago, I can't remember now. Um, but our clients, uh, both, uh, issuers and um, 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've built to help financial institutions um issue and Mitten bird, 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 uh having a lot of um 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 going to need to bring to Market to win, kind of in the agentic space and those are just a couple examples. Um, but I just want to 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 had a question about incentives. Yep. 2 for incentives. Uh, what's the question? So I I want to provide a little bit of context, um, you know, a lot of what I'm going to say is uh, things that were in my preparation.
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 Q4, we expected incentives to step up, sequentially into Q3 and into Q4 and as a result we have always consistently expected Q4 to be the highest growth quarter uh of FY 25 from an incentive, uh, point of view. Um,
In part because of the lapping that I talked about in, in the Q4 number, when we talk about the lapping of the 1 time items, but also, what I spoke about last quarter, which was, uh, the impact of performance adjustments and some deal timing that occurred prior to Q3. And so when you add that all up Q4 was going to be the high point for incentives. Uh, but that all said, um, again, I'll just reiterate, you know, our guidance today, our view of adjusted net revenue for Q4 is unchanged, uh, from The View that we had a quarter ago. Even after contemplating all the re-estimation of uh the current volatility Outlook drivers, and our latest view of deal closures into Q4, it's going to be a fundamental strong Q4 to cap off a strong fy2.
Next question, please.
Darren Peller with Wolfe Research, please go ahead.
Hey, thanks, guys. Could we just touch on number 1? 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, because I think this year, fiscal 2025, 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 the normal more like 15%. So is that still the case? And would we expect that to be more normalized next year? Thanks, guys. Okay, I'll take both these, Darren.
When we were having these conversations about Revenue versus yield pricing was less benefit than we might typically see in half, 1 consistent with that timing of pricing. And so now, uh, pricing back back half loaded, uh, we're having a more concentrated impact in Q3 and, and Q4 and that's really sort of what's Happening. Uh, and so it's great that we see, you know, Revenue outperforming volumes on data processing and and a number of other uh, spots. Uh, 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 in 24. Uh, you quoted the 20% number. We still believe. Uh, 20% of our PV is impacted this year. Above the above, the 15% last year. It's just more deal activity. Um, and you know, as you know, the deals are long in duration, increasingly more expansive uh which inherently brings the level of complexity. Uh, these are important deals and so, sometimes they take a long time to get.
Is that right? And we're going to take the time to get them, right? Uh, the good news is we feel really good about the success we're having in renewing and expanding our client partnerships. Uh, but as you can see, the timing can vary a bit from quarter to quarter.
Next question, please.
Fahad Kunwar with Rothschild & Co Redbarn. You may go ahead.
Hi both. Um, thanks for um,
Answer the question. Super helpful.
Um, I had one more intensive, so you don't mind. Um, if I go back a little further, you know, incentive growth is a percentage of revenues and going up about a percentage point a year for the best five to ten years. It does feel like in the last kind of year and a half, it has stabilized, or at least in the last year, about 28% level. Um, and I know you talked about renewal cycles now, but...
Is this a is this an inflection point? Like, do do we think that incentive growth now, broadly runs in line of revenues, and that kind of trend line up has has kind of, um, inflected to be flat. Or is there something else that we're missing or some other change that as to why we might see an inflection back upwards that old growth rate. Thanks.
Sure, I'll take this one as well. Um,
No, I mean it's just honestly, not the way that we think about our business. I, you know, this is consistent with the way 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. Um, and it does get impacted, of course, by the volume of expirations and renewals, and and can vary from year to year, but I but I certainly, um, am not going to comment on sort of the relationship between those 2. We're we're driving, net revenue, growth and and driving volumes. And and that's the most important thing.
Next question, please.
Nate, spend on what Dory to bank. Please go ahead.
Hi guys, thanks for the question. I want to talk a little more about cross-border trends, especially travel. Um, I know you gave some color in the prepared remarks, but it looks like we've had a couple of soft ones here in June. Maybe a little bit of recovery in July month-to-date. Uh, hoping you can give an update on what you're seeing specifically in international travel in your book of business, maybe what bookings look like, what impact recent FX moves are having on consumer demand, etc. and then anything to call out on specific corridors? I know we talked about inbound U.S. from Canada, but anything like Europe to U.S. or any other changing dynamics you've seen maybe over the past three months or July month-to-date.
Sure, uh okay, let's talk cross-border. And this, you know, we'll sort of try to break into a fair level of detail, so bear with me.
Um, just starting from the top, just so we have sort of a complete picture. Cross-border growth in Q3, as we reported, was 11%. That's in Europe and 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 due to the factors that we talked about: holiday timing of Easter, Ramadan, and weakness in currency from the US to Canada. All those things that we had anticipated to happen in Q3, 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.
Uh, and then obviously in July, uh, 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 e-commerce uh related. We Believe due to the dollar strengthening again uh, in July versus certain currencies. But also we see strong retail, spend in e-commerce and the reversal of some of the few of the smaller uh factors that that we referenced in June. Um,
Like the current candidate the US Quarter or permanent structural changes either. And so we could see, uh, some strengthening their or we could see further, you know, sort of impact from sentiment around the world, um, in specific deck corridors, which is the second part of your your, uh, I'll give a few examples. Uh, we've talked extensively about Canada to us, uh, that's remaining relatively consistent, uh, 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, uh, we believe has been impacted in a correlated way. Uh, AP currency has remained weak as well, uh, and has continued to remain weak, uh, and across a number of markets in AP, and that's impacting, uh, travel there as well. And then, of course, the timing of various, uh, holidays Easter, uh, which had a, a larger impact in Europe, uh, in Ramadan. Of course, uh, had a larger impact in Sama. Uh, those are
Some of the things that we're seeing from, uh, uh, from a, a corridor standpoint. But again, if we zoom out of the month the month and we look at cross border and total, uh, the overall level the data, the trends, you know, and we understand, sort of the currency impacts that that can have, uh, that can be that can show up. Uh, cross border volume, we think in total has remained strong, and above preco levels.
Last question, please. Michelle.
Thank you, Sanjay Sakrani with KBW. You may go ahead, sir.
Um, I had a bigger picture of the stable coin question. Totally understand that Visa can add stable coins 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.
Jay, you're the best. Um, listen, I need to go back to the product market fit that I described.
If you, uh, agree with that, which clearly I do, I think it's a lot of opportunity for us.
And why do I say that?
Um, 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 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 stablecoins in those markets to pay for things. I think that could accelerate our progress digitizing consumer payments and business, um, small business and commercial payments in those markets.
The second, um, you know, uh, product area product Market fit that I mentioned was cross border. Uh, and as you know, um, well, the cross border Tam, uh, in terms of whether it's remittances, or, um, B2B 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 we'll ask earlier for remittances on our Visa direct platform, you know, that's going to be an opportunity for us to continue to expand and accelerate our growth in remittances. So, you know, I'm genuinely optimistic about what, um, stable coins could do to accelerate, uh, our progress digitizing flows. Whether it's consumer payments or um, you know, opportunities and and CMS. And, you know, we'll continue to update you, as we as we learn more.
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.
Thank you all for participating.
The third quarter 2025 earnings conference call concludes today's conference. You may disconnect at this time, and please enjoy the rest of your day.