Visa Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights:

• Financial performance: Net revenue was $10.2 billion, up 14% year-over-year, and EPS up 23% year-over-year. Constant dollar payments volume grew 8%, U.S. payment volume grew 7%, and international payment volume grew 10%.
• Client engagement: Visa received a Net Promoter Score of 76 in the annual global client engagement survey.
• Innovations: In consumer payments, Flex Credential expanded with new clients and partnerships, and Visa Intelligent Commerce had over 30 partners in the sandbox. In commercial, Visa Direct made progress, and stablecoin initiatives were highlighted. Value-added services saw strong growth across all portfolios.

Segment Performance:

• Consumer Payments: Net revenue growth, total credentials up 7% year-over-year, near 15 billion tokens, over 50% of e-commerce transactions tokenized globally.
• Commercial and Money Movement Solutions: Commercial payments volume up 7% year-over-year in constant dollars, Visa Direct transactions up 25%, CMS revenue up 13% year-over-year in constant dollars.
• Value-Added Services: Up 26% year-over-year in constant dollars, with strong growth across Issuing, Acceptance, Risk and Security, and Advisory and Other Services portfolios.

Guidance:

• Q4 adjusted net revenue expectations unchanged, in the high single digits to low double digits.
• Adjusted operating expenses expected to grow in the high single digits to low double digits.
• Full-year guidance mostly unchanged, but net revenue and EPS growth stronger than initially anticipated due to strong Q3 and Q4 performance.

Risks:

• Macroeconomic uncertainties impacting consumer spending and cross-border volume.
• Currency volatility affecting cross-border revenue and margins.
• Timing of client deals impacting incentive accruals.

Q: Follow up on Q4 guide, bridge deceleration from Q3.

A: Chris explains Q4 is strong, normalizes for lapping items and FX, Q3 was strong due to high currency volatility and lower incentives.

Q: Ask on investment priorities, OpEx.

A: Ryan states priorities unchanged, Chris explains Q3 OpEx higher due to less FX benefit and higher personnel costs, Q4 OpEx expected to grow in line with revenue.

Q: Expand on spread between international transaction fees and cross-border volume.

A: Christopher Suh explains factors like higher currency volatility, hedging, and mix affecting the spread.

Q: Street looking for acceleration in volume transaction in fiscal '26.

A: Ryan talks about strong VAS growth and strategic focus, Chris mentions planning for '26 with evaluation of various drivers.

Q: Role of stablecoins in remittance space.

A: Ryan explains stablecoins can enable faster cross-border transactions, testing ongoing with potential value for users and clients.

Q: Incentives timing and normalization.

A: Chris discusses Q4 incentives expected to step up, but adjusted net revenue guidance unchanged.