Visa Inc. Q4 FY2025 earnings call

Ryan McInerney mentioned that Visa finished fiscal 2025 with strong financial performance. The company has intensified investment in innovation across the Visa as a Service stack. In the foundation layer, there were expansions in network of networks, settlement currencies, and deployment of next-gen VisaNet. In the services layer, progress was made in Visa credentials and stablecoin-related programs. In the solutions layer, consumer and commercial payments, Visa Direct, and value-added services all had positive developments. Christopher Suh discussed financial results, noting service revenue growth, data processing revenue growth, and other revenue growth. The company also outlined its investment plans for fiscal 2026 across various layers of the stack.

Fiscal fourth quarter net revenue grew 12% year-over-year to $10.7 billion, and EPS was up 10%, resulting in full year net revenue and EPS year-over-year growth of 11% and 14%, respectively. Total full year payments volume was $14 trillion, up 8% year-over-year in constant dollars, and process transactions totaled $258 billion, up 10% year-over-year. In the foundation layer of Visa as a Service stack, Visa expanded its network of networks with approximately 12 billion end points, added support for 4 stablecoins running on 4 unique blockchains representing 2 currencies convertible to over 25 traditional fiat currencies, and began deploying the next generation of VisaNet. In the services layer, Visa grew the number of Visa credentials by 270 million, had over 130 stablecoin-linked card issuing programs in over 40 countries, and Q4 stablecoin-linked Visa card spend quadrupled year-over-year. In the solutions layer, consumer payments saw progress in Visa Intelligent Commerce, Visa Flex Credential, Visa Accept, etc.; commercial payments volume grew 7% in constant dollars to $1.8 trillion; Visa Direct had 12.6 billion transactions, up 27% year-over-year; value-added services revenue grew 25% in constant dollars to $3 billion.

For 2026, adjusted full year net revenue growth is expected in the low double digits. Q1 adjusted net revenue growth is expected in the high end of low double digits, with adjusted operating expense growth in the low double digits. The company expects significant investments in the Visa as a Service stack in 2026. There is an approximately 0.5 point benefit from FX in nominal net revenue growth for Q1. Nonoperating expense is expected to be about $15 million in Q1, and the tax rate is expected to be around 18%.

Macro economic changes could impact business performance. In Latin America, there was a slight deceleration in volume, with the moderating inflation in Argentina being a significant contributor.

Q: Like the outlook. It's very strong. I guess when I think through some of the assumptions that are embedded in it, I know, Chris, you talked about assuming the macro is stable. But we've heard some of your competitors talk about choppiness in the economy, different spending habits, especially for consumers as they've been trading down on discretionary items. I mean have you guys seen anything like that? And sort of how does that factor into your outlook?

A: Sanjay, yes, we have great momentum exiting FY '25, and that's the underlying assumption as we go into '26 for another strong year. But let me address some of the specific points you've made about questions you had around sort of, I guess, spend and the strength of the macro economy. I mean if I just zoom out a little bit, really, one of the real strengths of our business here, Visa is the diversification of our business. And so we have the broadest exposure to credit, to debit. Our volumes are comprised of everyday spend, the special occasion spend, nondiscretionary like fuel and groceries and discretionary items like travel or holidays, goods, services, consumer, commercial and so really some of the broadest spend categories that you can imagine. And what we do is we remain data-driven and across this broad and diverse set, the growth across our spend bands has remained quite consistent all year. And it was again, in Q4, with higher spending cardholders driving more of the growth, and that's consistent with what we see across the U.S. economy. And so that all gives us good reason over that data to say that consumer has remained resilient. That is our -- that is what we saw in FY '25, and that is our assumption going into FY '26.

Q: James Faucette with Morgan Stanley. One that's quite topical, obviously, is all things agentic commerce. And I know you've had some recent announcements on that topic. Can you paint a picture for us like the role that you expect Visa to play in agentic commerce transactions and ramp and kind of milestones we should expect to see in its development?

A: We see considerable opportunity in agentic commerce. But just to put it in context, when we had the first wave of digital commerce with eCommerce, we set the standards. We led the product development, and Visa was a significant beneficiary. Then you saw a second wave of commerce, which was mobile commerce. And again, Visa was the leader in terms of standards, in terms of product innovation, in terms of the capabilities enabling that to happen. And we've been a big beneficiary. You've seen that both in people buying things on their phones but also using their phones to buy things, especially with Tap to Pay. And now in this third wave of agentic commerce, we've been leading in terms of our role of setting the standards. I think one great example of that is Visa Intelligent Commerce, where we put out a set of capabilities for AI-ready cards, leveraging tokenization, AI-powered personalization, leveraging our data token service. We put out a set of standards with payment instructions that are going to allow customers like you and I to easily set spending limits and conditions to provide clear guidance for agent transactions and also our payment signals, which are going to share those data payloads in real time with Visa, enabling us to help set transaction controls, manage disputes and Chargebacks and those types of things. So I think that's a great example of the leadership role that we're taking in agentic commerce. And then just 2 weeks ago, we announced the Visa Trusted Agent Protocol. The Visa Trusted Agent Protocol is meant to really ensure that merchants know when an agent is coming to buy something on my behalf, it is actually a real agent that I have authorized to make purchases on my behalf. And I think what differentiates the Visa Trusted Agent Protocol is 2 things. One is it's open. It's an open set of standards, and we think that an open framework is critical to drive mass adoption in the way that's needed for agentic commerce. And the second is it's easy to integrate. We built it on existing web infrastructure so that it's going to be easy for merchants to integrate into existing messaging standards and get up and running quickly. So those would be 2 examples. We're very excited about it. We think it's a significant opportunity for Visa and for everyone involved in the ecosystem.