Visa (V) Stock Stumbles After Mixed Earnings Despite Revenue Beat

TLDR

Table of Contents

Visa’s Q3 net income rose 8% to $5.3 billion but missed earnings per share expectations at $2.69 vs $2.81 forecast
Revenue jumped 14% to $10.2 billion, beating analyst estimates of $9.85 billion
Global payments volume increased 8% while cross-border transactions grew 11%
Stock fell 2.6% in after-hours trading despite beating revenue expectations
Company bought back $4.8 billion worth of shares during the quarter

Visa delivered a mixed bag of results for its third quarter of fiscal 2025, with strong revenue growth offset by earnings that fell short of Wall Street’s expectations. The payment processing giant’s stock dropped 2.6% in after-hours trading despite beating revenue forecasts.

The San Francisco-based company posted net income of $5.3 billion, or $2.69 per share, representing an 8% increase from the same period last year. However, this figure came in below analyst expectations of $2.81 per share. On an adjusted basis, earnings reached $2.98 per share, which did manage to top the $2.85 consensus estimate.

Visa, $V, Q3-25. Results:
📊 Adj. EPS: $2.98 🟢
💰 Revenue: $10.2B 🟢
📈 Net Income: $5.3B
🔎 Strong performance across payments, cross-border volume, and processed transactions. Returned $6.0B to shareholders through buybacks and dividends. pic.twitter.com/Qr6BPWIuow
— EarningsTime (@Earnings_Time) July 29, 2025

Revenue climbed 14% year-over-year to $10.2 billion, surpassing Wall Street’s forecast of $9.85 billion. This marks another quarter of solid top-line growth for the payments processor.

CEO Ryan McInerney highlighted the resilient consumer spending environment in his earnings statement. “Consumer spending remains resilient, with continued strength in discretionary and non-discretionary growth in the U.S.,” he noted.

The revenue growth was driven by several key factors across Visa’s business segments. Service revenue reached $4.3 billion, up 9% from the previous year. Data processing revenue showed stronger growth, increasing 15% to $5.2 billion.

International transaction revenue rose 14% to $3.6 billion, reflecting continued strength in cross-border spending. Other revenue posted the strongest growth at 32%, totaling $1 billion for the quarter.

Payment Volume Trends

Global payments volume, which represents the total value of purchases made on Visa-branded cards, increased 8% from the prior year. This metric serves as a key indicator of consumer spending patterns and economic health.

Cross-border volume, excluding European transactions, surged 11% in constant currency terms. Total cross-border volume grew 12% during the same period. These figures suggest international travel and spending continue to recover.

The company processed 65.4 billion transactions during the quarter, representing 10% annual growth. This increase in transaction volume directly benefits Visa’s business model, as the company earns fees on each transaction processed through its network.

U.S. payment volumes rose 7% while international volumes climbed 10% on a constant-dollar basis. Morgan Stanley analysts had projected 7% growth for U.S. volumes, while Visible Alpha tracked expectations of 6.7%.

Share Repurchase Activity

Visa continued its aggressive share buyback program during the quarter. The company repurchased approximately 14 million shares at an average price of $349.24 per share. This represented a total investment of $4.8 billion in share repurchases.

As of June 30, 2025, Visa maintains $29.8 billion remaining in its share repurchase authorization. This substantial war chest provides flexibility for future capital returns to shareholders.

The company’s client incentive costs increased 13% to $4 billion during the quarter. These incentives are payments made to financial institutions and other partners to encourage use of Visa’s payment network.

Visa shares have gained 12% year-to-date, outperforming the S&P 500’s 9% advance. The stock reached a record closing high of $373.31 last month before the earnings-related decline.

Wall Street analysts maintain a Strong Buy consensus rating on Visa stock. Based on 21 Buy ratings, three Hold ratings, and zero Sell ratings, the average price target stands at $390.64 per share. This implies potential upside of 10.7% from current levels.

The mixed earnings results reflect the challenging environment facing even strong companies as investors maintain high performance expectations. Despite beating revenue estimates and showing solid operational metrics, the earnings miss was enough to send shares lower in after-hours trading.

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