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Visa Q3 Earnings Beat Estimates on Strong Cross-Border Volumes
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Key Takeaways
Visa reported Q3 EPS of $2.98, beating estimates and rising 23.1% year over year on strong volumes.
Cross-border volume rose 12% and processed transactions grew 10% to 65.4B, both topping expectations.
Net revenues climbed 14.3% to $10.2B, driven by gains in payment volume and international transactions.
Visa Inc. (V - Free Report) reported third-quarter fiscal 2025 earnings per share (EPS) of $2.98, which beat the Zacks Consensus Estimate of $2.86 by 4.2%. The bottom line increased 23.1% year over year.
Net revenues of $10.2 billion improved 14.3% year over year. The top line beat the consensus mark by 3.1%.
The strong quarterly results benefited from higher processed transactions, payment and cross-border volumes. However, the upside was partly offset by increased operating expenses, primarily personnel costs and general and administrative expenses.
Visa's payments volume increased 8% year over year on a constant-dollar basis in the fiscal third quarter due to expanding operations across the United States, Europe, CEMEA and LAC regions. Processed transactions (implying transactions processed by Visa) grew 10% year over year to 65.4 billion. The metric beat the Zacks Consensus Estimate of 64.5 billion and our estimate of 65 billion.
On a constant-dollar basis, the cross-border volume of Visa rose 12% year over year. Excluding transactions within Europe, its cross-border volume (that boosts a company’s international transaction revenues) jumped 11% year over year on a constant-dollar basis.
Visa’s Q3 Operational Performance
Service revenues (depending on the payment volume in the previous quarter) increased 9% year over year to $4.3 billion in the June quarter, attributable to expanding payment volumes. The metric came in line with the consensus mark and beat our estimate by 1.7%.
Data processing revenues of $5.2 billion grew 15% year over year and beat the Zacks Consensus Estimate of $5.1 billion.
International transaction revenues rose 14% year over year to $3.6 billion in the fiscal third quarter, driven by higher cross-border volumes. The metric beat the consensus mark by 0.9% and our estimate by 1.4%. Other revenues were $1 billion, which climbed 32% year over year and surpassed our estimate by 5.7%.
Client incentives (a contra-revenue item) increased 13% year over year to $4 billion but were lower than the Zacks Consensus Estimate by 1.9%.
Adjusted operating expenses of $3.3 billion escalated 13% year over year due to higher marketing personnel costs and general and administrative expenses. This was higher than our estimate of $3.2 billion. Interest expenses decreased 80.1% year over year to $39 million.
Visa’s Balance Sheet (As of June 30, 2025)
Visa exited the June quarter with cash and cash equivalents of $17.1 billion, which rose from the fiscal 2024-end level of $12 billion.
Total assets of $100 billion increased from the fiscal 2024-end level of $94.5 billion.
Visa’s long-term debt amounted to $19.6 billion, down from $20.8 billion as of Sept. 30, 2024.
Total equity declined 1.2% from the fiscal 2024-end figure to $38.7 billion.
Visa’s Cash Flows
The company generated net cash from operations of $6.7 billion in the fiscal third quarter, which rose 31.1% year over year. Free cash flows were recorded at $6.3 billion, up 33.3% year over year.
Visa’s Capital Deployment Update
Visa rewarded $6 billion to its shareholders via share buybacks ($4.8 billion) and dividends ($1.2 billion) in the June quarter. The company had leftover authorized funds of $29.8 billion under its repurchase program as of June 30, 2025.
The quarterly cash dividend, amounting to 59 cents per share, will be paid out on Sept. 2, 2025, to its shareholders of record as of Aug. 12.
Visa’s Q4 FY25 Outlook
On an adjusted nominal-dollar basis, net revenues are anticipated to witness high-single-digit to low-double-digit growth. Operating expenses are estimated to grow in low double digits on an adjusted nominal-dollar basis. It expects EPS to witness growth in the upper-mid to high-single digit.
The amortization of acquired intangible assets is projected at around $55 million, or 2 cents per share. Acquisition-related costs are expected to be roughly $10 million or 1 cent per share.
Visa’s Fiscal 2025 View
Management now estimates net revenues to witness low double-digit growth on an adjusted nominal-dollar basis in fiscal 2025. Operating expenses are also expected to witness low double-digit growth on an adjusted nominal-dollar basis. Management also anticipates EPS will witness growth in the low teens.
The amortization of acquired intangible assets is projected at around $215 million, or 8 cents per share. Acquisition-related costs are expected to be roughly $100 million or 5 cents per share. It also expects severance costs of $213 million and a litigation provision of $1.6 billion.
The Zacks Consensus Estimate for Coherent’s current-year earnings of $3.52 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Coherent beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.2%. The consensus estimate for current-year revenues is pegged at $5.8 billion, implying 23% year-over-year growth.
The Zacks Consensus Estimate for APi Group’s current-year earnings of $1.41 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. APi Group beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 4.1%. The consensus estimate for current-year revenues is pegged at $7.5 billion, suggesting 7% year-over-year growth.
The Zacks Consensus Estimate for TransUnion’s current-year earnings of $4.1 per share has witnessed three upward revisions in the past 30 days against no movement in the opposite direction. TransUnion beat earnings estimates in each of the trailing four quarters, with the average surprise being 4.8%. The consensus estimate for current-year revenues is pegged at $4.5 billion, calling for a 6.3% year-over-year increase.
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Visa Q3 Earnings Beat Estimates on Strong Cross-Border Volumes
Key Takeaways
Visa Inc. (V - Free Report) reported third-quarter fiscal 2025 earnings per share (EPS) of $2.98, which beat the Zacks Consensus Estimate of $2.86 by 4.2%. The bottom line increased 23.1% year over year.
Net revenues of $10.2 billion improved 14.3% year over year. The top line beat the consensus mark by 3.1%.
The strong quarterly results benefited from higher processed transactions, payment and cross-border volumes. However, the upside was partly offset by increased operating expenses, primarily personnel costs and general and administrative expenses.
Visa Inc. Price, Consensus and EPS Surprise
Visa Inc. price-consensus-eps-surprise-chart | Visa Inc. Quote
Q3 Business Drivers of Visa
Visa's payments volume increased 8% year over year on a constant-dollar basis in the fiscal third quarter due to expanding operations across the United States, Europe, CEMEA and LAC regions. Processed transactions (implying transactions processed by Visa) grew 10% year over year to 65.4 billion. The metric beat the Zacks Consensus Estimate of 64.5 billion and our estimate of 65 billion.
On a constant-dollar basis, the cross-border volume of Visa rose 12% year over year. Excluding transactions within Europe, its cross-border volume (that boosts a company’s international transaction revenues) jumped 11% year over year on a constant-dollar basis.
Visa’s Q3 Operational Performance
Service revenues (depending on the payment volume in the previous quarter) increased 9% year over year to $4.3 billion in the June quarter, attributable to expanding payment volumes. The metric came in line with the consensus mark and beat our estimate by 1.7%.
Data processing revenues of $5.2 billion grew 15% year over year and beat the Zacks Consensus Estimate of $5.1 billion.
International transaction revenues rose 14% year over year to $3.6 billion in the fiscal third quarter, driven by higher cross-border volumes. The metric beat the consensus mark by 0.9% and our estimate by 1.4%. Other revenues were $1 billion, which climbed 32% year over year and surpassed our estimate by 5.7%.
Client incentives (a contra-revenue item) increased 13% year over year to $4 billion but were lower than the Zacks Consensus Estimate by 1.9%.
Adjusted operating expenses of $3.3 billion escalated 13% year over year due to higher marketing personnel costs and general and administrative expenses. This was higher than our estimate of $3.2 billion. Interest expenses decreased 80.1% year over year to $39 million.
Visa’s Balance Sheet (As of June 30, 2025)
Visa exited the June quarter with cash and cash equivalents of $17.1 billion, which rose from the fiscal 2024-end level of $12 billion.
Total assets of $100 billion increased from the fiscal 2024-end level of $94.5 billion.
Visa’s long-term debt amounted to $19.6 billion, down from $20.8 billion as of Sept. 30, 2024.
Total equity declined 1.2% from the fiscal 2024-end figure to $38.7 billion.
Visa’s Cash Flows
The company generated net cash from operations of $6.7 billion in the fiscal third quarter, which rose 31.1% year over year. Free cash flows were recorded at $6.3 billion, up 33.3% year over year.
Visa’s Capital Deployment Update
Visa rewarded $6 billion to its shareholders via share buybacks ($4.8 billion) and dividends ($1.2 billion) in the June quarter. The company had leftover authorized funds of $29.8 billion under its repurchase program as of June 30, 2025.
The quarterly cash dividend, amounting to 59 cents per share, will be paid out on Sept. 2, 2025, to its shareholders of record as of Aug. 12.
Visa’s Q4 FY25 Outlook
On an adjusted nominal-dollar basis, net revenues are anticipated to witness high-single-digit to low-double-digit growth. Operating expenses are estimated to grow in low double digits on an adjusted nominal-dollar basis. It expects EPS to witness growth in the upper-mid to high-single digit.
The amortization of acquired intangible assets is projected at around $55 million, or 2 cents per share. Acquisition-related costs are expected to be roughly $10 million or 1 cent per share.
Visa’s Fiscal 2025 View
Management now estimates net revenues to witness low double-digit growth on an adjusted nominal-dollar basis in fiscal 2025. Operating expenses are also expected to witness low double-digit growth on an adjusted nominal-dollar basis. Management also anticipates EPS will witness growth in the low teens.
The amortization of acquired intangible assets is projected at around $215 million, or 8 cents per share. Acquisition-related costs are expected to be roughly $100 million or 5 cents per share. It also expects severance costs of $213 million and a litigation provision of $1.6 billion.
V’s Zacks Rank & Other Key Picks
V currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the business services space are Coherent Corp (COHR - Free Report) , APi Group Corp (APG - Free Report) and TransUnion (TRU - Free Report) . While Coherent and APi Group currently sport a Zacks Rank #1 (Strong Buy) each, TransUnion carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Coherent’s current-year earnings of $3.52 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Coherent beat earnings estimates in each of the trailing four quarters, with the average surprise being 15.2%. The consensus estimate for current-year revenues is pegged at $5.8 billion, implying 23% year-over-year growth.
The Zacks Consensus Estimate for APi Group’s current-year earnings of $1.41 per share has witnessed one upward revision in the past 30 days against no movement in the opposite direction. APi Group beat earnings estimates in three of the trailing four quarters and met once, with the average surprise being 4.1%. The consensus estimate for current-year revenues is pegged at $7.5 billion, suggesting 7% year-over-year growth.
The Zacks Consensus Estimate for TransUnion’s current-year earnings of $4.1 per share has witnessed three upward revisions in the past 30 days against no movement in the opposite direction. TransUnion beat earnings estimates in each of the trailing four quarters, with the average surprise being 4.8%. The consensus estimate for current-year revenues is pegged at $4.5 billion, calling for a 6.3% year-over-year increase.