Visa earnings momentum underpins long-term payments growth case

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Visa earnings drive growth

Highlights

Visa processes 72 billion transactions in the quarter, up 10% year over year, with net revenue rising 14% to $11.6 billion and EPS increasing 11% to $3.32.
Global payments volume surpasses $4 trillion for the first time, up 10%, with value-added services revenue up 34% and Visa Direct transactions up 21%.
Visa stock trades about 1% below its all-time high, up roughly 3,250% from its split-adjusted IPO price, and now trades at 25 times forward earnings.

Quarterly performance and management outlook

As reported by CNBC, Visa’s latest quarterly update reinforces the strength of its core payments franchise as U.S. consumer spending holds up across income bands.

In the company’s most recent earnings call, CEO Ryan McInerney says Visa processes 72 billion transactions in the quarter, up 10% from a year earlier, while CFO Chris Suh says spending growth improves from the prior quarter across every spend band. Management says it does not see weakening among lower-spend consumers in its volumes, and U.S. payments volume rises 10%, a pace the company says it has not seen since fiscal 2019 outside the post-COVID recovery.

Visa reports net revenue of $11.6 billion, up 14% year over year, and non-GAAP diluted earnings per share of $3.32, up 11%. Global payments volume surpasses $4 trillion in a quarter for the first time in the company’s history, rising 10%, while cross-border volume increases 12%.

The company’s newer business lines also continue to grow. Value-added services revenue climbs 34% in constant dollars to $3.8 billion, commercial and money movement revenue grows 17%, and Visa Direct exceeds 4 billion transactions, up 21%. For the fourth quarter, management guides for net revenue growth at the high end of low double digits and EPS growth at the low end of mid-teens, while also signaling visibility into fiscal 2027 renewals, pricing and product pipeline trends.

Market position and valuation implications

Visa’s scale continues to support the argument that established card networks remain difficult to displace, despite years of claims that crypto-based or decentralized payment systems would offer a cheaper and more efficient alternative.

The company operates one of the world’s largest payment networks, linking billions of cards with more than 150 million merchant locations and collecting a small fee when transactions move across its rails. That business model leaves Visa highly exposed to broad consumption trends, but also gives it resilience when spending remains steady.

Commentary in the source text also highlights Visa’s long-term stock performance. Since its March 19, 2008 IPO at $44 a share, later adjusted to $11 after a 4-for-1 split in March 2015, the stock rises to $368, implying a gain of roughly 3,250% on a price-return basis.

More recently, Visa trades about 1% below its all-time high after recovering from a drawdown of as much as 21% in March. The stock was valued at 22 times forward earnings during that earlier pullback, its lowest level since emerging from the 2022 bear market, and now trades at about 25 times forward earnings as investors reassess the durability of its earnings growth.

Our earlier report on Tom Lee’s August outlook for the S&P 500 highlighted his call for a move toward 7,900–8,000, driven by resilient second-quarter earnings and improving longer-term profit expectations. We noted that technology leadership and bullish technical signals were central to his thesis, reinforcing the idea that strong fundamentals can keep valuations supported even after pullbacks.

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