Visa Q3 Earnings Beat Estimates on Strong Cross-Border Volumes

Core Insights - Visa Inc. reported Q3 fiscal 2025 EPS of $2.98, exceeding the Zacks Consensus Estimate of $2.86 by 4.2%, with a year-over-year increase of 23.1% [1][9] - Net revenues reached $10.2 billion, reflecting a 14.3% year-over-year growth and surpassing the consensus mark by 3.1% [1][9] Business Performance - The increase in quarterly results was driven by higher processed transactions and payment volumes, although partially offset by rising operating expenses [2] - Visa's payments volume grew 8% year over year on a constant-dollar basis, with processed transactions increasing 10% to 65.4 billion, exceeding expectations [3][9] - Cross-border volume rose 12% year over year, with a notable 11% increase excluding intra-European transactions [4] Revenue Breakdown - Service revenues increased 9% year over year to $4.3 billion, aligning with consensus estimates [5] - Data processing revenues grew 15% year over year to $5.2 billion, surpassing the Zacks Consensus Estimate [5] - International transaction revenues rose 14% year over year to $3.6 billion, driven by higher cross-border volumes [6] - Other revenues reached $1 billion, climbing 32% year over year [6] Operating Expenses - Adjusted operating expenses increased 13% year over year to $3.3 billion, primarily due to higher marketing and administrative costs [7] - Interest expenses significantly decreased by 80.1% year over year to $39 million [7] Balance Sheet Highlights - As of June 30, 2025, Visa had cash and cash equivalents of $17.1 billion, up from $12 billion at the end of fiscal 2024 [8] - Total assets increased to $100 billion from $94.5 billion at the end of fiscal 2024 [8] - Long-term debt decreased to $19.6 billion from $20.8 billion as of September 30, 2024 [8] Cash Flow and Capital Deployment - Visa generated net cash from operations of $6.7 billion, a 31.1% year-over-year increase, with free cash flows at $6.3 billion, up 33.3% [10] - The company returned $6 billion to shareholders through share buybacks and dividends, with $29.8 billion remaining under its repurchase program [11] Future Outlook - For Q4 FY25, Visa anticipates high-single-digit to low-double-digit growth in net revenues and low double-digit growth in operating expenses [12] - EPS is expected to grow in the upper-mid to high-single digits [12] - For fiscal 2025, management projects low double-digit growth in net revenues and operating expenses, with EPS growth in the low teens [13]