Core Insights - Visa Inc. opened fiscal 2026 with a resilient quarter, showcasing its status as a dependable compounder in the payments technology market [1] - The company reported adjusted earnings of $3.17 per share, a 15% year-over-year increase, and revenue of $10.9 billion, also up 15% [3] - Visa's Value-Added Services segment saw a significant revenue increase of 28%, reaching $3.2 billion, driven by demand for various services [5] Financial Performance - Visa's adjusted earnings beat the Zacks Consensus Estimate by 3 cents, while revenue exceeded expectations by 1.9% [3] - Cross-border volumes grew by 12% on a constant-currency basis, and payment volumes increased by 8% [3] - Processed transactions reached 69.4 billion, marking a 9% year-over-year increase, although slightly below the consensus estimate [3] Value-Added Services - The expansion of Visa's Value-Added Services (VAS) segment is a key growth driver, with revenues surging 28% [5] - The upcoming FIFA World Cup and Olympic Games are expected to further accelerate marketing and analytics services [5] Stablecoins and Digital Infrastructure - Visa is enhancing its role in blockchain-based infrastructure, enabling banks to issue and manage stablecoins [6] - Annualized settlement volumes for stablecoins reached $4.6 billion, indicating growing adoption in cross-border transactions [6] - Management has tempered expectations for stablecoins as mainstream consumer payment tools in developed markets, citing a lack of compelling product-market fit [7] Shareholder Returns - During the quarter, Visa returned $5.1 billion to shareholders, including $3.8 billion in buybacks and $1.3 billion in dividends [11] - The company's dividend yield of 0.81% exceeds that of Mastercard and the industry average [11] Analyst Estimates - The Zacks Consensus Estimate for Visa's fiscal 2026 and fiscal 2027 EPS suggests increases of 11.9% and 13.3%, respectively [12] - The consensus for fiscal 2026 and fiscal 2027 revenues indicates growth of 11.3% and 10.2% [12] Valuation and Market Performance - Visa's stock is trading at 24.65X forward price/earnings, above the industry average of 19.28X [16] - Over the past three months, Visa shares declined 1%, outperforming the industry's 3.4% drop [13] Conclusion - Visa's strong fiscal Q1 performance highlights the durability of its transaction-led business model, supported by steady payment growth and robust cross-border volumes [21] - Strategic investments in digital infrastructure and stablecoin settlement enhance its long-term positioning [21]

Core Insights - Visa has expanded its stablecoin settlement pilot to the U.S., allowing select U.S. issuing and acquiring banks to use USDC instead of fiat currency for transactions on VisaNet, aiming to enhance liquidity and efficiency in cross-border payments [9][10][12] - The annualized settlement volume for stablecoins reached $3.5 billion, indicating a growing integration of stablecoins into mainstream payment systems, although it remains a small fraction of the overall stablecoin market [14][15] - Visa's approach is chain-agnostic, focusing on the functionality of stablecoins rather than the underlying blockchain technology, which allows for flexibility in payment processing [22][23] Visa's Stablecoin Strategy - The pilot program does not alter Visa's four-party payment structure but introduces USDC as a settlement medium between issuing and acquiring banks [10][11] - Visa has been testing stablecoin transactions since 2020, with previous trials in Nigeria and partnerships with Crypto.com, indicating a long-term strategy rather than a sudden shift [12][13] - The integration of stablecoins is seen as a significant step towards mainstream acceptance, moving beyond mere concept validation to real operational use [13][14] Market Context - The stablecoin market is estimated to have a transaction volume in the trillion-dollar range, making Visa's $3.5 billion annualized figure relatively small [14][15] - Traditional banking systems require pre-funding for settlements, which stablecoins can reduce significantly due to their faster transaction speeds, enhancing capital efficiency [16][17] - Visa's use of stablecoins is expected to improve settlement speed and operational efficiency, allowing banks to lower their required working capital [16][17] Technological Considerations - Visa's choice of Solana for the pilot, rather than Ethereum, reflects its focus on high throughput and speed, continuing its previous collaborations with Solana [22][23] - The company aims to create a "network of networks," allowing payment credentials to flow across various blockchain networks, enhancing interoperability [30][31] Competitive Landscape - Visa's strategy contrasts with Mastercard's focus on building a multi-asset network, indicating different approaches to integrating stablecoins into their payment ecosystems [39][40] - The competitive dynamics in the payment space are evolving, with companies like Circle also developing their own payment networks, potentially challenging traditional card organizations [42][43]

Core Insights - Visa and Mastercard are making progress in accessing the Chinese payments market through partnerships, with Visa's latest deal involving a connection between Visa Direct and UnionPay's MoneyExpress platform [1][3] Market Potential - China's payments market is projected to reach $47 trillion by 2026 and exceed $70 trillion by 2031, indicating significant growth potential [2][6] - Visa holds a 39% share of the global credit card market, while UnionPay has 34%, and Mastercard has 24%, but their shares in China are minimal compared to UnionPay's dominance [2] Partnership Details - The Visa and UnionPay partnership will allow Visa customers to send cross-border remittances and business-to-consumer payouts to over 95% of UnionPay International debit cardholders in mainland China [3] - The connection is expected to be operational in the first half of the year and will support various payment needs, including freelancer payouts and family remittances [5] Industry Context - China is recognized as one of the most advanced real-time payments markets globally, with a mobile-first consumer base that has widely adopted digital payments [4] - The collaboration between Visa and UnionPay is seen as a strategic move to navigate the regulatory challenges and expand their reach in the Chinese market [6]

Core Insights - Visa Inc. is enhancing its global money movement capabilities through a partnership with UnionPay International, aiming to expand Visa Direct's reach in the Chinese Mainland [1][8] - This collaboration allows clients to send cross-border remittances to over 95% of UnionPay International debit cardholders, significantly reducing friction for global senders [1][8] - The partnership aligns with Visa's strategy to transition from a card-centric revenue model to an infrastructure-driven approach for money movement, capitalizing on the growing significance of cross-border payments [2][3] Strategic Implications - The partnership complements Visa's international expansion strategy by embedding into an established network, reducing execution risk while monetizing flows through value-added services [3][4] - The expected rollout in the first half of 2026 could represent a significant shift in Visa's money movement strategy, enhancing its relevance in evolving real-time payout networks [4] Competitive Landscape - Competitors such as Mastercard and American Express are also expanding their cross-border payment capabilities, with Mastercard reporting a 12% increase in net revenues and 15% growth in cross-border volumes in 2025 [5] - American Express is focusing on global business payments and integrated corporate solutions, achieving a 7% year-over-year growth in network volumes in 2025 [6] Financial Performance - Visa's stock has declined by 5.9% over the past year, compared to an 18.2% decline in the industry [7] - The Zacks Consensus Estimate for Visa's fiscal 2026 earnings suggests an 11.8% increase from the previous year [9] - Visa's forward price-to-earnings ratio stands at 24.53, above the industry average of 19.62, indicating a Value Score of D [11]

Core Viewpoint - UnionPay International and Visa have announced a strategic partnership for cross-border remittance, aiming to establish a new benchmark for an open, inclusive, efficient, and secure global cross-border payment ecosystem [1][2]. Group 1: Partnership Details - The collaboration will leverage the strengths of both companies, with Visa providing a broad global partner network and mature cross-border remittance capabilities, while UnionPay offers a solid domestic collection service system with features like direct RMB settlement and no additional fees [1][2]. - The partnership will create a diverse and convenient cross-border remittance service system tailored to different market user habits and needs, utilizing various channels such as mobile banking apps and physical outlets [1][2]. Group 2: Market Context and Future Plans - The global cross-border remittance market is expanding, with the Asia-Pacific region identified as a core growth area. UnionPay's cross-border remittance services currently cover 57 countries and regions, collaborating with over 60 foreign banks and major international remittance institutions [3]. - UnionPay aims to continue building an open and win-win global payment network in collaboration with Visa and other partners, supporting the country's high-level opening-up strategy [3].

Group 1 - Visa is expanding its operations in mainland China through a partnership with UnionPay International to facilitate cross-border remittances and real-time payments for UPI debit cardholders [3][7] - The Visa Direct-UPI connection is set to be available in the first half of 2026, targeting over 95% of UnionPay International debit cardholders [3][7] - The collaboration aims to support various cross-border payment use cases, including payments for creators, freelancers, contractors, and family remittances [4][7] Group 2 - The speed and availability of funds through this new connection will depend on the receiving institution and region, and may be subject to compliance reviews [3] - UnionPay's MoneyExpress remittance platform operates in 57 countries, including Canada, Japan, Singapore, and the United States [5]

Core Insights - Visa and Mastercard are positioning themselves as essential links between blockchain technology and everyday commerce, moving from conceptual frameworks to practical implementations in the stablecoin space [1][3]. Visa's Developments - Visa reported a global stablecoin settlement run rate of $4.6 billion and has enabled stablecoin card issuance in over 50 countries, emphasizing its commitment to integrating digital assets into daily payments [4]. - The company is expanding stablecoin settlement with USDC in the U.S. to enhance speed and liquidity for banks and FinTechs, and has launched a global stablecoins advisory practice to assist clients with strategy and technology [5]. - Visa's management clarified that stablecoin initiatives are additive to existing business operations, focusing on enhancing on-ramps, off-ramps, and settlement services [6]. Mastercard's Approach - Mastercard views stablecoins as an additional currency rather than a disruptive force, emphasizing their role in facilitating transactions through a trusted global network [8]. - The company is actively enabling stablecoin purchases and settlements, collaborating with partners like MetaMask and Gemini to expand its capabilities [10]. - Mastercard is integrating stablecoins into its broader strategy of agentic commerce, where AI-driven agents conduct transactions, highlighting the importance of trust and interoperability in payment networks [11]. Market Opportunities - Both Visa and Mastercard see significant market opportunities for stablecoins in regions with high currency volatility and limited access to U.S. dollars, as well as in cross-border payment scenarios [7][13]. - Visa is working with over 100 partners on agentic commerce, integrating stablecoins into the same infrastructure that supports real-time payouts and tokenization [11]. Regulatory Landscape - The operational advancements of Visa and Mastercard are occurring alongside evolving regulatory frameworks, with recent developments indicating a shift towards more structured oversight of the crypto market [14][15].

Core Insights - Executives warned that the Credit Card Competition Act could be harmful to the payments industry, arguing that the market already faces significant competition from various payment methods [14] - Visa reported fiscal Q1 revenue of $10.9 billion, reflecting a 15% year-over-year increase, with payments volume rising 8% in constant dollars to nearly $4 trillion [3][10] - The company emphasized the importance of credentials, stating that they now total over 5 billion worldwide, which anchor its global payments architecture [4] Agentic Commerce and Digital Payments - Management highlighted agentic commerce, Visa Direct, and B2B flows as key growth areas, with Visa Direct transactions increasing 23% year over year to 3.7 billion [8] - The Visa Intelligent Commerce platform utilizes tokens for agentic payments, with over 100 partners engaged [6][7] - Tap-to-pay penetration exceeded 80% of face-to-face transactions globally, with U.S. usage nearing 70% [5] Financial Performance - Global payment volume rose 8% in constant dollars, with cross-border volume increasing 11% [10] - Value-added services revenue surged 28% to $3.2 billion, contributing significantly to Visa's total revenue growth for the quarter [13] - Consumer spending showed resilience, with growth consistent across various spend bands, indicating stability in both discretionary and non-discretionary categories [12] Stablecoin and B2B Developments - Visa is testing stablecoin use cases, reporting an annualized settlement run rate of $4.6 billion, primarily for cross-border payments and markets with currency volatility [9] - Commercial and Money Movement Solutions revenue grew 20% in constant dollars, supported by a 10% increase in commercial payments volume [8] Legislative Concerns - Visa is actively briefing lawmakers on the potential negative impacts of the Credit Card Competition Act, warning of reduced access to credit and weaker security protections [14][15] - Management guided for full-year revenue growth in the low double digits, with shares down 1.4% in after-hours trading [15]

Financial Data and Key Metrics Changes - In the fiscal first quarter, the company reported a net revenue increase of 15% year-over-year to $10.9 billion, with EPS also up 15% [5][21] - Payments volume grew 8% year-over-year in constant dollars, reaching nearly $4 trillion, while processed transactions increased by 9% year-over-year, totaling $69 billion [5][21] - Operating expenses rose by 16%, primarily due to unfavorable foreign exchange impacts and higher-than-expected marketing expenses [29] Business Line Data and Key Metrics Changes - Consumer payments revenue was driven by strong payments volume, cross-border volume, and processed transaction growth [28] - Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars, with commercial payments volume also increasing by 10% [28][21] - Value-added services revenue surged by 28% year-over-year in constant dollars, driven by strong demand across all portfolios [29][21] Market Data and Key Metrics Changes - U.S. payments volume increased by 7%, with e-commerce growing faster than face-to-face spending [24] - Total international payments volume rose by 9% year-over-year in constant dollars, consistent with previous quarters [26] - Cross-border volume, excluding intra-Europe transactions, was up 11% year-over-year, with travel-related cross-border volume also increasing by 10% [27] Company Strategy and Development Direction - The company is focused on innovations in the Visa as a Service stack, enhancing Visa credentials, and expanding capabilities in agentic commerce and stablecoins [5][13] - The strategy includes building a secure and seamless interoperable layer between stablecoins and traditional fiat payments, with significant growth potential in this area [15][14] - The company aims to be a key enabler in agentic commerce, working with over 100 partners globally to streamline payment processes [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer spending and the effectiveness of their strategy, despite lower-than-expected currency volatility [23][35] - The company anticipates continued strong performance in value-added services and commercial solutions, offsetting potential challenges from lower volatility [48] - Future guidance remains optimistic, with expectations for adjusted net revenue growth in the low double digits for the full year [34][35] Other Important Information - The company has initiated a stablecoins advisory practice to assist clients in developing their stablecoin strategies [14] - The company is piloting Visa Direct stablecoin payouts, expanding its reach in markets with currency volatility [15] - The company has a remaining buyback authorization of $21.1 billion, indicating a strong commitment to returning capital to shareholders [30] Q&A Session Summary Question: Opportunities around value-added services for events like the Olympics and World Cup - Management highlighted the ability to leverage sponsorships for bespoke client programs, generating revenue and deepening partnerships [39][43] Question: Strength in value-added services and capital return strategy - Management noted strong performance in value-added services and commercial solutions, with a programmatic approach to capital return and share buybacks [46][49] Question: Regulatory environment and potential risks from CCCA - Management emphasized engagement with lawmakers to educate them on the competitive landscape and the potential negative impacts of CCCA legislation [53][56] Question: Growth in commercial solutions and spending trends - Management attributed growth in commercial solutions to successful product strategies and client wins, with stable international volume growth across regions [60][66] Question: Growth trajectory for Flex credentials - Management described Flex as a versatile payment solution with multiple funding options, indicating potential for significant growth in the future [77][80] Question: Updates on issuer processing and technology investments - Management confirmed ongoing investments in issuer processing technology, with a focus on modernizing clients' tech stacks [84][85]

Financial Data and Key Metrics Changes - In the fiscal first quarter, the company reported a net revenue increase of 15% year-over-year to $10.9 billion, with EPS also up 15% [5][24] - Payments volume grew 8% year-over-year in constant dollars, reaching nearly $4 trillion, while processed transactions increased by 9% year-over-year, totaling $69 billion [5][24] - Operating expenses rose by 16%, primarily due to unfavorable foreign exchange impacts and higher-than-expected marketing expenses [30] Business Line Data and Key Metrics Changes - Consumer payments revenue was driven by strong payments volume, cross-border volume, and processed transaction growth [29] - Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars, with commercial payments volume also increasing by 10% [29] - Value-added services revenue surged by 28% year-over-year in constant dollars, driven by strong demand across all portfolios [30][22] Market Data and Key Metrics Changes - U.S. payments volume increased by 7%, with e-commerce growth outpacing face-to-face spending [25] - Total international payments volume rose by 9% year-over-year in constant dollars, consistent with previous quarters [27] - Cross-border volume, excluding intra-Europe transactions, was up 11% year-over-year, with travel-related cross-border volume also increasing by 10% [28] Company Strategy and Development Direction - The company is focused on enhancing its Visa-as-a-Service stack, which includes innovations in payments technology, such as Visa credentials, agentic commerce, and stablecoins [5][13] - The strategy emphasizes building scalable technologies to enable money movement and payments businesses globally [5] - The company aims to be a key enabler in agentic commerce and stablecoin integration, expanding its capabilities in these areas [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of consumer spending and the effectiveness of their strategy, despite lower-than-expected currency volatility [24][35] - The company anticipates continued strong performance in value-added services and commercial solutions, which are expected to offset potential challenges from market volatility [50] - Management remains engaged with policymakers regarding regulatory risks, particularly concerning the CCCA, emphasizing the competitive nature of the industry [56][58] Other Important Information - The company repurchased approximately $3.8 billion in stock and distributed about $1.3 billion in dividends to shareholders during the quarter [31] - The company has launched a stablecoins advisory practice to assist clients in developing stablecoin strategies [14] Q&A Session Summary Question: Opportunities around value-added services for events - Management highlighted the ability to leverage sponsorships for bespoke client programs, particularly around major events like the FIFA World Cup and the Olympics [41][44] Question: Strength in value-added services and capital return strategy - Management noted strong performance in value-added services and commercial solutions, with a programmatic approach to capital return and share buybacks [49][51] Question: Regulatory environment and CCCA implications - Management emphasized the harmful effects of CCCA and the importance of educating policymakers on the competitive landscape and the need for innovation [56][58] Question: Growth in commercial solutions and spending trends - Management attributed growth in commercial solutions to successful product strategies and client engagement, with stable international volume growth across regions [62][66] Question: Flex credential growth trajectory - Management described the Flex credential as a versatile payment solution with significant growth potential, although still in early development stages [80][82] Question: Investment in processing assets and market opportunities - Management confirmed ongoing investments in processing technologies, particularly through the acquisition of Pismo, to modernize tech stacks for financial institutions [88][89]