Visa Posts Quarterly Revenue of $12.1 Billion; Shares Fall After Hours
Key Facts
Visa reported net revenue of $12.1 billion in the fourth quarter of fiscal 2026, up 13% year over year, while net income under generally accepted accounting principles was $6 billion and earnings per share were $3.19. Adjusted net income was $6.6 billion, or $3.48 per share, up 13% and 17%, respectively, from a year earlier. Adjusted earnings per share came in above analysts’ estimates, according to published coverage of the results. But shares fell in extended trading after the close on October 27 after the company presented its outlook for the next fiscal year. GuruFocus noted that more cautious guidance for earnings-per-share growth in 2027 may have contributed to the share decline, without concluding that it was the sole cause.
Activity indicators reflected broad growth across the payments network during the quarter. Payments volume rose 9% year over year, excluding the impact of foreign-exchange movements, while cross-border volume, excluding transactions within Europe, increased 14%. The company processed 74.2 billion transactions, up 10% from a year earlier, while data-processing revenue rose 16% to $6.2 billion. Chief Financial Officer Chris Su said the company saw “no signs of weakness among lower-spending consumers” in its volumes, and that growth across spending tiers remained relatively consistent with previous quarters. He added that spending supported demand for travel experiences and the expansion of e-commerce, while travel to and from the Middle East approached normal levels after declining because of the Iran conflict.
Seasonal factors also helped spur activity on the network, Reuters reported, as the FIFA World Cup, held from June 11 to July 19, boosted activity with visitors coming to the United States. On commercial expenses, client incentives rose 21% to $5.1 billion from a year earlier. The company attributed most of the increase to new deals signed between July and September and at the start of the fourth quarter. A Seaport analyst said client incentives were higher than expected, suggesting this may have affected the company’s fiscal 2027 guidance. KBW analysts said the earnings-per-share guidance may disappoint some investors, linking it to management’s continued investment in long-term strategic initiatives to support revenue growth.
Visa ended fiscal 2026 with revenue of $45.9 billion, up 15%, while adjusted earnings per share rose 16% to $13.27. Chief Executive Ryan McInerney described annual revenue as a record and said its 15% growth was the strongest in more than 15 years, excluding the post-pandemic recovery period and the impact of acquisitions. He added that trust is the company’s next growth driver. By contrast, management’s fiscal 2027 outlook points to net revenue growth at the low end of the double-digit range, and earnings-per-share growth ranging from the low end to the high end of the low double digits. That guidance puts slower earnings growth at the center of investors’ reading of the results, despite resilient payment volumes and quarterly revenue.
Visa expects to renegotiate or renew contracts covering about 25% of payment volumes in fiscal 2027, compared with about 20% in fiscal 2026, including a number of large clients. These renewals come as the company seeks to sustain revenue growth, while client incentives remain in focus after rising in the quarter. Shares fell about 1.4% in extended trading, Reuters reported, after rising 14.6% year to date through the previous session’s close. EL7 data showed the stock closed at $401.86 on October 27, compared with $404.16 on October 26 and $407.92 on October 23. The company also announced $5.2 billion in share repurchases and dividends in the quarter and $25.6 billion during the fiscal year, putting business performance and the outlook alongside shareholder returns in the assessment of the results.