Updated Version 3 - Visa Exceeds Expectations as Resilient Consumers Continue Spending

The first paragraph containing estimated data has been rewritten, and analyst and executive quotes have been added in paragraphs 3, 6-8, 10, 14-15, and 17.

Arasu Kannagi Basil/Atharva Singh

Reuters, October 27 - On Tuesday, Visa (V.N ) reported fourth-quarter earnings that exceeded market expectations, as consumers continued to swipe their cards to pay for travel, shopping, and dining out, despite macroeconomic uncertainty.

As the world's largest payments processor, Visa's earnings highlight the resilience of the U.S. economy under persistent inflationary pressures— thanks to a robust labor market and wage growth, consumers continue to spend.

"Growth across spending segments remained largely consistent with prior quarters, with the highest spending tier still growing fastest. From our transaction volumes, we do not see signs of weakening spending capacity among lower-income groups," Visa CFO Chris Su said during the earnings call.

Serving as a barometer for consumer and business spending on the Visa network, total payments volume this quarter jumped 9% at constant currency , while processed transactions grew 10%.

Visa's extensive digital payments network, spanning over 200 countries and regions, allows it to better withstand economic downturns, as billions worldwide rely on the card network for routine and other purchases.

Customer incentives and profit forecasts in focus

Customer incentive spending surged 21% this quarter from a year earlier to $5.1 billion, largely fuelled by new deals inked between July and September and early in the fourth quarter.

"The only nitpick is customer incentive spend, which came in higher than expected," said Seaport analyst Jeff Cantwell, adding that this may have affected Visa’s fiscal 2027 forecast.

Su told analysts that with around 25% of payment volume up for renewal in fiscal 2027—including renewals from several large clients— incentive spending growth will accelerate further. By comparison, the figure is 20% for fiscal 2026.

The company expects its earnings per share growth rate for fiscal 2027 to be in the low double-digits to low teens, while net revenue growth is anticipated to be in the low double-digit percentage range.

"While some may be disappointed with the EPS guidance, we believe this likely reflects...(management's) decision to continue investing in long-term strategic initiatives to extend the sustainability of revenue growth," said the KBW analyst team led by Sanjay Sakhrani.

Visa shares fell roughly 1.4% in after-hours trading, but are up 14.6% year to date through the last close.

According to estimates compiled by London Stock Exchange Group (LSEG), in the three months ended September 30, the company posted adjusted earnings per share of $3.48, beating market expectations of $3.44 per share.

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Strong Cross-border Performance

Excluding intra-Europe transactions, cross-border transaction volume—a metric that reflects international travel demand—stood out as this quarter’s highlight, up 14% at constant currency.

"This reflects strong consumer confidence, strong demand for travel experiences, and the ongoing expansion of e-commerce," Su said.

Su told Reuters that travel in and out of the Middle East, previously dampened due to Iran-related conflict, is also now gradually returning to normal levels.

The FIFA World Cup, held from June 11 to July 19, also helped boost transaction activity on the Visa network, as it attracted large numbers of tourists to the US.

"XB (cross-border) business saw a notable quarter-on-quarter acceleration—a key area we monitored for potential softening prior to the results," Seaport’s Cantwell said.

Net revenue jumped 13% this quarter to $12.1 billion. In fiscal 2026, Visa set a record with $46 billion in net revenue.

Rival Mastercard (MA.N) will report quarterly earnings later this week.

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