Visa Beats Q1 Estimates as Net Revenue Rises 15% on Strong Holiday Spending

Visa Inc. (NYSE: V) reported a 15% increase in net revenue for its fiscal first quarter of 2026, surpassing analyst estimates as robust holiday spending and cross-border travel volumes offset rising operating expenses. Following the announcement on Thursday, shares of the San Francisco-based payments leader rose 1.5% in after-hours trading to $331.49, reflecting investor confidence in the company’s ability to maintain double-digit growth despite macroeconomic headwinds.

The results underscore the continued resilience of the global consumer. Net income reached $5.9 billion, or $3.03 per share on a GAAP basis. Adjusted for one-time items, including a significant litigation provision, non-GAAP earnings per share (EPS) rose 15% to $3.17, exceeding the Zacks Consensus Estimate of $3.14.

Key Financial and Operational Drivers

The quarterly performance was anchored by broad-based growth across Visa’s core business segments. Payments volume, a critical metric for the company, grew 8% year-over-year on a constant-dollar basis, totaling nearly $4 trillion.

The company’s ability to monetize these volumes was reflected in its primary revenue streams:

• Data Processing Revenue: Increased 17% to $5.54 billion, benefiting from a 9% rise in processed transactions, which totaled 69.4 billion.
• Service Revenue: Grew 13% to $4.76 billion, largely trailing the payments volume recorded in the prior quarter.
• International Transaction Revenue: Rose 6% to $3.65 billion, supported by a 12% jump in total cross-border volume.
• Other Revenue: Surged 33% to $1.21 billion, driven by value-added services and pricing adjustments.

Total operating expenses on a GAAP basis surged 27% to $4.16 billion. This spike was primarily attributed to a $708 million litigation provision related to long-standing interchange fee disputes. On a non-GAAP basis, which excludes such items, operating expenses grew 16%, reflecting increased investments in marketing and professional fees.

Quarterly Performance Summary

Metric	Q1 2026 Result	Year-over-Year Change
Net Revenue	$10.9 billion	+15%
Non-GAAP Net Income	$6.1 billion	+12%
Non-GAAP Diluted EPS	$3.17	+15%
Total Payments Volume	$3.87 trillion	+8% (Constant $)
Processed Transactions	69.4 billion	+9%
Cross-Border Volume	—	+12% (Constant $)

Business Strategy and Growth Outlook

Visa remains focused on expanding beyond its traditional consumer credit and debit business. The company highlighted “New Flows”—including B2B payments and Visa Direct—as central to its diversification strategy.

• Visa Direct: The real-time money movement solution saw transaction growth of 28% during the period, reaching 3 billion transactions.
• Credential Expansion: Total Visa credentials reached 5.0 billion, with tap-to-pay penetration crossing the 80% mark globally for face-to-face transactions.
• Technological Investment: Management emphasized ongoing investments in stablecoin settlement capabilities and tokenization to maintain its competitive edge in digital commerce.

Management reaffirmed its full-year 2026 guidance, projecting net revenue and earnings growth in the low double digits. For the upcoming second quarter, the company anticipates net revenue growth to remain in the low double-digits, while operating expenses are expected to rise in the mid-teens as Visa continues to scale its digital wallet partnerships.

Macroeconomic and Industry Context

The global payments landscape is navigating a dual environment of steady consumer demand and tightening regulatory scrutiny. While the 12% growth in cross-border volume indicates a sustained recovery in international travel, regional performance remains varied. Growth in the Asia-Pacific region was notably softer, reflecting a more muted macroeconomic recovery in certain markets compared to the double-digit growth seen in Latin America (LAC) and the CEMEA region.

The company also continues its aggressive capital return program. During the first quarter, Visa returned $5.1 billion to shareholders through $3.8 billion in share repurchases and $1.3 billion in dividends. The board recently declared a quarterly dividend of $0.67 per share, payable in March 2026. Despite the strong headline numbers, analysts noted that client incentives—a contra-revenue item—climbed 12% to $4.3 billion, representing a significant portion of gross revenues. However, the higher average spend per transaction and the expansion of value-added services have allowed the company to maintain a robust net margin of over 50%.