• Net income increased 15% year-on-year at $10.9 billion, with EPS over 15%; payment volume grew 8% to nearly $4 trillion and processed transactions rose 9% to 69 billion, indicating a strong start to fiscal 2026.

• The outperformance was driven by acceleration in value-added services and merchant/money movement solutions: value-added services grew 28% in constant dollars to $3.2 billion, merchant revenue increased 20% and Visa Direct transactions increased 23% to $3.7 billion.

• Management emphasized the push for “Visa as a Service,” including tokenization (approx 17.5 billion chips), more than 5 billion credentials, the expansion of stablecoin settlement ($4.6 billion annualized execution rate) and issuer processing earnings, maintaining full-year guidance and returning capital (≈$3.8 billion buybacks and $1.3 billion dividends, repurchase authorization of 21,100 million dollars remaining).

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Visa (NYSE:V) reported what management described as a strong start to fiscal 2026, driven by resilience in consumer spending, continued growth in cross-border activity and accelerating contributions from value-added services and commerce and money movement solutions.

Chief Executive Officer Ryan McInerney said fiscal first-quarter net income rose 15% year over year to $10.9 billion, while earnings per share rose 15%. Payments volume grew 8% year-over-year in constant dollars to nearly $4 trillion, and processed transactions rose 9% to 69 billion.

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Chief Financial Officer Chris Suh said business drivers were “strong and relatively consistent” with the fiscal fourth quarter. In constant dollars, cross-border volume excluding intra-European increased by 11% and processed transactions grew by 9%.

In the US, payment volume increased by 7%, with credit up 7% and debit up 6%. Suh noted a “slight reduction” in payment volume in the US during the quarter, driven mainly by debit. He attributed this to a Visa Direct customer switching remaining volume to its own solution, the loss of some Interlink volume tied to a Capital One debit migration and severe weather affecting certain spend categories. He added that the higher spend band continued to grow faster and Visa saw no deterioration in the lower spend band.

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On holiday spending (Nov. 1 to Dec. 31), Suh said growth in U.S. consumer holiday spending was in line with last year, with strength in retail, improvement in fuel and moderation in other categories. Growth in holiday retail spending was slightly better than last year, led by e-commerce. Visa said several key countries saw similar patterns, with holiday retail growth improving year-on-year and e-commerce leading the way.

Suh said the fiscal first-quarter net income performance was largely driven by three factors: stronger-than-expected value-added services revenue, lower-than-expected customer incentives and higher-than-expected business solutions and money movement revenue, which more than offset lower-than-expected currency volatility. Revenue increased 13% in constant dollars, and EPS increased 14% in constant dollars.

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Detailed performance of Visa in the main revenue components:

• Revenue per service grew 13% year over year, which management said reflected the card’s pricing and benefits.

• Income from data processing it increased by 17%, attributed to prices, the good performance of value-added services and a greater mix of cross-border transactions.

• Income from international transactions rose 6%, below cross-border volume growth in constant dollars of 11% (excluding intra-Europe). Suh cited lower-than-expected volatility and additional pressure from mix and hedging.

• Other income grew 33%, driven by advisory and other value-added services and pricing.

• Customer incentives rose 12%, below management’s expectations due to one-time write-downs linked to customer performance and the timing of the transaction.

McInerney said merchant and money movement solutions revenue grew 20% in constant dollars, supported by 10% constant dollar merchant payment volume growth and 23% growth in Visa Direct transactions. Suh added that Visa Direct transactions rose 23% to 3.7 billion, with strength in domestic and cross-border use cases.

Value-added services revenue grew 28% in constant dollars to $3.2 billion, with Suh citing strength across all portfolios and particular demand for advisory and other services, “especially in marketing services.” In response to questions from analysts, management emphasized the broad nature of the growth in value-added services, which includes issuance, acceptance, risk and security and advisory solutions.

McInerney framed Visa’s strategy around a “Visa-as-a-Service stack,” highlighting innovations in credentials, tokens, agent trading, stablecoins, issuer processing, and risk and security.

On credentials, he said Visa now has more than 5 billion credentials. Tap-to-pay penetration exceeded 80% of face-to-face transactions globally, with the US at almost 70%. Visa also cited the growth of “Tap to Phone,” which McInerney said helped acceptance locations exceed 175 million worldwide and added more than 20 new markets over the past year.

Visa’s Flex Credential, which allows multiple sources of funding on a single credential, reached about 20 million credentials worldwide. McInerney said Block announced a pilot launch of a Cash App Visa Debit Flex card that allows Afterpay to “pay over time anywhere Visa is accepted” and leverages Visa’s DPS issuer processing solution for the debit component. Visa expects to expand Flex to more than 20 additional issuers this year, according to McInerney.

On tokenization, McInerney said Visa has more than 17.5 billion tokens worldwide, more than three times the number of physical cards, and described a long-term goal to completely replace card-centric e-commerce payment technology. He highlighted ongoing work to reduce Visa’s e-commerce guest payment, which he said fell from 44% in 2019 to about 16% in fiscal 2025; among Visa’s top 25 sellers, it is less than 4%.

McInerney said that stablecoins are still an early stage for payments, but Visa’s goal is to build an interoperable layer between stablecoins and traditional payments. He said Visa expanded stablecoin card issuance to more than 50 countries and expanded USDC settlement capabilities to total US stablecoin settlement reached an annual execution rate of $4.6 billion globally, according to McInerney. Visa also launched a global stablecoin advisory practice and announced pilots involving Visa Direct stablecoin payments in the US

In the issuer’s filing, Visa discussed investments in DPS and progress following its acquisition of Pismo. McInerney highlighted Pismo’s first post-acquisition commercial offering with Banco BICE in Chile (with Mendel) and Pismo’s first fleet card offering with Finance Now in New Zealand. In a Q&A, he described the modernization of banking technology stacks as a long sales cycle opportunity and said there was “no change” in the total addressable market, calling it “huge”.

On risk and security, McInerney said Nets (part of Nexi Group) selected Featurespace to expand fraud prevention to 150 banks in Nordic and Central Europe. Visa also provided updated results for Visa Account Attack Intelligence, which it said logged more than 60 billion transactions and identified nearly 600 million suspicious transactions in the past 12 months in the United States.

Looking ahead, Suh said Visa is maintaining its full-year expectations for nominal and adjusted net income growth, with adjusted net income growth expected to be in the low double digits. He said Visa assumes the macro environment remains broadly stable and consumer spending remains resilient.

For the fiscal second quarter, Visa expects adjusted net income growth in the low double digits, down from the first quarter driven by lower pricing contribution, lower volatility and higher incentive growth. Visa expects adjusted operating expense growth in the mid-teens in the second quarter, reflecting increased marketing-related expenses tied to the Olympics and FIFA and prior-year temporary effects.

On taxes and other items, Suh said full-year tax rate expectations were revised down from 18% to 18.5% due to “right-claim” tax benefits related to recent and early legal settlements, while he reiterated a long-term tax rate expectation of 19% to 20%. Visa now expects full-year non-operating expenses of approximately $100 million to $125 million.

During the quarter, Visa bought back roughly $3.8 billion in stock and paid out about $1.3 billion in dividends. Visa also funded a litigation escrow account with $500 million, which Suh said has the same effect on EPS as a share buyback. Visa had $21.1 billion remaining in repurchase authorization at the end of December.

Visa Inc is a global payments technology company that facilitates electronic funds transfers and digital commerce by connecting consumers, merchants, financial institutions and governments. The company operates one of the world’s largest payment networks, providing processing, authorization, clearing and settlement services for credit, debit and prepaid card transactions. Visa’s network-based model enables partner banks and other issuers to offer branded payment products, while Visa focuses on the infrastructure, standards and technologies that move money safely and efficiently around the world.

Visa’s portfolio of products and services includes card-based payment products for consumers and businesses, real-time automatic payment capabilities, tokenization and authentication services, fraud and risk management tools, data analytics, and APIs for fintech and merchant integration.

The article “Visa Q1 Earnings Call Highlights” was originally published by MarketBeat.