Visa Earnings: Solid Start to Fiscal Year as Consumer Spending Holds Up

Key Morningstar Metrics for Visa

• Fair Value Estimate: $323
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium

What We Thought of Visa’s Earnings

Visa V‘s fiscal first-quarter results largely echoed those of peer Mastercard and suggest consumer spending is holding steady.

Why it matters: Year-over-year constant-currency net revenue growth of 13% marked a strong start to the company’s fiscal year.

• Constant currency year-over-year volume growth in the quarter was 8%, in line with the level we’ve seen over the past few quarters. Transactions increased 9%.
• Constant-currency cross-border volume, excluding intra-Europe transactions (which are priced similarly to domestic transactions), grew 11% year over year during the quarter, in line with the last two quarters. We’ve seen a similar trend at Mastercard and think cross-border volumes have fully normalized. Going forward, we see cross-border volumes as the most macro-sensitive part of the business, as they are driven mainly by travel and online spending.

The bottom line: We will maintain our $323 fair value estimate for the wide-moat company and see shares as about fairly valued.

• During the quarter, Visa took a $707 million provision related to interchange litigation. This followed a relatively high level of charges ($2.6 billion) in fiscal 2025. We think charges due to fines and lawsuits are an ever-present risk for the company, and we factor ongoing charges into our valuation. However, we also see these issues, in a sense, as an outcome of its wide moat.
• Excluding amortization and one-time items, adjusted operating margins (based on net revenue) declined to 68.9% from 69.3% last year. Management’s guidance suggests this margin decline will continue into the second quarter. However, we don’t make much of this, as we believe prioritizing growth investments over near-term margins is the right move.