Visa beats quarterly estimates on resilient consumer spending but steady forecast drags shares

[BENGALURU] Visa beat Wall Street estimates for third-quarter profit and revenue on Tuesday (Jul 29), as the global payments processing company was helped by strong card spending volumes despite softness in the broader economy.

However, the payments processing company kept its full-year forecast for net revenue growth unchanged, sending shares of the company down nearly 2 per cent in extended trading.

Visa maintained its forecast of annual net revenue growth in the low single digits for fiscal year 2025.

The fiscal 2025 unchanged outlook guidance is “the likely cause of negative pressure on the shares as it implies a deceleration in revenue growth”, analysts at RBC Capital Markets said in a note. But it could be conservatism, given the macro environment, they added.

Analysts expect a potential spending slowdown in the back half of 2025 as consumers front-load expenses on products they expect to become costlier once tariffs take effect.

“We saw some evidence of pull forward in some categories. Specific categories that people thought might be hit by tariffs, even more significantly,” finance chief Chris Suh said.

The shifting US tariff policies may already be weighing on cross-border payments growth, with the volume of such transactions growing 12 per cent in the third quarter, slower than the 14 per cent rise reported last year.

CEO Ryan McInerney, however, said on a post-earnings conference call that the company sees no meaningful impact from tariffs.

Consumer resilience

Consumers have continued to use card payments for essential purchases, even as they rein in discretionary spending amid economic uncertainties spurred by geopolitical tensions and US President Donald Trump’s trade policies.

The company’s services are used by billions of people globally for everyday purchases, making the card network better positioned to withstand economic downturns.

Global payments volume, a gauge of overall consumer and business spending on Visa’s network, jumped 8 per cent on a constant US dollar basis in the quarter ended Jun 30.

Quarterly net revenue rose 14 per cent to US$10.17 billion, surpassing analysts’ estimates of US$9.84 billion, according to data compiled by LSEG.

Visa reported adjusted earnings of US$2.98 per share for the three months ended Jun 30, also beating estimates of US$2.85 per share.

Its stock has gained nearly 11 per cent this year as at last close, outpacing both its rivals, Mastercard and American Express. American Express, which generally caters to affluent customers, also beat estimates for quarterly profit earlier this month. Mastercard is set to report its earnings later in the week. REUTERS