TradingKey - Visa released its earnings for the third quarter of the fiscal 2025 on July 29th after the market closed.

· 3Q25 Earnings per share: $2.98 vs $2.85 estimate (+23% y/y)

· 3Q25 Revenue: $10.17 vs $9.85bn estimate (+14% y/y)

Retail consumption: As we can see, Visa once again beat the estimates for EPS and revenue, which is a good thing, as it shows certain resilience in macro spending. The volume of payments was also up 8% on a yearly basis.  Even within the cross-border segment, we see solid results (12% increase in cross-border volume) supported by strong travel-related and e-commerce spending.

Diversification efforts: Visa Direct, which facilitates fast account-to-account transfers, saw significant traction at 28% transaction growth in Q3, similar to the quarter before. There is a similar pace of growth we see in the Value-added Services segment and the B2B solutions. All of this means a step further towards diversification away from the consumer-tied revenue.

So why didn’t the market like the results?

Stablecoins: With regards to stablecoins, the management was quite vague and didn’t provide more details on what Visa’s role in the future of stablecoins will be, thus, keeping the market concerns about the long-term existential threat.

Macro headwinds are still not reflected: Visa’s guidance for the year did not get upward revision despite the earnings beat, which implies management still expect weak macro to weight on the consumers.

Valuation: Trading at 35x earnings, Visa’s valuation is not as attractive as the expectations of the broad market are very high and simple beats on both top and bottom lines don’t cut it anymore.

Visa 3Q25 Earnings Preview

Visa will release its earnings for the third quarter of the fiscal 2025 on July 29th after the market closes.

- 3Q25 Earnings per share: $2.85 estimate vs. 3Q24 actual of $2.42 (+18% y/y)

- 3Q25 Revenue: $9.85bn estimate vs. 3Q24 actual of $8.90bn (+11% y/y)

So, what should investors expect this week?

Retail consumption: We expect Visa to provide us with a better picture of the current state of the consumption both in the US and globally. This will be different from Amex which is more US-centered and more tilted towards wealthier consumers. As Visa users are on average not as affluent as Amex ones, we do expect the economic slowdown to affect Visa’s revenue to a greater extent. Cross border and FX business will also give light to the state of mass travel industry.

Diversification efforts: In order to smoothen the effect of macro fluctuations, Visa is trying to diversify towards expanding into B2B. This is a lucrative opportunity for Visa, as the company can provide not only payment facilitation but also add-value services such as fraud prevention, receivables management and analytics. Currently, B2B represents around 10% of the total company revenue and the value-added services are around 24%.

Stablecoin – friend or foe: Stablecoins already process larger volume than both Visa and Mastercard combined, and the convenient movement of stablecoins is believed to possess a threat to the whole payment network system, namely Visa and Mastercard. In order Visa to stay relevant, they are adopting stablecoins into their operations, trying to turn the threat into opportunity. The earnings will provide more updates on how the company is positioned as bridge in the flow of stablecoins, including the volume of USDC transactions (in 2024 they were $225 million).

Final words:

Regardless of the negative market sentiment recently, Visa’s business model is still mainly tied to retail purchases, and business transactions to the lesser extent – industries which will take a while to get disrupted, since as of now, stablecoins are primarily used in cross-border transactions, remittances and crypto trading.