Visa Inc.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal First Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer, and Chris Soth, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results, outcomes, or timing could differ materially as the result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K, and any subsequent reports on Forms 10Q and 8K, which you can find on the SEC's website and the Investor Relations section of our website. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. Our comments today regarding our financial results will reflect revenue on a GAAP basis and all of the results on a non-GAAP nominal basis unless otherwise noted. The related gap measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan.

Thanks, Jennifer. In our fiscal first quarter, we delivered strong financial results with net revenue up 15% year-over-year to $10.9 billion and EPS up 15%. Payments volume grew 8% year-over-year in constant dollars to nearly $4 trillion, and process transactions grew 9% year-over-year, totaling $69 billion, demonstrating resilient consumer spending. We continued to build and deliver innovations and scalable technologies across the Visa as a Service stack, acting as a payments hyperscaler to enable anyone in the ecosystem to build, launch, and scale money movement and payment businesses across the globe. Let me share some more detail on the recent progress we have made in the services and solutions layers of our Visa as a Service stack. More specifically, in the evolution of Visa credentials, agentic commerce, stablecoins, as well as in B2B and P2P money movement, issuer processing, and risk and security. The core of our consumer payments business is the Visa credential. It is much more than a physical card. It can be digital, in a wallet, online, mobile. It's the connection point to the Visa network on top of which we're able to layer all types of services, solutions, and access, now totaling more than 5 billion Visa credentials. We have continued to enhance Visa credentials in a few important ways this past quarter, tap-to-pay, Visa Flex credential, and tokens. Our tap-to-pay penetration has now crossed the 80% mark of all face-to-face transactions with the U.S. at nearly 70%. Transit acceptance remains a key enabler with our recent launches in San Francisco and more than 10 other systems globally this quarter. In our first quarter, we have continued to enable tap-to-pay use cases for the different form factors of the credential. For example, in Europe, we recently announced new digital wallet enablement of iOS wallets such as Klarna in 14 countries and Vips Mobile Pay in the Nordics. We also will soon launch a pilot in Italy with the domestic scheme Bancomat. In addition, We enabled Apple Pay for Visa cards issued in China for cross-border face-to-face, in-app, and online transactions. This spans eight issuers, representing nearly 60 million Visa credentials, supporting the many Chinese consumers traveling or living abroad, with more issuers coming soon. Our tap-to-phone capability, which has helped to grow our acceptance locations to more than 175 million globally, has added more than 20 new markets and more than doubled transactions in the last year. A second important area of progress enhancing Visa credentials is enabling multiple funding sources from one single credential with our Visa Flex credential. This past quarter, Block announced the pilot launch of a new Cash App Visa Debit Flex card. which enables Afterpay as a feature for their customers to pay over time anywhere Visa is accepted and leverages Visa's DPS issuer processing solution for the debit component. Globally, we have about 20 million Visa Flex credentials, just a small fraction of our total credentials, but growing fast. They are offering funding sources such as debit, credit, multi-currency accounts, rewards, installments, and more. and we expect to expand to more than 20 additional issuers this year. The third and maybe most revolutionary credential technology is the Visa Token. Our token technology delivers a digitally native payment credential designed for the unique characteristics and needs of digital commerce. We have more than 17.5 billion tokens globally, over three times the number of physical cards, which means that the solution has been embraced broadly across the ecosystem. We continue to make progress on the tokenization of e-commerce transactions to our ultimate goal of fully replacing card-centric PAN technology, further improving Visa's competitive positioning against cash, check, and legacy forms of digital payment. We utilize a variety of tools, such as incentives, sales oriented case studies performance compliance programs and enhancements to encourage tokenization and enhanced data sharing to make the e-commerce environment as safe as it can be issuer enrollment efforts are underway across europe samia and lac as we expand the click to pay directory to enable credentials to be always digital globally We have also been working with acquirers and payment facilitators to ultimately eliminate the guest checkout that occurs today, which we have reduced from 44% of all Visa e-commerce transactions in 2019 to about 16% in fiscal 2025. And among our top 25 sellers, it's less than 4%. This means that at our top 25 sellers, 96% of transactions now require only a simple click or biometric authentication and do not require a burdensome and error-prone form filling. We continue to build new capabilities on top of our token service platform, positioning our credentials and tokens as the fundamental building blocks for the future of payments. One of those capabilities that is enabled with Visa tokens is an important area of innovation, agentic commerce. Our Visa Intelligent Commerce solution utilizes tokens and their configurability as the core underlying foundation for agentic payments. We're working to enable agentic commerce with more than 100 partners across the commerce ecosystem globally. Over 30 partners are actively building in our sandbox with multiple agents and agent enablers running live production transactions and more partners expected in the future. Just this quarter, we expanded into B2B agentic payments with RAMP, streamlining corporate bill payments, enabling their business customers to capture cash back on card payments, and optimizing working capital. We also reached an agreement with AWS, to make Visa Intelligent Commerce available on AWS Marketplace to support developers building agentic commerce solutions, connecting secure automated payment workflows at scale through blueprints for workflows such as travel bookings or retail purchases. In our Samia region, Aldar, a leading real estate developer, investor, and manager, is integrating Visa Intelligent Commerce to make reoccurring payments, such as property service charges, on their LiveAldar app. Our Visa Trusted Agent protocol continues to help define the connectivity and data elements required to bring trust to the agentic environment. In Q1, we announced partnerships with leading internet security players, first Cloudflare, and then Akamai, who collectively serve millions of businesses globally, including nine of the world's top 10 retailers. In addition, We are building interoperability between key elements of Visa Intelligent Commerce and Google's new Universal Commerce Protocol as part of our global effort to help ensure that Visa transactions are securely supported as different protocols evolve. Our agentic solutions are live in the U.S. and Samia, and we are initiating pilot programs in Asia Pacific and Europe. LAC is soon to follow where we have already begun token enrollment for agentic commerce with issuers. We believe that we are well positioned to be the infrastructure provider and key enabler in agentic commerce so that every agent interaction is trusted and secure. Like agentic commerce, stablecoins have tremendous growth and disruption potential but are still in the very early stages of adoption for payments use cases. As new stablecoins and blockchains continue to emerge and show the promise of true utility, Visa's goal remains clear. Build the secure and seamless interoperable layer between stablecoins and traditional fiat payments at scale across the world. This past quarter, we expanded our capabilities across several fronts. First, We added stablecoin card issuance in nine additional countries in Q1 to surpass 50 countries worldwide, and payments volume continues to grow at a fast rate as we enable more consumers and businesses to spend stablecoins with Visa. This quarter, we also expanded our stablecoin settlement capabilities with USDC into the U.S., improving speed and liquidity for banks and fintechs, and providing interoperability to modernize treasury operations for our clients. And total stablecoin settlement has reached an annualized run rate of $4.6 billion globally, as demand has grown among both stablecoin native and more traditional clients. We're finding that more and more participants in the payments ecosystem, financial institutions, merchants, acquirers, and consumer-facing technology companies, are looking to develop and refine their stablecoin strategy. As such, we recently launched our stablecoins advisory practice globally, where we are working closely with our clients, providing access to training, strategy, and market entry planning and technology enablement. In addition to being a design partner with the Tempo Layer 1 blockchain initiative, We recently announced our participation in the testnet of ARK, a Layer 1 blockchain from Circle. With both, we see Visa's role in supporting both transaction processing and delivering value-added services. Finally, we are piloting Visa Direct stablecoin payouts, allowing platforms and businesses in the U.S. to send payouts directly to users or workers or employees' stablecoin wallets. This innovation expands the reach of Visa Direct by providing creators, freelancers, and marketplaces with a stable store of value and faster access to funds, even in markets facing currency volatility or limited banking infrastructure. The stablecoin opportunity remains additive to what Visa is doing today, and we will continue to invest where we see the greatest demand, on-ramps and off-ramps, settlement, money movement, consulting, and other value-added services. We believe that Visa is well-positioned as a global, trusted technology provider to deliver a full stack of bank and enterprise-grade infrastructure that our clients need to build the future of their business on-chain. Stablecoin is just one way that we are enabling money movement. We also have continued to make enhancements in our Visa Direct and commercial solutions capabilities. In Visa Direct, we have continued to deepen relationships with existing partners like Acquirer Nuve, who has expanded their agreement to include Visa Direct to account in addition to CARD in more than 30 countries. After initially enabling Visa Direct in 25 markets in 2023, PayPal's Zoom recently expanded its Visa Direct cross-border reach to more than 60 markets. In our B2B or commercial solutions, we continue to create compelling purpose-built offerings with a number of our services. In Europe, we've expanded our partnership with Revolut to launch Titan in the U.K., an ultra-premium card designed for high-growth companies that attracted thousands of business customer sign-ups on day one. Also in Europe, Eden Red Paytech has chosen Visa as its strategic partner to expand across multiple B2B use cases with our solutions, including open-loop workplace benefits, open-loop fleet and mobility, B2B travel, insurance payouts, and procure to pay. Another area of innovation and expansion in the services and solutions layers of the Visa as a service stack has been issuer processing. Visa has been in the issuer processing business for over 30 years. We have continued to invest in this space by enhancing DPS, but also through the acquisition of PISMO. Many issuers around the world are seeking to upgrade their technology stacks to ensure they can deliver for customers in a digital age. Visa's issuer processing capabilities enable clients to have one connection to Visa from which they can access our other solutions and services, such as network products, value-added services, tokenization, risk products, and more. One of the two agreements I would highlight this quarter is PISMO's first commercial offering since the acquisition with Banco Bisse in Chile. In collaboration with expense management platform Mendel, we will offer a business credit corporate issuer processing program for Banco Bisse and their large and middle market B2B clients. The second agreement is PISMO's first fleet card offering with FinanceNow in New Zealand. Visa will also provide fleet card issuance, tokenization, and risk services as well. We will continue to look for ways to invest in processing to both modernize and enhance payment systems globally and accelerate the adoption of our value-added services. The final area I want to highlight is our risk and security solutions. As you know, we closed on our acquisition of Feature Space just over a year ago, and we have continued to invest in this platform to provide a holistic, AI-driven solution for our clients before, during, and after a transaction. NETS, part of Nexi Group in Europe, has chosen Feature Space to expand fraud prevention for 150 banks across Nordic and Central Europe regions, leveraging cloud hosting and advanced fraud models. Another AI-powered solution, Visa Account Attack Intelligence, was announced in 2024 in the U.S. to help clients prevent enumeration attacks, which are when bad actors systematically initiate e-commerce transactions to obtain valid payment credentials. The results of this solution in the U.S. have been impressive, with over 60 billion transactions scored and nearly 600 million suspicious transactions identified in the last 12 months. We are now investing in its market expansion with launches in the rest of our regions where we are also seeing strong results. In LAC, for example, in just six months, we have almost 90% of clients already activated and have prevented more than $10 billion of fraud. We have brought our network agnostic risk solution, Visa Advanced Authorization, to more countries as well. including recently securing the business from Morocco's national switch, Switch El Marib, to score all domestic transactions. We have also expanded our A to A risk solution, Visa Protect for A to A, to two more countries this past quarter, with a half a dozen more planned by the end of the year. Of course, these represent just a small set of examples, and throughout the quarter, we have developed many more solutions that will help us drive long-term growth. Collectively, all of our efforts produced 15% year-over-year net revenue growth, with our growth pillars continuing to deliver very strong results. Commercial and money movement solutions, constant dollar revenue grew 20%, with 10% constant dollar commercial payments volume growth and 23% Visa direct transaction growth. Value-added services constant dollar revenue grew 28% and represented around 50% of our overall revenue growth in the first quarter. These results and our feedback from our clients give us confidence that our strategy is working and we are investing in the right capabilities to position Visa and our clients and partners for the future. Visa is delivering breakthrough innovations that redefine what's possible in payments as we enable our partners to achieve global scale quickly and securely. Now to Chris, where he will discuss our financial performance.

Thanks, Ryan, and good afternoon, everyone. We had a very strong start to our 2026 fiscal year, driven by strong driver growth, a strong holiday season, and continued execution of our strategy across consumer payments, commercial and money movement solutions, and value-added services. Business drivers remained strong and relatively consistent with Q4. In constant dollars, global payments volume was up 8% year over year. Cross-border volume, excluding intra-Europe, was up 11%. and total process transactions grew 9%. Fiscal first quarter net revenue was up 15% year-over-year, with the outperformance largely driven by stronger-than-expected value-added services revenue, lower-than-expected incentives, and stronger-than-expected commercial and money movement solutions revenue. These three factors more than offset lower-than-expected currency volatility. First quarter revenue was up 13% in constant dollars. EPS was up 15% year over year, better than expected, primarily due to stronger than expected net revenue growth. EPS was up 14% in constant dollars. Let's go into the details. U.S. payment volume was up 7%, with e-commerce growing faster than face-to-face spend, reflecting resilience in consumer spending. Credit was up 7%, and debit was up 6%. The slight step down in USPV throughout the quarter was driven by debit, primarily as a result of a Visa Direct client moving the remainder of its volume to its own solution and a number of other small factors, including the loss of some interlink volumes to the Capital One debit migration and severe weather that affected certain spend categories. Growth across consumer spend bands remained relatively consistent with Q4. with the highest spend band continuing to grow the fastest. We did not see a deterioration in the lower spend band. And across our volume, both discretionary and non-discretionary spend remain strong. Honing in on the holiday season specifically, which we define as the period from November 1 to December 31, I would note a few items. In the US, consumer holiday spending growth was in line with last year, reflecting continued strength in retail, an improvement in fuel, and some moderation in other spend categories. Focusing on retail, holiday spending growth was slightly better than last year, driven by strong growth in e-commerce, which continues to take on a greater share of consumer retail spend. In several key countries around the globe, we saw similar trends, with consumer retail holiday spending growth up from last year, led primarily by e-commerce growth. First quarter total international payments volume was up 9% year-over-year in constant dollars, generally consistent to the growth we've seen over the past several quarters. Now to cross-border volume, which I'll speak to in constant dollars and excluding inter-Europe transactions. Q1 total cross-border volume was up 11% year over year, consistent with Q4. Cross-border e-commerce volume was up 12%, slightly below Q4, primarily from lower growth in cryptocurrency purchases. Travel-related cross-border volume was up 10%, consistent with Q4. We saw continued strength in commercial volumes, and we started to see improvement in U.S. inbound from Canada. With that as a backdrop, I'll move to discuss our financial results, starting with the revenue components. Service revenue grew 13% year-over-year versus the 9% growth in Q4 cost and dollar payments volume, primarily due to pricing and card benefits. Data processing revenue grew 17% versus the 9% growth in process transactions. primarily due to pricing, strong value-added services performance, and higher cross-border transaction mix. International transaction revenue was up 6%, below the 11% increase in constant dollar cross-border volume growth, excluding intra-Euro. Even with the favorable FX, we saw much lower than expected volatility, with additional negative pressure from mix and hedging. Other revenue grew 33%, primarily driven by growth in advisory and other value-added services and pricing. Client incentives grew 12%, lower than our expectations due to one-time true downs related to client performance and deal timing. Now to our three growth engines. Consumer payments revenue was driven by strong payments volume, cross-border volume, and process transaction growth. Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars. CMS revenue was better than expected, driven primarily by our commercial solutions business. Commercial payments volume grew 10% in constant dollars, consistent with Q4 and faster than Visa's overall payments volume growth, primarily due to strong client performance driven by both new wins and continued cross-border strength. Visa direct transactions grew 23% to 3.7 billion transactions with strength in both domestic and cross-border. Value-added services revenue grew 28% year-over-year in constant dollars to $3.2 billion, driven by strength across all portfolios. Value-added services revenue growth was better than expected primarily due to greater demand for our advisory and other services. especially in marketing services. Operating expenses grew 16% above our expectations, primarily due to an unfavorable FX impact from balance sheet remeasurement and higher than expected marketing from both timing of marketing spend and marketing services related expenses, some of which are associated with the stronger value added services revenue I just mentioned. Non-operating expense was $4 million, better than our expectations, primarily due to investment income. Our tax rate for the quarter was 18.4%, slightly higher than expected due to the timing of the resolution of a tax matter. EPS was $3.17, up 15% year over year, with an approximate one-point benefit from exchange rates and a minimal impact from acquisitions. In Q1, we bought back approximately $3.8 billion in stock and distributed approximately $1.3 billion in dividends to our shareholders. We also funded the litigation escrow account by $500 million, which has the same effect on EPS as a stock buyback. At the end of December, we had $21.1 billion remaining in our buyback authorization. Now, let's look at drivers through January 21st with volume growth in constant dollars. U.S. payments volume was up 8%, with credit up 9% and debit up 6% year over year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 11% year over year, with e-commerce up 12% and travel up 10%. Process transactions grew 9% year over year. Moving to our guidance. Now that a quarter has passed since our initial FY26 commentary, I would note the following on our key assumptions. As we regularly say, we are not economic forecasters, so we're assuming the macroeconomic environment stays generally where it has been, and consumer spending remains resilient, so no change. On pricing, we also have no material changes with the benefits of new pricing expected to be similar in magnitude as last year and the majority in the back half. What that means from a cadence perspective is Q2 would see a relative step down in the year-over-year growth pricing contribution from Q1. On incentives, we had true downs in deal timing that helped in Q1 that we do not expect will carry into Q2. As such, this implies a step up in the growth rate from Q1 to Q2, with Q3 continuing to have the highest year-over-year incentive growth rate and the full year remaining relatively unchanged. On volatility, it has been much lower than we expected so far this year, and we are assuming that that volatility continues at current levels for the rest of the year, implying a larger drag for the rest of the year than in Q1, and with Q3 having the toughest comparable to last year's higher levels. We pool these assumptions together on an adjusted basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentations for more detail. For the full year, we have no material changes in our expectations for our adjusted and nominal net revenue growth. We still expect our full-year adjusted net revenue growth to be in the low double digits, reflecting an anticipated weaker volatility environment for the rest of the year that is offset by the Q1 outperformance and higher utilization of our products and services. On the expense side, we have no material changes to our prior full-year guidance and still expect adjusted operating expense growth to be in the low double digits for the year. As a result of Q1, our expectations for non-operating expense are now between approximately $100 and $125 million. On our tax rate, as a result of the claim of right tax benefits related to recent and anticipated legal settlements, we now expect our full year rate to be lower than we guided, between 18 and 18.5%. I should reiterate that we still expect our long-term tax rate to be between 19 and 20%. This implies adjusted EPS growth in the low double digits, albeit a bit higher in the range than previously guided, primarily due to the change in tax rate. Moving to Q2 financial expectations. We expect Q2 adjusted net revenue growth in the low double digits. The primary reasons for the step down from Q1 net revenue growth include the lower contribution from pricing, lower volatility, and higher incentive growth. We expect adjusted operating expense growth in the mid-teens, about a point above Q1 adjusted operating expense growth. This reflects the step up in marketing-related expenses primarily due to the Olympics and FIFA. And you may recall that Q2 last year had lower than expected operating expense growth due to timing. Non-operating expense is expected to be about $30 million. And our tax rate in the second quarter is expected to be around 16.5%, primarily as a result of the claim of right benefits I mentioned previously that we expect to realize in the second quarter. As a result, we expect adjusted second quarter EPS growth to be in the high end of low double digits. As always, if the environment changes and there are events that impact our business, we will remain flexible and thoughtful on balancing short and long-term considerations. It's an exciting time in payments, and we're confident in our strategy and investments to fuel Visa's future growth. And now, Jennifer, I'll hand it back to you.