V Q3 Deep Dive: Value-Added Services, Digital Innovation, and Margin Pressures

Global payments technology company Visa (NYSE:V) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 11.5% year on year to $10.72 billion. Its non-GAAP profit of $2.98 per share was in line with analysts’ consensus estimates.

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StockStory’s Take

Visa's third quarter results reflected continued momentum in digital payments and value-added services, with revenue surpassing analyst expectations and non-GAAP earnings per share matching consensus. Management credited growth to broad-based strength across consumer and commercial payment volumes, increased adoption of tokenization, and expansion in cross-border e-commerce transactions. CEO Ryan McInerney pointed to the company's “intense focus on innovation” and highlighted progress in expanding Visa's network of networks and the deployment of next-generation processing infrastructure as central to recent performance. Elevated operating expenses, driven by increased personnel costs and investments in technology, contributed to a notable decline in operating margin compared to the same period last year.

Looking ahead, Visa’s guidance is anchored by expectations of resilient consumer spending and continued growth in value-added services, product innovation, and expansion of stablecoin capabilities. Management emphasized a commitment to ongoing investment in its Visa as a Service stack, particularly in artificial intelligence and new payment technologies. CFO Christopher Suh noted that “we expect full year adjusted net revenue growth to be in the low double digits,” with incremental benefits from major global events like the Olympics and FIFA World Cup. Management cautioned that macroeconomic uncertainty and elevated operating expense growth could impact profitability, but remains focused on scaling digital solutions and maintaining Visa's leadership in global payments.

Key Insights from Management’s Remarks

Management attributed the quarter’s revenue growth to gains in cross-border e-commerce, value-added services, and key wins in commercial payments, while margin pressure stemmed from higher investments and operating costs.

• Cross-border and e-commerce momentum: Management noted strong growth in international transaction volumes, highlighting that e-commerce now represents around 40% of total cross-border payment activity. This shift reflects changing consumer behavior and Visa’s ability to enable seamless online transactions globally.
• Value-added services expansion: Revenue from advisory, risk, and issuing solutions grew faster than core payments, with new offerings such as Visa Protect for A2A (account-to-account) fraud prevention and the continued rollout of tokenization. These services are increasingly important for client retention and differentiation.
• Stablecoin and digital asset initiatives: Visa expanded support for stablecoins and blockchain-based settlement, including new card programs linked to stablecoins and a pilot for stablecoin prefunding with Visa Direct. Management sees tangible product-market fit for these solutions, especially in emerging markets and cross-border money movement.
• VisaNet modernization and AI adoption: The deployment of a new, modular VisaNet processing platform, much of it built with generative AI, is enabling faster feature development and improved system scalability. Management expects these technology upgrades to support future product launches and operational efficiency.
• Operating expense headwinds: Higher personnel costs and increased marketing investments for upcoming global events, along with foreign exchange impacts, led to a 13% rise in operating expenses. Management explained that these investments are necessary to sustain long-term growth but contributed to the year-over-year decline in operating margin.

Drivers of Future Performance

Visa’s outlook for the next year depends on the durability of consumer spending, continued adoption of digital and AI-enabled payment solutions, and the company’s ability to monetize new product offerings.

• Product innovation and AI investment: Management plans to accelerate development of digital payment features, expand stablecoin capabilities, and integrate AI across the service stack. Every leader at Visa has AI targets, with efficiency gains expected to be reinvested to maintain competitive differentiation and drive revenue growth.
• Global events and marketing spend: Major events like the Olympics and FIFA World Cup are expected to boost brand visibility and value-added services usage, particularly as clients leverage Visa’s marketing solutions to engage customers. However, marketing expenses linked to these events will create near-term margin pressure.
• Macro and expense management risks: Management’s guidance assumes stable macroeconomic conditions and resilient consumer spending, but flagged that heightened operating expense growth—driven by technology, personnel, and sales engineering—could weigh on profitability if revenue tailwinds moderate.

Catalysts in Upcoming Quarters

Our analyst team will watch closely for (1) adoption rates of new agentic commerce and stablecoin-enabled products, (2) the pace at which Visa’s AI-powered solutions translate into revenue and efficiency gains, and (3) whether increased marketing and operating expense investments yield sustained growth in value-added services and international transaction volumes. Additional updates on the rollout of modernized VisaNet processing and further commercial wins in emerging markets will also be important indicators.

Visa currently trades at $342.75, down from $347.10 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).

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