Visa Inc. (ויזה)
Analytical review · Quarter ended June 30, 2026 (Q3 of fiscal year 2026)
Bakshi Finance — Family Office | Research Depth: Comprehensive
What this review is based on. Visa's Form 10-Q for the quarter ended June 30, 2026, filed July 29, 2026; the Form 10-Qs for Q1 and Q2; the Form 10-K for fiscal 2025; the quarterly earnings releases from October 2025 to July 2026; and Form 8-K filings on litigation escrow deposits and the class B exchange offer. Visa's fiscal year ends September 30. Market data: closing price on Oct 6, 2026; Bank of Israel representative USD rate for the same day.
Company Profile
Visa Inc. operates VisaNet, a network that carries authorization, clearing and settlement of payment transactions between cardholders, issuing banks, acquirers and merchants in more than 200 countries and territories. Visa does not issue cards, extend credit or set cardholder fees — that is done by roughly 14,500 financial institutions that are its clients. The company is headquartered in San Francisco and had about 34,100 employees at the end of fiscal 2025.
In the 12 months ended June 2026, net revenue totaled $44.5 billion and net income $22.6 billion. Revenue comes from four streams: service fees based on payments volume, data processing fees based on transaction count, cross-border and currency-conversion fees, and other revenue, mainly value-added services and consulting. Client incentives that Visa pays are deducted from all of these. In fiscal 2025, about $17 trillion of payments and cash volume ran through the network.
Visa has no controlling shareholder. It has several share classes: traded class A; class B held by U.S. banks, which bears the cost of U.S. interchange litigation; class C; and preferred stock tied to the Visa Europe acquisition. In May 2026 an exchange offer was completed in which about 98% of class B-1 and B-2 shares were exchanged into class B-3 and class C. The CEO is Ryan McInerney.
Financial Performance
The quarter: broad growth, and three lines that distort the comparison
In the April–June 2026 quarter, net revenue rose 14% to $11.6 billion. Payments volume grew 10% in constant dollars, processed transactions grew 10% to 71.7 billion, and value-added services grew 33%. Operating income rose 11% and net income 7%.
Three lines to read separately: (1) severance of $563 million in the quarter, after $213 million in Q1 of fiscal 2025. (2) A litigation provision every year: $927, $462 and $2,562 million in fiscal 2023–2025, and $1,290 million in the last nine months. The company removes most of it from its adjusted earnings. (3) Marketing rose 54% and other revenue rose 45%; according to the filing, both were affected by the FIFA World Cup 2026 and the Winter Olympics.
| $ millions | Q3 FY25 | Q4 FY25 | Q1 FY26 | Q2 FY26 | Q3 FY26 |
|---|---|---|---|---|---|
| Net revenue | 10,172 | 10,724 | 10,901 | 11,230 | 11,633 |
| Year-over-year growth | 14% | 12% | 15% | 17% | 14% |
| Litigation provision | 615 | 903 | 708 | 329 | 253 |
| Net income | 5,272 | 5,090 | 5,853 | 6,021 | 5,628 |
| Diluted EPS ($) | 2.69 | 2.62 | 3.03 | 3.14 | 2.97 |
| Company-adjusted EPS ($) | 2.98 | 2.98 | 3.17 | 3.31 | 3.32 |
The multi-year context
In fiscal 2021–2025, net revenue grew 13.5% a year on average and net income 13.0% a year. In the first nine months of fiscal 2026, revenue rose 15% and adjusted EPS 15%. The adjusted operating margin, by our calculation from company data, declined slightly: 67.8% in the nine months versus 68.3% a year earlier, as adjusted expenses grew 17% and revenue 15%.
Balance Sheet & Capital
On June 30, 2026 Visa held $13.9 billion in cash and investment securities against $23.9 billion of debt — net debt of $9.9 billion, versus $5.2 billion in September 2025. Net debt equals about 0.35x trailing-12-month EBITDA. In the nine months the company repaid $5.6 billion of notes, issued $3.0 billion of new notes, and began using commercial paper ($1.5 billion in June). In July 2026 the commercial paper program was raised from $3 billion to $7 billion.
Capital return: in the nine months Visa repurchased 50 million shares for $16.5 billion (an average of $328 per share) and paid $3.9 billion of dividends — together 134% of reported free cash flow for the period. Excluding covered-litigation payments (see below), the ratio is about 112%. The difference was funded by lower cash and more debt. The as-converted share count fell from 1,930 to 1,880 million in nine months. The quarterly dividend rose 14% to $0.67.
How the U.S. interchange litigation works: settlement payments in the interchange case (MDL 1720) are paid from an escrow account. Each deposit into the account reduces the conversion rate of class B shares and, according to the company's filings, has "the same effect on earnings per share as repurchasing the Company's class A common stock". $875 million was deposited in the nine months and another $405 million on Sept 18, 2026. The remaining class B shares are worth about $34.7 billion at the Oct 6, 2026 price, by our calculation. This mechanism does not cover other litigation — including the U.S. Department of Justice debit case. A similar mechanism exists in Europe, but the remaining cushion there is only $1.16 billion.
Settlement exposure: Visa guarantees settlement to its clients if another client fails to fund its obligations. In the nine months, average daily exposure was $99.5 billion and the peak $168.6 billion, against $9.5 billion of collateral. According to the filing, new rules in Brazil will require extending the guarantee to merchants, and exposure will increase.
Segments
Visa reports one operating segment. The breakdown it publishes is by revenue type and by geography. In Q3, U.S. revenue rose 12% to $4.4 billion, and international revenue rose 16% to $7.2 billion — 62% of net revenue.
| Q3, $ millions | FY25 | FY26 | Change | What drives the line, per the filing |
|---|---|---|---|---|
| Service | 4,330 | 4,922 | +14% | Prior-quarter nominal payments volume (+11%), select pricing, card benefits |
| Data processing | 5,153 | 6,042 | +17% | Processed transactions (+10%), select pricing, value-added services |
| International transaction | 3,633 | 3,853 | +6% | Cross-border volume +14% nominal, offset by "lower volatility" of currencies and mix |
| Other | 1,028 | 1,496 | +45% | Advisory and other services, select pricing; World Cup-related marketing |
| Client incentives | (3,972) | (4,680) | +18% | Volume growth; 28.7% of gross revenue vs 28.1% |
The international transaction gap: this is the most profitable line, and it grew 6% while the volume that drives it grew 14%. Management attributes the gap to lower currency volatility and business mix. In fiscal 2025 the same line benefited, according to the annual report, from "higher volatility". In other words, part of this line depends on currency-market conditions and not only on volume.
Value-added services: $7.2, $8.8 and $10.9 billion in fiscal 2023–2025, and $10.3 billion in the last nine months (+32%). The figure includes Featurespace (acquired December 2024) and Prisma and Newpay in Argentina (acquired February 2026 for $1.5 billion). The filings do not disclose organic growth.
Competitive Position
The asset Visa presents is a two-sided network: billions of payment credentials on one side and hundreds of millions of acceptance points on the other, under uniform operating rules. According to the annual report, Tap to Pay accounted for 79% of face-to-face transactions globally and 66% in the U.S. Processed transactions rose 10% in each of the last two years.
Where the filings show pressure: (1) Regulation — the U.S. debit interchange cap is being tested in court; the Credit Card Competition Act may return to Congress; the EU is reassessing its interchange caps; Australia, Brazil and Argentina are tightening oversight. (2) Antitrust — the Department of Justice suit filed in September 2024 alleges monopolization of debit; the motion to dismiss was denied in June 2025, and the fiscal 2026 quarterly reports give no update on the case. (3) Alternatives — real-time account-to-account payments, closed wallets, and stablecoins. Visa itself describes stablecoins and AI-agent commerce as part of its strategy.
Concentration: one client accounted for 11% of net revenue in each of fiscal 2023–2025. The filing does not name it. This review does not include primary-source competitor data.
How to Think About This Company
With Visa, the central question is not business quality but which earnings figure represents it. The same 12 months have at least three versions: reported EPS of $11.76, company-adjusted EPS of $12.77, and free cash flow of about $11.2 per share — or about $12.9, if the litigation payments funded by the class B mechanism are excluded. The spread between versions is about 15%, and it comes almost entirely from three lines: litigation, severance and timing.
Litigation: covered versus uncovered. Settlement payments in the U.S. interchange case are effectively funded by shrinking class B, so from a class A holder's perspective they resemble a buyback. But not every provision belongs to that case. Uncovered provisions totaled $322 and $352 million in fiscal 2024 and 2025, and $159 million in the nine months, and by our calculation from the reconciliation tables the company excluded about $358 million of them from adjusted earnings over the last 12 months.
"One-time" items that recur. Severance was recorded twice in six quarters, both times explained by efficiency and reinvestment. A litigation provision was recorded in each of the four periods reviewed. A reader comparing adjusted to reported earnings has to decide whether these are costs of the period or costs of the business.
Cash flow versus earnings. In the nine months, operating cash flow fell 3% while net income rose 17%. Most of the gap is explained by covered-litigation payments: $3.0 billion in the nine months versus $0.8 billion a year earlier. Excluding them, operating cash flow rose about 10%. Cash paid for taxes also included $1.8 billion to purchase transferable federal tax credits.
Growth: volume, price, acquisitions and events. Constant-dollar payments volume grew 8% to 10% each quarter, and transactions 9% to 10%. Revenue grew faster — 12% to 17%. The filing attributes the difference to "select pricing modifications", value-added services, acquisitions and sporting events. The filings do not separate the contributions, so it is hard to tell from them how much of the growth recurs.
Currency as a variable. International transaction revenue depends not only on travel and cross-border shopping volume but also on exchange-rate volatility. In fiscal 2025 volatility lifted the line; in Q1 and Q3 of 2026 it held it back. Someone looking only at volume may miss this variable.
Capital allocation outran cash flow. For years Visa returned to shareholders an amount close to free cash flow. In fiscal 2025 the ratio was 106%, and in the last nine months 134% (about 112% excluding covered-litigation payments). The difference was funded by lower cash and more debt. Leverage is still low, but this pace cannot continue without more debt.
The share structure affects supply. After the May 2026 exchange offer, class B holders received about 23 million class C shares, each convertible into 4 class A shares, and their lock-up ended by August 2026. These shares are already in the as-converted count, so selling them is not dilutive — but it adds supply in the market, against a buyback program with $28.4 billion remaining.
Historical multiple versus today's. Visa's reported P/E at fiscal year-ends 2021–2025 ranged from 23 to 37, with a median of 26.9. On Oct 6, 2026 it stood at about 31.5, and on company-adjusted earnings at about 29. The price-to-free-cash-flow multiple (32.4, per stockanalysis) is the highest in the series. These figures describe the starting point; they do not determine direction.
This framework is intended to structure analysis, not to produce an investment conclusion. It does not take part in the decision — the decision is the reader's.
Risks & Monitoring
Risks that emerge from the filings
- U.S. antitrust: the Department of Justice debit monopolization suit is not covered by the class B mechanism. According to the annual report, it seeks to enjoin the challenged agreements.
- European litigation: more than 100 merchants with open claims, new UK claims in 2026, and a cushion of only $1.16 billion in the European mechanism.
- Interchange regulation: the U.S. debit cap, the Credit Card Competition Act, and reassessment in the EU and Australia.
- Settlement exposure: an average of $99.5 billion per day against $9.5 billion of collateral; the filing says Brazil's rules will increase it.
- Concentration: one client accounts for 11% of net revenue.
- Rising leverage: net debt rose from $5.2 to $9.9 billion in nine months, and the commercial paper program was raised to $7 billion.
Items to monitor in the Q4 report (late October 2026)
| # | Item | Latest reading |
|---|---|---|
| 1 | Constant-dollar payments volume | +10% (Jan–Mar and Apr–Jun 2026: +9% and +10%) |
| 2 | International transaction revenue vs cross-border volume | +6% vs +14% nominal |
| 3 | Other revenue and value-added services after the World Cup | +45% and +33% |
| 4 | Adjusted expenses vs revenue | +17% vs +14% |
| 5 | Client incentives as % of gross revenue | 28.7% (Q3) |
| 6 | Uncovered litigation provision | $159 million in nine months |
| 7 | Capital return vs cash flow, and net debt | 134% of FCF; $9.9 billion |
| 8 | DOJ suit and interchange caps | No update in 2026 filings |
Scenario Framework
The scenarios below are descriptive, not predictive. They contain no prices, no probabilities, and do not rank outcomes. Their only purpose is to organize the conditions that would need to hold for each state to materialize, so they can be checked against future filings.
Scenarios are descriptive, not predictive.
- If value-added services and other revenue keep growing at double digits after the World Cup leaves the comparison base
- If international transaction revenue returns to growing close to cross-border volume
- If adjusted expenses return to growing more slowly than revenue
- If the U.S. interchange case closes within the class B cushion, and the DOJ suit ends without a material change to agreements
- If payments volume keeps growing within the range of recent years
- If litigation provisions and severance keep appearing from time to time
- If regulatory proceedings continue without resolution
- If capital return moves back toward free cash flow
- If the DOJ suit or new regulation forces changes to debit agreements or fees
- If client incentives keep rising as a share of gross revenue
- If volume growth slows and growth relies mainly on pricing
- If capital return keeps exceeding cash flow and debt keeps growing
Analytical Lens
The following six questions are identical in every company review we publish. They are deliberately open and do not lead to a single conclusion. Their role is to let the reader examine the company on the same six dimensions as every other company.
Key Observations
1. In the April–June 2026 quarter Visa reported net revenue of $11.6 billion (+14%) and EPS of $2.97 (+10%). The company's adjusted EPS was $3.32 (+11%). The quarter included $563 million of severance.
2. Constant-dollar payments volume grew 8%, 9% and 10% in the three quarters of fiscal 2026. International transaction revenue grew 6% in Q3, against 14% growth in nominal cross-border volume.
3. In the nine months, operating cash flow fell 3% while net income rose 17%; covered-litigation payments were $3.0 billion. Capital return was 134% of free cash flow, and net debt rose to $9.9 billion.
4. The class B-1 and B-2 exchange offer was completed in May 2026. Prisma and Newpay in Argentina were acquired in February 2026 for $1.5 billion. The DOJ debit suit is pending, with no update in the quarterly reports.
Bakshi Finance operates as a Family Office for qualified clients only. Mr. Yaron Bakshi held an investment advisory license from 2008 to 2023. As of the publication date of this document, the company does not hold an investment advisory, investment marketing, or portfolio management license.
This document is intended for research and professional education purposes only. Nothing herein constitutes a recommendation to buy, sell, hold, or take any action in securities. It is not a substitute for advice that takes into account each person's individual data and needs. Any decision is the sole responsibility of the investor.
Past performance is not indicative of future results. Data was drawn from official sources: the Form 10-Q for the quarter ended June 30, 2026 (filed July 29, 2026), the Form 10-Qs for Q1 and Q2 of fiscal 2026, the Form 10-K for fiscal 2025 (November 6, 2025), the quarterly earnings releases, and the company's Form 8-K filings with the U.S. Securities and Exchange Commission. Historical multiples: stockanalysis.com. Calculations: Bakshi Finance, from filing data. Filing updates published after this date are not included.
Qualified-Client Review — Family Office
The full analytical review of Visa (V) for the quarter ended June 2026 is available to Bakshi Finance premium clients.
The review includes a 10-section analysis, "How to Think About This Company", a structured scenario framework, and a 6-dimension Analytical Lens.
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