Visa Stock Drops Despite Earnings That Narrowly Beat. What to Know.

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Visa reported revenue of $8.6 billion in the fourth quarter of its fiscal 2023, up 11%, matching Wall Street analysts’ average forecast.

Visa narrowly topped earnings estimates for its most recent quarter, driven by a continued postpandemic rebound in international travel.

The results for the calendar third quarter show that consumers are eager to travel internationally and spend while they are abroad. Visa’s so-called “cross-border” payments volume was up 21% year over year, versus 9% overall. The company processed a whopping $3.2 billion in credit and debit transactions in the period.

“There is still macro uncertainty, but just as in fiscal 2023, I am confident in our ability to manage through it,” CEO Ryan McInerney said on Tuesday’s earnings call. Over the long term, there’s a lot to like about Visa. The company has an unassailable position in the growing global payment-processing business. Its balance sheet is pristine, with no net debt. The business model has built-in inflation protection, as a percentage of payment volume, and economies of scale—it doesn’t cost Visa much to process another transaction on a network that already exists—so profits rise faster than revenues, at hefty profit margins.

 

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