Visa third-quarter profit climbs to $6.3 billion, plans to cut 2,600 jobs

Earnings beat

Visa reported fiscal third-quarter net revenue of $11.63 billion, a 14% increase from a year earlier, surpassing the $11.39 billion consensus estimate from analysts polled by LSEG. Adjusted net income rose to $6.3 billion, or $3.32 per share, compared with $5.83 billion, or $2.98 per share, in the same period last year. Payments volume across Visa's network, which operates in more than 200 countries and territories, grew 10%, while the number of processed transactions also increased 10%. The company earns fees from each transaction flowing through its system.

“Visa's quarter paints a pretty clear picture: people kept spending money, and more than Wall Street expected. This wasn't a fluke or an accounting trick, it reflected actual transactions.”

David Wagner, portfolio manager at Aptus Capital Advisors, said the results were grounded in real consumer activity rather than one-time factors.

Job cuts

Visa confirmed an earlier media report that it will cut about 7% of its workforce, amounting to roughly 2,600 jobs, as part of an efficiency drive. The reductions are concentrated in technology and product departments. The company recorded a $563 million charge in the quarter for severance and related costs. Operating expenses climbed 19% to $4.8 billion, driven in part by higher personnel costs that preceded the layoffs. The job cuts are among the largest in Visa's recent history.

Consumer resilience

Consumer spending remained robust during the quarter despite inflationary pressures and geopolitical uncertainty stemming from the conflict in the Middle East. U.S. retail sales held steady in June, and a decline in gasoline prices from their May peaks offered some relief to stretched household budgets. The 10% growth in both payments volume and processed transactions indicates that consumers continued to spend on goods and services through Visa's network. The company's results suggest that the broader spending environment has not yet been derailed by economic headwinds.

Cross-border boost

Cross-border volume, a lucrative segment for Visa, rose 13% on a currency-adjusted basis. The company attributed part of the strength to spending by visitors attending the 2026 FIFA World Cup, which is being hosted across the United States, Canada, and Mexico. Those expenditures flowed through hotels, restaurants, transportation, and entertainment venues, lifting transaction volumes. The tournament provided a tailwind that amplified the already steady travel demand.

Market reaction

Visa shares fell about 1% in after-hours trading following the earnings release, even as the company beat profit and revenue estimates. The decline may reflect investor caution over the job cuts and the associated $563 million charge, as well as the 19% rise in operating expenses. The stock's move suggests that the market had already priced in much of the positive consumer spending trend.

Actual11.63

Estimate11.39

Actual

11.63 $B

Estimate

11.39 $B

Data from the article text