# How Visa makes money

CXProWealth Business Lens · Visa (V) · Q3 FY2026

Read from the 10-Q for the period 2026-04-01 to 2026-06-30, filed 2026-07-29 with the SEC (accession 0001403161-26-000104): https://www.sec.gov/Archives/edgar/data/1403161/000140316126000104/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $11.6B (+14.4% on the year)
- Operating income: $6.9B (operating margin 59.1%)
- Net income: $5.6B (net margin 48.4%)
- Gross margin: not reported (the company reports expenses by nature: no cost of revenue or gross profit line exists)
- Free cash flow: —
- Cash conversion (operating cash flow / net income): —
- Capital expenditure: — of revenue

## Where the money goes (Q3 FY2026)

- Net revenue → Total operating expenses: $4.8B
- Total operating expenses → Personnel: $2.5B
- Total operating expenses → Marketing: $649.0M
- Total operating expenses → Network and processing: $280.0M
- Total operating expenses → Professional fees: $246.0M
- Total operating expenses → Depreciation and amortization: $367.0M
- Total operating expenses → General and administrative: $503.0M
- Total operating expenses → Litigation provision: $253.0M
- Net revenue → Operating income: $6.9B
- Operating income → Total non-operating income (expense): $44.0M
- Total non-operating income (expense) → Interest expense: $194.0M
- Investment income (expense) and other → Total non-operating income (expense): $150.0M
- Operating income → Income before income taxes: $6.8B
- Income before income taxes → Income tax provision: $1.2B
- Income before income taxes → Net income: $5.6B

## Where the revenue comes from

### Products and services (Revenue - Schedule of Disaggregation of Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Data processing revenue | $6.0B | 51.9% |
| Service revenue | $4.9B | 42.3% |
| International transaction revenue | $3.9B | 33.1% |
| Other revenue | $1.5B | 12.9% |
| Client incentives | -$4.7B | -40.2% |

The members sum to total revenue.

## Income statement, as filed

| Line | Q3 FY2026 | Of revenue |
|---|---:|---:|
| Net revenue | $11.6B | 100% |
| Personnel | $2.5B | 21.1% |
| Marketing | $649.0M | 5.6% |
| Network and processing | $280.0M | 2.4% |
| Professional fees | $246.0M | 2.1% |
| Depreciation and amortization | $367.0M | 3.2% |
| General and administrative | $503.0M | 4.3% |
| Litigation provision | $253.0M | 2.2% |
| **Total operating expenses** | $4.8B | 40.9% |
| **Operating income** | $6.9B | 59.1% |
| Interest expense | ($194.0M) | 1.7% |
| Investment income (expense) and other | $150.0M | 1.3% |
| **Total non-operating income (expense)** | -$44.0M | 0.4% |
| **Income before income taxes** | $6.8B | 58.7% |
| Income tax provision | $1.2B | 10.4% |
| **Net income** | $5.6B | 48.4% |
|   Class A common stock | $5.0B | 42.7% |
|   Class B-1 common stock | $15.0M | 0.1% |
|   Class B-2 common stock | $238.0M | 2.0% |
|   Class B-3 common stock | $152.0M | 1.3% |
|   Class C common stock | $212.0M | 1.8% |
| Class A common stock | $3 | 0.0% |
| Class B-1 common stock | $5 | 0.0% |
| Class B-2 common stock | $4 | 0.0% |
| Class B-3 common stock | $4 | 0.0% |
| Class C common stock | $12 | 0.0% |
| Class A common stock | 1,673,000,000 |  |
| Class B-1 common stock | 3,000,000 |  |
| Class B-2 common stock | 53,000,000 |  |
| Class B-3 common stock | 34,000,000 |  |
| Class C common stock | 18,000,000 |  |
| Class A common stock | $3 | 0.0% |
| Class B-1 common stock | $5 | 0.0% |
| Class B-2 common stock | $4 | 0.0% |
| Class B-3 common stock | $4 | 0.0% |
| Class C common stock | $12 | 0.0% |
| Class A common stock | 1,898,000,000 |  |
| Class B-1 common stock | 3,000,000 |  |
| Class B-2 common stock | 53,000,000 |  |
| Class B-3 common stock | 34,000,000 |  |
| Class C common stock | 18,000,000 |  |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2007 | $3.6B | -$1.4B | -$1.1B | $505.0M | $160.0M | $345.0M |
| FY2008 | $6.3B | $1.2B | $804.0M | $531.0M | $415.0M | $116.0M |
| FY2009 | $6.9B | $3.5B | $2.4B | $558.0M | $306.0M | $252.0M |
| FY2010 | $8.1B | $4.6B | $3.0B | $2.7B | $241.0M | $2.5B |
| FY2011 | $9.2B | $5.5B | $3.7B | $3.9B | $353.0M | $3.5B |
| FY2012 | $10.4B | $2.1B | $2.1B | $5.0B | $376.0M | $4.6B |
| FY2013 | $11.8B | $7.2B | $5.0B | $3.0B | $471.0M | $2.6B |
| FY2014 | $12.7B | $7.7B | $5.4B | $7.2B | $553.0M | $6.7B |
| FY2015 | $13.9B | $9.1B | $6.3B | $6.6B | $414.0M | $6.2B |
| FY2016 | $15.1B | $7.9B | $6.0B | $5.6B | $523.0M | $5.1B |
| FY2017 | $18.4B | $12.1B | $6.7B | $9.3B | $707.0M | $8.6B |
| FY2018 | $20.6B | $13.0B | $10.3B | $12.9B | $718.0M | $12.2B |
| FY2019 | $23.0B | $15.0B | $12.1B | $12.8B | $756.0M | $12.0B |
| FY2020 | $21.8B | $14.1B | $10.9B | $10.4B | $736.0M | $9.7B |
| FY2021 | $24.1B | $15.8B | $12.3B | $15.2B | $705.0M | $14.5B |
| FY2022 | $29.3B | $18.8B | $15.0B | $18.8B | $970.0M | $17.9B |
| FY2023 | $32.7B | $21.0B | $17.3B | $20.8B | $1.1B | $19.7B |
| FY2024 | $35.9B | $23.6B | $19.7B | $20.0B | $1.3B | $18.7B |
| FY2025 | $40.0B | $24.0B | $20.1B | $23.1B | $1.5B | $21.6B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: +11.3% (year before +10.0%): steady
- Operating income: +1.7% (year before +12.4%): slowing
- Net income: +1.6% (year before +14.3%): slowing
- Free cash flow: +15.4% (year before -5.1%): accelerating

## Operating figures stated in the filing

- Processed transactions growth: 10.0% (as of 2026-06-30). "Processed transactions increased 10% and 9% over the three and nine-month prior-year comparable periods, respectively, and payment credentials increased 8% over the prior-year comparable period." (Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations)
- Nominal payments volume growth: 11.0% (as of 2026-03-31). "Service revenue increased over the three and nine-month prior-year comparable periods primarily due to growth in nominal payments volume of 11% and 10%, respectively, select pricing modifications and growth in card benefits." (Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations)
- Nominal cross-border volume growth, excluding transactions within Europe: 14.0% (as of 2026-06-30). "International transaction revenue increased over the three and nine-month prior-year comparable periods primarily due to growth in nominal cross-border volume of 14% and 15%, respectively, excluding transactions within Europe, partially offset by lower volatility of a broad range of currencies and business mix." (Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations)
- Payment credentials growth: 8.0% (as of 2026-03-31). "payment credentials increased 8% over the prior-year comparable period" (Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations)

## Key insights

### Revenue grows faster than the payments it carries

Net revenue rose 14.4% while processed transactions grew 10% and payments volume 11%, so Visa earned more on each payment than a year earlier.

Each fee line has its own driver. The filing names payments volume as the main driver of service revenue and processed transactions as the main driver of data processing revenue. Service revenue was $4.92B and data processing revenue $6.04B, 51.9% of net revenue of $11.63B on its own. Nominal payments volume grew 11%, processed transactions 10% and payment credentials 8%. _(from the filing)_
In the revenue lines the filing credits the gap to "select pricing modifications", growth in value-added services, growth in card benefits and a higher cross-border transaction mix. It also says exchange rate movements added to net revenue growth. Other revenue, which includes Advisory and Other Services, was $1.50B, 12.9% of net revenue. _(from the filing)_
Analysis: revenue that grows faster than activity comes from price and from services sold on top of the network, not from more payments. It is the closest thing to pricing power a network shows in its accounts, and it is being earned while merchants are suing over network fees in several countries. Whether the gap lasts depends on banks and merchants continuing to accept those prices. _(analysis)_
Service revenue is assessed mainly on the prior quarter's volume, so the 11% volume growth describes the three months to March, while processed transactions are counted for the quarter itself. The two growth rates are not measured over the same window. _(from the filing)_

### Litigation savings offset the personnel jump; marketing cut the margin

Personnel rose 3.94 points as a share of revenue and litigation fell 3.87, so marketing's 1.44-point rise explains most of the 1.61-point margin decline.

Operating margin was 59.1%, down 1.61 points on a year earlier, and operating income grew 11.3% against revenue growth of 14.4%. Personnel was $2.46B against $1.75B, up 40.5%, which the filing attributes primarily to "higher severance costs resulting from actions taken to drive operational efficiencies and reinvest in high-growth opportunities", plus more employees and higher compensation, including from acquisitions. _(from the filing)_
The litigation provision fell to $253M from $615M, on lower accruals for the U.S. covered litigation. As shares of revenue, personnel rose 3.94 points and litigation fell 3.87 points, so the two nearly cancelled. Marketing rose 54.2% to $649M from $421M, 1.44 points more of revenue, which the filing ties to client marketing and campaigns driven in part by the FIFA World Cup. _(from the filing)_
Analysis: the margin decline is mostly a sponsorship and campaign cost the filing links to one event, plus smaller rises in professional fees and network spending. Severance and the litigation provision are both items the filing excludes from its non-GAAP measures, so this quarter's mix is not a clean read of the ongoing cost base. The next quarters show whether personnel returns toward its earlier share of revenue. _(analysis)_

### Interest and tax cut an 11.3% profit gain to 6.8%

Operating income grew 11.3% but net income only 6.8%, as the non-operating result swung from $156M of income to a $44M expense.

Interest expense was $194M against $39M a year earlier, which the filing explains by "an interest benefit related to taxes in the prior year", so the comparison base was unusually low. Investment income fell to $150M from $195M, on lower interest income on cash and investments. Pre-tax income grew 7.9%. _(from the filing)_
Tax took a larger share as well. The income tax provision was $1,205M against $1,061M, 17.6% of pre-tax income against 16.8% a year earlier. Net income was $5.63B against $5.27B, and the net margin was 48.4%, down 3.45 points, more than double the 1.61-point fall in operating margin. _(from the filing)_
Analysis: much of the gap comes from a one-off in the earlier quarter rather than a change in how the business earns. Lower interest income also fits a smaller cash balance after the share repurchases and debt repayments the filing reports for the nine months, so part of the drag reflects how the company is using its cash rather than how the network performs. _(analysis)_

### Competitive edge

- **Carrying one more payment costs the network little** Network and processing cost $280M, 2.4% of net revenue, against an operating margin of 59.1%, so most added revenue can reach operating income.
- **Cross-border payments earn a third of net revenue** International transaction revenue was $3.85B, 33.1% of net revenue, on cross-border volume that grew 14%, faster than total payments volume at 11%.
- **Services sold around each payment add a second engine** Other revenue, which includes Advisory and Other Services, reached $1.50B, 12.9% of net revenue, and the filing credits value-added services across the fee lines.

### What to watch

- **Interchange lawsuits draw cash even as charges fall** The litigation provision fell to $253M from $615M, but in the quarter to March operating cash flow was $3.01B, half of net income.
- **Payments to banks exceed two-thirds of operating income** Client incentives of $4.68B equal 40.2% of net revenue and 68.1% of operating income, and they change with every contract the banks renegotiate.
- **New Brazil rules extend Visa's settlement guarantee to sellers** Visa covers clients' losses when another client fails to settle; rules submitted in Brazil would extend that guarantee to sellers, and Visa expects its exposure to rise.

## Investor view

**Personnel costs rose 40.5%, led by severance, so Visa's operating income grew slower than its revenue**

### How it makes money

Visa runs the network between the banks that issue cards, the banks that serve merchants, and sellers. It is paid for moving the money, not for lending it: the filing says Visa does "not issue cards, extend credit or set rates and fees for account holders". Of $11.63B in net revenue this quarter, $6.04B came from data processing, the fees for authorizing, clearing and settling each transaction, and $4.92B from service revenue, charged on the dollar value of payments. _(from the filing)_
Each fee line follows its own driver. The filing names payments volume as the main driver of service revenue and processed transactions as the main driver of data processing revenue. Nominal payments volume grew 11% and processed transactions 10% over a year earlier. Service revenue is assessed mainly on the prior quarter's volume, so this quarter's service line reflects spending in the three months to March. _(from the filing)_
International transaction revenue, $3.85B or 33.1% of net revenue, comes from payments that cross a border or a currency. It grew with nominal cross-border volume, up 14% excluding transactions within Europe. Other revenue, $1.50B, includes what the filing calls Advisory and Other Services, sold to banks and other clients on top of the network. _(from the filing)_
The gross fee lines add up to more than net revenue because Visa pays a large part back. Client incentives were $4.68B this quarter, equal to 40.2% of net revenue. They are contract payments to clients that the filing says vary with "performance expectations, actual client performance, amendments to existing contracts or the execution of new contracts", and they are deducted from revenue, so the $11.63B is already net of them. _(from the filing)_

### What shifted

Expenses took 40.9% of net revenue, up 1.6 points on a year earlier. Personnel did most of it: $2.46B against $1.75B, up 40.5%. The filing puts this primarily down to "higher severance costs resulting from actions taken to drive operational efficiencies and reinvest in high-growth opportunities", plus more employees and higher compensation, including from acquisitions. _(from the filing)_
Two lines moved against each other. Personnel rose 3.9 points as a share of revenue, and the litigation provision fell 3.9 points, to $253M from $615M, on lower accruals for the U.S. covered litigation. Marketing rose 54.2% to $649M, which the filing ties to client marketing and campaigns driven in part by the FIFA World Cup. _(from the filing)_
Below operating income the quarter turned. Interest expense was $194M against $39M a year earlier, which the filing explains by an interest benefit related to taxes in the earlier quarter. Investment income fell to $150M from $195M on lower interest income on cash. The non-operating result swung to a $44M expense from $156M of income, so pre-tax income grew 7.9% and net income 6.8%, both well behind revenue. _(from the filing)_
Revenue keeps outrunning the activity beneath it. Net revenue grew 14.4% against payments volume growth of 11%, processed transactions up 10% and payment credentials up 8%. In the revenue lines the filing credits the gap to "select pricing modifications", growth in value-added services and a higher cross-border transaction mix. _(from the filing)_
Cash lagged profit earlier in the year. Operating cash flow in the quarter to March was $3.01B against net income of $6.02B. The filing attributes the nine-month decline in operating cash to "higher litigation payments, higher incentive payments and timing of payments related to income taxes". This quarter's own cash flow cannot be separated from the year-to-date figure in the filing. _(from the filing)_

### Risks in the filing

Litigation over interchange is the largest exposure the filing names. Visa recorded more accruals for the U.S. interchange multidistrict litigation in the nine months, and says the probable loss "could materially vary based on developments in the litigation" and that it cannot estimate a loss at trial if negotiated resolutions are not reached. New merchant claims in the UK High Court allege European interchange fees restrict competition, and the company "anticipates additional claims in the future". _(from the filing)_
Settlement risk. Visa guarantees settlement between its clients, so if one fails to fund its obligations Visa covers the losses of the others. The filing says future obligations under the guarantee "could be material" and are not determinable. New rules in Brazil will require Visa to extend settlement guarantees to sellers, and the company expects its settlement exposure to increase. _(from the filing)_
Currency and spending. Revenue earned in local currencies is converted into dollars, and the filing says exchange rate movements and volatility "have contributed to periodic variability in our results, and may continue to do so in the future". It also says volume growth will depend on consumer spending levels and broader macroeconomic conditions. _(from the filing)_
Incentives, tax and acquisitions. The amount of client incentives recorded will vary with client performance and contract changes. Tax filings are under examination, with an appeal open with the Internal Revenue Service. The acquisition of Prisma and Newpay in Argentina is subject to review by the Argentine competition authority. For its full list of risk factors, the quarterly report refers to the annual report. _(from the filing)_
Two of these already show in the numbers. Litigation appears every quarter in the litigation provision line, and in the weak operating cash flow of the quarter to March, when payments to merchants left the company. Currency appears in international transaction revenue, which the filing says was held back by calmer currencies even as cross-border volume grew. _(analysis)_

## Founder view: mechanisms

### A toll on other people's payments

Visa sits between the bank that issues a card and the bank that serves the merchant, and takes a small fee on the value and on each message that passes through. It does not lend, so it carries no credit losses, and it does not own the cardholder, who stays with the bank. Once the network exists, one more transaction costs almost nothing to carry, so most additional revenue becomes profit. _(analysis)_

### Paying the banks that distribute the card

Visa does not sell to cardholders. Banks issue the cards and choose which network goes on them, so Visa pays them, through client incentives tied to volume and contract terms, to choose Visa and route volume through it. The payments are booked as a reduction of revenue, so the reported revenue line is already net of the cost of distribution. _(analysis)_

### Selling more on every transaction

Once the network carries the payment, Visa sells more around it: risk and fraud tools, tokenization, issuer processing, consulting and marketing services. It also adjusts prices on existing services. Both make revenue grow faster than the number of payments, which is the closest thing to pricing power a network shows in its accounts. _(analysis)_

### Charging more where it is harder

A payment that crosses a border or a currency is priced well above a domestic one. It involves currency conversion, two sets of rules and more fraud risk, and the payer has few alternatives at the moment of paying. Part of that revenue also depends on how much currencies move, which Visa does not control. _(analysis)_

## Member research

Signed-in members read, on the page: what Visa's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Visa 10-Q for the period to 2026-06-30: https://www.sec.gov/Archives/edgar/data/1403161/000140316126000104/ (2026-07-29)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-01 · as of 2026-11-01