Visa Inc (NYSE:V, XETRA:3V64) reported fiscal third quarter results that exceeded Wall Street expectations, but its shares fell in after-hours trading as investors weighed higher operating expenses.
The payments company posted adjusted earnings of $3.32 per share for the quarter ended June 30, ahead of analysts' consensus estimate of $3.23 per share.
Revenue rose 14.4% year over year to $11.63 billion, exceeding expectations of $11.4 billion.
Despite the earnings beat, Visa shares were down about 2.2% in after-hours trading. The decline came as investors focused on higher operating expenses that pressured margins and following profit-taking after the stock climbed to a fresh 52-week high of $371.16 before the results were released.
Visa's operating margin contracted to 59.1% in the fiscal third quarter from 60.7% a year earlier, a decline of 160 basis points. The compression reflected the impact of higher client incentives, which weighed on revenue growth, as well as increased operating expenses that offset some of the company's top-line gains.
Key operating metrics remained strong during the quarter. Payments volume increased 10% year over year on a constant-dollar basis, processed transactions rose 10%, cross-border volume excluding intra-Europe grew 12%, and total cross-border volume increased 13%.
The company also returned $6.2 billion to shareholders through share repurchases and dividends during the quarter.
Visa CEO Ryan McInerney highlighted continued spending trends and growth across the business.
“Consumer and business spending remains resilient, and our strategy continues to deliver strong performance across consumer payments, commercial and money movement solutions and value-added services,” McInerney said.
“As the leading hyperscaler of payments globally, we are designing, building and shipping products at an increased velocity, positioning Visa, our clients and the ecosystem to capture the opportunities ahead and drive growth.”
