Visa reports $5.4bn in Q2 FY2025 profit, announces $30bn share buyback plan

How Did Visa Perform Financially in Q2 FY2025?

Visa Inc. (NYSE: V) reported its fiscal second-quarter earnings for the period ending March 31, 2025, posting net revenue of $9.6 billion—a 9% year-on-year increase. In constant-currency terms, the growth accelerated to 11%, reflecting a strong global recovery in both domestic and international consumer transactions.

GAAP net income was $4.6 billion or $2.32 per diluted share, a 2% decline from the previous year due to a $992 million litigation charge related to the interchange multidistrict litigation (MDL) case. Adjusting for this and other non-recurring items, Visa’s non-GAAP net income rose 6% year-over-year to $5.4 billion. Corresponding non-GAAP earnings per share grew 10% to $2.76, or 11% on a constant-dollar basis.

CEO Ryan McInerney attributed this performance to resilient consumer spending, despite macroeconomic headwinds. He stated that Visa’s strength in payments volume, cross-border flows, and transaction processing demonstrated the company’s strategic durability and innovative capabilities across consumer payments and value-added services.

What Are the Key Revenue Drivers This Quarter?

Visa’s growth trajectory was supported by sustained momentum across its key revenue categories. Payments volume grew 8% year-on-year in constant dollars during the March quarter. Notably, cross-border volume excluding intra-Europe transactions surged 13%, benefiting from increased international travel and ecommerce activity. Total processed transactions rose 9% to reach 60.7 billion.

Segment-wise, service revenue increased 9% to $4.4 billion, data processing revenue rose 10% to $4.7 billion, and international transaction revenue climbed 10% to $3.3 billion. Other revenue jumped 24% to $937 million. Meanwhile, client incentives rose 15% to $3.7 billion, reflecting competitive issuer agreements and fintech partnerships.

How Is Visa Managing Costs and Legal Challenges?

Total GAAP operating expenses rose sharply by 22% to $4.2 billion, primarily due to the litigation provision. Non-GAAP operating expenses, excluding legal and acquisition-related items, increased 7% year-over-year, driven by higher personnel costs, marketing spend, and technology infrastructure investments.

Non-GAAP operating income remained strong at $5.4 billion. Visa’s GAAP effective tax rate for the quarter stood at 15.8%, while the non-GAAP rate was 16.9%. Net equity investment losses for the quarter were $23 million, and non-operating income totaled $26 million on a non-GAAP basis.

What Is the Significance of the $30 Billion Share Repurchase Plan?

During the March quarter, Visa repurchased approximately 13 million shares of its class A common stock at an average price of $340.26, totalling $4.5 billion. Additionally, it returned $1.1 billion in dividends to shareholders. In a significant move reflecting continued confidence in its financial trajectory, Visa’s board authorised a new $30 billion multi-year buyback programme in April 2025.

The company also deposited $375 million into its litigation escrow account under the U.S. retrospective responsibility plan. This move, structured to mitigate shareholder exposure to future liabilities, functionally mirrors a stock buyback as it reduces the diluted share count of class B shares, supporting EPS performance for class A shareholders.

How Strong Is Visa’s Balance Sheet and Liquidity?

As of March 31, 2025, Visa reported total cash, cash equivalents, and investment securities of $15.2 billion. The company maintained a robust liquidity position despite deploying over $10 billion in capital across share repurchases, dividends, and strategic investments during the first half of the fiscal year.

Total assets stood at $92.9 billion, with total liabilities at $54.8 billion. Visa’s cash flows from operating activities increased significantly to $10.1 billion in the six months ending March 31, 2025, up from $8.2 billion a year earlier. This increase was primarily driven by higher net income, favourable changes in settlement receivables, and lower outflows for accrued litigation.

What Is the Market Sentiment and Investment Outlook for Visa Stock?

Visa stock has demonstrated relative strength in the post-earnings period, trading around the $345 level on the NYSE. The 10% non-GAAP EPS growth, paired with the $30 billion repurchase announcement, has buoyed investor sentiment. Despite legal overhang from the MDL proceedings, the broader market views Visa’s fundamentals as intact and forward-looking.

Institutional flows remained positive, with major long-only asset managers maintaining exposure. Options activity suggests investor expectations of stable appreciation in the $330–$360 trading band in the short term. While no immediate DII/FII breakdown is disclosed publicly in U.S. markets, fund tracker data suggests net inflows into large-cap payments stocks during April 2025, with Visa featuring among top ETF exposures in the fintech segment.

Brokerage consensus remains tilted toward a “Buy” rating. Morgan Stanley recently reiterated its “top pick” stance on Visa for 2025, citing its unique cross-border moat, strong margins, and capital efficiency. MarketWatch analysts also highlighted Visa’s strategic edge over peers such as Mastercard, especially in B2B and embedded finance.

What Are the Risks and Forward-Looking Considerations?

Visa continues to navigate regulatory headwinds across key jurisdictions, including data privacy, cybersecurity, and emerging AI governance mandates. The company remains exposed to litigation uncertainties, competitive pricing dynamics, and evolving market structures in digital payments. However, its broad-based platform across card networks, money movement, and merchant services insulates it from sectoral volatility.

Visa’s ability to scale innovation—particularly in AI-driven fraud detection, contactless commerce, and real-time payments—positions it to leverage global digitisation trends. The company’s strategic investments in cloud-based payment rails and partnerships with fintechs also enhance long-term revenue durability.

CEO Ryan McInerney reaffirmed that Visa’s diversified operating model and focus on innovation offer confidence in sustaining growth even amid macroeconomic uncertainty. The company expects continued strength across cross-border commerce and B2B transactions in the second half of FY2025.