Welcome to Visa's Fiscal First Quarter 2026 Earnings Conference Call. All participants are in a listen-only mode until the question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would like to now introduce to your conference to your host, Ms. Jennifer Como, Senior Vice President and Global Head of Investor Relations. Ms. Como, you may begin.

Thank you. Good afternoon, everyone, and welcome to Visa's Fiscal First Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer, and Chris Sa, Visa's Chief Financial Officer. This call is being webcast on the Investor Relations section of our website at investor.visa.com. A replay will be archived on our site for 30 days. A slide deck containing financial and statistical highlights has been posted on our IR website. Let me also remind you that this presentation includes forward-looking statements. These statements are not guarantees of future performance, and our actual results, outcomes, or timing could differ materially as the result of many factors. Additional information concerning those factors is available in our most recent annual report on Form 10-K, and any subsequent reports on Forms 10-Q and 8-K, which you can find on the SEC's website and the Investor Relations section of our website. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. Our comments today regarding our financial results will reflect revenue on a gap basis, and all of the results on a non-gap nominal basis unless otherwise noted. The related gap measures and reconciliation are available in today's earnings release and related materials available on our IR website. And with that, let me turn the call over to Ryan.

Thanks, Jennifer. In our fiscal first quarter, we delivered strong financial results with net revenue up 15% year-over-year to $10.9 billion and EPS up 15%. Payments volume grew 8% year-over-year in constant dollars to nearly $4 trillion, and process transactions grew 9% year-over-year, totaling $69 billion, demonstrating resilient consumer spending. We continued to build and deliver innovations and scalable technologies across the Visa as a service stack acting as a payments hyperscaler to enable anyone in the ecosystem to build launch and scale money movement and payments businesses across the globe let me share some more detail on the recent progress we have made in the services and solutions layers of our visa as a service stack more specifically in the evolution of visa credentials agentic commerce stable coins as well as in b2b and p2p money movement issuer processing and risk and security the core of our consumer payments business is the visa credential it is much more than a physical card it can be digital in a wallet online mobile it's the connection point to the visa network on top of which we're able to layer all types of services solutions and access now totaling more than 5 billion Visa credentials. We have continued to enhance Visa credentials in a few important ways this past quarter, tap-to-pay, VisaFlex credential, and tokens. Our tap-to-pay penetration has now crossed the 80% mark of all face-to-face transactions, with the U.S. at nearly 70%. Transit acceptance remains a key enabler, with our recent launches in San Francisco and in more than 10 other systems globally this quarter. In our first quarter, we have continued to enable tap-to-pay use cases for the different form factors of the credential. For example, in Europe, we recently announced new digital wallet enablement of iOS wallets such as Klarna in 14 countries and VIPs MobilePay in the Nordics. We also will soon launch a pilot in Italy with the domestic scheme Bancomat. In addition, we enabled Apple Pay for Visa cards issued in China for cross-border face-to-face, in-app, and online transactions. This spans eight issuers representing nearly 60 million Visa credentials, supporting the many Chinese consumers traveling or living abroad, with more issuers coming soon. Our tap-to-phone capability, which has helped to grow our acceptance locations to more than 175 million globally, has added more than 20 new markets and more than doubled transactions in the last year. A second important area of progress enhancing Visa credentials is enabling multiple funding sources from one single credential with our VisaFlex credential. This past quarter, Block announced the pilot launch of a new Cash App Visa Debit FlexCard, which enables Afterpay as a feature for their customers to pay over time anywhere Visa is accepted and leverages Visa's DPS issuer processing solution for the debit component. Globally, we have about 20 million Visa Flex credentials, just a small fraction of our total credentials, but growing fast. They are offering funding sources such as debit, credit, multi-currency accounts, rewards, installments, and more. And we expect to expand to more than 20 additional issuers this year. The third and maybe most revolutionary credential technology is the Visa token. Our token technology delivers a digitally native payment credential designed for the unique characteristics and needs of digital commerce. we have more than 17.5 billion tokens globally over three times the number of physical cards which means that the solution has been embraced broadly across the ecosystem we continue to make progress on the tokenization of e-commerce transactions to our ultimate goal of fully replacing card-centric pan technology further improving visa's competitive positioning against cash, check, and legacy forms of digital payment. We utilize a variety of tools, such as incentives, sales-oriented case studies, performance compliance programs and enhancements to encourage tokenization and enhanced data sharing to make the e-commerce environment as safe as it can be. Issuer enrollment efforts are underway across Europe, Samia, and LAC, as we expand the click-to-pay directory to enable credentials to be always digital. Globally, we have also been working with acquirers and payment facilitators to ultimately eliminate the guest checkout that occurs today, which we have reduced from 44% of all Visa e-commerce transactions in 2019 to about 16% in fiscal 2025. And among our top 25 sellers, it's less than 4%. This means that at our our top 25 sellers, 96% of transactions now require only a simple click or biometric authentication and do not require a burdensome and error prone form filling. We continue to build new capabilities on top of our token service platform, positioning our credentials and tokens as the fundamental building blocks for the future of payments. One of those capabilities that is enabled with Visa tokens is an important area of innovation, agentic commerce. Our Visa Intelligent Commerce solution utilizes tokens and their configurability as the core underlying foundation for agentic payments. We're working to enable agentic commerce with more than 100 partners across the commerce ecosystem globally. Over 30 partners are actively building in our sandbox with multiple agents and agent enablers running live production transactions and more partners expected in the future. Just this quarter, we expanded into B2B agentic payments with Ramp, streamlining corporate bill payments, enabling their business customers to capture cash back on card payments, and optimizing working capital. We also reached an agreement with AWS to make Visa Intelligent Commerce available on AWS Marketplace to support developers building agentic commerce solutions, connecting secure automated payment workflows at scale through blueprints for workflows such as travel bookings or retail purchases. In our Samia region, Aldar, a leading real estate developer, investor, and manager, is integrating Visa Intelligent Commerce to make reoccurring payments, such as property service charges, on their LiveAldar app. Our Visa Trusted Agent Protocol continues to help define the connectivity and data elements required to bring trust to the agentic environment. in q1 we announced partnerships with leading internet security players first cloudflare and then akamai who collectively serve millions of businesses globally including nine of the world's top 10 retailers in addition we are building interoperability between key elements of visa intelligent commerce and google's new universal commerce protocol as part of our global effort to help ensure that visa transactions are securely supported as different protocols evolve our agentic solutions are live in the u.s and samia and we are initiating pilot programs in asia pacific and europe lac is soon to follow where we have already begun token enrollment for agentic commerce with issuers we believe that we are well positioned to be the infrastructure provider and key enabler in agentic commerce so that every agent interaction is trusted and secure like agentic commerce stable coins have tremendous growth and disruption potential but are still in the very early stages of adoption for payments use cases as new stable coins and blockchains continue to emerge and show the promise of true utility visa's goal remains clear build the secure and seamless interoperable layer between stable coins and traditional fiat payments at scale across the world this past quarter we expanded our capabilities across several fronts first we added stablecoin card issuance in nine additional countries in q1 to surpass 50 countries worldwide and payments volume continues to grow at a fast rate as we enable more consumers and businesses to spend stable coins with visa this quarter we also expanded our stable coin settlement capabilities with usdc into the us improving speed and liquidity for banks and fintechs and providing interoperability to modernize treasury operations for our clients and total stable coin settlement has reached an annualized run rate of $4.6 billion globally as demand has grown among both Stablecoin native and more traditional clients. We're finding that more and more participants in the payments ecosystem, financial institutions, merchants, acquirers, and consumer-facing technology companies are looking to develop and refine their Stablecoin strategy. As such, we recently launched our Stablecoins advisory practice globally where we are working closely with our clients providing access to training strategy and market entry planning and technology enablement in addition to being a design partner with the temple layer one blockchain initiative we recently announced our participation in the test net of arc a layer one blockchain from circle with both we see visa's role in supporting both transaction processing and delivering value-added services finally we are piloting visa direct stablecoin payouts allowing platforms and businesses in the u.s. to send payouts directly to users or workers or employees stablecoin wallets this innovation expands the reach of visa direct by providing creators freelancers and marketplaces with a stable store of value and faster access to funds even in markets facing currency volatility or limited banking infrastructure the stablecoin opportunity remains additive to what visa is doing today and we will continue to invest where we see the greatest demand on ramps and off ramps settlement money movement consulting and other value-added services we believe that visa is well positioned as a global trusted technology provider to deliver a full stack of bank and enterprise-grade infrastructure that our clients need to build the future of their business on chain. Stablecoin is just one way that we are enabling money movement. We also have continued to make enhancements in our Visa Direct and commercial solutions capabilities. In Visa Direct, we have continued to deepen relationships with with existing partners like Acquirer Nuve, who has expanded their agreement to include Visa Direct to account in addition to card in more than 30 countries. After initially enabling Visa Direct in 25 markets in 2023, PayPal's Zoom recently expanded its Visa Direct cross-border reach to more than 60 markets. In our B2B or commercial solutions, we continue to create compelling, purpose-built offerings with a number of our services. In Europe, we've expanded our partnership with Revolut to launch Titan in the UK, an ultra-premium card designed for high-growth companies that attracted thousands of business customer sign-ups on day one. Also in Europe, Eden Red Paytech has chosen Visa as its strategic partner to expand across multiple B2B use cases with our solutions including open loop workplace benefits open loop fleet and mobility B2B travel insurance payouts and procure to pay another area of innovation and expansion in the services and solutions layers of the visa as a service stack has been issue or processing visa has been in the issuer processing business for over 30 years we have continued to invest in this space by enhancing dps but also through the acquisition of pismo many issuers around the world are seeking to upgrade their technology stacks to ensure they can deliver for customers in a digital age visa's issuer processing capabilities enable clients to have one connection to Visa from which they can access our other solutions and services such as network products, value-added services, tokenization, risk products, and more. One of the two agreements I would highlight this quarter is PISMO's first commercial offering since the acquisition with Banco Bisse in Chile. In collaboration with expense management platform Mendel we will offer a business credit corporate issuer processing program for Banco BSA and their large and middle market B2B clients. The second agreement is PISMO's first fleet card offering with Finance Now in New Zealand. Visa will also provide fleet card issuance, tokenization, and risk services as well. We will continue to look for ways to invest in processing to both modernize and enhance payment systems globally and accelerate the adoption of our value-added services. The final area I want to highlight is our risk and security solutions. As you know, we closed on our acquisition of FeatureSpace just over a year ago, and we have continued to invest in this platform to provide a holistic, AI-driven solution for our clients before, during, and after a transaction nets part of nexi group in europe has chosen feature space to expand fraud prevention for 150 banks across nordic and central europe regions leveraging cloud hosting and advanced fraud models another ai-powered solution visa account attack intelligence was announced in 2024 in the u.s to help clients prevent enumeration attacks which are when bad actors systematically initiate e-commerce transactions to obtain valid payment credentials. The results of this solution in the U.S. have been impressive, with over 60 billion transactions scored and nearly 600 million suspicious transactions identified in the last 12 months. We are now investing in its market expansion with launches in the rest of our regions where we are also seeing strong results. In LAC, for example, in just six months, we have almost 90% of clients already activated and have prevented more than $10 billion of fraud. We have brought our network agnostic risk solution, Visa Advanced Authorization, to more countries as well, including recently securing the business from Morocco's national switch, switch El Marib, to score all domestic transactions. We have also expanded our A-to-A risk solution, Visa Protect for A-to-A, to two more countries this past quarter, with a half a dozen more planned by the end of the year. Of course, these represent just a small set of examples, and throughout the quarter, we have developed many more solutions that will help us drive long-term growth. Collectively, all of our efforts produced 15% year-over-year net revenue growth with our growth pillars continuing to deliver very strong results. Commercial and money movement solutions, constant dollar revenue grew 20% with 10% constant dollar commercial payments volume growth and 23% Visa direct transaction growth. Value-added services, constant dollar revenue grew 28% and represented around 50% of our overall revenue growth in the first quarter. These results and our feedback from our clients give us confidence that our strategy is working and we are investing in the right capabilities to position Visa and our clients and partners for the future. Visa is delivering breakthrough innovations that redefine what's possible in payments as we enable our partners to achieve global scale quickly and securely. Now to Chris, where he will discuss our financial performance.

Thanks, Ryan, and good afternoon, everyone. We had a very strong start to our 2026 fiscal year, driven by strong driver growth, a strong holiday season, and continued execution of our strategy across consumer payments, commercial and money movement solutions, and value-added services. Business drivers remain strong and relatively consistent with Q4. In constant dollars, global payments volume was up 8% year-over-year. Cross-border volume, excluding intra-Europe, was up 11%, and total process transactions grew 9%. Fiscal first quarter net revenue was up 15% year-over-year, with the outperformance largely driven by stronger-than-expected value-added services revenue, lower-than-expected incentives, and stronger-than-expected commercial and money movement solutions revenue. These three factors more than offset lower-than-expected currency volatility. First quarter revenue was up 13% in constant dollars. EPS was up 15% year-over-year, better-than-expected, primarily due to stronger-than-expected net revenue growth. EPS was up 14% in constant dollars. Let's go into the details. U.S. payment volume was up 7%, with e-commerce growing faster than face-to-face spend, reflecting resilience in consumer spending. Credit was up 7%, and debit was up 6%. The slight step down in USPB throughout the quarter was driven by debit primarily as a result of a visa direct client moving the remainder of its volume to its own solution and a number of other small factors including the loss of some interlinked volumes to the capital one debit migration and severe weather that affected certain spend categories growth across consumer spend bands remained relatively consistent with Q4, with the highest spend band continuing to grow the fastest. We did not see a deterioration in the lower spend band, and across our volume, both discretionary and non-discretionary spend remain strong. Honing in on the holiday season specifically, which we define as the period from November 1 to December 31, I would note a few items. In the US, consumer holiday spending growth was in line with last year, reflecting continued strength in retail, an improvement in fuel, and some moderation in other spend categories. Focusing on retail, holiday spending growth was slightly better than last year, driven by strong growth in e-commerce, which continues to take on a greater share of consumer retail spend. In several key countries around the globe, we saw similar trends, with consumer retail holiday spending growth up from last year, led primarily by e-commerce growth. First quarter total international payments volume was up 9% year-over-year in constant dollars, generally consistent to the growth we've seen over the past several quarters. Now to cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Q1 total cross-border volume was up 11% year-over-year, consistent with Q4. Cross-border e-commerce volume was up 12%, slightly below Q4, primarily from lower growth in cryptocurrency purchases. Travel-related cross-border volume was up 10%, consistent with Q4. We saw continued strength in commercial volumes, and we started to see improvement in US inbound from Canada. With that as a backdrop, I'll move to discuss our financial results, starting with the revenue components. Service revenue grew 13% year-over-year versus the 9% growth in Q4 constant dollar payments volume, primarily due to pricing and card benefits. Data processing revenue grew 17% versus the 9% growth in process transactions, primarily due to pricing strong value-added services performance and higher cross-border transaction mix international transaction revenue was up six percent below the 11 increase in constant dollar cross-border volume growth excluding intra-europe even with the favorable fx we saw much lower than expected volatility with additional negative pressure from mix and hedging other revenue grew 33%, primarily driven by growth in advisory and other value-added services and pricing. Client incentives grew 12%, lower than our expectations due to one-time true downs related to client performance and deal timing. Now to our three growth engines. Consumer payments revenue was driven by strong payments volume, cross-border volume, and process transaction growth. Commercial and money movement solutions revenue grew 20% year-over-year in constant dollars. CMS revenue was better than expected, driven primarily by our commercial solutions business. Commercial payments volume grew 10% in constant dollars, consistent with Q4 and faster than Visa's overall payments volume growth, primarily due to strong client performance, driven by both new wins and continued cross-border strength. Visa direct transactions grew 23% to 3.7 billion transactions, with strength in both domestic and cross-border. Value-added services revenue grew 28% year-over-year, in constant dollars to $3.2 billion, driven by strength across all portfolios. Value-added services revenue growth was better than expected, primarily due to greater demand plan for our advisory and other services, especially in marketing services. Operating expenses grew 16% above our expectations, primarily due to an unfavorable FX impact from balance sheet remeasurement and higher than expected marketing from both timing of marketing spend and marketing services related expenses, some of which are associated with the stronger value added services revenue I just mentioned. Non-operating expense was $4 million, better than our expectations, primarily due to investment income. Our tax rate for the quarter was 18.4%, slightly higher than expected due to the timing of the resolution of a tax matter. EPS was $3.17, up 15% year-over-year, with an approximate one-point benefit from exchange rates and a minimal impact from acquisitions. In Q1, we bought back approximately $3.8 billion in stock and distributed approximately $1.3 billion in dividends to our shareholders. We also funded the litigation escrow account by $500 million, which has the same effect on EPS as a stock buyback. At the end of December, we had $21.1 billion remaining in our buyback authorization. Now, let's look at drivers through January 21st. with volume growth in constant dollars. U.S. payments volume was up eight percent with credit up nine percent and debit up six percent year over year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 11 percent year over year with e-commerce up 12 percent and travel up 10 percent. Process transactions grew nine percent year over year. Moving to our guidance. Now that a quarter has passed since our initial FY26 commentary, I would note the following on our key assumptions. As we regularly say, we are not economic forecasters, so we're assuming the macroeconomic environment stays generally where it has been, and consumer spending remains resilient. So no change. On pricing, we also have no material changes, with the benefits of new pricing expected to be similar in magnitude as last year and the majority in the back half. What that means from a cadence perspective is Q2 would see a relative step down in the year-over-year growth pricing contribution from Q1. On incentives, we had true downs and deal timing that helped in Q1 that we do not expect will carry into Q2. As such, this This implies a step up in the growth rate from Q1 to Q2 with Q3 continuing to have the highest year-over-year incentive growth rate and the full year remaining relatively unchanged. On volatility, it has been much lower than we expected so far this year, and we are assuming that that volatility continues at current levels for the rest of the year, implying a larger drag for the rest of the year than in Q1, and with Q3 having the toughest comparable to last year's higher levels. We pool these assumptions together on an adjusted basis defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentations for more detail. For the full year, we have no material changes in our expectations for our adjusted and nominal net revenue growth we still expect our full year adjusted net revenue growth to be in the low double digits reflecting an anticipated weaker volatility environment for the rest of the year that's that is offset by the q1 outperformance and higher utilization of our products and services on the expense side we have no material changes to our prior full year guidance and still expect adjusted operating expense growth to be in the low double digits for the year. As a result of Q1, our expectations for non-operating expense are now between approximately $100 and $125 million. On our tax rate, as a result of the claim of right tax benefits related to recent and anticipated legal settlements, we now expect our full year rate to be lower than we guided between 18 and 18 and a half percent i should reiterate that we still expect our long-term tax rate to be between 19 and 20 percent this implies adjusted eps growth in the low double digits albeit a bit higher in the range than previously guided primarily due to the change in tax rate moving to q2 financial expectations we expect q2 adjusted net revenue growth in the low double digits. The primary reasons for the step down from Q1 net revenue growth include the lower contribution from pricing, lower volatility, and higher incentive growth. We expect adjusted operating expense growth in the mid-teens, about a point above Q1 adjusted operating expense growth. This reflects the step up in marketing related expenses primarily due to the Olympics and FIFA. And you may recall that Q2 last year had lower than expected operating expense growth due to timing. Non-operating expense is expected to be about $30 million. And our tax rate in the second quarter is expected to be around 16.5%, primarily as a result of the claim of right benefits I mentioned previously that we expect to realize in the second quarter. As a result, we expect adjusted second quarter EPS growth to be in the high end of low double digits. As always, if the environment changes and there are events that impact our business, we will remain flexible and thoughtful on balancing short and long-term considerations. It's an exciting time in payments, and we're confident in our strategy and investments to fuel Visa's future growth. And now, Jennifer, I'll hand it back to you.

Thanks, Chris. And with that, we're ready to take questions.

Thank you. If you would like to ask a question, please press star 1 and clearly record your name. You will be announced prior to asking your question. To ensure all questionnaires are heard, we ask that you please limit yourself to one question. Once again, to ask a question, please press star 1. To withdraw your question, press star 2. Dan Perlin with RBC Capital Markets, your line is open.

Thanks. Good evening, Miron. I wanted to dig in a little bit on the opportunities around value-added services, but specifically around purpose-built offerings for events.

So here we're really talking about the Olympics and World Cup, given that value-added services is a much bigger part of the business today than the last time that occurred.

Yeah, so let me see if I hit the corner of the question, Dan. So first of all, let me just start with these sponsorship assets that we have. They're obviously marquee sponsorship partnerships, talking about, for example, this year, FIFA, this year, Winter Olympics, you know, global, very, very global in nature. and what we have through our sponsorships is the ability to pass through those rights to our clients and partners all over the world and that's what we do our value added value added services sales teams go to market they sit with our clients many many months in advance of these programs and they design programs that are bespoke and custom built for our clients to help them grow their businesses so for some clients those might be advertising campaigns that we develop together with them in support of maybe a sweepstakes for their card holders things like that for other clients they might want to create client events for their private banking clients at one of the fifa games in the u.s canada or mexico so in that example our team works with them to build bespoke events, obviously branded for the bank or financial institution and those types of things. So it's a very busy time of year for us. It's a very, very busy year for us. There is a ton of demand from our clients. And, you know, the great thing about this is not only are we helping our clients, not only are we generating revenue from these services, we're deepening our partnerships with our clients. And so, you know, we get more renewals because of them. We get more business because of them. And so we feel really good about it. Next question, please.

Our next caller is Darren Piller with Wolf Research. Your line is open.

Maybe we just touch on what you're seeing strengthen. That's actually, it seems like it's offsetting the lower than expected FX volatility, such that you're able to maintain your full year guide for revenue growth. I know VAS and CMS seems to be standing out pretty well. And just if I could just throw one more about capital return, have you guys thought through any changes given where the market is placing valuations now over capital allocation buybacks

baby's picking up a notch thanks guys okay hi darren um well yeah let me jump in uh value-added services in particular we saw in q1 really great performance strong execution strong client demand ryan talked about some of that around some of the events but the strength was really quite broad base we saw strong growth year over year in all four of the portfolios that we talk about issuing solutions acceptance risk and security and advisory the the team continues to execute very well across that and so when when we think about the performance and then of course cms had had a very high growth quarter as well performing above what we expected so when we think about the full year expectations those are the moving parts that we talked about we said volatility it you Obviously, it's hard to determine where that's going to go, but given the persistent low that we saw in Q1, if we extend that throughout the rest of the year, that does provide for more downside than our original expectation, but that is being offset by strong performance that we saw in Q1. And the momentum that we have in the business that we anticipate will continue throughout the rest of the year, and those two become largely offsetting. To your second point around capital return, as you know, Darren, our approach to capital return and share buyback has largely been programmatic um and we've executed on that very consistently uh throughout our history um but at the same time you know we do take advantage uh when we see opportunities when we think the market is uh under pricing our stock and we see an opportunity we'll lean in as well and and uh we'll continue to look for opportunities to do that as well next question please thank you

will nance with goldman sachs your line is open

hey thanks for taking the question uh today i i wanted to ask just uh the obligatory question on the regulatory environment tcca has been and then there's quite a bit just you could share your updated thoughts on you're thinking about i guess the the risk to the business from that potentially going forward as well as you know how you're thinking about recent conversations on the hill and you know the likelihood of that uh becoming a reality thank you for taking the question hey will you cut a little out when you

asked about the specific thing was it ccta you mentioned or something else yeah it was it was

ccca kind of effects of implementation as well as you know recent conversations on the hill and

likelihood of passing yeah so um as you'd expect we're very engaged on the hill we're very engaged with members. As you know well, there's many things floating around. And, you know, we view it as our job to educate elected representatives on the impacts that the various policies that are being floated around could have. In the case of CCCA specifically, we've talked extensively in this call and other places about our view, and it's, you know, it hasn't changed. It's very harmful and it's just simply not needed so you know when i have a chance to talk to elected officials and the rest of my leadership team does like they're listening they're understanding you know these people don't live in our industry every day so you know they they do need the time to understand it you know when we talk to them about why it's not necessary we explain the competitive environment in this business it is intense we have new players entering all the time you know we talk on this call about crypto stable coins bnpl obviously all the competition in the credit card and debit card markets um you know wallet players a to a we take them through and explain you know this competitive environment and we also explain why the market is working so well and there's no need for government intervention you know the second thing we explain to them is just how harmful it would be i mean this legislation would have far-reaching negative consequences at a time when you know the economy certainly doesn't need that consumers and small businesses would see reduced access to credit you know rewards would be eliminated entirely there'd be fewer credit card options and by the way weaker security protections less innovation all these things and we explain why so i think this is just going to be um this is going to be part of what we all do regularly because there's elections you have new elected officials they're very busy with lots of other things and so we just have to continue to remind them of the impacts whether it's ccca or anything else for that matter next question please adam frisch with evercore isi

your line is open sir thanks guys uh nice results uh could you double click into the much better than expected growth in commercial and what you saw there if it was just a great quarter or did something unlock in a market with immense potential but i think previously was supposed to be a little bit more slow and steady and then um would appreciate if you could provide just a quick perspective on spending trends around the world maybe some color on what you're seeing in the major regions and to the extent you can some insights on affluent versus mass thanks guys

hey chris let me start a little bit on commercial from a business perspective then you can follow up on the numbers and then you can hit the the other questions fed in trends yeah i think what you're seeing in commercial is the results of the strategy we've been talking to you about now for um really for a few years. And, you know, I think just credit to our teams, like we've been shipping great product. Our sales teams have been engaging with players all around the world. We've been winning. You know, when we think about the commercial space, we've been talking with you all about three different types of opportunities. And we're having great success across all three of them. You know, we talked about converting more small business and medium business spending. and you know what's an example i'd point to there i you know point to um the chase sapphire reserve for business product um you know that was a portfolio win that we announced a great product in the market that's doing exactly that you know the second opportunity we talk about is scaling large and middle market card and virtual payables use cases and and again that's an area where we've been shipping some great product and having some great client wins i'd point to our trip.com global virtual travel card issuing business i think it's a great example there and then the third opportunity um the third leg of this strategy and we've been talking to you all about is delivering product innovation and network flexibility to help our partners reach under penetrated spend and you know i i think it was maybe the last call or call before that i mentioned um you know our win at bmo up in canada where we launched our network agnostic enhanced spend management capabilities um with them and you know that's going to allow them to really capture some of that under penetrated spend so i think it's the strategy it's the results we've been shipping great product having great client wins you know like the ones that i mentioned and then chris you

want to pick up on some of the numbers sure uh i think ryan covered uh cms and vcs so let me just hit on some of the question you had around some of the regional volume numbers so when we look at our international volume in total, which was 9% this quarter, that was largely in line with what we saw last quarter, which was 10%. And if you think about the difference in that, in Q4, we did see some idiosyncratic things that sort of helped the international volume growth to be 10%. And so when you normalize for some of those things, we see a lot of stability. As you click into each of these regions, some of these things do show up in some of the regional stories. So if I do sort of a tour around the world and give a little bit of high-level commentary, in Europe, payments volume was relatively consistent with Q4. We continue to execute well, and we're seeing the benefit of some of the wins that we've had there. in Samia also, you know, that was down maybe a couple points from Q4. And that's being impacted by some of those idiosyncratic things that I talked about. But still very strong growth, very strong growth. Let me be very clear about that. One of our fastest growing regions. But it was really related to the timing of promotional campaigns that we saw in Q4. Maybe the last one I'd call out is AP as well. AP is growing low single digits, a little bit slower than Q4. But that was one that we also called out before in terms of timing of tax payments that we saw in Asia. And so when we normalize for some of these timing differences, we're seeing relative stability across international payments.

Next question, please. Sanjay Sakrani with KBW. Your line is open, sir.

Thank you. I know you talked about in the quarter that.

Sure. Let me try to address it. Yeah, you know, just building on what I said earlier about the strong start to the year and that's obviously we don't guide to growth pillars, but you know, a lot of the things that we've talked about, you know, Q1 being 28% that is above where we expected it to go in, but it's also, you know, in line with the momentum that we've seen, we've seen growth in the 25, 24, mid 20s for some period of time, it's really a reflection of, you know, similar to what ryan was saying about cms it's a reflection of the fact that we're executing against our strategy we're investing behind it uh we you know we have a clear strategy and a clear addressable market that we're going after the teams are certainly doing a really really great job about that um you know some of the things also just to tie into some of the other conversation we've been having the first question is around event and this year is a unique year that we do have two events, both FIFA World Cup and the Olympics. We've talked about how that's going to benefit marketing services in particular, which lands in sort of the other revenue line. That is a business where, you know, clients are super excited to engage with us and activate and have access to these sponsorships, and we're excited about that. But that does also contribute to some of the revenue, some of the expense reasoning that we talked about. And so let me talk about that real quick so with both those two big events you know from an expense standpoint we see a little bit more quarterly variability this year than a normal let's say a typical year when we went into the year we said the expense associated with these two events will be in primarily peaking in q2 and q3 and so therefore as we look at sort of q1 and q2 we do think half one expense is a bit higher than have to as a result of that but it really is associated with incremental revenue that we're capturing uh um related to these two events and so you know we're happy to do that and

obviously clients are thrilled as well next question andrew jeffrey with william blair your

line is open thank you uh good afternoon appreciate you taking the question i wanted to ask a question on the flex credential, which is really intriguing and recognizing it's very small as a percent of your total credentials today. Could you maybe sort of frame out a growth trajectory for us? Is there a point in time where you think about flex really bending the growth curve for Visa? And I'm just trying to dimensionize what it can mean over the next, say, three, five, seven years

for your revenue growth. It's still early in the development of flex. I talked about you know, some of the wins we had this quarter and others. I also talked, I think, in my prepared remarks about some of the expansion opportunities we have in the pipeline. Clients are very excited about it. You know, we, like, if you just step back for a sec, you know, we think about the flex credential like the Swiss Army knife of payments. You know, like, it's got multiple funding options that are all packed into one card. And that resonates with different players across the ecosystem. You know, you look at a SMCC in Japan, who, you know, they're more of a traditional bank, and they launched this product to bundle, you know, credit, debit, rewards, etc., all into, you know, one product. You know, I've mentioned on this call in the past, BNPL players like Affirm and Klarna, and now, as you heard in my prepared remarks, Block, who are able to take BNPL offerings that they used to have to go build out merchant by merchant by merchant around the world, which is obviously very difficult, time-consuming, and costly. Now they can offer their users a VisaFlex credential, and they can go use the BNPL offering anywhere where Visa is accepted, which is all over the world. And it kind of goes on and on. So in terms of the growth impact it's going to have, we're still early in the sales cycle. Like you said, these numbers at this point um you know we're small in the context of our 5 billion credentials but you know when you look at other things that we've done like tokenization when you look at visa direct you look at some of the other innovations that we brought to market it you know we follow a similar strategy and path build great product get it out there in the ecosystem and then and then go at it year after year after year to ultimately help serve our clients and grow the business next

question thank you tingjin wong with jp morgan your line is open sir thanks so much hi ryan

kristen jennifer i want to ask on the issue of processing side if that's okay just i heard some good wins in dps like block and you talked about the pismo expansion so it's got just got me to thinking how much have you invested in both of these assets from a tech perspective especially it feels like there's some momentum on the processing side and maybe can you discuss if the TAM has changed around issuer processing love to hear just an

update on that thanks attention no change in the TAM it's enormous I mean you think about you think about the the opportunity every bank on the planet except a few needs to go through the process of modernizing their tech stack whether that be, you know, debit issue of processing, which is where DPS is focused in the U.S. in a more narrow place, but more broadly, their whole entire issue of processing stacks and their core banking stacks. And, yeah, we've definitely been investing product and engineering resources into both. I think we've been shipping some great products in both, which is, you know, what's driving the wins, both with, you know, more traditional financial institutions and with fintechs like you referenced. and pismo especially you know our thesis um when we bought pismo was that our clients were facing big decisions on how they could modernize their tech stacks and ultimately move into the cloud and that's you know that's what that's what's proving out is we're we're having great sales interactions with financial institutions all around the world and when we're able to take them through the pismo capabilities and show them that it's cloud native you know provides issuer processing core banking it does it for all products you know debit credit commercial you know current accounts ddas etc um we're getting a lot of uptick now you know these are long sales cycles you know you know a a bank kind of changing out it's it's um you know it's core banking infrastructure moving from on-prem into the cloud like these are big decisions they take time. And we knew that going into buying Pismo. And, you know, we'll continue at the sales cycle, continue to ship great product on it. And we're very excited about the space.

Next question, please. Thank you. Ramsey Ellisal with Cantor Fitzgerald. Your line is open.

Hi, thank you for taking my question this evening. I wanted to ask about your commentary on stable coins at $4.6 billion of settlement. It's a small number, but it's ramping seemingly quite quickly. Do you expect more growth in stablecoin flows to be related to settling consumer retail payments? Or do you see the bigger opportunity for Visa on sort of the disbursements, money movement side of things? And just one quick point of clarification for Chris, you said there was some pressure on cross-border revenues from low effects of all hedging and mix. What did you mean by mix?

yeah so let me um let me just try to frame this i think the short answer is the latter but let me um let me unpack that you know in terms of stable coins the areas where we see product market fit are generally the areas around the world with significant tams and areas where we're actually under penetrated today you know what is that so one is you know it's countries around the world where there's high currency volatility or hard-to-access U.S. dollars, and we've had great success issuing Visa credentials. I think I said in my prepared remarks, I talked about this, now in more than 50 markets around the world to provide on and off-ramps for stablecoins. And, you know, that's an area where there's great product fit, product market fit. The second area where we see good product market fit is around cross-border, whether that's remittances at the consumer level, or whether that's B2B payments, or even B2C payments for disbursements. Another area of opportunity, another area where we're generally underpenetrated, another gigantic TAM. And then coming back to the beginning of your question, we're seeing a lot of interest. As you noted, the numbers are still small in the big scheme of things, but the growth rates are very high of settlement on our network with stable coins. When we have partners that settle on our network with stablecoins, they're able to get access to seven day a week settlement, for example, because, you know, with stablecoins, we can settle on Saturdays and we can settle on Sundays, even when correspondent banking is not generally available. and that creates more liquidity for partners and clients they're able to get access to settlement flows faster in the case of some instances where they might otherwise have to hold collateral during a weekend they don't have to do that so yeah i mean we're very excited about the opportunities i guess just to be very clear about it um to the beginning of your question we don't see a lot of product market fit in developed digital payment markets like the united states so like you know the uk or europe for stablecoin payments you know as i said before in the us if a consumer wants to pay for something using a digital dollar they have ample ways to do that today they can pay from you know their checking account or their savings account it's become quite easy to do so we don't see a lot of product market fit for stablecoin payments and consumer payments

in digitally developed markets hey ramsi uh i'm going to tackle the second part i'm glad you asked the question about the commentary the prepared commentary on international transaction revenue and that's the first place i'd start i'd differentiate because of the way you asked questions that cross pressure on cross-border yields international transaction revenue does not equal uh one-to-one cross-border revenue cross-border revenue uh lands in all of our service lines it lands it contributes to the 15 growth we saw across the business it contributes the 17 percent growth in data processing and it also obviously contributes the international transaction line and and i will say uh when we look at the cross-border business in total obviously the volumes have remained strong and stable uh this business remains high yielding and very profitable and so it remains a very healthy business now to your specific question around you know the commentary around uh the difference between international transaction revenue i called out three things i won't go through them all uh but the first one and the biggest one was volatility and we talked about you know sort of the low currency volatility and the second one was mix which is the one that that you've talked that you brought up um so as we've talked about mix in prior quarters and really this is talking about the composition of yields across our business uh different clients different products different regions have different yield and as growth rates across these different items vary, then it can have a mixed impact. This quarter, the one I note is Visa Direct, which continues to grow fast and also very profitable, but typically has a lower yield than carded transactions. So to the extent Visa Direct cross-border transactions are growing faster than carded, then that's going to mix the yield down. And so that's an example of mix. Next question.

Thank you. Dan DeLibb with Mazuho. Your line is open.

Oh, hey, guys. Great quarter. Thanks for letting me ask the question. I just have a follow-up on the PISMO update. Sounds like it's off to a really good start, and you're making a lot of progress. Ryan, can you maybe update us on how PISMO is trending in terms of wins with large versus small banks, and how much bigger do you think PISMO could be in two to three years? Because it sounds like it's a great business here, and you're getting a lot of traction. Thank you.

Yeah. Yeah, as I mentioned, we remain very excited about it. You know, the large versus small bank question, it's really both. You know, the smaller players tend to be the fintechs. You know, the other part of our thesis when we bought Pismo beyond what I said earlier was fintechs are limited in their capabilities that they have to drive international expansion in many markets around the world. Often a fintech will grow up in one country and then want to expand. And what they quickly run into is a challenge. They can't find a technology partner that can help them scale to the next 5, 10, 15 countries. So on the smaller fintech side of things, that's where Pismo has been a great fit, right? Because it's cloud native, we're able to move with fintechs and help them expand broadly around the world. By the way, that helps the fintech. That's great news for Pismo because it drives revenue, but it's really good news for Visa because we're able to help more fintechs scale more broadly into markets that are underserved with visa credentials so it's a real win-win-win in that sense um on the the more traditional financial institutions and and the bigger banks as as you referred to them as it's more about kind of engaging with clients on this journey that they're embarking on moving from on-prem legacy technology stacks to the cloud and that's for you know that's for issue processing that's for core banking. And what we're finding is that when these big, sophisticated, large clients really dig through the PISMO capabilities, they're extraordinarily impressed and they find what we found, which is when we found PISMO, that it really is the best cloud-native issuer processing and core banking stack on the planet. All right, we'll take one more question, please.

Thank you. And our last caller is Hershwita Waprawit from Bernstein. Your line is open.

Good afternoon. I want to ask about tokens. As you said, they've grown to over 17 billion, three times the number of cards you have. We know the authorization rates and fraud deduction benefits, which are meaningful. It's also needing the agenda capabilities. My question is, how does this proliferation of tokens and the benefits it brings changes the conversation you have with your issuer customers and merchants and merchant acquirers? does it further change the nature of those conversations from network fees to the value of bringing and i know there could also be more opportunity for pricing for value here thank you

thank you um you know as i mentioned when i prepared remarks were the progress that we've made with token and excited about the opportunities that we have to ultimately meet our goal of 100 percent um tokenized transactions um i want to before i answer your question directly i want to go back to something I alluded to earlier, you know, to get to the point where we are right now with 17 and a half billion tokens and 50% plus of transactions, it has been a multi-year journey. You know, our teams in countries around the world have had to go, you know, client by client, both the issuers and the acquirers and merchants, as you asked about, get them to embed the tokenization into their tech stacks, help them understand the value of it, and do that work for many, many years, which has led us to where we are. The nature of the dialogue, both with issuers and especially with merchants and acquirers, has been great. If you're a retailer, big or small, your number one goal is more sales. And when we're able to show the sales uplift that tokenization provides, it's a real aha moment. You know, the other thing that is very much on the minds that you alluded to of merchants and acquires all around the world is fraud reduction. And when we're able to show them the impact that tokenization can have on their fraud rights, they're very, very impressed. So what we're doing right now is we're just continuing that journey. We're engaging with merchants and acquires and issuers on case studies and showing them the impact, like I described in my prepared remarks. We're really focused on merchants who have large stored credentials cards to file, and we're showing them the benefits of converting those cards on file to Visa tokens. We're focused on guest checkout. I mentioned in my prepared remarks the enormous progress we've made reducing guest checkout, but it's still 16% of Visa e-commerce around the world. That means 16% of the transactions our customers aren't as delighted as they could be if those were as simple as a tap or a biometric authentication using a Visa token. So we're working with those merchants to try to put in place the Visa token solutions to improve those user experiences. And we're also focused on new markets, you know, bringing tokens to new markets, both with issuers and acquirers in places like Europe and Samia and Latin America. So we're excited about the progress, but we still have a lot of work ahead of us and we're very

focused on it. And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or email our investor relations team. Thanks again and have a

great day. Thank you all for participating in Visa's fiscal first quarter 2026 earnings conference call. That concludes today's conference. You may disconnect at this time and please enjoy the rest of your day.