Visa Inc. Q2 FY2026 Earnings Call

Welcome to Visa's Fiscal Second Quarter 2026 Earnings Conference Call. Operator Instructions were provided to participants. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over 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 Second Quarter 2026 Earnings Call. Joining us today are Ryan McInerney, Visa's Chief Executive Officer; and Chris Suh, 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 a 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 GAAP basis and all other results on a non-GAAP nominal basis unless otherwise noted. The related GAAP 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 second quarter, net revenue was up 17% year-over-year to $11.2 billion and EPS was up 20%. This represented the strongest net revenue growth since 2022. And when you exclude the post-pandemic recovery and the Visa Europe acquisition, it was the strongest since 2013. Payments volume grew 9% year-over-year in constant dollars to $3.7 trillion and processed transactions grew 9% year-over-year to $66 billion. Our business has incredible momentum. Visa has become the leading hyperscaler of payments globally, and our strategy and Visa as a Service stack will help us drive future growth in 4 important ways. One, we are winning in consumer payments, commercial payments and money movement. Our investments and innovations are paying off in a meaningful way and will continue to drive growth. Two, AI and agentic commerce will expand our addressable market, and our efforts will accelerate Visa's long-term growth. Three, stablecoins and blockchain are significant opportunities, and we have established Visa's role as a key interoperability layer between this powerful infrastructure and real-world solutions for users. And four, value-added services is an even bigger opportunity and has demonstrated its value as a key driver of our growth, now representing 30% of our net revenue, growing at 25% plus in constant dollars. These services have durable competitive advantages as the vast majority are linked to transactions, cards and accounts, and they are only strengthened with AI, reinforcing their importance as a growth lever for years to come. We have deep conviction in our ability to grow revenue well into the future, not just for the next 3 to 5 years, but beyond. I'll go through each of these 4 drivers in more detail. As I mentioned, our investments in consumer, commercial and money movement are delivering meaningful results. We are winning with fintechs, wallets and apps. They are building on our stack, and tapping into our innovation and our vast acceptance footprint, to help hyperscale their growth and ours, capturing both carded and non-carded payments. A few recent examples. Just last week in the U.K., we partnered with TikTok to launch a debit card specifically designed for content creators. The Creator Card enables faster access to income from TikTok LIVE, brand partnerships and platform payouts so that creators can spend, plan and reinvest in their business quickly. In Japan, a country with nearly 50% of spending in cash, we are collaborating with mobile payments app PayPay and their 40 million monthly transacting users and millions of acceptance locations to deploy new domestic and international solutions. With Visa, PayPay plans to grow Japanese merchant acceptance, utilize our Visa Flex Credential to integrate multiple payment methods into a single Visa credential and expand internationally. Shifting to commercial and money movement solutions, where revenue grew 24% in constant dollars as we continue to reinforce the value of our offering with expanded reach and tailored solutions. Visa Direct, the largest money movement network globally, now has more than 18 billion endpoints. This vast network is helping us win new business and power more transactions. In Q2, we had 3.7 billion transactions, up 23% year-over-year. In the U.S., X will soon begin early public access for X Money, enabling push and pull payments for their millions of users with Visa Direct, and payments anywhere Visa is accepted using a Visa Flex Credential. In Mainland China, UnionPay International will connect Visa Direct with UnionPay's Moneyexpress, enabling real-time cross-border remittances and payouts to reach more than 95% of their debit cardholders through a single integration. Moving to commercial, where this quarter, we drove 11% payments volume growth in constant dollars with strength in our travel, fleet and premium business reward portfolios. Commercial cross-border volume now represents the highest percentage of both commercial volume and total cross-border volume in Visa's history. In Travel, we expanded our agreement with fintech issuer processor Highnote to enable their 8 OTA platforms with our flexible interchange product for virtual cards called Visa Commercial Choice for Travel, which also includes specific automation, controls and reconciliation across the travel value chain. In Fleet, we signed a new agreement with Westpac that expands our partnership and demonstrates the potential for Pismo for commercial card modernization. We also secured their commercial card portfolios, including credit and debit for small business. Another example of deepening relationships with our clients is with Scotiabank. Across 11 countries in Latin America and the Caribbean, we have created a new strategic agreement, consolidating our relationship and expanding into new areas of issuance focused on affluent and small businesses. So our momentum in consumer, commercial and money movement is clearly strong and will strengthen with agentic commerce and stablecoins. I'll start with agentic commerce. We believe AI and agentic commerce will expand our addressable market in 4 important ways. First, like eCommerce and mobile commerce before it, agentic commerce will accelerate the digitization of commerce around the world. And just like the acceleration from eCommerce and mobile commerce, Visa will benefit. Second, agents will create significantly more transactions. Agents will intelligently split purchases across multiple transactions, optimizing price, timing and value to the buyer. And importantly, in some use cases, we expect agents will pay for their own data and resource consumption transaction by transaction and event by event, which creates an entirely new category of commerce with micro transactions. Third, we will see accelerated digitization of B2B payments, where there is still enormous friction that AI agents can help remove. They will be able to automate payment initiation directly from invoices and contracts and manage approvals autonomously. In this context, virtual cards and tokenization will become a preferred way to pay and be paid. And lastly, just like the advent of eCommerce and mobile commerce, agentic commerce will increase economic growth generally. Third parties estimate we are looking at a boost of 80 to 150 basis points of incremental GDP growth from AI and when GDP grows, spending grows and digital payments transactions grow. Visa is extraordinarily well positioned to win in agentic for 3 important reasons. Our network, security and trust. Our network has enormous scale, more than 175 million seller locations, 5 billion credentials in 200 countries and territories with nearly 14,500 financial institution clients who have opted in to using this network. Payment security is only going to become more difficult and more valued. With our scale comes over 300 billion transactions annually, equating to an average of about 900 million transactions per day, and all of the data that comes with it. Visa has proven it knows how to manage transaction risk, identity risk and fraud, all enabled by this transaction data. And trust. Visa has well-established trust grounded in our standards and brand. We've set the standards that enable trusted payments in the digital and emerging agentic ecosystem. And a big part of our network, security and trust are Visa tokens. Visa is a proven leader in tokenization, which is foundational in eCommerce and is set to become an essential element of trusted transactions in an agentic world. People overwhelmingly choose to pay with cards face-to-face and online, and they will prefer their agents to pay with cards. And merchants want this, too. We recently launched Intelligent Commerce Connect, which acts as a network protocol and token vault agnostic on-ramp to agentic commerce for agent builders, merchants and enablers. Now while it's early, we are seeing growth in agentic shopping and the emergence of early agentic commerce, real transactions with Visa agentic tokens. And AI continues to evolve. With the AI landscape, we are seeing that Claude, code and other agentic coding assistants will allow anyone to become a developer. It's that easy to work in simple command-style tools like the command line interface, or CLI. These agentic coding assistants are a great example of how we see AI and agentic commerce increasing economic growth as they enable anyone to bring their new business ideas to life. We see a world where we will all design, build and launch digital products and experiences ourselves, engage with digital platforms and buy digital services using the CLI, or a slick consumer-friendly version of one as our interface. The CLI itself is becoming a commerce platform, and we believe that the preference and value of cards will be equally strong for all sizes of transactions, including micro transactions. A key to making this happen is enabling safe, simple and easy payments that are widely accepted by all API endpoints. We recently launched Visa CLI as a proof of concept, which shows how easy it is for a developer, soon all of us, to use their Visa credential to pay for digital services like an image, a website builder or more via the CLI. The early feedback we have been receiving from developers is very positive. And as we move forward, we plan to enable CLI commerce at scale, which means scaling the availability of command line tools and card acceptance by promulgating standards, products, rules and pricing. Over time, we have continued to adapt our technology and commercial model to win when new payments use cases emerge. Transit, vending, parking, subscriptions, app purchases and Visa Direct are all great examples of where we've made purposeful investments to enhance our commercial and technical model to deliver new smaller ticket payments use cases. Agentic Commerce will be another great example. In all of these use cases, Visa cards are providing significant value. They're easy to use, broadly accepted, integrated into the transaction flow, offer privacy, unlike most stablecoins, offer a way to manage liquidity in aggregate rather than funding millions of real-time micro transactions, offer an issuer KYC user, security protections if something goes wrong, and in many cases, cards offer rewards and benefits. We see no other payment method on earth that delivers all of these features. Buyers know this, sellers know this and soon so will agents. We expect more transactions, more value-added services and therefore, more revenue in the years ahead from agentic. Let's shift to stablecoins and on-chain payments. Our strategy and innovations have positioned Visa as a hyperscaling bridge layer between stablecoin and real-world solutions and applications for users. I'll call out 3 important examples. On-ramps and off-ramps, settlement and money movement and blockchain infrastructure. In many countries around the world, especially in emerging markets, consumers and businesses are increasingly using stablecoins as a store of value, essentially on-chain, primarily U.S. dollar-denominated accounts. In these countries, stablecoins are not generally accepted as a means of payment. We are providing on-ramps and off-ramps with stablecoin-linked Visa cards. So consumers in these countries are increasingly using stablecoin-linked Visa cards to spend their stablecoins online and at their local grocery store, petrol station and restaurants where Visa is accepted. Businesses are using stablecoin-linked Visa cards to buy digital advertisements and supplies for their businesses. And we now have over 160 stablecoin card programs globally with key partners such as Rain, Reap and Bridge, and the payment volume continues to grow at a very strong rate, up nearly 200% year-over-year in Q2. Now to my second example, a pragmatic real-world B2B use case, Visa's own settlement capabilities. Last year, Visa settled almost $13 trillion among and between our nearly 14,500 financial institution partners. Nearly all of this was settled in fiat currencies Monday through Friday. We have been enabling our clients to settle with us using stablecoins. So an issuer who's working in stablecoins can pay us in stablecoins seven days a week, and an acquirer or merchant who wants to get paid can get paid in stablecoins. This provides immense liquidity and efficiency benefits. We have just added five additional blockchains for settlement, Arc, Base, Canton, Polygon and Tempo, bringing the total to nine. We currently have a $7 billion annual run rate of stablecoin settlement volume, and it's growing fast, up more than 50% since last quarter. Now to the third example, becoming a key player in blockchain infrastructure. We are actively participating and innovating to ensure Visa plays an important role in emerging payments-focused blockchains. We are design partners for Layer 1 blockchains and have become a validator on Tempo and a super validator on Canton network. Our role as a design partner with Tempo allowed us to play a critical role developing and launching the machine payments protocol card specification that is enabling Visa CLI payments. Running a validator node moves Visa from a blockchain participant to an infrastructure leader. And in the case of Canton, where we are a super validator, Visa also helps govern the network that validates the transaction. Ultimately, we will help operate the infrastructure that can make private regulated blockchain transactions possible. Additionally, we are increasingly providing value-added services to crypto-native partners and traditional financial institution partners to help them expand their stablecoin offerings to better serve their users, which is a good transition to the fourth driver of Visa's growth, value-added services. As I said at the outset, value-added services is a bigger opportunity than ever for Visa. Value-added services revenue grew 27% in the second quarter in constant dollars, and we are just getting started. VAS is inextricably linked to our network business and with that comes significant distribution globally. We have transaction data at scale, and we will enhance that data with AI. We have the brand assets and sponsorships to provide unique opportunities for our clients and Visa to grow, and we are winning because our VAS portfolio of solutions brings powerful capabilities, the trust that Visa stands for, and our commitment to continuous innovation. The vast majority of our value-added services revenue is linked to transactions, cards and accounts. So as we grow consumer and commercial payments, we are also fueling VAS growth. For example, eCommerce transactions are the fastest-growing part of consumer and commercial payments, and many of them utilize our value-added services to help increase authorization rates and reduce fraud. Also, affluent cards are the fastest-growing area of consumer payments and more and more of them have a deep set of card benefits and loyalty services linked to them. Across Visa, AI is making what we do even better, especially for our value-added services. Our new Visa Large Transaction Model is beginning to act as the foundational model for a variety of AI-powered fraud and risk services at Visa. Early results have shown that it can power up to a 5x increase in fraud value capture. Our team has been integrating new AI-enabled features across our suite of VAS solutions, including the recent release of six dispute resolution capabilities. In fact, across all of our services, client adoption has been the fastest among AI-embedded services such as Smarter Stand-In Processing and Visa Provisioning Intelligence. In addition, our brand and sponsorship relationships are highly valued. In our fiscal year 2026, Olympic and Paralympic Winter game sponsorships tracked ahead of plan with more than 100 projects across more than 70 clients and nearly 40 markets. And with FIFA, we have already seen increased activation of cards, spend and engagement from our clients. Our acquired capabilities represent important growth opportunities as well. In Q2, Pismo signed our first clients in France, the Philippines, Paraguay and Romania, reaching 15 new countries since the acquisition. And we're thrilled to announce that Wells Fargo has entered into an agreement to migrate to Pismo's core account ledger as part of its core banking modernization over the coming years, reflecting the strength of the partnership between Wells Fargo and Visa. We recently announced the acquisition of Prisma, a credit, debit and prepaid issuer processor and Newpay, a real-time payment services, bill pay and an ATM network. We believe the combined technology platforms will accelerate the deployment of advanced technologies such as tokenization, biometric authentication, intelligent risk tools and agentic commerce solutions, and help us to grow both our carded and non-carded business in Argentina. Our value-added services are highly differentiated and even more so in an AI world. Before I close, I wanted to say that we are watching the impacts from the conflict in the Middle East closely. Chris will go into more detail about the impact on our business in a moment. Our primary concern is, and has been, the safety of our team and clients. You can see from our second quarter performance that there is momentum in our business, tailwinds behind us, and enormous opportunities ahead of us. We are pushing every day to build the future of payments faster and better than ever before and to make our stack the most capable and valuable way for our partners to connect to the world's payments ecosystem. Our track record, strategy, innovation and Visa as a Service stack will help us drive growth well into the future. Now over to Chris to discuss our financial performance.

Thanks, Ryan, and good afternoon, everyone. We delivered an outstanding second quarter with strong revenue and profit growth, driven by effective execution of our strategy and the resilience of our diversified business model. Drivers remain strong and relatively consistent with Q1. In constant dollars, global payments volume was up 9% year-over-year. Cross-border volume, excluding intra-Europe, was up 11%, and total processed transactions grew 9%. Fiscal second quarter net revenue was up 17% year-over-year with the out-performance largely driven by higher-than-expected volatility, stronger-than-expected value-added services revenue and lower-than-expected incentives. Second quarter net revenue was up 16% in constant dollars. EPS was up 20% year-over-year in both nominal and constant dollars, better than expected, primarily due to stronger-than-expected net revenue growth. Now let's go into the details. U.S. payments volume grew 8% year-over-year, up almost 1.5 points from Q1, reflecting resilience in consumer spending. E-commerce spend outpaced face-to-face spend. Both U.S. credit and debit demonstrated broad-based spend improvement, and we believe both were helped in part by higher tax refunds. Debit grew 7%, up almost 1 point from Q1 and credit grew 10%, up more than 2 points from Q1, with strong travel spend in both consumer and commercial. Growth across consumer spend band saw incremental improvement from Q1 with the highest spend band continuing to grow the fastest. Across our volume, both discretionary and nondiscretionary spend remains strong. We do not see signs of the lower spend consumer weakening in our volumes. Second quarter total international payments volume was up 10% year-over-year in constant dollars, generally consistent to the growth we've seen over the past several quarters. Latin America and Europe payments volume growth was relatively consistent with Q1 in constant dollars. Canada had a more than 1 point improvement from Q1, primarily due to processing days. In Asia Pacific, we saw macro improvements in Mainland China. And in other Asia Pacific countries, we saw strong client performance. In CEMEA, we saw a step down of about 2.5 points in payments volume growth in constant dollars from Q1, primarily due to the conflict in the Middle East. Keep in mind that CEMEA generally represents about 6% of our total payments volume. Pulling it together, globally, our total payments volume growth remains strong, up almost 1 point from Q1 in constant dollars. Now to cross-border volume, which I'll speak to in constant dollars and excluding intra-Europe transactions. Q2 total cross-border volume was up 11% year-over-year, consistent with Q1. Cross-border eCommerce volume was up 13%, 1 point above Q1. While crypto continued to be a slight drag, the improvement was primarily driven by U.S. inbound volume. Travel-related cross-border volume was up 10%, generally consistent with Q1, led by continued strength in commercial and improved U.S. inbound volume that generally offset the impact in the Middle East that was most pronounced in March. With that as a backdrop, I'll move to discuss the financial results. Starting with the revenue components. Service revenue grew 13% year-over-year, versus the 8% growth in Q1 constant dollars payments volume, primarily due to pricing and card benefits. Data processing revenue grew 18% versus the 9% growth in processed transactions, primarily due to pricing, strong value-added services performance and higher cross-border transaction mix. International transaction revenue was up 10%, below the 11% increase in constant dollar cross-border volume growth, excluding intra-Europe. Even with the favorable FX, we had offsetting impacts from volatility, mix and hedging. While volatility was better than we expected for the quarter, it was still below last year's levels. Other revenue grew 41%, primarily driven by growth in advisory and other value-added services, especially marketing services revenue as well as pricing. Client incentives grew 14%, lower than our expectations, driven primarily by deal timing and performance adjustments. Now to our 3 growth engines. Consumer payments revenue was driven by strong payments volume, cross-border volume and processed transaction growth. Commercial and money movement solutions revenue grew 24% year-over-year in constant dollars. CMS revenue was better than expected, driven primarily from performance adjustments and deal timing in addition to pricing. Commercial payments volume grew 11% in constant dollars, up more than 1 point from Q1 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% year-over-year, consistent with Q1, driven by continued strength in domestic and cross-border. Value-added services revenue grew 27% year-over-year in constant dollars to $3.3 billion, driven by underlying business drivers, which included processed transactions, number and mix of credentials and client consulting and marketing engagements and pricing. Value-added services revenue growth was better than expected, primarily due to greater demand for network products for issuers and acquirers and marketing services. Marketing services leverage our brand assets, expand and deepen our relationship with our clients, help them increase engagement with their customers and drive increased spend, all while growing revenue at attractive levels of profitability. As Ryan mentioned, the Olympics and FIFA are exciting opportunities this year, and we also see further expansion opportunities for sponsorships beyond sports. One example was with the music tour sponsorship in Asia Pacific for a popular K-pop group. We completed activations for multiple clients in the region and drove increased payments volume growth and card issuance, which drove revenue for our clients and Visa, in addition to driving direct VAS revenue. For one client, they saw a nearly 30% increase in year-over-year spend as a result of this campaign and another client saw a 50,000 increase in card count in just 6 weeks. Operating expenses grew 17%, consistent with our expectations, driven primarily by personnel and marketing. Non-operating expense was $45 million, above our expectations, primarily due to lower cash balances and higher debt levels and interest rates than forecasted. Our tax rate for the quarter was 16.4%, consistent with our expectations. EPS was $3.31, up 20% year-over-year, better than expected, with an approximately 0.5 point benefit from exchange rates. For our non-GAAP results, Prisma and Newpay increased net revenue and operating expense growth by approximately 0.5 point each and had a minimal impact on EPS growth. In Q2, we bought back $7.9 billion in stock, the highest quarterly buyback in Visa's history, and a tangible sign of our capital allocation strategy at work, and our belief in the long-term value of our company. We also distributed $1.3 billion in dividends to our shareholders. We funded the litigation escrow account by $125 million, which has the same effect on EPS as a stock buyback. At the end of March, we had $13 billion remaining in our buyback authorization. And in April, the Board of Directors authorized a new $20 billion multiyear share repurchase program, putting our total buyback capacity at approximately $33 billion. Now let's look at drivers through April 21 with volume growth in constant dollars. U.S. payments volume was up 9%, with credit up 10%, and debit up 8% year-over-year. For constant dollar cross-border volume, excluding transactions within Europe, total volume grew 9% year-over-year with eCommerce up 14% and travel up 5%. The step down in travel from March was driven by both the impact from the Middle East conflict and Ramadan timing. When you normalize for Ramadan timing, the total April cross-border volume growth was in line with February levels. Processed transactions grew 8% year-over-year. Now let me move to our guidance, which is on an adjusted growth basis, defined as non-GAAP results in constant dollars and excluding acquisition impacts. You can review these disclosures in our earnings presentation for more details. The key message is we are increasing our total net revenue and EPS guide for the full year. For net revenue growth, we now expect low double-digit to low teens. This incorporates the strong year-to-date performance and our current assumptions on drivers, incentives, volatility and expected higher value-added services revenue growth, which incorporates the increased enthusiasm from our clients for the upcoming FIFA World Cup. Let me walk through those assumptions. First, the drivers. We are assuming the broader consumer spend stability continues from a macro perspective. The Middle East conflict has introduced some near-term uncertainty, in particular to cross-border travel spend in the CEMEA region. As we have seen, our spend is incredibly diverse. And as we look to the rest of the year, we are expecting improvements in the U.S. and Latin America inbound travel due to FIFA, and we have the lapping impact of low U.S. inbound growth from last year. Furthermore, cross-border eCommerce continues to grow very well, so we're assuming our drivers overall remain resilient and strong. On pricing, there are no material changes in our pricing assumptions. And as we said before, our new pricing goes into effect in the back half of the year. On incentives, we have no material changes. You may recall that Q3, 2025 represented the low point for incentive growth last year. And as we will be lapping that, we still expect a step-up in the incentive growth rate from Q2 to Q3. On volatility, it was higher than expected in Q2 and thus far into Q3. We are, therefore, bringing our assumptions back up to where we originally guided in October, with Q3 and Q4 more in line with where we exited in Q4 of 2025. On the expense side, largely due to the increased client demand for FIFA-related marketing services, we also expect low double-digit to low teens operating expense growth. We are investing further in marketing-related solutions that will generate incremental revenue around our activations in a high-yielding and profitable way. For example, after we set our budget for the year, we partnered with one client in Latin America with nearly 20 million cards to design FIFA campaigns, tying exclusive tournament experiences to everyday spend. And in just over 3 months since the launch of the campaign, the client reported a 10% lift in active cards, driving payments volume growth and Visa generated $10 million in VAS revenue for delivering these campaigns. And with the first match less than 45 days away, the FIFA campaigns should continue to deliver value to our clients, their customers and to Visa. Our expectation for nonoperating expense is now approximately $150 million as a result of the first half and our increased debt levels and interest rate estimates. We have no change to the range for our tax rate between 18% and 18.5%, although we do believe it will be closer to the low end of that range. This implies adjusted EPS growth in the low teens, also revised up from our prior outlook. For non-GAAP nominal expectations, our acquisitions add approximately 1 point to net revenue growth, approximately 1.5 points to operating expense growth and approximately 0.5 point to EPS growth. Moving to Q3 financial expectations, which again are on an adjusted basis. We expect Q3 net revenue growth in the low double digits. Consistent with the directional comments provided at the start of the year, this low double-digit growth should be the lowest growth quarter of the year. When compared to Q2 growth rates, there are a few dynamics at play. First, higher incentive growth as a result of deal timing and lapping of the low point of incentive growth in Q3, 2025. Second, lower volatility levels with a tough comparable versus the highest volatility quarter that we saw last year. And third, the second half weighted pricing going into effect, which will somewhat offset the first two factors. For those of you connecting the dots to the full year guide, this implies an approximately 1 point step-up in net revenue growth from Q3 to Q4, primarily driven by less of a drag from volatility and stronger marketing services-related revenue. We expect Q3 operating expense growth in the low teens, a slight step-up from Q2, primarily due to FIFA-related marketing. Non-operating expense is expected to be about $55 million. And our tax rate in the third quarter is expected to be around 18.5%. As a result, we expect third quarter EPS growth to be in the mid- to high single digits. For our non-GAAP nominal Q3 financials, Prisma and Newpay will add approximately 1.5 points to net revenue, and approximately 2 points to operating expense growth, and an approximately 0.5 point to EPS growth. 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. To echo Ryan, we firmly believe in the future growth of Visa. We have a proven track record of delivering strong net revenue growth, driven by higher growth in both commercial and money movement solutions and value-added services, underpinned by consistent consumer payments growth, all with industry-leading margins. The opportunity across our entire business is significant, and we are executing against our strategy to capture it as is evident in the financial results that we're delivering. And now Jennifer, I'll hand it back to you.

Thanks, Chris. And with that, we're ready to take questions. As a reminder, please limit yourselves to only one question.

Operator Instructions were provided to participants. Our first question comes from Tien-Tsin Huang from JPMorgan.

Really strong revenue momentum here. Sorry. Just thinking about Ryan and Chris, what you guys went through — was this the largest revenue upside that we've seen in 3 or 4 years? I'm just trying to disaggregate it. What were the biggest factors that drove the upside in the quarter? And how does that change your second half outlook exactly? I don't want you to rehash everything you talked about there, Chris, but just trying to maybe rank the top two or three things.

Tien-Tsin, Q2 was a very strong quarter. We're very pleased with both net revenue and non-GAAP EPS coming in better than expected. In terms of differences versus what we had expected, I would call out volatility — it rose higher throughout the course of the quarter. It was still a drag year-over-year, but it was better than we anticipated. Secondly is our VAS business. We had strong growth across all our portfolios. It was better than we expected, primarily due to greater demand for our network products as well as marketing services. And then incentives grew at 14%, which was below our expectations for the quarter, primarily due to deal timing and performance adjustments. In terms of our Q3 guide, the primary difference, as I said, is our assumptions around incentives remain the same, and volatility was higher during Q2 and we're anticipating that pulling through into Q3. We're continuing to see strength across the breadth of the business, so we're anticipating another strong quarter in Q3.

Our next question comes from Craig Maurer from FT Partners.

I wanted to ask about the agentic commerce discussion earlier in the call. We've seen American Express step out there and take on the risk of a fraudulent agent transaction, and so I'm curious how you can achieve something similar with a four-party network versus a three-party network, when it seems that issuers are going to have to buy in to whatever rule-making you decide on? Or are they going to be left to decide how they're going to deal with that risk? Any discussion there would be helpful.

Craig, this is very early. As the agentic commerce use cases and threat vectors start to mature, we'll adapt and evolve our capabilities and our rules, as we have historically with eCommerce and mobile commerce. If a Visa cardholder experiences fraud, they're going to be protected. That's been part of the promise for Visa cardholders for a very long time. In agentic commerce, we're going to have more transactions that are initiated from authenticated tokens, which will reduce fraud and further protect the ecosystem. Issuers and merchants are going to have more data on transactions and user intent, which can be included in dispute processes. We're working on this with full buy-in from the ecosystem and will evolve our rules as the market matures.

Our next question comes from Matthew O'Neill from Bank of America.

I'd love to follow up on agentic and stablecoin. Specifically, could you step back and give a high-level unit economics top-of-house view? Are these transactions accretive or dilutive? Or are you agnostic, but obviously excited about growth in volume from a small but increasingly important base?

We view our role as a hyperscaling bridge layer between stablecoins/blockchain infrastructure and real-world solutions. We're engaging at all levels in the stablecoin stack and delivering bridge solutions that have very similar economics to our existing products. For example, if someone in Argentina holds $1,000 in stablecoins and uses a Visa debit card issued on top of those stablecoins to spend at local merchants, the economics look similar to our normal products. By investing in building this bridge layer, we're providing real-world utility and delivering economics consistent with what we do today.

Our next question comes from James Faucette from Morgan Stanley.

I wanted to follow up on agentic topic and specifically agent-to-agent transactions. Many of these are micro transactions. Could you talk about some capabilities of Visa and the Visa networks you can deliver in those environments beyond just the transaction, providing trust, et cetera? How should we think about the potential for that to be accretive to volumes?

We're very excited and feel extremely well-positioned. Our network, security and trust are foundational. When agents transact on behalf of users, trust will be paramount. Visa cards are easy to use, broadly accepted, integrated into the transaction flow, offer privacy, allow sellers to manage liquidity in aggregate rather than funding millions of real-time micro transactions, provide billions of issuer KYC users, and offer security protections and rewards. When users decide who to trust, they will fall back on payment methods they trust, and we expect Visa to be that trusted method for macro, average and micro transactions.

Our next question comes from Tim Chiodo from UBS.

I want to talk about two programs that reduce total cost of acceptance for merchants and require more data from the merchant: the commercial Enhanced Data program (CEDP) and the Digital Commerce Authentication Program (DCAP). Could you expand on the importance of these two programs for the payments ecosystem and what that data may mean to Visa?

Both CEDP and DCAP exemplify ways we add value by creating enhanced data payloads so merchants, acquirers and issuers can run more efficient dispute processes, build better risk programs, make better authorization decisions and reduce fraud. Using our position in the ecosystem — whether it's a commercial product platform like CEDP or tokenization platforms like DCAP — we can deliver these data payloads, create incentives across the ecosystem to include the data in the transaction payloads, and enable partners to use that data to improve outcomes.

Our next question comes from Bryan Bergin from TD Cowen.

I wanted to dig into VAS and the underlying strength in network assets and marketing services. It seems like a switch flipped over the last four quarters leading to robust growth. What has worked so well and how are you thinking about sustainability of those contributors?

We laid out a clear strategy at Investor Day a couple of years ago and invested ahead of those opportunities in product solutions, sales, go-to-market and new ways of running the company. For VAS specifically, we've built business units, leadership teams and product road maps and have been deploying those products aggressively, especially AI-driven products in issuing solutions. We outperformed in Q2 in our AI-driven stand-in processing platform and our Visa supplier payment services platform. On the acceptance side, Visa Account Updater outperformed. In Risk and Security Solutions, we saw outsized performance in Visa Consumer Authentication Service, Visa Advanced Authorization and Visa Risk Manager. These AI-driven products are driving broad-based outperformance and demonstrate that the strategy is working and execution is delivering results.

Our next question comes from Harshita Rawat from Bernstein.

I have a question on payments nationalism. There's a growing desire for countries to control payments infrastructure locally. Maybe share your updated perspective on payments nationalism outside the U.S. and how you're engaging with governments?

Nationalism and sovereignty concerns are not new for Visa; we've been addressing them for a long time. Payments are inherently local, and we operate with local teams, local infrastructure and local partners to navigate regulatory, political and market-specific requirements. In Europe, we are deeply committed with a long-standing presence across 38 countries, 29 offices and more than 6,000 employees. The business is strong and growing — we added nearly 30 million cards in the last year and expect to add another 30 million based on wins already closed. There will be more competition in Europe and globally, including domestic digital wallets and initiatives like Wero and a potential digital euro, but we continue to deliver value through the Visa network, brand and trust and aim to win more than our fair share.

Our next question comes from Darrin Peller from Wolfe Research.

Chris, how much of the VAS strength was driven by the World Cup versus sustainable drivers? Ryan, have you seen a step function in demand for fraud protection services given the increase in AI-driven fraud and bots?

Yes. We've seen more demand across the board for our fraud products. Two things are driving this: the environment and client concerns, and that clients view Visa as a trusted provider. Fraud is a top concern for CEOs of issuers, acquirers and merchants. Our Visa LLM built on billions of transactions is powering models that are delivering 2x to 5x improvements in value capture. We're seeing a step-up in demand for these products and services.

Darrin, to add, we're seeing broad-based strength across portfolios. While we do anticipate accelerated marketing services growth this year with the Olympics and FIFA, that doesn't detract from growth across all portfolios. In Q2 specifically, network products were a driver of outperformance. Marketing services deepen client engagement and help clients grow their Visa business with us, creating a strong flywheel. We remain optimistic about the durability of that business.

Our next question comes from Andrew Bauch from BMO Capital Markets.

You emphasized marketing and other value-added services growing at attractive profitability. As VAS becomes a larger share of revenue and scales, how should we think about incremental margins relative to Visa's historical network margins over time?

Looking backward, we've grown VAS to be about 30% of our business while preserving overall Visa margins. There are different margin profiles within the portfolios, but marketing services is profitable, incremental revenue and profits for Visa and creates a flywheel by driving client volume back to Visa. We remain disciplined on expenses and enthusiastic about the VAS opportunity.

Our next question comes from Bryan Keane from Citi.

Congrats on the results. Looking at the cross-border growth chart, can you help quantify the impact of Ramadan in the Middle East? March looked higher which was surprising given events in the region, and April year-to-date comes back a little. When you net this all out with potential lingering impact in the Middle East, what should we model for cross-border in Q3?

Cross-border remains strong and resilient. April ticked down one point to 9%; if you normalize for Ramadan timing, April is back to February levels. While there is some impact in the Middle East, we've seen offsetting strength in other regions. We expect increases in inbound volumes in the U.S. and Latin America due to the World Cup, we're lapping low U.S. inbound a year ago, and commercial volumes remain strong. Cross-border eCommerce has been stronger than travel and is a bigger share today. Overall, we expect drivers to remain healthy and strong for the rest of the year.

Our next question comes from Jason Kupferberg from Wells Fargo.

I wanted to tie together VAS and CMS performance. At Investor Day last year, the medium-term outlook was 16% to 18% growth combined for VAS and CMS. You're now in the mid-20s. Olympics and FIFA may help this year. Should we recalibrate our multi-year view on how fast these businesses can grow?

We don't guide to growth pillars, but we are seeing terrific momentum and execution across both VAS and CMS. CMS growth this quarter was 24%, and some of that outperformance involved adjustments and deal timing. Underlying fundamentals are healthy, and while we don't expect one-time items to repeat, the overall strength across VAS and CMS is real and we'll continue executing against our longer-term aspirations.

Our final question comes from Sanjay Sakhrani from KBW.

Ryan, congratulations on the Wells Fargo relationship signing at Pismo. That seems meaningful in the U.S. How should we think about monetization strategy? Is it VAS revenue or other areas? And do you see more large banks as target opportunities for Pismo?

On Pismo, our thesis was twofold: many large financial institutions are planning platform modernization and migration to the cloud, and fintech issuers are expanding geographically and need a cloud-native, modular issuer processing stack. Pismo addresses both needs. The Wells Fargo partnership reflects a broad need among large banks for modernization, and we expect Pismo to be a strong platform for additional large financial institutions. We're actively working with other potential clients and hope to share more over time.

Pismo is reported as part of VAS. It shows up in revenue in the other revenue line.

And with that, we'd like to thank you for joining us today. If you have additional questions, please feel free to call or e-mail our Investor Relations team. Thanks again, and have a great day.

Thank you all for participating in Visa's Fiscal Second Quarter 2026 Earnings Conference Call. That concludes today's call. You may now disconnect, and please enjoy the rest of your day.