Visa fiscal 2026: revenue +15% to $45.9B; GAAP EPS +21% but adjusted +16% as litigation charges shrank

Visa's fiscal year 2026 (the twelve months ended September 30, 2026) brought net revenue of $45,903 million, up 14.8%, and GAAP net income of $23,504 million, up 17.2%. GAAP diluted earnings per share rose 20.8% to $12.32. Visa's own adjusted ("non-GAAP") EPS, which strips out litigation charges, severance, a tax adjustment and a few smaller items, rose a slower 15.7% to $13.27. The gap matters: a smaller litigation charge than last year and a one-time tax benefit did part of the work in the GAAP figure, and about 3 points of the per-share growth came from Visa buying back its own stock. The fiscal fourth quarter (July to September) looked the same: revenue +13% to $12,139 million, GAAP EPS +22% to $3.19, adjusted EPS +17% to $3.48.

This analysis is written from the earnings release (Exhibit 99.1 to the 8-K filed October 27, 2026). The full annual report (10-K) is not filed yet, so the management discussion that explains each line, and region-by-region detail, are not available yet.

The numbers

Operating margin is the share of revenue left after running the business, before interest and tax. The business drivers behind the revenue: payments volume (the total value spent on Visa-branded cards) +9% and total cross-border volume +13%, both in constant dollars, and processed transactions (the number of payments Visa's network handled) +9% to 281.3 billion.

The fiscal fourth quarter on its own:

Where the revenue came from

Visa reports four billing lines and then subtracts what it pays banks and merchants to use its cards:

• Data processing revenue (+17%) grew almost twice as fast as the number of transactions (+9%). Visa is earning more per transaction it handles. The release does not say why; in the fiscal Q3 10-Q Visa credited pricing changes, more add-on services and a higher share of cross-border transactions.
• International transaction revenue grew 8% while the cross-border volume it is billed on grew 14% in Q4 (12% for the year, excluding payments within Europe). Part of what Visa earns on a foreign payment is the spread on converting the currency, and that spread is worth less when exchange rates are calm. The release gives no reason for the gap this time; the Q3 10-Q blamed "lower volatility of a broad range of currencies." Q4's gap (8% vs 14%) was a little narrower than Q3's (6% vs 14%).
• Other revenue rose 40% to $5.7 billion, now about 9% of gross billings. This is where much of Visa's consulting, marketing and other add-on services is booked, the part of the business that does not depend on how many cards get swiped.
• Client incentives are growing a bit faster than billings. For the year, gross revenue before incentives was $64,220 million, up 15.2% from $55,751 million (our calculation from the four lines and the incentive figures in the cash flow statement), while incentives rose 16.3%. Incentives took 28.5% of gross revenue, up from 28.3%. In Q4 incentives rose 21%, faster than every billing line except other revenue.

Costs

GAAP operating expenses rose 11% to $17,793 million for the year and 7% to $4,877 million in Q4. Those totals mix ordinary costs with several items Visa treats as one-offs, so the lines are worth taking apart:

• Personnel +14% to $7,934 million for the year, including $563 million of severance booked in fiscal Q3.
• Marketing +37% to $2,315 million. In Q4 it was $711 million, up 23% on the year before and higher than Q3's $649 million, which Visa had tied partly to the FIFA World Cup 2026.
• General and administrative $829 million in Q4, up from $544 million. $282 million of that is a non-cash donation of investments to the Visa Foundation. Without it, Q4 G&A was roughly flat.
• Litigation provision down to $1,764 million from $2,562 million for the year ($474 million vs $903 million in Q4), mostly accruals for the long-running U.S. interchange case (the "MDL", a group of merchant lawsuits over card fees).

Excluding the items Visa adjusts out, operating expenses rose 16% for the year, a little faster than revenue, "primarily driven by increases in personnel and marketing expenses." In Q4 adjusted costs rose 12% against 13% revenue growth, so the quarter ended with costs growing slightly slower than revenue.

What the headline numbers hide

Part of the GAAP growth is a smaller legal bill, not a better business. Visa books a litigation provision almost every year: $1.7 billion in fiscal 2026 and $2.5 billion in fiscal 2025. Because this year's was about $800 million smaller before tax, GAAP profit grew faster than the business did. A $314 million deferred tax benefit (from a change in U.S. taxation of certain foreign earnings) also helped GAAP net income. Going the other way, severance ($563 million vs $213 million) and the $282 million Foundation donation were larger this year. Netting all of Visa's adjustments, they reduced GAAP net income by $1,810 million this year against $2,484 million last year. That $674 million swing is why GAAP EPS grew 21% and adjusted EPS 16%. Since litigation charges recur every year, the adjusted figures somewhat overstate Visa's real cost base, but they are the better guide to growth this year.

Adjusted margins were flat, not rising. On Visa's adjusted figures, operating income rose 14.4% to $30,984 million and the adjusted operating margin was 67.5%, against 67.7% the year before (our calculation from Visa's reconciliation). The GAAP margin rose 1.2 points only because the one-off charges shrank. In Q4 the adjusted margin edged up to 66.6% from 66.3%.

Below operating income, interest and tax took some growth away; buybacks added it back. Walking down Visa's adjusted figures for the year:

Non-operating items swung from a $287 million gain to a $141 million cost, as interest expense rose to $758 million from $589 million and investment income dipped. A slightly higher tax rate took off a bit more. Then the 3% lower share count added back about 3 points. The business grew adjusted operating profit about 14%; the 16% EPS growth is that, less interest and tax, plus buybacks.

Cash lagged profit for the year, then caught up in Q4. Operating cash flow was $23,728 million, 101% of net income, down from 115% a year earlier. The biggest single reason is litigation paid in cash: the accrued-litigation line drained $2,040 million of operating cash this year against a $1,303 million build last year. Fiscal Q4 alone produced $7,386 million of operating cash against $6,002 million of net income (123%), up from $6,238 million a year earlier (our calculation, full-year less the nine-month figure in the Q3 10-Q).

Visa paid out more than it generated. Free cash flow (operating cash flow minus $1,671 million of capital spending) was $22,057 million. Buybacks of $20,451 million and dividends of $5,112 million came to $25,563 million, or 116% of free cash flow. The difference came from the balance sheet: cash and investment securities fell to $14.2 billion from $20.0 billion, while total debt fell to $22.1 billion from $25.2 billion as $5.6 billion of notes were repaid and $3.0 billion issued.

Receivables grew faster than revenue. Accounts receivable rose 19.9% to $3,749 million, against 14.8% revenue growth. That is worth watching in the 10-K but is small relative to Visa's revenue.

On balance the year is flattered: GAAP EPS growth of 21% leans on a smaller litigation charge and a tax benefit, adjusted net income rose 12%, and buybacks supplied about 3 points of the per-share growth.

Takeaway: Visa's network had a strong year (volume +9%, cross-border +13%, revenue +15%), but the profit that reaches shareholders grew more slowly than the revenue. Adjusted operating margin was flat at about 67.5%, adjusted net income rose 12%, and incentives and add-on-service costs are absorbing a slightly larger share of each new dollar of billings. The 21% GAAP EPS growth is the least representative number in the release.

Did last time's read hold up?

Our fiscal Q3 report listed what to watch in the annual results:

• Operating margin back toward 60% or above in Q4: mostly yes. Q4's GAAP margin was 59.8%, up from 59.1% in Q3 and 57.3% a year earlier, helped by a smaller litigation provision.
• Adjusted costs growing slower than revenue: yes in Q4 (12% vs 13%), no for the full year (16% vs 15%).
• Incentives growing slower than gross revenue: no. Q4 incentives rose 21%, faster than the main billing lines.
• Operating cash flow recovering as litigation payouts slow: yes. Q4 operating cash flow rose 18% and covered 123% of profit.
• The currency drag on international transaction revenue continuing: yes, though slightly smaller (8% revenue growth on 14% volume, against 6% on 14% in Q3).

Other moves

• Buybacks. Visa repurchased about 61 million class A shares for $20.5 billion over the year (average $335.49) and 11 million for $4.0 billion in Q4 (average $369.12). $24.4 billion of authorization remains.
• Dividend raised 16% to $0.780 per quarter from $0.670, payable December 1, 2026.
• Litigation escrow. Visa deposited $405 million into its U.S. litigation escrow account on September 18. Under Visa's share structure this reduces the number of class A shares its class B shares will eventually convert into, at an effective $366.81 a share, so for class A holders it works like a buyback. The escrow balance stood at $628 million at September 30, down from $2,990 million a year earlier.
• Acquisition. On August 3 Visa agreed to buy BioCatch, a fraud-detection company, for $2.4 billion in cash, expected to close by the end of fiscal Q2 2027.

What to expect next

The earnings release gives no numeric revenue or EPS outlook for fiscal 2027; Visa gives its outlook on the earnings call, so nothing in the filing behind this analysis states a target. What the release does show:

• Fiscal Q1 2027 service revenue has a slightly weaker input. Service revenue is billed on the previous quarter's payments volume. Q4's service revenue rested on June-quarter volume growth of 10% in constant dollars; the September quarter, which drives Q1 2027, grew 9%.
• Some costs will not repeat, others will. The $563 million severance charge and the $282 million Foundation donation are unlikely to recur at that size, which would lift GAAP margins. Litigation provisions have appeared every year and should be expected again. The BioCatch purchase will add acquisition costs and amortization once it closes.
• Buybacks will be harder to fund at this pace. Visa returned 116% of its free cash flow this year and drew its cash down by about $5.8 billion. Holding buybacks at $20 billion a year with $2.4 billion going to BioCatch would need more borrowing or a smaller program.

Our read: volume growth of 9-10% and cross-border growth in the low teens support another year of double-digit revenue growth if spending holds. The things to watch in fiscal 2027 are whether incentives and adjusted costs grow slower than gross billings, which would show up as a rising adjusted margin (it was flat this year), and whether international transaction revenue closes the gap with cross-border volume if currency markets turn more volatile.