Finance
Visa Profit Beats Estimates as Discounts Fuel Holiday Shopping Splurge
Published by Global Banking & Finance Review®
Posted on January 30, 2025
2 min readLast updated: January 26, 2026
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Quick Summary
Visa's Q1 profit exceeded expectations due to holiday discounts boosting spending. Payments volume rose 9%, and cross-border volume increased 16%.
Visa Reports Strong Q1 Profit as Discounts Drive Holiday Spending
By Jaiveer Shekhawat and Manya Saini
(Reuters) -Visa's first-quarter profit beat Wall Street estimates on Thursday, as easing concerns about an economic slowdown and discounts encouraged customers to splurge during the holiday shopping season.
Retailers offered deep discounts on everything from apparel to toys and luxury products to lure cost-conscious consumers while online sales remained strong thanks to a boom in mobile shopping.
Payments volume — a gauge of overall consumer and business spending on Visa's network — jumped 9%, while revenue rose 10% to $9.5 billion in the quarter.
Shares of the world's largest payments processor were up 1.8% after the bell.
Visa also benefited from strong domestic and international travel demand, driven by improved pricing and the absence of severe weather-related disruptions.
Cross-border volume excluding intra-Europe, a measure of international travel demand, jumped 16%. Processed transactions rose 11% in the quarter.
The San Francisco, California-based company posted an adjusted profit of $2.75 per share in the three months ended Dec. 31. Analysts, on average, had expected $2.66 per share, according to data compiled by LSEG.
SPENDING OUTLOOK
Although higher-for-longer interest rates were expected to be a dampener, consumer spending continues to be underpinned by a solid labor market and continued wage growth.
"Consumer spending in the U.S. and around the globe is quite resilient and strong," said Chief Financial Officer Chris Suh in an interview with Reuters.
The trend bodes well for Visa and rival Mastercard as they pocket a small fee off each transaction on their networks.
Mastercard earlier in the day reported a fourth-quarter profit that beat Wall Street estimates as consumers ramped up spending during the holiday season.
Shares of both companies had underperformed the broader markets in 2024 on worries that a slowdown in major global economies could hurt the sector.
(Reporting by Jaiveer Singh Shekhawat and Manya Saini in Bengaluru; Editing by Sriraj Kalluvila, Maju Samuel and Alan Barona)
Key Takeaways
- •Visa's Q1 profit exceeded Wall Street expectations.
- •Holiday discounts drove increased consumer spending.
- •Payments volume on Visa's network rose by 9%.
- •Cross-border volume saw a significant 16% increase.
- •Visa shares rose 1.8% post-earnings announcement.
Frequently Asked Questions about Visa profit beats estimates as discounts fuel holiday shopping splurge
1How did Visa's profit compare to Wall Street estimates?
Visa's first-quarter profit beat Wall Street estimates, posting an adjusted profit of $2.75 per share compared to the expected $2.66 per share.
2What factors contributed to Visa's strong performance?
Easing economic slowdown concerns, deep discounts from retailers, and strong domestic and international travel demand contributed to Visa's strong performance.
3What was the increase in payments volume for Visa?
Payments volume on Visa's network jumped 9%, indicating an increase in overall consumer and business spending.
4How did consumer spending trends affect Visa and Mastercard?
The resilient consumer spending trends bode well for Visa and Mastercard, as they earn a small fee from each transaction on their networks.
5What was the impact of interest rates on consumer spending?
Despite expectations that higher interest rates would dampen spending, consumer spending remained strong due to a solid labor market and ongoing wage growth.
