Sixty Percent, and What It Is Calculated OnWide moat
Visa (V) — moat facet
Measured before the incentive line the margin is forty-three percent, and the gap between the two numbers belongs to the banks.
Visa's operating margin was 60.0% in fiscal 2025 and 59.1% across the first nine months of fiscal 2026 on much higher absolute income1. Very few businesses of this size sustain anything close, and almost none that handle other people's money.
The margin is not the product of pricing power in the ordinary sense — Visa's price per transaction is tiny and has been under pressure for decades. It is the product of a cost base that does not grow with volume sitting under a revenue line that does. Every year the network carries more traffic across substantially the same rails.
There is an important qualification in how it is struck. Net revenue is reported after deducting $15.8 billion of client incentives2, so the famous margin is calculated on a number that already reflects what Visa pays to keep its distribution. Measured on gross revenue before incentives, operating income of $24.0 billion against $55.8 billion is about 43% — still excellent, and a different picture.
Watch both, because the gap between them is the share of the network's economics that belongs to the banks rather than to Visa, and that gap has been widening for a decade.
The margin has held near sixty percent for years. It is struck after incentives, so a stable margin can sit on top of a slowly eroding split with the banks.
The famous margin is struck after deducting what Visa pays its own distribution. The gap between the two figures is the share of the network's economics that belongs to the banks.
Source: Visa Form 10-K, fiscal year ended September 30, 2025 ↗- Moat Explorer calcVisa's operating margin was 60.0% in fiscal 2025 and 59.1% across the first nine months of fiscal 2026 on much higher absolute incomeVisa Inc. Form 10-Q for the quarter ended June 30, 2026 (CIK 1403161) — net revenue of $11,633 million against $10,172 million, comprising service revenue $4,922 million, data processing revenue $6,042 million, international transaction revenue $3,853 million and other revenue $1,496 million, less client incentives of $4,680 million against $3,972 million; operating income of $6,877 million against $6,177 million and net income of $5,628 million against $5,272 million; nine-month net revenue of $33,764 million against $29,276 million, operating income of $20,848 million against $17,846 million, total operating expenses of $12,916 million against $11,430 million and a litigation provision of $1,290 million against $1,659 million; interest expense of $194 million in the quarter against $39 million; U.S. net revenue of $4,410 million and international net revenue of $7,223 million; revenue from value-added services of $3.8 billion in the quarter against $2.8 billion a year earlier — Q3 FY2026 and the nine months to 30 June 2026 · publ. 29 July 2026 · source ↗
- ReportedNet revenue is reported after deducting $15.8 billion of client incentivesVisa Inc. Form 10-K for FY2025, Item 7 Management's Discussion and Analysis — net revenue of $40,000 million, up 11%, comprising service revenue $17,539 million (+9%), data processing revenue $19,993 million (+13%), international transaction revenue $14,166 million (+12%) and other revenue $4,053 million (+27%), less client incentives of $15,751 million (+14%); operating expenses of $16,006 million (+30%) and operating income of $23,994 million; nominal payments volume of $13,894 billion and total nominal volume including cash of $16,383 billion for the twelve months ended 30 June 2025; 257,545 million processed transactions, up 10%; payments volume growth of 7% and cash volume growth of (1)%; cross-border volume growth of 13%; diluted earnings per share of $10.20 — FY2025 · publ. 6 November 2025 · source ↗