Visa executes steadily on its three-pillar strategy: Consumer Payments volume growing 8-9% in constant dollars driven by secular cash-to-card conversion and cross-border recovery; CMS at ~20% initially decelerating to ~12% by FY30; VAS sustaining 20-25% growth before decelerating to ~15% by FY32 as the business matures. The DOJ antitrust case resolves with a monetary settlement and limited routing adjustments — painful but not structurally disruptive to the debit network economics. A2A rails remain fragmented outside Brazil and India; Visa monetizes the trend indirectly via Visa Direct. Non-GAAP operating margins expand from ~67.7% (FY2025) to ~71% by FY2030 as VAS scales and operating leverage is captured. Revenue grows in low-double-digits in FY2026-FY2027 (consistent with management guidance of 'low-double-digit adjusted net revenue growth'), decelerating to 7-8% by FY2033-FY2035 as the base grows and secular conversion matures in developed markets.
FCF Conversion Assumption: 80% of non-GAAP operating income. Rationale: FY2025 actuals — non-GAAP operating income ~$27.1B, FCF $21.6B = 79.7%. FCF conversion reflects ~$1.5B annual capex (6.4% of operating cash flow) and minimal working capital intensity. The 80% rate is held constant across Neutral years; Bear uses 77% (higher compliance capex, incentive pressure); Bull uses 83% (VAS revenue mix at higher conversion).
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