PayPal Holdings (PYPL) has released its third-quarter earnings report, showcasing impressive results that exceeded Wall Street expectations. The digital payments giant announced an earnings per share of $1.34, marking a 12% increase year-over-year, along with a 7% rise in revenue to $8.42 billion. This performance was bolstered by a significant 20% increase in revenue from its Venmo platform.
Analysts had predicted earnings of $1.20 per share with revenues of $8.236 billion, making PayPal’s actual results a pleasant surprise. Following the announcement, PayPal’s stock surged nearly 16% in early trading, reaching $81.18, the highest level since February. The company’s stock had seen a downturn earlier in the year, dropping 17% in 2025 prior to this report.
In addition to its earnings report, PayPal also made headlines by declaring its first shareholder dividend and revealing a new e-commerce partnership with OpenAI. This collaboration will allow ChatGPT users to make instant purchases using their PayPal wallets. Given that ChatGPT boasts over 800 million weekly users, this partnership could significantly enhance PayPal’s user base and transaction volume.
PayPal’s focus on its branded business remains crucial, especially in light of competition from Apple. The growth in branded checkout, which includes the online checkout button and digital wallet, aligned with expectations at 5%. The total payment volume (TPV) processed from merchant customers also saw an 8% increase, amounting to $458 billion, surpassing the estimated $447.5 billion based on data from Visible Alpha.
Analysts are keenly observing PayPal’s transaction margin dollars, which grew 6% to $3.87 billion, exceeding estimates of $3.78 billion. This figure represents PayPal’s profit from each transaction after accounting for associated costs, and it indicates strong operational efficiency.
The company recorded a 1% growth in active accounts in the third quarter, bringing the total to 438 million. Looking ahead, PayPal anticipates adjusted earnings per share in the range of $1.27 to $1.31 for the upcoming quarter. While this forecast is slightly below FactSet estimates of $1.31, it remains positive amid ongoing changes at its subsidiary Braintree, which are aimed at improving transaction margins despite some pressure on revenue growth.
PayPal has not only solidified its position in digital payments but has also transitioned into a comprehensive mobile shopping and peer-to-peer payments platform. However, its stock currently holds an IBD Composite Rating of 46, indicating there is room for improvement in terms of growth potential. The Accumulation/Distribution Rating sits at D-plus, suggesting that more institutional funds are buying into the stock than selling, providing a hint of optimism for investors.
Overall, PayPal is navigating through competitive challenges and is setting the stage for future growth with its strategic partnerships and innovations in digital commerce.