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PayPal's Q3 EPS of $1.34 beat estimates and rose 11.7% year over year.
Net revenues climbed 7.3% to $8.42B, with TPV up 8.4% and transaction margin dollars up 5.9%.
PYPL raised 2025 EPS guidance range to $5.35-$5.39 and uplifted transaction margin dollar projections.
PayPal Holdings (PYPL - Free Report) reported third-quarter 2025 non-GAAP earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate of $1.19 and jumped 11.7% year over year.
Reflecting positive sentiments, shares of PYPL were up more than 11% on the NYSE at the time of posting this article. Results reflected better-than-expected growth in revenues. PayPal witnessed an uptick in both total payment volume (TPV) and revenues year over year, along with another quarter of high single-digit growth in transaction margin dollars. With such results, the company raised its full-year guidance for non-GAAP EPS and transaction margin dollars. However, its total number of payment transactions declined in the reported quarter.
Net revenues of $8.42 billion increased 7.3% year over year on a reported basis and 6% on a forex-neutral basis. The figure topped the Zacks Consensus Estimate of $8.26 billion.
PayPal Holdings, Inc. Price, Consensus and EPS Surprise
TPV was $458.09 billion for the third quarter, up 8.4% year over year on a reported basis and 7% on a forex-neutral basis.
The transaction margin in dollar terms was $3.87 billion, which grew 5.9% on a reported basis. Excluding interest on customer balances, transaction margin dollars increased 7.1% to $3.55 billion.
Transaction revenues were $7.52 billion (89.4% of net revenues), up 6.4% year over year. Value Added Services revenues were $895 million (10.6% of net revenues), which rose 14.7% year over year.
Net revenues from the United States totaled $4.75 billion (56.5% of net revenues), up 5.2% on a year-over-year basis. International net revenues were $3.66 billion (43.5% of net revenues), up 10.1% year over year on a reported basis and 7% on a forex-neutral basis.
PayPal witnessed year-over-year growth of 1.4% in total active accounts to 438 million in the reported quarter. The total number of payment transactions was 6.33 billion, down 4.5% on a year-over-year basis. PYPL’s payment transactions per active account were 57.6, which dropped 6.2% year over year.
PYPL’s Operating Details
PayPal’s operating expenses were $6.90 billion in the third quarter, up 6.8% year over year. However, the operating margin expanded 33 basis points year over year to 18.1%.
The transaction expense rate was 0.89% in the third quarter compared with 0.91% reported in the year-ago quarter.
The transaction margin shrank 60 basis points to 46%.
PYPL’s Balance Sheet Remains Strong
As of Sept. 30, 2025, cash, cash equivalents and investments were $14.4 billion. The long-term debt balance was $11.4 billion.
PYPL generated $2 billion in cash from operations, while adjusted free cash flow was $2.3 billion in the third quarter of 2025.
The company returned $1.5 billion to shareholders through share repurchases in the quarter.
PayPal Raises 2025 Guidance
For 2025, PayPal anticipates non-GAAP EPS between $5.35-$5.39 per share, calling for 15-16% growth year over year. This is up from the prior guided range of $5.15-$5.30.
The transaction margin dollar is expected between $15.45 billion and $15.55 billion, suggesting growth in the 5-6% range. This is ahead of the prior projection of $15.35 billion-$15.5 billion.
Non-GAAP non-transaction operating expenses are expected to grow approximately 3%.
Free cash flow is expected to be between $6 billion and $7 billion. Share repurchase is expected to be roughly $6 billion.
For the fourth quarter of 2025, PayPal expects non-GAAP EPS between $1.27 and $1.31.
Transaction margin dollars are expected between $4.02 billion and $4.12 billion, suggesting growth in the 2-5% range for the current quarter.
PYPL’s Zacks Rank & Upcoming Earnings Releases
Currently, PayPal carries a Zacks Rank #3 (Hold).
We now look forward to the earnings release of other stocks in the Financial Transaction Services industry — Mastercard Incorporated (MA - Free Report) and Fidelity National Information Services, Inc. (FIS - Free Report) . While Mastercard is scheduled to report on Oct. 30, Fidelity National Information Services is slated to report on Nov. 5.
The Zacks Consensus Estimate for Mastercard’s third-quarter 2025 EPS stands at $4.31, indicating a 10.8% increase year over year. The consensus mark for Fidelity National Information Services’ third-quarter EPS is pegged at $1.48, implying a 5.7% increase year over year.
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PYPL Shares Rise on Q3 Earnings Beat, 2025 EPS Guidance Raised
Key Takeaways
PayPal Holdings (PYPL - Free Report) reported third-quarter 2025 non-GAAP earnings per share (EPS) of $1.34, which surpassed the Zacks Consensus Estimate of $1.19 and jumped 11.7% year over year.
Reflecting positive sentiments, shares of PYPL were up more than 11% on the NYSE at the time of posting this article. Results reflected better-than-expected growth in revenues. PayPal witnessed an uptick in both total payment volume (TPV) and revenues year over year, along with another quarter of high single-digit growth in transaction margin dollars. With such results, the company raised its full-year guidance for non-GAAP EPS and transaction margin dollars. However, its total number of payment transactions declined in the reported quarter.
Net revenues of $8.42 billion increased 7.3% year over year on a reported basis and 6% on a forex-neutral basis. The figure topped the Zacks Consensus Estimate of $8.26 billion.
PayPal Holdings, Inc. Price, Consensus and EPS Surprise
PayPal Holdings, Inc. price-consensus-eps-surprise-chart | PayPal Holdings, Inc. Quote
PYPL’s Revenue Details
TPV was $458.09 billion for the third quarter, up 8.4% year over year on a reported basis and 7% on a forex-neutral basis.
The transaction margin in dollar terms was $3.87 billion, which grew 5.9% on a reported basis. Excluding interest on customer balances, transaction margin dollars increased 7.1% to $3.55 billion.
Transaction revenues were $7.52 billion (89.4% of net revenues), up 6.4% year over year. Value Added Services revenues were $895 million (10.6% of net revenues), which rose 14.7% year over year.
Net revenues from the United States totaled $4.75 billion (56.5% of net revenues), up 5.2% on a year-over-year basis. International net revenues were $3.66 billion (43.5% of net revenues), up 10.1% year over year on a reported basis and 7% on a forex-neutral basis.
PayPal witnessed year-over-year growth of 1.4% in total active accounts to 438 million in the reported quarter. The total number of payment transactions was 6.33 billion, down 4.5% on a year-over-year basis. PYPL’s payment transactions per active account were 57.6, which dropped 6.2% year over year.
PYPL’s Operating Details
PayPal’s operating expenses were $6.90 billion in the third quarter, up 6.8% year over year. However, the operating margin expanded 33 basis points year over year to 18.1%.
The transaction expense rate was 0.89% in the third quarter compared with 0.91% reported in the year-ago quarter.
The transaction margin shrank 60 basis points to 46%.
PYPL’s Balance Sheet Remains Strong
As of Sept. 30, 2025, cash, cash equivalents and investments were $14.4 billion. The long-term debt balance was $11.4 billion.
PYPL generated $2 billion in cash from operations, while adjusted free cash flow was $2.3 billion in the third quarter of 2025.
The company returned $1.5 billion to shareholders through share repurchases in the quarter.
PayPal Raises 2025 Guidance
For 2025, PayPal anticipates non-GAAP EPS between $5.35-$5.39 per share, calling for 15-16% growth year over year. This is up from the prior guided range of $5.15-$5.30.
The transaction margin dollar is expected between $15.45 billion and $15.55 billion, suggesting growth in the 5-6% range. This is ahead of the prior projection of $15.35 billion-$15.5 billion.
Non-GAAP non-transaction operating expenses are expected to grow approximately 3%.
Free cash flow is expected to be between $6 billion and $7 billion. Share repurchase is expected to be roughly $6 billion.
For the fourth quarter of 2025, PayPal expects non-GAAP EPS between $1.27 and $1.31.
Transaction margin dollars are expected between $4.02 billion and $4.12 billion, suggesting growth in the 2-5% range for the current quarter.
PYPL’s Zacks Rank & Upcoming Earnings Releases
Currently, PayPal carries a Zacks Rank #3 (Hold).
We now look forward to the earnings release of other stocks in the Financial Transaction Services industry — Mastercard Incorporated (MA - Free Report) and Fidelity National Information Services, Inc. (FIS - Free Report) . While Mastercard is scheduled to report on Oct. 30, Fidelity National Information Services is slated to report on Nov. 5.
The Zacks Consensus Estimate for Mastercard’s third-quarter 2025 EPS stands at $4.31, indicating a 10.8% increase year over year. The consensus mark for Fidelity National Information Services’ third-quarter EPS is pegged at $1.48, implying a 5.7% increase year over year.
Both MA and FIS carry a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.