PayPal has released its Q1 2025 earnings report, exceeding Wall Street expectations on adjusted profits despite falling slightly short on revenue.
The announcement comes as global economic uncertainty continues to cloud tech sector performance. Market reaction was muted, with PayPal shares showing little movement following the news.
Financial Snapshot:
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Adjusted EPS: $1.33 vs. $1.16 expected
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Revenue: $7.79 billion vs. $7.85 billion forecast
While revenue grew just 1% year-over-year, PayPal emphasized a strategic focus on profitability over volume, actively trimming low-margin streams to improve overall margins.
Transaction-based profit, PayPal’s key metric, rose by 7% to $3.7 billion, marking the fifth straight quarter of profitable growth under CEO Alex Chriss.
Platform Metrics and User Growth:
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Total Payment Volume (TPV): $417.2 billion (just below the $418B target)
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Active Accounts: Up 2% to 436 million
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US market share: Over 45% of online checkouts now go through PayPal’s upgraded experience
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Debit card growth (PayPal & Venmo): Nearly 2 million users adopted the cards for the first time this quarter, a 90% YoY increase
Venmo Sees Strong Momentum:
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Revenue Growth: +20% YoY
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TPV: $75.9 billion (+10%)
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“Pay with Venmo” Transactions: +50%
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Monthly Card Users: +40%
Chriss noted that Venmo and Braintree continue to scale profitably, with high-profile merchants like Starbucks, DoorDash, and Ticketmaster integrating Venmo payments.
Strategic Risks and Analyst Concerns
Despite positive signals, Morgan Stanley and Jefferies analysts pointed to ongoing investor caution, citing competition from Apple and Shopify, trade-related uncertainty, and the long-term sustainability of branded payments.
Jefferies also flagged risks tied to cross-border commerce with China, especially as new tariffs could impact transaction volumes. However, CFO Gabrielle "Jamie" Miller played down these concerns, stating that only 2% of PayPal-branded payment volume involves Chinese merchants.
Our merchant base is globally diverse, she added, “which gives us strong flexibility to adapt to shifting global spending trends.”
Outlook: Q2 and Full-Year 2025
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Q2 Guidance:
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Adjusted EPS: $1.29–$1.31 (vs. $1.21 expected)
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Transaction profit growth: 4% to 5%
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Full-Year 2025 Outlook:
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Adjusted EPS: $4.95–$5.10
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Free cash flow: $6–7 billion
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Despite steady execution, PayPal stock has dropped 24% YTD, outpacing the 10% decline in the Nasdaq Composite during the same period.
