PayPal Holdings on Tuesday reported second quarter earnings and revenue that topped Wall Street estimates. The company upped its full-year earnings guidance for PayPal stock, which fell as analysts mulled key financial metrics for its branded business.
The digital payments firm reported June-quarter earnings before the market open. PayPal earnings for the second quarter rose 18% to $1.40 per share on an adjusted basis. Revenue climbed 5% to $8.3 billion.
Analysts expected PayPal earnings of $1.30 a share on revenue of $8.08 billion. Venmo revenue rose 20% amid new product initiatives, said the company, which did not disclose a dollar figure. Analysts continue to focus on PayPal's branded business — its online checkout button and digital wallet.
On the stock market today, PayPal stock fell 8.7% to close at 71.45.
"Headline results came in better-than-expected, but branded checkout TPV (total payment volume) growth decelerated to 5% year-over-year (compared to 6% last quarter), which is consistent with 'mid-single digit' guidance but offsetting some of the other positive developments," said Evercore ISI analyst Adam Frisch in a report.
He added: "The other parts of branded experiences — growth vectors outside of online such as Venmo debit, Paypal credit — are growing really well but are not big enough yet to move the needle."
Key Financial Metrics
In Q2, total payment volume (TPV) processed from merchant customers climbed 6% to $443.5 billion, roughly in-line with estimates.
Branded TPV is tied to the online PayPal checkout button that many consumers use when shopping online. The company's new definition of branded volume now includes Pay with Venmo.
TD Cowen analyst Bryan Bergin said in a report: "Branded checkout lagged more bullish expectations and tariff-related pressure dampened buy-side optimism despite underlying stability and PayPal demonstrating significant innovations and early traction across a broad product portfolio."
Another key financial metric, transaction margin dollars, rose 7% to $3.8 billion, topping estimates of $3.67 billion.
For PayPal, transaction margin dollars represent the profit it makes from each individual payment transaction it processes, after accounting for the direct costs associated with that transaction, such as fee payments to credit card networks.
William Blair analyst Andrew Jeffrey holds a market perform rating on PayPal stock.
'We recommend investors concentrate on better alpha opportunities following a disappointing quarter in the (metrics) we consider most impactful to valuation," he said in a report. "Specifically, we note that online branded volume growth fell one point sequentially to 5%. This is notable, considering it includes buy now, pay later, which posted 20%-plus volume expansion."
For full year 2025, the company upped its EPS outlook to a range of $5.15 to $5.30 from $4.95 to $5.10. It did not provide revenue guidance.
Active Users Grow
In Q2, active PayPal accounts increased 2% to 438 million.
Repricing initiatives last year at subsidiary Braintree have pressured revenue growth as well as payment volumes but improved transaction margins. Venmo, a person-to-person money transfer service, has expanded into debit cards and other areas.
Heading into the PayPal earnings report, shares were down 9% in 2025.
Also, lost checkout market share to Apple and others continue to be a concern for PayPal stock.
PayPal Stock Technical Ratings
San Jose, Calif.-based PayPal has evolved from an online checkout option to a mobile shopping and person-to-person payments app.
Further, PYPL stock holds an IBD Composite Rating of 83 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Also, PYPL stock has an Accumulation/Distribution Rating of B-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying, E means heavy selling. Think of the C grade as neutral.
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