PayPal Earnings Smash Expectations: Stock Soars on Strong Revenue & Upgraded 2025 Outlook

PayPal Holdings Inc. (NASDAQ: PYPL) delivered a stronger-than-expected third-quarter 2025 performance, buoyed by rising payment volumes, strict cost controls, and a high-profile partnership with OpenAI’s ChatGPT that promises fresh transaction streams. Strong headline numbers • Revenue climbed 9% year over year to $8.40 billion, topping the Street’s $8.25 billion consensus. • GAAP EPS jumped 32% to $1.30, while non-GAAP EPS reached $1.34, beating the $1.16–$1.19 expectation band. • Total Payment Volume (TPV) surged 15% to $409 billion, outpacing forecasts and offsetting flat active-account growth. • Operating expenses fell 4% year over year, expanding operating margin 180 basis points to 22.5%. Guidance and shareholder returns Management lifted full-year 2025 non-GAAP EPS guidance to $5.35–$5.39 from $5.15–$5.30, but set a cautious Q4 range of $1.26–$1.29 versus the $1.31 consensus. PayPal also authorized an additional $15 billion share-buyback program and initiated its first quarterly dividend of $0.20 per share, underscoring confidence in long-term cash generation. Strategic catalyst: ChatGPT wallet integration CEO Alex Chriss highlighted the new OpenAI agreement that embeds PayPal and Venmo payments natively inside ChatGPT. The integration, launching in beta this holiday season, positions PayPal at the center of conversational commerce and could accelerate TPV growth in 2026 and beyond. Early demos showed friction-free checkout via natural-language prompts, an experience rival fintechs have yet to match. Market reaction and analyst sentiment PYPL shares spiked 6% pre-market to $79, their highest level since April, as investors cheered the earnings beat and capital-return moves. Zacks Investment Research reiterated its “Buy” rating, citing the margin rebound, while Mizuho raised its price target to $95 on the back of the ChatGPT partnership potential. Key metrics snapshot • Active accounts: 428 million (flat YoY) • Average transactions per account: 55 (up 12% YoY) • Transaction margin dollars: +11% YoY • Free cash flow: $1.6 billion, 19% of revenue What’s next PayPal will host its earnings call at 8:00 a.m. ET today; investors can access the webcast and slide deck on the company’s investor relations site. Management is expected to provide more color on holiday-season demand, the rollout timeline for the ChatGPT wallet, and early traction for its revamped merchant pricing model. Bottom line With a clean earnings beat, renewed guidance, and a headline-grabbing AI partnership, PayPal appears to be regaining momentum after a challenging 18-month reset. Sustained TPV growth and disciplined cost management will be critical to maintaining investor confidence as competitive pressure from Apple Pay, Block, and traditional card networks intensifies heading into 2026.