PayPal’s third quarter results were well received by the market, reflecting the company’s progress on its strategic transformation. Management attributed the uptick in performance to accelerated revenue growth from core businesses such as branded payment experiences, Venmo, and enterprise payments. CEO Alex Chriss highlighted that deliberate actions to focus on profitable growth, deepen customer engagement, and expand omnichannel initiatives have begun to deliver results. The quarter also saw notable momentum in Buy Now, Pay Later (BNPL) and a return to growth in PayPal’s enterprise payments segment. Management pointed to increased transaction activity and broader product adoption as evidence that recent investments are yielding positive outcomes.
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PayPal (PYPL) Q3 CY2025 Highlights:
- Revenue: $8.42 billion vs analyst estimates of $8.24 billion (7.3% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.34 vs analyst estimates of $1.21 (11.3% beat)
- Adjusted EBITDA: $2.09 billion vs analyst estimates of $1.66 billion (24.8% margin, 25.6% beat)
- Adjusted EPS guidance for the full year is $5.37 at the midpoint, beating analyst estimates by 2.4%
- Operating Margin: 18.1%, in line with the same quarter last year
- Market Capitalization: $63.94 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PayPal’s Q3 Earnings Call
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Tien-Tsin Huang (J.P. Morgan Payments) asked if agentic commerce has shifted PayPal's strategic priorities and whether investments could be funded without margin sacrifice. CEO Alex Chriss responded that agentic commerce is an extension of PayPal’s strategy to be available everywhere, and CFO Jamie S. Miller acknowledged near-term investment headwinds but stressed the long-term opportunity.
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Harshita Rawat (Bernstein) questioned the deceleration in branded checkout growth and the path to reacceleration given macro headwinds. Miller noted that U.S. initiatives are progressing but macro softness is offsetting gains, and international scaling remains a key opportunity.
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Dan Dolev (Mizuho) inquired about BNPL’s competitive positioning and future investments. Chriss highlighted PayPal’s scale and brand advantage, as well as upstream product integration to capture more transactions, while Miller confirmed further investment details would be shared in upcoming quarters.
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Sanjay Sakhrani (KBW) asked about Venmo’s revenue trajectory and monetization levers. Chriss detailed ongoing progress in debit card and Pay with Venmo adoption, emphasizing a large untapped opportunity in user engagement and ARPA growth.
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Darrin Peller (Wolfe Research) sought clarity on transaction margin trends and 2026 investment implications. Miller explained that tough comps, macro dynamics, and investment ramp-up could pressure near-term growth but positioned these as necessary to capture major shifts in digital payments.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and global reach of PayPal’s redesigned checkout and omnichannel initiatives, (2) adoption and monetization of BNPL and Venmo products, and (3) the effectiveness of new AI and agentic commerce partnerships in driving merchant and consumer engagement. Execution of targeted investments and international scaling will be critical signposts of sustained growth.
PayPal currently trades at $67.91, down from $70.21 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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