PayPal NASDAQ: PYPL used its fourth-quarter and full-year 2025 earnings call to outline a leadership transition, review results across its diversified portfolio, and acknowledge slower-than-expected progress in modernizing online branded checkout—an area executives described as central to profitability.
Leadership transition tied to execution
Management opened the call with a leadership announcement: the board appointed Enrique Lores, previously PayPal’s board chair, as the next president and CEO, effective March 1. The company said the move is intended to “accelerate execution” and bring more discipline to implementing strategic priorities. Jamie—who led the prepared remarks—said PayPal’s execution “has not been what it needs to be” and that the company “has not moved fast enough or with the level of focus required.”
During the transition period, Jamie said he will serve as interim CEO while Steve Winoker partners with him and leads the finance function to ensure continuity. Board member David Dorman was named board chair, effective immediately.
In Q&A, management emphasized that the CEO change was driven by execution rather than a major strategy reset. Jamie said the board’s decision was “based on execution,” adding that Enrique has been involved in shaping strategy, capital allocation priorities, and the 2026 guidance.
2025 results: growth drivers offset branded checkout pressure
Steve said transaction margin dollars (excluding interest) grew 4% in the fourth quarter and 6% for the full year, citing broad-based drivers including credit performance, improved PSP profitability, Venmo monetization, and loss improvement across multiple products. He said that diversification helped offset headwinds in branded checkout.
On the top line, the company reported:
- Total payment volume (TPV) of $475 billion in 4Q, up 9% spot and 6% currency-neutral; full-year TPV reached $1.8 trillion (up 7% spot and 6% currency-neutral).
- Fourth-quarter revenue growth of 4% spot and 3% currency-neutral; full-year revenue grew 4% to $33.2 billion.
- Non-GAAP EPS of $1.23 for the quarter (up 3%) and $5.31 for the year (up 14%). Steve said quarterly non-GAAP EPS came in $0.04 below the low end of guidance due largely to a higher-than-expected tax rate and slightly lower operating income tied to branded pressure and OpEx timing.
- Adjusted free cash flow of $2.1 billion in 4Q and $6.4 billion for the full year (excluding timing effects from buy now, pay later receivable origination and sales).
PayPal reported monthly active accounts of 231 million, up 1%, and said transactions per active account excluding PSP rose 5%, which management framed as a proxy for engagement.
Online branded checkout: deceleration and a revised approach
Executives spent much of the call on online branded checkout. Jamie said PayPal reimagined the product after years of underinvestment, but “was too optimistic” about the pace of merchant and consumer adoption across its global base.
In the fourth quarter, online branded checkout TPV grew 1% on a currency-neutral basis, down from 5% in the third quarter. Jamie said the deceleration was greater than expected and concentrated in three areas:
- U.S. retail weakness: pressure across retail merchants, particularly among lower- and middle-income consumers, with PayPal noting it needs to do more to win with key merchants during high-volume shopping periods.
- International headwinds: softer trends in Germany driven by macro conditions, normalization of long-standing leadership, and competition from alternative payment methods.
- High-growth vertical normalization: deceleration in travel, ticketing, crypto, and gaming after strong prior-year growth.
Jamie added that operational and deployment issues amplified the pressure, particularly slower-than-planned product rollout and a merchant adoption process that required more hands-on integration support than PayPal expected. He also pointed to the importance of biometric adoption and competitive presentment.
To restore momentum, PayPal said its branded checkout efforts in 2026 will focus on three priorities: experience, presentment, and selection. Management highlighted several elements it believes are working when deployed together, including redesigned checkout flows, biometric and passkey authentication, upstream Buy Now, Pay Later (BNPL) messaging, second payment buttons, and co-marketing with merchants.
Jamie said redesigned paysheet experiences now cover more than 30% of global checkout transactions, with “fully optimized cohorts” showing nearly a 1-point conversion improvement. He said biometric authentication can drive 2 to 5 points of conversion improvement in testing with some large merchants, and that about 36% of consumers are now “checkout ready” (biometric or passkey enabled), up 15 percentage points year-over-year. The company’s goal is to get closer to half of consumers to checkout-ready status by the end of 2026.
On presentment, PayPal said upstream BNPL messaging is visible to less than 15% of traffic, but when presented upstream with a second payment button, it has seen more than a 10% lift in branded checkout volume. Jamie also said merchants with the full “playbook” deployed during Cyber Five produced double-digit branded TPV growth on average, outpacing local markets—though he stressed the approach is not yet deployed broadly enough.
Other growth areas: Venmo, PSP profitability, omni, and agentic commerce
Management highlighted strong performance in Venmo and enterprise payments. Jamie said Venmo revenue grew approximately 20% in 2025 to $1.7 billion (excluding interest income), active accounts surpassed 100 million, and monthly active accounts reached 67 million in the fourth quarter (up 7%). Venmo TPV rose 13% in 4Q, while Pay with Venmo TPV grew 32% and Venmo debit card TPV grew more than 50%.
In enterprise payments, PayPal said it delivered seven consecutive quarters of profitable growth and returned to double-digit volume growth in 4Q. Steve said PSP volume growth accelerated to 8% in the quarter, with enterprise payments up 12%, helped by front-book growth and retention. Management also discussed scaling “value-added services,” ending 2025 with 16 services it said merchants are willing to pay for.
PayPal also discussed omnichannel progress, including taking its first omnichannel enterprise merchant live through Verifone and expanding into in-store payments. The company said debit or tap-to-pay is live in the U.S., Germany, and the U.K., and noted that PayPal Debit Card TPV growth accelerated to over 50% in 4Q, with debit MAAs up more than 35% in the U.S.
On “agentic commerce,” PayPal outlined a vision of connecting merchant catalogs to AI agents. The company said it is already connecting early adopters such as Abercrombie & Fitch, Fabletics, PacSun, and Wayfair through its Store Sync offering, and is live with agentic purchasing through Perplexity and Microsoft Copilot. Management said agentic commerce will not materially impact 2026 growth, and noted PayPal has agreed to acquire Cymbio to bring Store Sync technology in-house.
Guidance: investment headwinds, one-year-at-a-time outlook
For 2026, management said it is increasing targeted investments to drive engagement, selection, and improved presentment, particularly in branded checkout and BNPL. Steve said these investments represent about a 3-point headwind to transaction margin dollar growth in 2026, with about two-thirds directed toward branded checkout and BNPL and the remainder toward areas including Venmo, loyalty, and agentic commerce.
PayPal guided to slightly negative to roughly flat transaction margin dollars (excluding interest) for both the first quarter and full year 2026. For 1Q, management expects low single-digit revenue growth on a currency-neutral basis and non-GAAP EPS down mid-single digits. For the full year, PayPal expects non-GAAP EPS ranging from down low single digits to slightly positive, with non-transaction operating expenses up about 3%.
PayPal also said it is no longer committing to the specific 2027 outlook provided at investor day a year earlier, citing a more demanding environment, increased competitive intensity, and a slower pace of product rollout and merchant adoption than anticipated.
On branded checkout specifically, management said guidance reflects “slightly positive to low single-digit” growth for 2026, and that quarter-to-date trends in January were running slightly better than the fourth quarter, though the environment remains dynamic.
In capital allocation, Steve said PayPal repurchased $1.5 billion of shares in the fourth quarter, bringing 2025 buybacks to $6 billion, and paid its first quarterly dividend of $0.14 per share. For 2026, the company’s guidance assumes about $6 billion in share repurchases and at least $6 billion in adjusted free cash flow.
About PayPal NASDAQ: PYPL
PayPal Holdings, Inc operates a global digital payments platform that enables consumers and merchants to send and receive payments online, on mobile devices and at the point of sale. The company provides a broad set of payment solutions, including a digital wallet, merchant payment processing, checkout services, invoicing and fraud-management tools. PayPal's platform is designed to support e-commerce, in-person retail and person-to-person transfers, targeting both individual consumers and businesses of varying sizes.
Key products and services in PayPal's portfolio include the PayPal wallet and checkout ecosystem, the Venmo peer-to-peer mobile app, Braintree's developer-focused payment gateway, Xoom for international money transfers, and PayPal Credit and buy-now-pay-later options.
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