PayPal bumped up its profitability guidance and reported revenue growth in the company's first earnings release since receiving a takeover offer from rival fintech Stripe and buyout firm Advent International.

The company said it now expects transaction margin dollars, a key measure of the company's profitability, to grow this year to around $15.6 billion from $15.5 billion in 2025. PayPal had previously said the metric would decline slightly in 2026.

In its earnings release, PayPal didn't address Stripe's proposal, which values the company at around $53 billion. But Chief Executive Enrique Lores said the raised outlook speaks to PayPal's execution of its turnaround strategy.

"We moved with urgency to sharpen our transformation plan and advance our growth strategies across our three businesses," Lores said. "Branded checkout has further stabilized and we're building on the strong momentum in Venmo and Braintree as well as diversifying our business model through financial services."

Lores, the former CEO of HP, assumed PayPal's top job in March, succeeding former CEO Alex Chriss. He quickly reshuffled PayPal's operations into three distinct business lines and said the company will accelerate its adoption of artificial intelligence. PayPal also plans to lay off 20% of staff over the next two to three years in a cost-cutting push, The Wall Street Journal reported in May.

PayPal on Tuesday said Lores's strategy is beginning to bear fruit. It highlighted growth in Venmo and Braintree, as well as PayPal's debit card and buy now, pay later businesses. The company said it expects to hit $400 million in gross run-rate savings this year and is on track to reach Lores's goal of $1.5 billion in gross run-rate savings over the next two to three years.

The company reported a second-quarter profit of $1.1 billion, or $1.25 a share, down from $1.26 billion, or $1.29 a share, a year earlier.

Stripping out certain one-time items, the company logged adjusted earnings of $1.38 a share. Analysts surveyed by FactSet were expecting $1.28 a share.

Revenue rose 5% to $8.68 billion, beating analyst estimates of $8.47 billion. Transaction margin dollars grew 1% to $3.9 billion.

PayPal said it now expects full-year adjusted earnings of $5.38 a share. It had previously forecast adjusted earnings would fall by low-single digits or inflect slightly positive compared with $5.31 a share a year earlier. Analysts are expecting adjusted earnings to stay flat at $5.31 a share.

For the current third quarter, the company said it expects a low-single-digit decline in adjusted earnings with slightly positive growth in transaction margin dollars.

Analysts are expecting third-quarter adjusted earnings to fall to $1.33 a share, compared with $1.34 in the same period a year earlier.