MW PayPal earnings show the highest Venmo revenue growth since 2023. Here's what's working.

By Emily Bary

PayPal is improving monetization of Venmo with debit cards and increased usage of a checkout option

PayPal Holdings Inc. is lifting its outlook on two closely watched profitability metrics in light of upbeat performances from businesses ranging from debit cards to the core checkout button to Venmo, which just booked its highest revenue growth rate since 2023.

The company now expects $15.35 billion to $15.5 billion in transaction-margin dollars, a metric that tracks the company's ability to process payment volume profitably. PayPal's (PYPL) prior outlook was for $15.2 billion to $15.4 billion. PayPal also now models $5.15 to $5.30 in adjusted earnings per share, whereas it was previously calling for $4.95 to $5.10.

Some PayPal investors have been worried about the company's core branded checkout business, which faces competition from Apple Inc.'s Apple Pay and others. PayPal Chief Executive Alex Chriss said in the release that momentum in the latest quarter reflected "continued strength across many of our strategic initiatives ranging from PayPal and Venmo branded experiences to PSP and value-added services," with PSP referring to the company's unbranded checkout business.

Another issue that has long loomed over PayPal's stock is whether the company can make sufficient money off its popular Venmo peer-to-peer platform. The company said that Venmo revenue growth exceeded 20% in the second quarter to log its highest growth rate since 2023.

The stock was down more than 2% in premarket trading Tuesday following the results.

See also: Earnings push Fiserv's stock toward its worst year since 2008. Here's what worries Wall Street.

Total payment volume for Pay with Venmo, which lets people use Venmo as a checkout option, was up more than 45%, while the company saw over 40% growth in monthly active accounts for the Venmo debit card.

The company is trying to appeal to younger users with things like cobranded Venmo debit cards at schools that are members of the Big 12 conference.

For the latest quarter, PayPal turned in revenue of $8.29 billion, up 5% from a year before and above the FactSet consensus of $8.08 billion. The company logged $1.40 in adjusted earnings per share, up 18% from a year before and ahead of the $1.30 consensus view.

Active accounts increased 2% in the quarter, reaching 438 million. Payment transactions per active account, which is measured on a trailing-12-month basis, fell 4%, though was up 4% when excluding the PSP unbranded business.

For the third quarter, PayPal models $1.18 to $1.22 in adjusted earnings per share, while analysts tracked by FactSet were looking for $1.21.

-Emily Bary

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 29, 2025 07:06 ET (11:06 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.