💰 Market Cap: $77B | 🏢 24.4K Employees | 🌍 200+ Markets

👨‍💼 CEO Alex Chriss | 🎯 Commerce Platform | 🇺🇸 San Jose, CA

$78.50

📈 +$8.25 (+11.7%) Post-Earnings

+11.5% YTD | Q3 2025 Earnings Surge

🚀 Needs:

New checkout hits 75%+ of transactions and boosts conversions 2-5% • BNPL growth drives 10% lift in core PayPal usage • U.S. momentum expands globally • Venmo revenue per user climbs from $25 to $40+ • AI partnerships with OpenAI/Google add 3-5% volume • Transaction margins expand to 46.5%+ • Stock multiple expands to 17x

⚖️ Needs:

New checkout reaches 50% penetration with gradual improvements • Core PayPal volume grows 7-8% • BNPL maintains $40-45B volume at 20%+ growth • Venmo hits $2B+ revenue • Management delivers 12-14% EPS growth through 2027 via revenue growth, margin expansion, and $6B+ annual buybacks • Stock trades at peer-average 15x P/E

⚠️ Risk:

Apple Pay and digital wallets steal market share • Checkout improvements deliver minimal conversion gains • Europe remains weak • BNPL competition from Affirm/Klarna intensifies • Stripe/Adyen win enterprise business • 2026 investments hurt short-term profits • Consumer spending weakens

💰

What Happened

OpenAI Partnership: PayPal becomes FIRST payment wallet in ChatGPT (700M+ weekly users); launching 2026 with Agentic Commerce Protocol; merchants get instant ChatGPT storefront

Revenue Beat: $8.42B revenue (+7% YoY) crushed $8.24B consensus

EPS Blowout: $1.34 adj EPS (+12%) demolished $1.20 estimate by $0.14

TPV Growth: $458B total volume (+8%) driven by 10% U.S. branded growth

First Dividend: $1.5B Q3 buyback plus 10% payout ratio dividend initiated

📈

Why It Matters

AI Shopping Revolution: OpenAI deal positions PayPal as payments backbone for agentic commerce (AI autonomously shops for you); ChatGPT's 700M weekly users create massive TAM expansion

Turnaround Proof: Transaction margin on pace for 6-7% growth vs negative 2 years ago

U.S. Momentum: 10% U.S. branded growth is 2x last year's rate, validates strategy

Diversified Growth: TM$ now balanced across checkout, BNPL, Venmo, PSP, and AI commerce vs historically checkout-only

CEO Conviction: Chriss: "It's a whole new paradigm for shopping...agentic commerce is going to be a big part of the future"

🎯

What's Next

ChatGPT Launch 2026: PayPal merchants' catalogs go live in ChatGPT; PayPal handles all payment routing/validation; also scaling ChatGPT Enterprise to 24K employees + Codex for engineers

Raised Guidance: FY25 transaction margin now $15.45-15.55B (+6-7% ex-interest); EPS $5.35-5.39 (+15-16%)

Q4 Outlook: $1.27-1.31 EPS with TM$ +3.5% reflecting growth investments starting

2026 Warning: Management signaling potential near-term margin/EPS headwinds to win "generational shifts" including agentic commerce

Long-Term Target: High-single-digit TM$ growth and teens+ EPS growth as initiatives scale

💡

Bottom Line for Retail Investors

PayPal delivered a clean beat proving the turnaround is working, then announced becoming the first payment wallet in ChatGPT—a potential game-changer giving access to 700M+ weekly users for agentic AI shopping. U.S. branded volume hit 10% growth (double last year) validating checkout improvements. The OpenAI deal positions PayPal as the payments infrastructure for AI commerce where ChatGPT autonomously researches and purchases for consumers. Bull case strengthened: redesigned checkout scales to 75%+ penetration, BNPL upstream presentment drives 10% volume lift, Venmo ARPA climbs to $40+, AND ChatGPT integration creates 3-5% incremental TPV. At 13x forward earnings generating $6-7B FCF with new dividend, PYPL offers compelling value. Stock surged 15% pre-market on OpenAI news alone—market sees the potential. Critical test: Can management execute on agentic commerce opportunity while managing 2026 investment headwinds?

🚀

BNPL Megatrend Ownership

$40B TPV Scale: Processing ~$40B BNPL in 2025, growing 20%+ as flexible payments accelerate

Upstream Strategy: Shifting from wallet option to shopping journey start; tests show 10% branded volume lift when BNPL shown on product pages

Customer Love: NPS of 80 globally with U.S. monthly actives +21% demonstrates product-market fit

Flywheel Effect: BNPL users show 35% TPV lift and 30-40% incremental branded checkout usage

Global Expansion: <30% U.S. originations; successfully expanded Canada, Italy, Spain, Germany with in-store rollout

📱

Venmo Monetization Inflection

$1.7B Revenue: On pace for $1.7B in 2025 ex-interest (+20% YoY), 10-point acceleration from 2 years ago

66M Users: Growing 7% with mid-teens ARPA expansion; doubled debit and Pay with Venmo revenue in 2 years

$1B Monthly TPV: Pay with Venmo hit $1B in September; Pay with Venmo MAs +25%, debit MAs +43%

ARPA Upside: Current $25 is 25-33% of peer potential; power users with P2P+debit+Pay with Venmo have 4x ARPA

Early Adoption: Only 5-10% using debit/Pay with Venmo; new users adopting debit at 4x rate vs 2 years ago

💳

Checkout Transformation Scaling

Redesigned Pay Sheet: Now 25% of global checkouts, only half optimized; optimized show 1-point conversion improvement

Biometric Auth: Testing biometrics + redesign showing 2-5% conversion gains; scaling passkeys and mobile

Merchant Tools: Scaling upstream messaging, payment-ready API for targeting, improved placement

U.S. Proof: Online branded checkout growing faster vs 2024; with omnichannel driving 10% total U.S. growth

Global Rollout: Expanding to Europe through 2026; launching competitive rewards program

🚀

Omnichannel + Agentic + PSP

🚨 OpenAI Exclusive: First payment wallet in ChatGPT launching 2026; 700M+ weekly users; Agentic Commerce Protocol adopted; tens of millions of PayPal merchants get instant ChatGPT storefronts; PayPal handles all payment orchestration

Omnichannel: Debit actives transact 6x more, generate 3x ARPA; debit/Tap to Pay spend +65% YoY

AI Ecosystem: Also partnered with Google and Perplexity for agentic commerce; ChatGPT Enterprise to 24K employees; Codex for engineers

PayPal World: First transactions this week; one integration for merchants to accept all wallets globally

Capital Returns: $2.28B Q3 FCF (+48%); $6B buyback + 10% dividend; $14.4B cash vs $11.4B debt

🍎

Digital Wallet Competition

Slow Rollout: New checkout only at 25% penetration after a year, "taking more time than planned"

Modest Gains: Only 1-point conversion improvement so far vs 2-5% target

Weak Spending: Europe and U.S. seeing softer discretionary spending with declining basket sizes

Q4 Caution: Transaction margin guide of 3.5% (vs 7% YTD) signals potential slowdown

⚔️

BNPL Competition

Affirm Exclusives: Competitors locking up Amazon, Shopify, Walmart partnerships

Klarna Threat: European rival aggressively expanding in U.S. with strong youth appeal

Embedded Finance: Square, Stripe, Shopify offering BNPL directly to merchants

Margin Risk: Competition could force fee cuts eliminating profit advantage

🏢

Enterprise PSP Struggles

Losing to Stripe: Enterprise payment processing becoming commoditized price war

6% Growth Weak: PSP volume growth dramatically trails Stripe (25%+) and Adyen (20%+)

Customer Churn: Large merchants exploring alternatives due to pricing/service issues

Legacy Tech: Infrastructure less developer-friendly than modern competitors

📉

2026 Investment Risks

Profit Pressure: Management flagging 2026 investments may create "near-term headwinds" to margins/EPS

Marketing Spend: Starting Q4 investments in rewards, merchant co-marketing recorded as contra-revenue

Credit Tailwind Ending: Strong credit outperformance normalizing, easier comps fading

OpEx Rising: Non-transaction expenses +6% as company reinvests after years of cuts