FMP
Feb 4, 2025 2:21 PM - Davit Kirakosyan
Image credit: FMP
PayPal (NASDAQ:PYPL) delivered an optimistic earnings forecast for 2025, outpacing analyst expectations, while fourth-quarter results also came in ahead of estimates, reinforcing signs that the company’s strategic overhaul is gaining traction. However, the company’s shares dropped more than 5% pre-market today.
Under the leadership of CEO Alex Chriss, who took over last year, PayPal has been aggressively cutting costs and redirecting investments toward automation and artificial intelligence. A major shift in focus has also been underway, moving away from lower-margin divisions like Braintree and prioritizing highly profitable segments such as branded checkout.
For the 2025 fiscal year, PayPal expects earnings per share between $4.95 and $5.10, comfortably surpassing Wall Street’s estimate of $4.89. Additionally, first-quarter EPS guidance of $1.15 to $1.17 also exceeded expectations.
CEO Alex Chriss noted that PayPal is experiencing “strong momentum”, positioning the company for sustained growth in 2025, with a key priority being wider adoption of its services.
In the fourth quarter, total payment volume rose 6.8% year-over-year to $437.84 billion, while active customer accounts grew by 1.9% to 434 million. As a leading digital payments provider, PayPal generates substantial revenue through transaction fees, collected from both retailers and consumers.
The company reported adjusted earnings per share of $1.19, up from $1.14 a year ago, and beating analyst projections of $1.13. With a renewed focus on AI-driven efficiencies and high-margin transactions, PayPal appears poised to unlock greater profitability in the coming year.
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