PayPal Lifts FY25 Outlook Above Market, Teams With OpenAI; Stock Up

(RTTNews) - Shares of PayPal Holdings, Inc. were gaining around 15 percent in the pre-market activity on the Nasdaq, after the company issued earnings forecast for its fourth quarter expecting year-over-year growth, and raised fiscal 2025 outlook above the market estimates. The payment technology major also initiated quarterly cash dividend after reporting higher third-quarter results above market.

Separately, PayPal announced its partnership with OpenAI to power instant checkout and agentic commerce in ChatGPT. PayPal will adopt the Agentic Commerce Protocol or ACP to expand payments and commerce in ChatGPT. Millions of ChatGPT users will be able to check out instantly using PayPal. The company will also connect its global merchant network to OpenAI.

PayPal also announced the launch of agentic commerce services to Power AI-Driven Shopping. It offers a suite of solutions that allow merchants to attract customers and future-proof their success in the new era of AI-powered commerce. PayPal will be introducing an agentic payments solution called agent ready.

Alex Chriss, President and CEO, said, "PayPal delivered another strong quarter and we are raising guidance, with broad-based profitable growth across branded experiences, PSP, and Venmo. We have returned the company to growth and are on pace for 6 percent to 7 percent transaction margin dollar growth in 2025 when excluding interest on customer balances. We are also building for an agentic future, partnering with leaders such as Google, OpenAI, and Perplexity."

Looking ahead for the fourth quarter, the company projects earnings per share in a range of $1.23 to $1.27, higher than last year's $1.11, and adjusted earnings of $1.27 to $1.31 per share, compared to $1.19 a year ago.

The Wall Street analysts on average expect the company to report earnings of $1.31 per share for the quarter. Analysts' estimates typically exclude special items.

For fiscal 2025, the company now expects earnings per share on a reported basis between $5.11 and $5.15, higher than previous estimate of $4.90 to $5.05, and last year's $3.99 per share.

Adjusted earnings per share are now projected between $5.35 and $5.39, compared to previous estimate of $5.15 to $5.30, and prior year's $4.65.

The Street is looking for earnings of $5.24 per share for the year.

In the third quarter, PayPal's bottom line came in at $1.248 billion or $1.30 per share, compared to $1.010 billion or $0.99 per share last year.

Adjusted earnings were $1.288 billion or $1.34 per share for the period, compared to $1.20 per share a year ago. Analysts had expected the company to earn $1.21 per share.

The company's revenue for the period rose 7.3 percent to $8.417 billion from $7.847 billion last year. The Street expected revenues of $8.23 billion for the quarter.

Total payment volume or TPV increased 8 percent year-over-year to $458.09 billion.

Further, PayPal announced that its Board of Directors approved the initiation of a quarterly cash dividend program and declared a cash dividend of $0.14 per share on common stock, payable on December 10, to stockholders of record as of the close of business on November 19.

The company intends to pay a cash dividend on its common stock on a quarterly basis going forward.

In pre-market activity, PayPal shares were gaining around 14.7 percent to trade at $80.55.

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