Earnings Call Insights: PayPal Holdings, Inc. (PYPL) Q4 2025
Management View
- Jamie Miller, Executive VP and Chief Financial & Operating Officer, announced a leadership change: “The Board has appointed Enrique Lores, who was most recently our Board Chair, as the next President and CEO of PayPal effective March 1 to accelerate execution and bring greater discipline to how we implement our strategic priorities as we enter our next phase of growth.” Miller acknowledged, “We recognize as a company that our execution has not been what it needs to be… we are taking immediate steps to address that reality.”
- Miller stated PayPal delivered “solid 2025 performance across multiple dimensions,” highlighting Venmo revenue growth of approximately 20% to $1.7 billion excluding interest income, total active accounts surpassing 100 million, and 14% ARPA growth for monthly actives. She also pointed to turnaround in Enterprise Payments, which drove “nearly half of our 6% transaction margin dollar growth.”
- Miller noted that Buy Now, Pay Later (BNPL) delivered over $40 billion in total payment volume (TPV) in 2025, growing more than 20% year-over-year.
- Miller called out underperformance in online branded checkout: “In the fourth quarter, online branded checkout TPV grew 1% on a currency-neutral basis, down from 5% in the third quarter.” She attributed the deceleration to U.S. retail weakness, international headwinds—particularly in Germany—and slowdown in several high-growth verticals.
- Miller described new strategic priorities for 2026: “This work in branded checkout has brought three priorities into clear focus: experience, presentment and selection.” She highlighted a renewed focus on frictionless consumer experiences, biometric and passkey adoption, competitive placement, and loyalty programs.
- Miller shared, “About 36% of our consumers are now what we would consider checkout-ready, which means they have biometric authentication in our app or with a device passkey. This is a 15 percentage point improvement relative to the prior year, and our goal is to bring closer to half of our consumers to checkout-ready status by the end of 2026.”
- Miller emphasized high-impact partnerships and new product rollouts, including the launch of PayPal Plus rewards program in Europe and the U.S. in 2026, and a “brand-new app this year.”
- Steven Winoker, Chief Investor Relations Officer, reported, “TM dollars excluding interest grew 4% in the fourth quarter. The drivers of that growth were broad-based, led by strong credit performance, PSP profitability, Venmo monetization and loss improvement across multiple products.”
Outlook
- Winoker provided 2026 guidance: “For the first quarter, we expect low-single-digit revenue growth on a currency-neutral basis, TM dollars to decline slightly or roughly flat, excluding interest on customer balances, mid-single-digit growth in non-transaction operating expenses and non-GAAP EPS to be down mid-single digits.”
- For the full year 2026, Winoker said, “We expect TM dollars to decline slightly or roughly flat excluding interest and customer balances, approximately 3% growth in nontransaction operating expenses and non-GAAP EPS ranging from down low-single digits to slightly positive.”
- Miller announced, “We are no longer committing to the specific outlook for 2027 we laid out at Investor Day last year. For these reasons, we think it’s prudent for now to provide financial guidance 1 year at a time.”
Financial Results
- Winoker detailed, “Total payment volume grew 9% spot, 6% currency neutral in 4Q and 7% and 6%, respectively, for the full year, reaching $1.8 trillion. 4Q revenue grew 4% on a spot and 3% on a currency-neutral basis. Full year revenue grew 4% on a spot and currency-neutral basis to $33.2 billion.”
- Non-GAAP earnings per share increased 3% to $1.23 for Q4 and 14% for the full year to $5.31, with “non-GAAP EPS coming in $0.04 below the low end of our range.”
- Winoker cited “adjusted free cash flow, which excludes the timing impact from the origination and sales of Pay Later receivables, was $2.1 billion and $6.4 billion for the full year.”
- Monthly active accounts increased 1% to 231 million, and transactions per active account excluding PSP grew 5%.
- Venmo TPV increased 13% in Q4; Venmo debit card TPV and MAAs were both up over 50%.
- Pay with Venmo and Buy Now, Pay Later grew 32% and 23%, respectively.
- “In the fourth quarter, we completed $1.5 billion in share repurchases, bringing full year repurchases to a total of $6 billion. We also paid the company’s first quarterly dividend of $0.14 per share.”
Q&A
- Tien-Tsin Huang, JPMorgan: Questioned the CEO change and risk of wholesale strategy shifts. Miller responded, “The Board’s decision is based on execution… our execution is just too slow. Both the Board and Enrique have been deeply involved in setting our plans strategically…”
- Ramsey El-Assal, Cantor Fitzgerald: Asked about merchant engagement with modern checkout. Miller explained, “Every single conversation we have involves a different strategy… What we have done now is really reformulated our teams around dedicated, mission-based teams particularly for high-impact merchants…”
- Darrin Peller, Wolfe Research: Sought clarity on timing of investment impact. Winoker answered, “Those investments have already started. So they will hit us in 1Q and through the course of the year as opposed to us calling for kind of a back-end loaded year.”
- Sanjay Sakhrani, KBW: Asked about 2026 outlook and Enrique’s involvement. Winoker provided “just running down the kind of P&L for ’26,” and Miller added, “When you look at the traction side of it, certainly, the changes we’re making… will begin to gain traction as we go throughout the year.”
- Andrew Schmidt, KeyBanc: Probed branded checkout shortfall and consumer trends. Miller said, “I’d say it’s a play of both. And really, it underscores our need to get our experience further out into the market with our merchants…”
Sentiment Analysis
- Analysts expressed skepticism about execution speed and strategic continuity, focusing on merchant adoption, branded checkout headwinds, and capital allocation. Questions highlighted the need for visible turnaround and the risk of further delays.
- Management maintained a neutral-to-slightly defensive tone, emphasizing lessons learned, targeted investments, and continuity in strategy. Miller stressed, “We are confident in the plan to stabilize and strengthen it.”
- Compared to the previous quarter, management’s tone shifted from confident acceleration to a more measured, pragmatic stance, with explicit acknowledgment of operational shortcomings and the need for disciplined execution.
Quarter-over-Quarter Comparison
- The current quarter introduced a leadership transition, with Enrique Lores taking over as CEO—a significant shift from the previous call led by Alex Chriss.
- Management withdrew multi-year guidance for 2027, moving to one-year-at-a-time forecasts.
- Branded checkout growth decelerated from 5% in Q3 to 1% in Q4, and management identified specific causes for the slowdown, compared to more generalized macro commentary in Q3.
- Venmo and BNPL continued to post strong growth, consistent with the previous quarter.
- Analysts’ questions this quarter were more focused on the success and timeline of execution, compared to the previous quarter’s emphasis on strategic momentum and innovation.
Risks and Concerns
- Management cited operational and deployment issues, slow product adoption by merchants, and macroeconomic headwinds as primary business risks.
- International softness, especially in Germany, and U.S. retail weakness were highlighted as contributing factors to branded checkout underperformance.
- Miller acknowledged, “Our execution is not yet where it needs to be.”
- There was explicit concern over the ability to deliver branded checkout growth in line with historical performance and the time required to scale new initiatives.
Final Takeaway
PayPal’s Q4 2025 call underscored a pivotal moment for the company, marked by executive transition and a sharper focus on execution for its branded checkout business. Management is prioritizing experience, presentment, and selection, with clear goals to expand biometric adoption to closer to half of active users and roll out new loyalty programs and a redesigned app in 2026. Despite solid overall growth in Venmo, BNPL, and enterprise payments, the company is taking a cautious approach by withdrawing its multi-year guidance and committing to annual outlooks. While management asserts confidence in the turnaround plan, they acknowledge the need for improved discipline and speed, especially as branded checkout growth slowed and operational challenges came to the forefront.