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PayPal Holdings (NASDAQ:PYPL) is set to post second-quarter earnings before Tuesday’s market open, with investors on watch for “signs of sustainable momentum behind its turnaround strategy,” Evercore ISI said on Monday.
Analysts, on average, expect the payments behemoth will record adjusted EPS of $1.30 in Q2, down from $1.33 in the prior three-month period and $1.19 a year earlier. PayPal (NASDAQ:PYPL) had guided for Q2 non-GAAP EPS of $1.29-$1.31 in April.
Its Q2 revenue is expected to rise to $8.08B from Q1’s $7.79B and $7.89B in Q2 2024.
The company’s earnings have topped Wall Street expectations in each of the last four quarters, while revenue saw two beats and two misses over the same period.
PayPal’s (PYPL) Q1 was particularly strong amid its turnaround strategy, representing its “fifth consecutive quarter of profitable growth with progress across branded checkout, PSP, omnichannel, and Venmo,” President and CEO Alex Chriss had said.
“We found the 1Q25 data to be generally more encouraging, namely accelerated Branded experiences (online & offline) TPV growth, sustained BNPL growth at 20%, strong penetration of the new Branded API in the US, and a new partnership with Perplexity AI to power payments for its agentic commerce solution,” Evercore ISI analyst Adam Frisch wrote in a recent note to clients.
Frisch said he believes PayPal’s (PYPL) Q2 results will land in line with guidance, although there could be risk of downside potential if Branded Online growth disappoints.
Oakoff Investments, Investing Group Leader of Beyond the Wall Investing, was optimistic about PayPal’s (PYPL) turnaround plan and how it has been progressing so far. “The new partnerships with the key crypto names in the industry to enable stablecoin transactions, and also the focus on the “Agentic Commerce,” will likely unlock new revenue streams for PayPal, stopping its top-line growth deterioration cycle at some point.”
Earlier on Monday, PayPal (PYPL) introduced its “Pay with Crypto” product for merchants to simplify cross-border transactions.
The key risk to Oakoff’s Buy thesis, though is its “potentially too optimistic assumptions about PayPal’s branded TPV growth in Q2. If this time we see weak rates as we saw for Q1, the market might be disappointed again.”
The Q2 report is not expected to be “the breakout moment the bulls are hoping for, as this likelycontinues to be a bit of a medium-term turn-around story,” Evercore’s Frisch contended.
PYPL shares edged up 0.9% in midday trading.