PayPal reported adjusted second-quarter earnings of $1.38 a share, above the $1.28 consensus, and raised its full-year profit target to about $5.38. Wall Street's attention sits elsewhere: Stripe and Advent International reportedly offered $53 billion for the company in mid-July, and the shares rose less than 1% on the results.
PayPal cleared Wall Street's second-quarter bar, but the market is weighing a possible sale rather than the results. Adjusted earnings per share came in at $1.38, above the $1.28 consensus view. The company now expects about $5.38 for the full year, up from $5.31 a year before, after prior guidance that had pointed to anything from a low-single-digit decline to slightly positive performance.
Revenue and payment volumes clear estimates
Revenue climbed 5% to $8.713 billion, against the $8.47 billion analysts expected. Total payment volume processed from merchant customers rose 10% to 486.4 billion versus estimates of $473.93 billion, according to Visible Alpha.
Transaction-margin dollars, a measure of payment-activity profitability, rose 1% to $3.9 billion against estimates of $3.774 billion. That growth amounted to 3% when excluding interest on customer balances, and PayPal expects slightly positive to low-single-digit growth on the metric in the third quarter on that same basis. Branded checkout, the segment that includes the core PayPal button, grew 2%, matching the first-quarter rate — which the company billed as a stabilization.
Deal developments drive the stock
Wall Street's focus, however, is a bid from Stripe and the private-equity firm Advent International. Reuters reported earlier this month that the two had submitted a bid for PayPal, which the company didn't discuss in its earnings press release. The offer was reportedly $53 billion, made in mid-July.
The stock rose 17% in the session following that report. On Tuesday it rose less than 1% in early trading. Heading into the report, the shares were down 3% in 2026 after falling 31% last year.
Even before the results, a BofA analyst noted that near-term performance would likely stay more dependent on deal-related developments and on investor perceptions of the value of PayPal's assets and long-term earnings power.
Diversifying beyond the checkout button
Growth has become more challenging in an increasingly competitive payment-technology market. PayPal competes with the likes of Apple Pay, which saw growing adoption during the COVID-19 pandemic era, and many browsers now make it easy to store and deploy payment credentials — traditionally a main selling point of PayPal's service.
The company has responded by increasing its diversification efforts. Volume from debit cards and tap-to-pay options rose more than 60%, while buy-now-pay-later volume climbed 26%. Monthly active accounts for the Venmo debit card grew more than 50%.
In May the company announced a $1.5 billion cost reduction program over the next two to three years and reorganized into three businesses: Checkout Solutions and PayPal; Consumer Financial Services and Venmo; and Payment Services and Crypto. According to MarketWatch, CEO Enrique Lores said in a release: "Our transformation is well underway".
Lores, who took the helm in February, will likely comment on the speculation during the earnings call, which starts at 8 a.m. Eastern Time.
Sources: MarketWatch, Investor's Business Daily
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