PayPal Holdings Inc. (NASDAQ:PYPL) stock gained on Tuesday after it announced an OpenAI collaboration, upbeat third-quarter 2025 results, and the initiation of a dividend plan.
The Venmo parent reported a quarterly revenue growth of 7% year-over-year to $8.42 billion, topping the analyst consensus estimate of $8.23 billion.
The adjusted EPS was $1.34, beating the analyst consensus estimate of $1.20.
Also Read: PayPal Expands Honey With AI Shopping Tools To Turn Searches Into Purchases
Transaction Metrics And Margins
Total payment volumes rose by 8% year-over-year, reaching $458.1 billion in the quarter. However, payment transactions declined by 5%, totaling 6.3 billion.
On a trailing 12-month basis, the number of payment transactions per active account decreased by 6%, averaging $57.6.
The total number of active accounts increased by 1%, reaching 438 million. Sequentially, active accounts rose by 0.1%, or 0.3 million accounts.
The operating margin improved by 33 basis points to 18.1%. The adjusted operating margin decreased by 19 basis points to 18.6%.
The company generated a quarterly operating cash flow of $2 billion, free cash flow of $1.7 billion, and an adjusted free cash flow of $2.3 billion.
PayPal held $14.4 billion in cash and equivalents as of September 30, with $11.4 billion in debt.
Dividend
PayPal’s Board of Directors approved the launch of a quarterly cash dividend program. It declared an initial dividend of 14 cents per share. The dividend is payable on December 10, 2025, to shareholders of record as of November 19, 2025.
The payout represents roughly 10% of PayPal’s adjusted net income.
PayPal CEO Alex Chriss said the company achieved another strong quarter and raised its guidance as growth accelerated across branded checkout, payment services, and Venmo.
OpenAI Deal
He stated that PayPal has returned to sustained growth and remains on track to deliver 6%–7% transaction margin dollar growth in 2025, excluding interest on customer balances. Chriss emphasized that PayPal is preparing for an AI-driven future through partnerships with Alphabet Inc. (NASDAQ:GOOGL) Google, OpenAI, and Perplexity.
On Tuesday, PayPal also announced plans to adopt the Agentic Commerce Protocol (ACP) to expand payments and shopping capabilities within ChatGPT.
The move will enable millions of ChatGPT users to complete instant checkouts using PayPal, while PayPal will process payments for merchants through OpenAI’s Instant Checkout system.
Through this partnership, PayPal will integrate its wallet features—including multiple payment methods, buyer and seller protections, and post-purchase services such as tracking and dispute resolution—into ChatGPT’s commerce experience. It will also manage card payments using its delegated payments API.
Beyond commerce, PayPal is deepening its AI collaboration with OpenAI by deploying ChatGPT Enterprise for its 24,000 employees, enabling developers with Codex, and expanding internal use of OpenAI APIs to accelerate innovation and improve customer experiences.
Outlook
PayPal expects a fourth-quarter adjusted EPS of $1.27 to $1.31, compared to the analyst consensus estimate of $1.31.
PayPal expects a full-year 2025 adjusted EPS of $5.35-$5.39 (up from prior forecast of $5.15-$5.30). Current analysts estimate an EPS of $5.24.
PYPL Price Action: PayPal Holdings shares were up 16.68% at $81.97 during premarket trading on Tuesday, according to Benzinga Pro data.
Read Next:
Photo Courtesy BigTunaOnline via Shutterstock
