PayPal beats forecasts with Q2 profits, but shares fall sharply

(Sharecast News) - Second-quarter results from payment platform PayPal topped Wall Street forecasts on Wednesday as the company raised its full-year guidance, though the stock fell sharply after a number of key financial metrics disappointed. Net revenues were up 5% year-on-year at $8.29bn, driving earnings per share 18% higher to $1.40, beating the $8.08bn and $1.30 that the market had pencilled in, respectively.

Transaction margin dollars (the amount that PayPal makes on each individual transaction after costs) rose 7% year-on-year to $3.84bn, in line with the growth seen in the first quarter but ahead of forecasts of $3.67bn.

However, analysts were choosing to focus on the branded side of the business, comprised of its online checkout button and digital wallet. Branded checkout total payment volumes were up 5% compared with last year, slowing from the 6% growth seen in the first quarter.



Another cause for concern was free cash flow, which plummeted 49% to $692m in the second quarter.

Nevertheless, looking ahead PayPal raised its full-year EPS guidance to $4.90-5.05, up from $4.80-4.95 previously and well ahead of the $3.99 earned in 2024.

The stock was down 8.3% at $71.74 by 1025 ET.