Paypal surge 14% after Q3 beat, full year outlook raise and OpenAI partnership

PayPal Holdings (NASDAQ: PYPL) delivered stronger-than-expected third-quarter results and announced a strategic partnership with OpenAI, signaling renewed momentum under CEO Alex Chriss’s turnaround strategy.

Shares of PayPal surged over 14% in premarket trading following the announcements.

Earnings beat driven by profitable growth

PayPal reported adjusted earnings of $1.34 per share, surpassing Wall Street expectations of $1.20.

Net revenue rose 6% year-over-year to $8.4 billion, also ahead of analysts’ estimates of $8.2 billion.

The company attributed the strong results to “broad-based profitable growth” across its business lines, including Venmo and payment service provider (PSP) profitability.

Total payment volume (TPV), adjusted for foreign exchange effects, climbed 7% to $458.1 billion, reflecting the company’s ability to monetize its platform effectively.

Branded experiences—which include online branded checkout, debit, and tap-to-pay transactions—accounted for 31% of total payment volume.

Online-only branded checkout volumes increased 5%, in line with management’s earlier guidance for mid-single-digit growth.

Despite the solid top-line figures, there were some weak spots.

Payment transactions fell 5% to 6.3 billion, while payment transactions per active account dropped 6% to 57.6 over the past 12 months.

Excluding PSP transactions, however, both metrics showed 7% and 5% growth, respectively.

The company emphasised that these declines were part of a deliberate shift toward higher-value transactions and better margins, consistent with its “price to value” strategy.

Guidance raised and dividend declared

Reflecting confidence in its business trajectory, PayPal raised its full-year earnings outlook.

The company now expects adjusted earnings between $5.35 and $5.95 per share, up from its previous range of $5.15 to $5.30.

Analysts had anticipated $5.25 per share. Transaction margin dollars are projected between $15.45 billion and $15.55 billion, representing 5–6% growth.

PayPal also announced a cash dividend of 14 cents per share, payable on December 10 to shareholders of record as of November 19.

The payout represents roughly 10% of adjusted net income—a move that could appeal to income-focused investors and signal management’s confidence in the company’s cash generation.

OpenAI partnership positions PayPal in AI commerce

Alongside its earnings, PayPal unveiled a strategic partnership with OpenAI that will integrate PayPal’s payments wallet directly into ChatGPT.

The collaboration will allow ChatGPT users to check out instantly using PayPal, while PayPal’s processing network will support merchants leveraging OpenAI’s Instant Checkout feature.

The partnership grants PayPal access to millions of ChatGPT users, expanding its reach across AI-driven commerce.

Additionally, PayPal’s 24,000 employees will gain access to ChatGPT Enterprise.

CEO Alex Chriss described the collaboration as part of the company’s commitment to “building for an agentic future,” referencing the rise of agentic AI shopping tools that autonomously research, compare, and purchase products on behalf of consumers.

These tools, he said, will “help people go from chat to checkout in just a few taps.”

While analysts remain cautious about PayPal’s branded growth trajectory, the OpenAI partnership and improved profitability mix signal a potential inflection point.

As Chriss continues to streamline operations and focus on higher-margin segments, investors are watching closely to see if this strategic pivot can reignite sustained growth in the quarters ahead.

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