PayPal affirms is 2025 outlook amid trade war | PaymentsSource

If Trump’s trade war causes consumers and merchants to suffer, PayPal is equipped to respond, the company’s management claims. During Tuesday’s earnings call, CEO Alex Chriss and CFO Jamie Miller said the company has not noticed any signs of stress resulting from the Trump administration’s barrage of trade announcements over the past three months, but projected confidence that there are ways to navigate weakness. 

“The situation around tariffs is changing daily,” Miller said during the earnings call, adding PayPal’s U.S. revenue is evenly split between retail and services – which would be less prone to short-term swings in payment volume. “We come into this from a position of strength. We are global and diverse.” 

The consumer and labor markets have proven resilient, but it remains to be seen how tariffs will impact consumer spending and supply chains over time, Miller said. 

PayPal’s backward-looking view is strong. For the quarter ending March 31, PayPal reported net revenue of $7.8 billion, up 1% from the prior year and in line with FactSet analysts’ estimates. Non-GAAP earnings per share were $1.33, up 23% and better than the $1.16 estimated by analysts. Active monthly users were 436 million, up 2% over the prior year, and total payment volume from merchant clients was $417.2 billion, up 3% and just below analysts’ estimates of $418 billion. Profit was $1.33 billion, up 15% from the prior year.

For the quarter ending in June, PayPal expects EPS between $1.29 and $1.31. The company projected full year EPS between $4.95 and $5.10, or 6% to 10% growth over 2024, affirming its earlier outlook. For the current quarter ending in June, PayPal expects its per-share earnings to range from $1.29 to $1.31. PayPal said the first half earnings will come in higher than the company’s initial projection, but it did not raise its full-year earnings outlook due to macroeconomic uncertainty. 

“We have a solid foundation that allows us to invest in uncertain times,” Chriss said. PayPal was unusual in affirming its full-year outlook. Seventy-five percent of firms that have reported earnings for the March quarter have pulled their guidance for 2025, including companies in categories that impact payment revenue, such as airlines. “I wouldn’t say we’re reordering any priorities, things have been pretty consistent so far,” Chriss said.

Chriss mentioned PayPal’s buy now/pay later lending and financial incentives for consumers to use debit cards and crypto as a way the company would “lean into” any economic stress that results from the tariffs and trade war. “That puts more money into the hands of consumers,” Chriss said during Tuesday’s earnings call. 

Regarding small businesses, Chriss said PayPal has not noticed a large negative impact due to tariffs, but drew attention to the company’s merchant capital product as a way for businesses to manage their cash flow. “We can be a place [for merchants] to come to in times of need,” Chriss said. PayPal has used investment in artificial intelligence, omnichannel commerce and cryptocurrency to drive earnings over the past two years. PayPal’s strategy has been successful – PayPal on Tuesday reported its fifth consecutive quarter of profit growth. 

But analysts said PayPal could struggle to grow faster in coming quarters due to macroeconomic issues. PayPal’s stock was holding steady on Tuesday but is down 24% in 2025.  

Economic risks could make it even harder for PayPal to show meaningful performance in the foreseeable future, Seeking Alpha wrote in a research note issued before PayPal’s earnings, adding the trade war with China has “dramatically escalated.” During Tuesday’s call, Miller said China is less than 2% of PayPal’s global payments volume. 

In a research note following PayPal’s earnings, Evercore said PayPal’s results were a “mixed bag” and in line with its estimates, and branded checkout – a key category for the company, reported 6% growth – which Evercore said is “flattish” year over year and not showing signs of acceleration. 

HSBC analysts were more bullish, noting PayPal gave an outlook that was largely in line with HSBC’s expectations. “Transaction volume and net revenue growth is slowing as the company pursues its profitable growth strategy, but branded checkout volumes were resilient. Overall, we have a positive first take,” HSBC said in a research note.