By Emily Bary

PayPal is also instituting its first dividend, boosting its full-year forecast and partnering with OpenAI

Letting people use Venmo for online and in-store purchases is one way PayPal monetizes the peer-to-peer payment service it owns.

PayPal Holdings Inc. expects to generate $1.7 billion in Venmo revenue this year, the company said Tuesday, while giving a rare glimpse into the peer-to-peer payment service’s top-line performance.

While PayPal (PYPL) has shared other numbers about Venmo’s growth, the company hasn’t given a revenue figure since 2021, when the business was generating about $900 million in annual revenue.

For years, PayPal has been working to grow monetization of Venmo, which got its start as a popular way for friends to pay each other. PayPal doesn’t charge users to send money to their friends, but the company makes money in other ways, including by letting customers use their Venmo balances for online and in-store purchases, pay for goods and services through associated debit cards and transfer money to their bank accounts more quickly.

Earlier this month, Bernstein analyst Harshita Rawat wrote that Venmo monetization was a factor she was watching, even as PayPal’s initiatives there have “had a series of false starts over the years.” Generating meaningful Venmo revenue has long been part of the bull case for PayPal’s stock, but getting customers to adopt new behaviors on the platform hasn’t necessarily been as easy as some analysts initially predicted.

Tuesday’s update gives investors more transparency into the business and comes in conjunction with a packed slate of earnings results and other announcements from the payment-technology company.

The stock is up 14% in Tuesday’s premarket action.

AI checkout

Among the other newly announced initiatives is a partnership with OpenAI, through which users of ChatGPT will be able to use PayPal as a payment method for checkout. PayPal will also conduct payment processing for vendors that use OpenAI’s Instant Checkout feature.

“By partnering with OpenAI and adopting the Agentic Commerce Protocol, PayPal will power payments and commerce experiences that help people go from chat to checkout in just a few taps for our joint customer bases,” Chief Executive Alex Chriss said in a statement, referring to an open standard for online purchases facilitated with the help of artificial-intelligence agents.

PayPal joins Etsy Inc. (ETSY) and Shopify Inc. (SHOP), two other players that have partnered with OpenAI on the checkout function.

Don’t miss: The surprising stocks leading the tech sector this year thanks to an AI renaissance

PayPal’s payout

PayPal is joining the ranks of dividend payers, announcing Tuesday that it will start delivering a quarterly payout to investors.

The company is targeting a payout ratio that represents 10% of adjusted net income, which amounts to 14 cents a share for this quarter, for an implied yield of about 0.8% on an annual basis. The dividend will be payable on Dec. 10 to shareholders of record as of the close on Nov. 19.

This adds to the company’s shareholder-return efforts, which also include about $6 billion in stock buybacks expected for this year.

A boost to guidance

PayPal lifted its full-year forecast for transaction margin dollars – an industry metric that measures the profitability of payment processing. The company now expects between $15.45 billion and $15.55 billion, whereas it was previously targeting $15.35 billion to $15.5 billion.

Management also now targets $5.35 to $5.39 in adjusted earnings per share for the full year, above its prior outlook of $5.15 to $5.30.

That comes on the heels of $3.9 billion in transaction margin dollars delivered in the third quarter. PayPal’s adjusted earnings per share for the third quarter amounted to $1.34, up 12% from a year before, whereas analysts were modeling $1.20.

Branded checkout volume in the third quarter was up 5% on a currency-neutral basis, in line with the company’s expectations delivered a month back in an investor newsletter.

What management has to say

“This is a stronger company today than we were two years ago,” Chriss said. “With differentiated competitive advantages, clear strategic direction and building execution momentum, we believe we are exceptionally well-placed to win into the future.”

Chriss is roughly two years into his tenure as PayPal’s CEO.

Read: Verizon names a PayPal veteran as its next CEO. Why telecom stocks are falling.

-Emily Bary

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  10-28-25 0709ET


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