Executive Summary

Q4 2024 net revenues were $8.37B, up 4% YoY; GAAP EPS was $1.11 and non-GAAP EPS $1.19; GAAP operating margin contracted 431 bps to 17.2% while non-GAAP margin slipped 34 bps to 18.0 .
Transaction margin dollars rose 7% to $3.94B on strength in branded checkout and Venmo; TPV grew 7% to $437.8B; active accounts reached 434M (+2% YoY) .
Guidance: Q1 2025 non-GAAP EPS $1.15–$1.17; FY 2025 non-GAAP EPS $4.95–$5.10; management highlighted a ~5pt revenue headwind in 2025 from Braintree renegotiations but +1pt benefit to TM dollars, and ~$150M interest-rate headwind to TM dollars .
Catalysts: accelerated rollout of modern checkout (25% of U.S. traffic), ramping Fastlane (~2,000 merchants, new enterprise signings), Venmo monetization (debit and Pay with Venmo MAAs +20–30%), and a new $15B buyback authorization .

What Went Well and What Went Wrong

What Went Well

Branded checkout and Venmo were key contributors; TM dollars rose for the second straight quarter as price-to-value initiatives took hold: “Transaction margin percent increased by more than 100 basis points for the second consecutive quarter” .
Fastlane adoption and partnerships: “We have signed NBCUniversal, Roku and StockX… nearly 2,000 merchants up and running with Fastlane” and 75% of users are new or dormant to PayPal, expanding reach and reactivation .
Venmo monetization traction: engaged MAAs reached ~64M; debit card MAAs grew >30% and Pay with Venmo MAAs >20%, lifting ARPU multipliers (4x debit; 3x Pay with Venmo) .

What Went Wrong

GAAP margin compression in Q4: operating margin fell 431 bps YoY to 17.2% as strategic investments and mix weighed; non-GAAP margin -34 bps to 18.0 .
Braintree renegotiations will slow revenue growth (~5pt headwind in 2025), though margin accretive; management guided PSP processing growth deceleration and uneven quarterly trends .
Fading rate tailwind: interest on customer balances shifts from a 2024 tailwind to an estimated ~$150M headwind in 2025; transaction loss expected to normalize with new product rollouts .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Net Revenues ($USD Billions)	$7.89	$7.85	$8.37
GAAP Diluted EPS ($)	$1.08	$0.99	$1.11
Non-GAAP Diluted EPS ($)	$1.19	$1.20	$1.19
GAAP Operating Margin (%)	16.8%	17.7%	17.2%
Non-GAAP Operating Margin (%)	18.5%	18.8%	18.0%
Transaction Margin Dollars ($USD Billions)	$3.61	$3.65	$3.94
Total Payment Volume ($USD Billions)	$416.81	$422.64	$437.84

Net Revenues by Type	Q2 2024	Q3 2024	Q4 2024
Transaction Revenues ($USD Billions)	$7.15	$7.07	$7.59
Other Value-Added Services ($USD Billions)	$0.73	$0.78	$0.78
Total Net Revenues ($USD Billions)	$7.89	$7.85	$8.37

KPIs	Q2 2024	Q3 2024	Q4 2024
Active Accounts (Millions)	429	432	434
Payment Transactions (Billions)	6.58	6.63	6.62
Transactions per Active (TTM)	60.9	61.4	60.6
Transaction Expense Rate (%)	0.95	0.91	0.91
Transaction & Credit Loss Rate (%)	0.08	0.08	0.10
Transaction Margin (%)	45.8	46.6	47.0

Additional Q4 detail: GAAP EPS included ~$0.04 negative impact from strategic investment portfolio; FY24 GAAP EPS had ~$0.23 negative impact from investments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Non-GAAP EPS	FY 2024	Low to mid-teens growth	High teens growth	Raised
GAAP EPS	FY 2024	~$3.88–$3.98	$3.92–$3.96	Slightly raised/tightened
Non-GAAP EPS	Q4 2024	Low to mid-single-digit decrease (vs prior year)	Actual non-GAAP EPS $1.19 (reported)	Actual delivered; guidance was conservative
Non-GAAP EPS	Q1 2025	—	$1.15–$1.17	New
GAAP EPS	Q1 2025	—	$1.11–$1.13	New
Non-GAAP EPS	FY 2025	—	$4.95–$5.10	New; includes rate and tax headwinds
TM Dollars	FY 2025	—	~$15.2–$15.4B; ≥5% growth ex interest	New; margin-focused growth

Management noted 2025 revenue growth will be impacted by a ~5pt headwind from Braintree renegotiations, offset by margin accretion (+>1pt to TM dollars) .

Earnings Call Themes & Trends

Topic	Q2 2024	Q3 2024	Q4 2024	Trend
Branded Checkout	6% CN growth; mobile/vault improvements; conversion lift tests (75–110 bps)	Rollout to ~5% U.S. traffic; +100–400 bps conversion; BNPL attach +15–20%	~25% U.S. traffic on modern checkout; U.S. branded +3pts QoQ	Accelerating
Braintree (PSP) Price-to-Value	Returned to profitable growth; deliberate shift to margins	Contributing to TM dollars; revenue growth deliberately slowed	~5pt 2025 revenue headwind; +1pt TM dollars benefit; uneven near term	Margin accretive; revenue reset
Venmo Monetization	TPV $73B (+8%); MAAs ~62M; debit & PwV MAAs ~30%	Debit MAAs +30%; PwV MAAs +20%; ARPU lift (4x/3x)	Engaged MAAs ~64M; debit MAAs +30%; PwV MAAs +20%; TM dollars contribution rising	Strengthening
Fastlane (Guest Checkout)	GA announced H2; adoption focus	>1,000 merchants; 170M auto-fill profiles; processor partnerships	~2,000 merchants; NBCU/Roku/StockX signed; 25% new to PayPal, 50% dormant	Ramping adoption
Interest on Customer Balances	~3pt TM tailwind	~3pt TM tailwind	Minimal benefit in Q1; ~$150M headwind in 2025	Fading tailwind
Credit Portfolio	OVAS credit revenue down YoY; risk-tightening	Return to growth in credit revenue; better portfolio performance	Modestly growing merchant originations; positive revenue/profit driver	Improving
AI/Automation	Efficiency focus; groundwork	—	AI improving support, risk decisions, personalization; OpEx funded by automation savings	Scaling internal use

Management Commentary

“2025 will be focused on scaling adoption… win checkout, scale Omni, grow Venmo and accelerate SMB” — Alex Chriss, CEO .
“We expect renegotiations to be about a 5-point revenue growth headwind in 2025, but +1 point accretive on TM dollars” — Jamie Miller, CFO .
“We added more than 1.5M first-time PayPal debit card users in Q4, and debit TPV was up nearly 100%” — Alex Chriss .
“Fastlane users: 25% never had a PayPal account; >50% dormant — reactivation opportunity” — Alex Chriss .
“Full year non-GAAP EPS $4.95–$5.10; includes lower rates and ~2pt higher non-GAAP effective tax rate” — Jamie Miller .

Q&A Highlights

Branded checkout trajectory: U.S. accelerated ~3pts QoQ; global outlook mid-single-digit with ramp from modern checkout; mobile upgrades and BNPL attach support acceleration .
Braintree strategy: revenue growth headwinds near term from repricing and share normalization but margin accretive; broader value-added services and two-sided network underpin renegotiations .
Venmo specifics: TPV +10% in Q4; debit TPV +40%; Pay with Venmo +50%; contribution to TM dollars rising into 2025 .
OpEx and marketing: targeted increases, heavier in Q4 and Q2 2025; AI/automation to fund investments; CapEx stepping up to $200–$300M over next two years for infra/data centers .
Interest rates and transaction loss: ~$150M TM dollars headwind in 2025 from rate cuts; transaction loss normalization expected as new products scale .

Estimates Context

Wall Street consensus estimates (EPS and revenue) via S&P Global were unavailable at time of analysis due to an access limit; therefore beat/miss versus consensus cannot be assessed. We anchored comparisons to company guidance and reported results [GetEstimates error].

Key Takeaways for Investors

Margin-first reset should improve earnings quality: Braintree repricing is a near-term revenue drag but structurally accretive to transaction margins; expect uneven quarterly revenue while TM dollars grow ~≥5% ex interest in 2025 .
Branded checkout momentum is building, especially on mobile; with 25% U.S. traffic on modern flows and conversion lifts, watch for incremental TPV gains and attach (BNPL) to support margins in 2025 .
Fastlane is a strategic wedge into guest checkout; adoption via major processors and enterprise wins expands funnel of new/dormant users, supporting reactivation and branded share gains over time .
Venmo monetization is accelerating (debit and Pay with Venmo), with clear ARPU uplift; this should be a growing contributor to TM dollars in 2025 .
Macro headwinds: the tailwind from interest on customer balances reverses (~$150M TM headwind), and transaction loss normalizes; plan for EPS growth primarily from operating levers and buybacks ($6B planned) .
Capital return is robust: new $15B repurchase authorization on top of remaining ~$4.86B from 2022 program; Q4 buybacks were $1.2B, FY2024 $6.0B — supportive of EPS growth and multiple resilience .
Near-term trading lens: headline revenue may underwhelm given PSP reset and rate headwinds, but focus on TM dollars growth, checkout adoption metrics, and Venmo MAAs/TPV as key stock drivers through 1H25 .

Sources: PayPal Q4 2024 8-K and Exhibit 99.1 (financial tables, guidance, KPIs) ; Q4 2024 earnings call transcript (prepared remarks and Q&A) ; Q3 2024 8-K and transcript ; Q2 2024 8-K and transcript .

PayPal Holdings, Inc. (PYPL)·Q4 2024 Earnings Summary