PayPal (PYPL) will release its second-quarter 2025 earnings on July 29. While PYPL stock is still down around 8% year-to-date, it has staged a recovery over the past three months, rising more than 20%. This growth is driven by easing concerns about recession odds and the company’s focus on expanding its addressable market and prioritizing profitable growth.

2025 began on a strong note for PayPal, with the company reporting its fifth straight quarter of profitable growth. Notably, transaction margin dollars increased, led by a diverse range of strategic initiatives. From expanding its omnichannel commerce presence to strengthening both its online branded checkout and in-store payment options, PayPal has been steadily growing its customer base. Furthermore, contributions from its Venmo and payment service provider (PSP) businesses have also played a significant role.

These efforts have translated into significant earnings gains. Adjusted earnings per share (EPS) jumped 23% year-over-year in Q1, reflecting its ability to scale its profitability.

However, with macro uncertainty, will PayPal be able to sustain that momentum in Q2? Let’s look at analysts’ expectations.

PayPal Q2 Earnings: Here’s What to Expect

The momentum in PayPal’s business is likely to sustain in Q2. Management is forecasting low- to mid-single-digit revenue growth on a currency-neutral basis. Transaction margin dollars are projected to fall between $3.75 billion and $3.8 billion, translating to around 4.5% growth at the midpoint. The continued strength in its branded checkout services, both online and offline, as well as growing usage of the Venmo platform, and strength in its PSP business, will support its growth. 

Both total active accounts and monthly active users are expected to increase, with each user transacting more frequently, indicating deeper engagement with PayPal’s platforms.

The key catalyst for growing engagement has been PayPal’s revamped checkout experience. This upgrade is already translating into higher total payment volume (TPV) through PayPal and Pay with Venmo.

The company’s buy now, pay later (BNPL) offering is also showing robust momentum. In Q1, BNPL volumes surged more than 20% year-over-year, while monthly active accounts rose by 18%. This growth reflects increased consumer value as BNPL users spend 33% more on average and complete 17% more transactions. PayPal plans to build on this strength with targeted awareness campaigns in key international markets, which will support future growth and expansion.

Meanwhile, Pay with Venmo continues to resonate with both consumers and merchants. As more merchants integrate the service, TPV and user engagement are rising steadily, contributing to a broader expansion of Venmo’s ecosystem.

On the profitability front, PayPal is maintaining its focus on margin expansion to support earnings growth. Management is guiding for adjusted EPS of $1.29 to $1.31 for Q2, reflecting 9% growth at the midpoint.

Wall Street’s estimate is largely in line with management’s forecast. Analysts expect PayPal to post EPS of $1.30, up 9.24% from last year’s $1.19. Notably, PayPal has exceeded analyst earnings estimates in each of the past four quarters, including a substantial 15.7% beat in the previous quarter.

Is PYPL Stock a Buy, Sell, or Hold?

PayPal continues to show solid momentum in its core businesses, but broader economic uncertainty and concerns about consumer spending are keeping Wall Street cautious in the short term.

Currently, analysts rate PayPal stock as a “Moderate Buy,” reflecting a mix of optimism and caution. While macroeconomic headwinds may cloud the near-term outlook, PayPal’s long-term story remains compelling.

The company is evolving beyond digital payments into a broader commerce platform. Strategic investments in Venmo, expansion into cryptocurrency services, and the launch of PayPal Ads are all moves aimed at accelerating future growth. These initiatives, combined with steady performance in its core operations, suggest that PayPal is building a strong foundation for the years ahead.

For investors with a long-term horizon, PayPal remains a name worth watching. While short-term volatility may persist, its transformation efforts could unlock significant value in the long run.