The news: PayPal’s net revenues increased 4% to $8.7 billion, per earnings release, flat compared with last year’s growth, missing analysts’ projections at $8.8 billion.

Investors sent PayPal’s share prices down more than 20% by the time markets closed, unimpressed with PayPal’s failure to boost branded checkout volume YoY—a key component of 2024’s “transition year” strategy.

As a result, PayPal CEO Alex Chriss was removed from leadership, effective March 1. Enrique Lopez, formerly of HP, will take his seat.

Diving into the earnings: PayPal’s Q4 2025 performance metrics showcased both critical failures and areas of promise.

• Online branded checkout volume growth sank to 1% from 5% last quarter and 7% a year ago.
• TPV growth slipped to 6% from 7% in Q3 2025.
• Total active accounts were flat YoY at 439 million.
• But Venmo revenues grew 20% over the fiscal year to $1.7 billion—powered by the strong performance of the Venmo debit card, with TPV up 50%.
• Buy now, pay later (BNPL) volume hit $40 billion, surging 20%.
• And enterprise business payments executed seven consecutive quarters of profitable growth.

Amid underperformance in key areas, PayPal lowered its fiscal year outlook to a range of low-single digit decline or meager one-digit increase—dashing Wall Street expectations of 8% growth. CFO Jamie Miller also walked back PayPal’s previous 2027 expectations.

What’s not working? Chriss’ bet that focusing on higher-margin branded checkout would offset declining TPV failed to materialize. Miller admitted that the company was “too optimistic about how quickly we could drive change and customer adoption across a massive global user base.”

The firm pointed to pressures from the K-shaped economy, slimming German market growth, and Miller noted “deceleration in several growth verticals” like ticketing, travel, crypto, and gaming, as partial explanations for PayPal’s lackluster metrics.

Moving forward, PayPal plans to focus investment on strategic merchants that represent over 25% of branded checkout volume to get back on track, as well as an emphasis on biometric integrations to reduce checkout friction.

Implications for payment providers: PayPal’s earnings show consumer hunger for debit products like Venmo and payment flexibility like BNPL offerings as non-wealthy consumers look for alternative ways to finance essential purchases.

As spending tightens, prioritizing strategic merchants that still attract these customers’ spend and more broadly deploying biometric checkout can reduce cart abandonment.