Operating margins have been maintained near 18% through disciplined cost management, despite gross margins fluctuating within a narrow 45% to 47% range due to unbranded processing volume shifts.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 |
|---|
| Sales/Revenue | 33.73B | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Revenue Growth % | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Cost of Goods Sold | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| COGS % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Gross Profit | 15.56B | 15.46B | 14.66B | 13.7B | 13.77B | 14B | 11.78B | 9.6B | 8.6B | 7.66B | 6.41B | 5.83B | 5.21B | 4.39B |
| Gross Margin % | 46.12% | 46.62% | 46.1% | 46.03% | 50.05% | 55.17% | 54.9% | 54.03% | 55.63% | 58.53% | 59.1% | 63.03% | 64.91% | 65.26% |
| Gross Profit Growth % | - | 5.51% | 6.96% | -0.5% | -1.59% | 18.82% | 22.67% | 11.7% | 12.16% | 19.6% | 9.93% | 11.9% | 18.66% | - |
| Operating Expenses | 9.54B | 9.4B | 9.33B | 8.68B | 9.94B | 9.73B | 8.49B | 6.88B | 6.4B | 5.54B | 4.82B | 4.37B | 3.94B | 3.3B |
| OpEx % of Revenue | - | 28.34% | 29.35% | 29.14% | 36.11% | 38.37% | 39.57% | 38.73% | 41.43% | 42.29% | 44.48% | 47.23% | 49.11% | 49.04% |
| Selling, General & Admin | 4.28B | 4.26B | 4.15B | 3.87B | 4.36B | 4.56B | 3.93B | 3.11B | 2.85B | 2.4B | 2B | 1.54B | 1.48B | 1.17B |
| SG&A % of Revenue | - | 12.85% | 13.05% | 12.99% | 15.83% | 17.97% | 18.32% | 17.51% | 18.48% | 18.33% | 18.42% | 16.71% | 18.44% | 17.38% |
| Research & Development | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Operating Income | 6.02B | 6.07B | 5.33B | 5.03B | 3.84B | 4.26B | 3.29B | 2.72B | 2.19B | 2.13B | 1.59B | 1.46B | 1.27B | 1.09B |
| Operating Margin % | 17.85% | 18.28% | 16.75% | 16.89% | 13.94% | 16.8% | 15.33% | 15.3% | 14.2% | 16.24% | 14.63% | 15.8% | 15.8% | 16.22% |
| Operating Income Growth % | - | 13.9% | 5.91% | 31.04% | -9.97% | 29.58% | 20.96% | 23.93% | 3.15% | 34.11% | 8.56% | 15.22% | 16.22% | - |
| EBITDA | 6.74B | 7.03B | 6.36B | 6.1B | 5.15B | 5.53B | 4.48B | 3.63B | 2.97B | 2.93B | 2.31B | 2.07B | 1.78B | 1.54B |
| EBITDA Margin % | 19.98% | 21.19% | 19.99% | 20.49% | 18.73% | 21.78% | 20.87% | 20.43% | 19.22% | 22.39% | 21.31% | 22.37% | 22.23% | 22.95% |
| EBITDA Growth % | 0.63% | 10.56% | 4.21% | 18.35% | -6.75% | 23.43% | 23.33% | 22.26% | 1.3% | 26.93% | 11.65% | 15.98% | 15.54% | - |
| D&A (Non-Cash Add-back) | 718M | 963M | 1.03B | 1.07B | 1.32B | 1.26B | 1.19B | 912M | 776M | 805M | 724M | 608M | 516M | 453M |
| EBIT | 6.51B | 6.73B | 5.71B | 5.76B | 3.67B | 4.33B | 5.27B | 3.11B | 2.45B | 2.21B | 1.63B | 1.51B | 1.27B | 1.09B |
| Net Interest Income | 34M | 76M | 280M | 133M | -130M | -175M | -121M | 82M | 91M | 78M | 0 | 0 | 0 | 0 |
| Interest Income | 372M | 517M | 662M | 480M | 174M | 57M | 88M | 197M | 168M | 85M | 0 | 0 | 0 | 0 |
| Interest Expense | 338M | 441M | 382M | 347M | 304M | 232M | 209M | 115M | 77M | 7M | 0 | 0 | 0 | 0 |
| Other Income/Expense | 0 | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Pretax Income | 6.08B | 6.29B | 5.33B | 5.41B | 3.37B | 4.1B | 5.07B | 3B | 2.38B | 2.2B | 1.63B | 1.49B | 1.26B | 1.08B |
| Pretax Margin % | 18.03% | 18.97% | 16.76% | 18.18% | 12.23% | 16.16% | 23.61% | 16.87% | 15.38% | 16.8% | 15.04% | 16.09% | 15.71% | 16.11% |
| Income Tax | 1.02B | 1.06B | 1.18B | 1.17B | 947M | -70M | 863M | 539M | 319M | 405M | 230M | 260M | 842M | 129M |
| Effective Tax Rate % | 16.82% | 16.83% | 22.18% | 21.53% | 28.13% | -1.71% | 17.04% | 17.98% | 13.43% | 18.41% | 14.1% | 17.47% | 66.77% | 11.9% |
| Net Income | 5.06B | 5.23B | 4.15B | 4.25B | 2.42B | 4.17B | 4.2B | 2.46B | 2.06B | 1.79B | 1.4B | 1.23B | 419M | 955M |
| Net Margin % | 15% | 15.78% | 13.04% | 14.26% | 8.79% | 16.43% | 19.59% | 13.84% | 13.31% | 13.71% | 12.92% | 13.28% | 5.22% | 14.2% |
| Net Income Growth % | 11.28% | 26.19% | -2.33% | 75.53% | -41.98% | -0.79% | 70.88% | 19.54% | 14.6% | 28.12% | 14.09% | 193.08% | -56.13% | - |
| Net Income (Continuing) | 5.06B | 5.23B | 4.15B | 4.25B | 2.42B | 4.17B | 4.2B | 2.46B | 2.06B | 1.79B | 1.4B | 1.23B | 419M | 955M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 44M | 44M | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 5.50 | 5.41 | 3.99 | 3.84 | 2.09 | 3.52 | 3.54 | 2.07 | 1.71 | 1.47 | 1.15 | 1.00 | 0.34 | 0.80 |
| EPS Growth % | 19.24% | 35.59% | 3.91% | 83.73% | -40.63% | -0.56% | 71.01% | 21.05% | 16.33% | 27.83% | 15% | 194.12% | -57.5% | - |
| EPS (Basic) | - | 5.46 | 4.03 | 3.85 | 2.10 | 3.55 | 3.58 | 2.09 | 1.74 | 1.49 | 1.16 | 1.00 | 0.34 | 0.82 |
| Diluted Shares Outstanding | 920M | 968M | 1.04B | 1.11B | 1.16B | 1.19B | 1.19B | 1.19B | 1.2B | 1.22B | 1.22B | 1.23B | 1.22B | 1.19B |
| Basic Shares Outstanding | 913M | 959M | 1.03B | 1.1B | 1.15B | 1.17B | 1.17B | 1.17B | 1.18B | 1.2B | 1.21B | 1.22B | 1.22B | 1.17B |
| Dividend Payout Ratio | - | 2.48% | - | - | - | - | - | - | - | - | - | - | - | - |
Margin Compression from Braintree
As reported in recent financial statements, PayPal's gross margin has fluctuated within a narrow 45% to 47% range, reflecting the ongoing shift toward lower-margin unbranded processing volumes that appear to structurally constrain the company's ability to achieve the high-margin profile seen in traditional card network peers.
The persistent pressure on gross margins suggests that the mix shift toward Braintree is not merely a temporary phenomenon but a fundamental change in the business model. Investors should monitor whether the introduction of new products like Fastlane can successfully improve the net take rate or if the competitive environment will continue to force margin dilution.
Based on the provided income statement data, PayPal has maintained operating margins near 18% despite gross margin volatility, suggesting that management's aggressive cost-cutting and headcount rationalization efforts are effectively serving as a primary lever to protect bottom-line profitability in a challenging competitive landscape for digital payments.
The ability to keep operating income relatively stable at $1.5 billion over several quarters indicates a disciplined approach to managing SG&A expenses. However, it remains unclear if this level of austerity is sustainable without potentially underfunding the R&D initiatives required to defend the company's core branded checkout moat.
According to the company's quarterly filings, stock-based compensation remains a significant non-cash expense, frequently exceeding $250 million per quarter, which warrants careful adjustment when evaluating the true cash-generative capacity of the business relative to the reported GAAP net income figures presented in the income statement.
While GAAP earnings show consistent profitability, the reliance on stock-based compensation as a bridge to non-GAAP metrics suggests that shareholders should scrutinize the dilution impact. The variance between net income and cash flow generation appears to be heavily influenced by these recurring equity-based charges, which may mask underlying operational performance trends.
Data from recent periods suggests that PayPal's branded checkout volume faces increasing pressure from OS-native wallets and browser-based autofill solutions, which may indicate that the company's historical competitive advantage is narrowing as alternative payment methods achieve parity in speed and user convenience across the digital ecosystem.
The market's valuation of PayPal as a legacy processor rather than a high-growth fintech platform may reflect these concerns regarding the long-term durability of the branded button. If the company fails to successfully pivot its value proposition toward higher-margin merchant services, the current revenue trajectory may struggle to return to historical growth levels.
Quick answers to the most common questions about buying PYPL stock.
PayPal Holdings, Inc. (PYPL) is profitable, generating $5.23B in net income for the fiscal year ending 2025 with a net profit margin of 15.8%.
PayPal Holdings, Inc. (PYPL) reported an operating income of $6.07B, resulting in an operating profit margin of 18.3%. This margin reflects the operational efficiency of the business before interest and taxes.
PayPal Holdings, Inc. (PYPL) generated $15.46B in gross profit for the year, representing a gross profit margin of 46.6%. This demonstrates the company's core pricing power and production efficiency.