PayPal Forecasts 2025 Profit Above Estimates as Turnaround Gains Traction

PayPal app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
PayPal app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
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PayPal Forecasts 2025 Profit Above Estimates as Turnaround Gains Traction

PayPal app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
PayPal app is seen on a smartphone in this illustration taken, July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

PayPal forecast full-year profit above estimates on Tuesday, fueled by a push to revive growth in branded products, improve pricing and sharpen cost-cutting efforts.

Shares of the digital payments giant swung between gains and losses in volatile premarket trading as investors assessed the results in a pivotal year for the firm. The stock was last down 4.5%.

Since taking over in late 2023, PayPal CEO Alex Chriss has focused on high-margin products and touted 'profitable growth' as the company's new strategy. PayPal has since revamped its pricing approach and shifted away from chasing revenue acceleration.

The upbeat outlook will likely ease worries about increasing competition from big-tech giants and fintech rivals such as Block in the digital payments sector, Reuters reported.

PayPal has worked to defend its dominant position with new products, including a "one-click" checkout feature called Fastlane, and forged lucrative partnerships with companies such as Global Payments and Fiserv.

Transaction margin dollars, a key measure of the profitability of its core business, increased 7% for the full year.

"The improvements we made to branded checkout, peer-to-peer, and Venmo, plus the progress we made on our price-to-value strategy, are beginning to show up in our results," Chriss said.

PayPal expects full-year adjusted profit to grow between $4.95 and $5.10 per share, surpassing Wall Street views of $4.90 according to estimates compiled by LSEG.

However, adjusted operating margins - a key source of investor anxiety - contracted 34 basis points to 18% in the fourth quarter.

SPENDING RESILIENT DESPITE CHALLENGES

Stronger margins and profitability in branded checkout products, which includes PayPal's core payment services, headlined 2024 for the payments company after years of uneven results.

Consumer spending has also remained resilient as Americans brush off concerns over high interest rates and shrinking savings, splurging on everything from travel to online shopping.

PayPal expects transaction margin dollars to grow between 4% and 5% in 2025.

Analysts and investors are optimistic about the outlook for the payments sector this year, though the recent imposition of tariffs by the US President Donald Trump's administration on China are seen as potentially inflationary.

For the first quarter, PayPal expects to post an adjusted profit in the range $1.15 to $1.17 per share, above expectations of $1.14.

The holiday season also lured shoppers as retailers offered deep discounts on Christmas, Thanksgiving, Black Friday and Cyber Monday.

PayPal's net revenue increased 4% to $8.4 billion in the fourth quarter ended Dec. 31. Total payment volume climbed 7%, mirroring results at traditional card networks - Visa and Mastercard.

It posted a fourth-quarter adjusted profit of $1.19, topping estimates of $1.12.

PayPal's shares surged nearly 40% in 2024, outperforming broader markets and ending three years of consecutive annual declines.



Downloads of DeepSeek's AI Apps Paused in South Korea Over Privacy Concerns 

People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
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Downloads of DeepSeek's AI Apps Paused in South Korea Over Privacy Concerns 

People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)
People watch a TV reporting DeepSeek, a Chinese artificial intelligence startup, during a news program at the Seoul Railway Station in Seoul, South Korea, Monday, Feb. 17, 2025. (AP)

DeepSeek, a Chinese artificial intelligence startup, has temporarily paused downloads of its chatbot apps in South Korea while it works with local authorities to address privacy concerns, South Korean officials said Monday.

South Korea’s Personal Information Protection Commission said DeepSeek’s apps were removed from the local versions of Apple’s App Store and Google Play on Saturday evening and that the company agreed to work with the agency to strengthen privacy protections before relaunching the apps.

The action does not affect users who have already downloaded DeepSeek on their phones or use it on personal computers. Nam Seok, director of the South Korean commission’s investigation division, advised South Korean users of DeepSeek to delete the app from their devices or avoid entering personal information into the tool until the issues are resolved.

DeepSeek got worldwide attention last month when it claimed it built its popular chatbot at a fraction of the cost of those made by US companies. The resulting frenzy upended markets and fueled debates over competition between the US and China in developing AI technology.

Many South Korean government agencies and companies have either blocked DeepSeek from their networks or prohibited employees from using the app for work, amid worries that the AI model was gathering too much sensitive information.

The South Korean privacy commission, which began reviewing DeepSeek’s services last month, found that the company lacked transparency about third-party data transfers and potentially collected excessive personal information, Nam said.

Nam said the commission did not have an estimate on the number of DeepSeek users in South Korea. A recent analysis by Wiseapp Retail found that DeepSeek was used by about 1.2 million smartphone users in South Korea during the fourth week of January, emerging as the second-most-popular AI model behind ChatGPT.