PayPal Holdings, Inc.
For the period ended Jun 30, 2025. Filed Jul 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 29, 2025
PYPL$59.24+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0001633917-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-29.
0001633917-25-000161
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 146 previous paragraphs and 155 current paragraphs.
90 unchanged; 51 reworded; 14 added; 5 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Total operating expenses increased $224 million, or 3%, in the three months ended June 30, 2025 compared to the same period of the prior year due primarily to an increase in transaction and credit losses and sales and marketing expense, partially offset by a decline in general and administrative expense.
Current report
Operating income increased $179 million, or 14%, in the three months ended June 30, 2025 compared to the same period of the prior year due to the increase in net revenues partially offset by the increase in operating expenses. Our operating margin was 18% and 17% in the three months ended June 30, 2025 and 2024, respectively, reflecting the positive impact of lower transaction expense growth rate and general and administrative expense, partially offset by higher transaction and credit losses and sales and marketing expense.
Current report
SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Current report
Net revenues increased $495 million, or 3%, in the six months ended June 30, 2025 compared to the same period of the prior year driven primarily by growth in TPV of 5% and an increase in interest and fee revenue earned on our loans receivable portfolio.
Current report
Net income increased $532 million, or 26%, in the six months ended June 30, 2025 compared to the same period of the prior year due to the previously discussed increase in operating income of $541 million partially offset by a decrease of $17 million in other income (expense), net.
Current report
Number of payment transactions
Current report
TPV
Current report
Transaction revenues growth was lower than the growth in TPV in the three and six months ended June 30, 2025 compared to the same periods in the prior year due primarily to changes in product mix, merchant mix and unfavorable impact from foreign exchange hedging.
Current report
Transaction expense increased $26 million, or 1%, and decreased $187 million, or 2%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year. The increase in transaction expense for the three months ended June 30, 2025 was primarily attributable to the increase in TPV of 6%, partially offset by favorable changes in merchant mix to lower cost merchants as well as regional mix within our Braintree products and services. The decrease in transaction expense for the six months ended June 30, 2025 compared to the same period of the prior year was primarily due to a decline in volume of Braintree products and services, which generally have higher expense rates than other products and services, and favorable changes in merchant mix and regional mix, partially offset by an increase in volume from PayPal products and services. The decline in transaction expense rate for the three and six months ended June 30, 2025 compared to the same periods of the prior year was primarily attributable to a lower proportion of TPV from Braintree products and services and changes in merchant mix and regional mix.
Current report
Transaction and credit losses increased $141 million, or 42%, and $191 million, or 29%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year.
Current report
General and administrative expenses decreased $109 million, or 19%, and $70 million, or 7%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year due primarily to a decline in indirect tax expense of approximately $80 million and $60 million, respectively, a contingency reserve in the prior periods for which there was no similar activity in the current periods, and a decline in employee-related expenses. The decline in the six months ended June 30, 2025 was partially offset by increases in professional services expense, costs associated with enterprise software services and facilities expense.
Current report
During the second quarter of 2025, management undertook a large-scale initiative (the “Q2 2025 Plan”) to reengineer our existing technology infrastructure to improve scalability, reduce network latency, decrease operational costs, and optimize our workforce. The Q2 2025 Plan is a transformative unified program designed to streamline operations and includes exiting certain data centers to migrate to more efficient cloud-based solutions. The plan is expected to be executed over a period of 18 to 42 months with the workforce component to be substantially completed in 2027 and the technology infrastructure component to be substantially completed in 2028. The associated restructuring charges during both the three and six months ended June 30, 2025 were $95 million and included employee severance and benefits costs.
Current report
In connection with this restructuring, we expect to incur employee severance and benefits costs of approximately $90 million to $100 million, asset impairment and accelerated depreciation charges of approximately $40 million to $60 million, and other restructuring costs of approximately $110 million to $140 million over the term of the Q2 2025 Plan. Other restructuring costs relate to process re-engineering and one-time migration to cloud solutions and consist of contractor costs, consulting fees, and prepaid software and maintenance costs without future economic benefit. We expect annualized cost savings of approximately $280 million associated with the impacted workforce, including stock-based compensation, and operational costs for our technology infrastructure. We expect that these cost savings will begin to occur upon the completion of the components of the Q2 2025 Plan and also expect to reinvest a portion of the reduction in annual costs to drive business priorities. The timing of activities, cost, and savings estimates continue to be developed and are subject to change.
Current report
For information on the associated restructuring liabilities, see “Note 17—Restructuring and Other” in the notes to the condensed consolidated financial statements in Part I, Item 1 of this Form 10-Q.
Removed paragraphs (5)
Previous report
Transaction revenues remained consistent while TPV increased 3% in the three months ended March 31, 2025 compared to the same period in the prior year due primarily to changes in volume mix with a higher proportion of TPV from payout products, which have lower pricing, as well as a decline in volume from large merchants on Braintree products and services as a result of our focus on profitable growth.
Previous report
Revenues from other value added services increased $110 million, or 17% in the three months ended March 31, 2025 compared to the same period in the prior year due primarily to an approximately $70 million increase in interest and fee revenue earned from our loans receivable portfolio driven by consumer interest-bearing installment loans, merchant loans, and consumer revolving loans.
Previous report
Transaction expense decreased $213 million, or 5%, in the three months ended March 31, 2025 compared to the same period of the prior year. The decline in transaction expense and the associated transaction expense rate was primarily attributable to favorable changes in merchant mix as well as a volume decline within our Braintree products and services, which generally have a higher expense rate than other products and services.
Previous report
The decrease in net charge-off rate for merchant receivables at March 31, 2025 as compared to March 31, 2024 was due primarily to the improvement in the credit quality of the PPBL portfolio and a significant decline in our outstanding merchant receivables in the prior period which increased the net charge-off rate presented as a percentage of our outstanding loan balance.
Previous report
General and administrative expenses increased $39 million, or 8%, in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to an increase in indirect tax expense and professional services expense, partially offset by lower employee-related costs.
Reworded paragraphs (51)
Previous wording
The following table provides a summary of our consolidated financial results for the three months ended March 31, 2025 and 2024:
Current wording
The following table provides a summary of our condensed consolidated financial results for the three and six months ended June 30, 2025 and 2024:
Previous wording
Net revenues increased $92 million, or 1%, in the three months ended March 31, 2025 compared to the same period of the prior year driven primarily by growth in total payment volume (“TPV”) of 3% and an increase in interest and fee revenue earned on our loans receivable portfolio, partially offset by changes in TPV mix, which resulted in lower transaction revenue.
Current wording
Net revenues increased $403 million, or 5%, in the three months ended June 30, 2025 compared to the same period of the prior year driven primarily by growth in total payment volume (“TPV”) of 6% and an increase in interest and fee revenue earned on our loans receivable portfolio.
Previous wording
Net income increased $399 million, or 45%, in the three months ended March 31, 2025 compared to the same period of the prior year due to the previously discussed increase in operating income of $362 million and an increase in other income (expense), net of $32 million.
Current wording
Net income increased $133 million, or 12%, in the three months ended June 30, 2025 compared to the same period of the prior year due to the previously discussed increase in operating income of $179 million, partially offset by a decline in other income (expense), net of $49 million.
Previous wording
Total operating expenses decreased $270 million, or 4%, in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to a decline in transaction expense and restructuring and other expenses.
Current wording
Total operating expenses decreased $46 million in the six months ended June 30, 2025 compared to the same period of the prior year due primarily to a decline in transaction expense and restructuring and other expenses, partially offset by an increase in sales and marketing expense and transaction and credit losses.
Previous wording
Operating income increased $362 million, or 31%, in the three months ended March 31, 2025 compared to the same period of the prior year due to the increase in net revenues and decline in operating expenses. Our operating margin was 20% and 15% in the three months ended March 31, 2025 and 2024, respectively, reflecting the positive impact of lower transaction expense and restructuring and other expenses.
Current wording
Operating income increased $541 million, or 22%, in the six months ended June 30, 2025 compared to the same period of the prior year due to the increase in net revenues and decline in operating expenses. Our operating margin was 19% and 16% in the six months ended June 30, 2025 and 2024, respectively, reflecting the positive impact of lower transaction expense and restructuring and other expenses, partially offset by higher transaction and credit losses and sales and marketing expense.
Previous wording
We have significant international operations that are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, and Canadian dollar, subjecting us to foreign exchange risk which may adversely impact our financial results. The strengthening or weakening of the United States (“U.S.”) dollar versus foreign currencies in which we conduct our international operations impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar. We generated approximately 43% and 42% of our net revenues from customers domiciled outside of the U.S. in the three months ended March 31, 2025 and 2024, respectively. Because we generate substantial net revenues internationally, we are subject to the risks of doing business outside of the U.S. See Part I, Item 1A, Risk Factors in our 2024 Form 10-K, as supplemented and, to the extent inconsistent, superseded (if applicable) below in Part II, Item 1A, Risk Factors of this Form 10-Q.
Current wording
We have significant international operations that are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, and Canadian dollar, subjecting us to foreign exchange risk which may adversely impact our financial results. The strengthening or weakening of the United States (“U.S.”) dollar versus foreign currencies in which we conduct our international operations impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar. We generated approximately 43% and 42% of our net revenues from customers domiciled outside of the U.S. in the three and six months ended June 30, 2025 and 2024, respectively. Because we generate substantial net revenues internationally, we are subject to the risks of doing business outside of the U.S. See Part I, Item 1A, Risk Factors in our 2024 Form 10-K, as supplemented and, to the extent inconsistent, superseded (if applicable) below in Part II, Item 1A, Risk Factors of this Form 10-Q.
Previous wording
In the three months ended March 31, 2025, year-over-year foreign exchange rate movements relative to the U.S. dollar had the following impact on our reported results:
Current wording
In the three and six months ended June 30, 2025, year-over-year foreign exchange rate movements relative to the U.S. dollar had the following impact on our reported results:
Previous wording
As our transaction revenue is typically correlated with TPV growth and the number of payment transactions completed on our payments platform, management uses these metrics to gain insights into the scale and strength of our payments platform, the engagement level of our customers, and underlying activity and trends which may be indicators of current and future performance. We present these key metrics to enhance investors’ evaluation of the performance of our business and operating results.
Current wording
As our transaction revenue growth is typically correlated with TPV growth and the number of payment transactions completed on our payments platform, management uses these metrics to gain insights into the scale and strength of our payments platform, the engagement level of our customers, and underlying activity and trends which may be indicators of current and future performance. We present these key metrics to enhance investors’ evaluation of the performance of our business and operating results.
Previous wording
The components of our net revenues for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
The components of our net revenues for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Transaction revenues remained consistent in the three months ended March 31, 2025 compared to the same period of the prior year driven primarily by a decline in revenues of approximately $200 million from our Braintree products and services resulting from a decline in TPV and the number of payment transactions, partially offset by an increase in revenues of approximately $170 million from our Venmo and PayPal products and services resulting from growth in TPV and the number of payment transactions.
Current wording
Transaction revenues increased $288 million, or 4%, and $270 million, or 2%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year. The increase in the three and six months ended June 30, 2025 was driven primarily by an increase in revenue from PayPal and Venmo products and services of $430 million and $600 million, respectively, which was largely driven by growth in TPV and number of payment transactions, partially offset by a decline in revenues of approximately $50 million and $250 million, respectively, from our Braintree products and services predominantly attributable to a decline in the number of payment transactions. Transaction revenues for the three and six months ended June 30, 2025 were also impacted unfavorably by net losses from hedging activities in the current periods compared to net gains in the prior periods.
Previous wording
As a result of our stronger focus on profitable growth and ongoing negotiations with merchants, we expect lower volume and transaction revenue growth from our Braintree offerings in 2025.
Current wording
As a result of our stronger focus on profitable growth and ongoing negotiations with merchants, we experienced lower volume and transaction revenue from our Braintree offerings in the first half of 2025. In the second half of 2025, we expect volume from our Braintree offerings to return to growth.
Previous wording
The graphs below present the respective key metrics (in millions) for the three months ended March 31, 2025 and 2024:
Current wording
The graphs below present the respective key metrics (in millions) for the three and six months ended June 30, 2025 and 2024:
Previous wording
We had active accounts of 436 million and 427 million as of March 31, 2025 and 2024, respectively, an increase of 2%. Our total number of payment transactions was 6.0 billion and 6.5 billion for the three months ended March 31, 2025 and 2024, respectively, a decrease of 7%. TPV was $417 billion and $404 billion for the three months ended March 31, 2025 and 2024, respectively, an increase of 3%.
Current wording
We had active accounts of 438 million and 429 million as of June 30, 2025 and 2024, respectively, an increase of 2%. Our total number of payment transactions was 6.2 billion and 6.6 billion for the three months ended June 30, 2025 and 2024, respectively, a decrease of 5%. Our total number of payment transactions was 12.3 billion for the six months ended June 30, 2025, compared to 13.1 billion in the six months ended June 30, 2024, a decrease of 6%. TPV was $444 billion and $417 billion for the three months ended June 30, 2025 and 2024, respectively, an increase of 6%. TPV was $861 billion for the six months ended June 30, 2025 compared to $821 billion in the six months ended June 30, 2024, an increase of 5%.
Previous wording
Transaction and credit losses increased $50 million, or 16%, in the three months ended March 31, 2025 compared to the same period of the prior year.
Current wording
Revenues from other value added services increased $115 million, or 16%, and $225 million, or 16%, in the three and six months ended June 30, 2025 compared to the same periods in the prior year due primarily to an increase of approximately $80 million and $150 million, respectively, in interest and fee revenue earned from our loans receivable portfolios as well as an increase of $50 million in each of those respective periods from revenue earned from an independent chartered financial institution (“partner institution”). Revenue from the partner institution is earned primarily through revenue share associated with our U.S. revolving consumer credit product and PayPal and Venmo branded credit cards.
Previous wording
Transaction expense for the three months ended March 31, 2025 and 2024 was as follows (in millions):
Current wording
Transaction expense for the three and six months ended June 30, 2025 and 2024 was as follows (in millions):
Previous wording
Our transaction expense rate is impacted by changes in product mix, merchant mix, regional mix, funding mix, and fees paid to payment processors and other financial institutions. The cost of funding a transaction with a credit or debit card is generally higher than the cost of funding a transaction from a bank or through internal sources such as a PayPal or Venmo account balance or our consumer credit products. The cost of funding a transaction is also impacted by the geographic region or country in which a transaction occurs, as we generally pay lower rates for transactions funded with credit or debit cards outside the U.S. For the three months ended March 31, 2025 and 2024, approximately 35% and 36% of TPV, respectively, was generated outside of the U.S.
Current wording
Our transaction expense rate is impacted by changes in product mix, merchant mix, regional mix, funding mix, and fees paid to payment processors and other financial institutions. The cost of funding a transaction with a credit or debit card is generally higher than the cost of funding a transaction from a bank or through internal sources such as a PayPal or Venmo account balance or our consumer credit products. The cost of funding a transaction is also impacted by the geographic region or country in which a transaction occurs, as we generally pay lower rates for transactions funded with credit or debit cards outside the U.S. For the three months ended June 30, 2025 and 2024, approximately 38% and 36%, respectively, of TPV was generated outside of the U.S. For both the six months ended June 30, 2025 and 2024, approximately 36% of TPV was generated outside of the U.S.
Previous wording
The components of our transaction and credit losses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
The components of our transaction and credit losses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Transaction losses were $278 million in the three months ended March 31, 2025 compared to $260 million in the three months ended March 31, 2024, an increase of $18 million, or 7%. Transaction loss rate (transaction losses divided by TPV) was 0.07% for the three months ended March 31, 2025, compared to 0.06% for the three months ended March 31, 2024. The increase in transaction losses and the associated transaction loss rate in the three months ended March 31, 2025 compared to the same period of the prior year was primarily due to an increase in losses from our PayPal products and services driven by fraud incidents.
Current wording
Transaction losses increased $124 million, or 48%, and $142 million, or 27%, in three and six months ended June 30, 2025 compared to the same periods of the prior year. Transaction loss rate (transaction losses divided by TPV) was 0.09% and 0.08% for the three and six months ended June 30, 2025, respectively, compared to 0.06% for both the three and six months ended June 30, 2024. The increase in transaction losses and the associated transaction loss rate in the three and six months ended June 30, 2025 compared to the same periods of the prior year was primarily due to an increase in losses driven by fraud incidents from our PayPal products and services and, to a lesser extent, from our Venmo products and services.
Previous wording
Credit losses increased $32 million in the three months ended March 31, 2025 compared to the same period of the prior year. The components of credit losses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
Credit losses increased $17 million and $49 million in the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year. The components of credit losses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Credit losses in the three months ended March 31, 2025 were attributable to loan originations during the period. Credit losses in the three months ended March 31, 2024 were attributable to loan originations partially offset by improvement in the credit quality of loans outstanding.
Current wording
Credit losses in the three and six months ended June 30, 2025 were primarily attributable to loan originations during the period. Credit losses in the three and six months ended June 30, 2024 were attributable to loan originations partially offset by improvement in the credit quality of loans outstanding.
Previous wording
In June 2023, we entered into a multi-year agreement with a global investment firm to sell United Kingdom (“U.K.”) and other European buy now, pay later loan receivables, consisting of eligible loans and interest receivables, including a forward-flow arrangement for the sale of future originations of eligible loans over a 24-month commitment period (collectively, “eligible consumer installment receivables”). In December 2024, this agreement was amended and restated to extend the commitment period to December 2026 and to increase the maximum balance of loans that can be sold at a time. As of March 31, 2025 and 2024, loans and interest receivable, held for sale was $714 million and $307 million, respectively.
Current wording
In June 2023, we entered into a multi-year agreement with a global investment firm to sell United Kingdom (“U.K.”) and other European buy now, pay later loan receivables, consisting of eligible loans and interest receivables, including a forward-flow arrangement for the sale of future originations of eligible loans over a 24-month commitment period (collectively, “eligible consumer installment receivables”). In December 2024, this agreement was amended and restated to extend the commitment period to December 2026 and to increase the maximum balance of loans that can be sold at a time. As of June 30, 2025 and 2024, loans and interest receivable, held for sale was $817 million and $369 million, respectively.
Previous wording
The consumer loans and interest receivable balance as of March 31, 2025 and 2024 was $5.4 billion and $4.5 billion, respectively, net of participation interest sold, representing an increase of 21%. The increase was driven primarily by growth of approximately $500 million and $300 million in our installment credit products driven by growth in Japan and the U.S., respectively, as well as growth of approximately $230 million in our revolving credit product in the U.K., partially offset by a decline of approximately $100 million in our installment credit products in Germany due to the forward-flow arrangement with the global investment firm.
Current wording
The consumer loans and interest receivable balance as of June 30, 2025 and 2024 was $5.8 billion and $4.6 billion, respectively, net of participation interest sold, representing an increase of 27%. The increase was driven primarily by growth of approximately $590 million and $290 million in our installment credit products driven by growth in Japan and the U.S., respectively, and growth of approximately $370 million in our revolving credit product in the U.K.
Previous wording
In response to changing portfolio performance and macroeconomic environment, we continue to monitor risk and evaluate and modify our acceptable risk parameters. Modifications to the acceptable risk parameters did not have a material impact on our consumer loans for the three months ended March 31, 2025.
Current wording
In response to changing portfolio performance and macroeconomic environment, we continue to monitor risk and evaluate and modify our acceptable risk parameters. Modifications to the acceptable risk parameters did not have a material impact on our consumer loans for the three and six months ended June 30, 2025.
Previous wording
We offer access to merchant finance products for certain small and medium-sized businesses, which we refer to as our merchant finance offerings. Total merchant loans, advances, and interest and fees receivable outstanding, net of participation interest sold, as of March 31, 2025 and 2024 was $1.6 billion and $1.2 billion, respectively, reflecting an increase of 32%. The increase was due primarily to growth of approximately $230 million in our PPWC product portfolio, primarily from the U.S., Germany and the U.K., as well as growth of approximately $160 million in our PayPal Business Loans (“PPBL”) product in the U.S.
Current wording
We offer access to merchant finance products for certain small and medium-sized businesses, which we refer to as our merchant finance offerings. Total merchant loans, advances, and interest and fees receivable outstanding, net of participation interest sold, as of June 30, 2025 and 2024 was $1.7 billion and $1.2 billion, respectively, reflecting an increase of 41%. The increase was due primarily to growth of approximately $260 million in our PayPal Working Capital product portfolio, primarily from Germany, the U.S., and the U.K. and growth of approximately $230 million in our PayPal Business Loans (“PPBL”) product in the U.S.
Previous wording
The decline in net charge-off rate for consumer receivables at March 31, 2025 as compared to March 31, 2024 was due primarily to the improvement in credit quality of the U.S. interest-bearing installment products.
Current wording
The decrease in net charge-off rate for merchant receivables at June 30, 2025 as compared to June 30, 2024 was due primarily to the improvement in the credit quality of PPBL loans receivable.
Previous wording
In response to changing portfolio performance and macroeconomic environment, we continue to monitor risk and evaluate and modify our acceptable risk parameters. Modifications to the acceptable risk parameters did not have a material impact on our merchant loans for the three months ended March 31, 2025.
Current wording
In response to changing portfolio performance and macroeconomic environment, we continue to monitor risk and evaluate and modify our acceptable risk parameters. Modifications to the acceptable risk parameters did not have a material impact on our merchant loans for the three and six months ended June 30, 2025.
Previous wording
Customer support and operations expenses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
Customer support and operations expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Customer support and operations expenses decreased $56 million, or 12%, in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to a decline of approximately $40 million in employee-related costs associated with the prior year reduction in headcount, and to a lesser extent, a decline in software expenses.
Current wording
Customer support and operations expenses decreased $23 million, or 5%, and $79 million, or 9%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year. The decline in the three and six months ended June 30, 2025 was due primarily to a decline in employee-related costs, and to a lesser extent, a decline in software expenses.
Previous wording
Sales and marketing expenses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
Sales and marketing expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Sales and marketing expenses increased $67 million, or 16%, in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to higher spend of approximately $90 million on marketing and brand advertising, including our PayPal Everywhere advertising campaign, partially offset by lower employee-related costs.
Current wording
Sales and marketing expenses increased $137 million, or 31%, and $204 million, or 24%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year due primarily to higher spend of approximately $150 million and $240 million, respectively, on marketing and brand advertising, including our PayPal Everywhere and Venmo Everything advertising campaigns, partially offset by lower employee-related costs.
Previous wording
Technology and development expenses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
Technology and development expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Technology and development expenses decreased $11 million in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to lower employee-related costs associated with the prior year reduction in headcount and a decline in depreciation and amortization expense, partially offset by an increase in contractor and consultant costs and higher costs from cloud computing services utilized in delivering our products and services.
Current wording
Technology and development expenses increased $49 million, or 7%, and $38 million, or 3%, in the three and six months ended June 30, 2025 compared to the same periods of the prior year. The increase in technology and development expenses in the three months ended June 30, 2025 was primarily due to increases in employee-related costs, contractor and consultant costs, and software maintenance costs, partially offset by a decline in depreciation expense. The increase in technology and development expenses in the six months ended June 30, 2025 was driven by increases in contractor and consultant costs, software maintenance costs, and costs from cloud computing services utilized in delivering our products and services, partially offset by a decline in depreciation and amortization expense.
Previous wording
General and administrative expenses for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
General and administrative expenses for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Restructuring and other for the three months ended March 31, 2025 and 2024 were as follows (in millions):
Current wording
Restructuring and other for the three and six months ended June 30, 2025 and 2024 were as follows (in millions):
Previous wording
Restructuring and other decreased $146 million in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to a decline in restructuring charges as compared to the prior year.
Current wording
Restructuring and other increased $3 million and decreased $143 million in the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year. The decline in the six months ended June 30, 2025 was due primarily to a decline in restructuring charges compared to the prior period.
Previous wording
During the first quarter of 2025, management initiated a workforce reduction to ensure compliance with a new regulation impacting operations in an international market. The associated restructuring charges during the three months ended March 31, 2025 were $39 million, and included employee severance and benefits costs, substantially all of which were accrued for as of March 31, 2025. We do not anticipate cost savings in conjunction with this reduction.
Current wording
During the first quarter of 2025, management initiated a workforce reduction to ensure compliance with a new regulation impacting operations in an international market. The associated restructuring charges during the six months ended June 30, 2025 were $36 million and included employee severance and benefits costs, which were substantially completed as of June 30, 2025. We do not anticipate cost savings in conjunction with this reduction.
Previous wording
During the first quarter of 2024, management initiated a global workforce reduction intended to streamline operations, focus resources on core strategic priorities, and improve our cost structure. The associated restructuring charges during the three months ended March 31, 2024 were $175 million and included employee severance and benefits costs and stock-based compensation expense, which were substantially completed in the fourth quarter of 2024.
Current wording
During the first quarter of 2024, management initiated a global workforce reduction intended to streamline operations, focus resources on core strategic priorities, and improve our cost structure. The associated restructuring charges during the three and six months ended June 30, 2024 were $83 million and $258 million, respectively, and included employee severance and benefits costs and stock-based compensation expense, which were substantially completed in the fourth quarter of 2024.
Previous wording
During the three months ended March 31, 2025 and 2024, approximately $25 million and $37 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.
Current wording
During the three and six months ended June 30, 2025, approximately $27 million and $52 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value. During the three and six months ended June 30, 2024, approximately $27 million and $64 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.
Previous wording
Other income (expense), net increased $32 million in the three months ended March 31, 2025 compared to the same period of the prior year due primarily to net gains on strategic investments in the current period compared to net losses and impairments in the prior period, which contributed an increase of approximately $100 million year-over-year, partially offset by a decrease of approximately $40 million from a decline in interest income resulting from lower average cash balances year-over-year and an increase in interest expense due in part to incremental expense from the May 2024 debt issuance.
Current wording
Other income (expense), net decreased $49 million and $17 million in the three and six months ended June 30, 2025 compared to the same periods of the prior year due primarily to a decline of approximately $30 million and $50 million, respectively, in interest income resulting from lower average cash balances year over year, an increase in interest expense due to incremental expense from the March 2025 and May 2024 debt issuances, and foreign exchange losses in the current periods compared to foreign exchange gains in the prior periods. These items unfavorably impacting other income (expense) were partially offset by net gains on strategic investments in the current periods compared to net losses and impairments in the prior periods, which contributed increases of approximately $20 million and $115 million year over year.
Previous wording
Our effective income tax rate was 20% and 27% for the three months ended March 31, 2025 and 2024, respectively. The decrease in our effective income tax rate for the three months ended March 31, 2025 compared to the same period of the prior year was due primarily to discrete tax adjustments including tax effects of stock-based compensation.
Current wording
Our effective income tax rate was 18% and 19% for the three months ended June 30, 2025 and 2024, respectively, and 19% and 23% for the six months ended June 30, 2025 and 2024, respectively. The decrease in our effective income tax rate for the three and six months ended June 30, 2025 compared to the same periods of the prior year was due primarily to discrete tax adjustments including tax effects of stock-based compensation partially offset by the impact of foreign income taxed at different rates.
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