PYPL · Forward model · Transaction revenues · Bear case
What has to happen in Transaction revenues
Model as of
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Transaction revenues
Ninety per cent of PayPal, and literally units times price: the payment volume that crosses the platform multiplied by the take rate PayPal publishes on exactly that definition. Volume is compounding - $486.4B in the basis quarter, +10% year over year and +9% currency-neutral, with Braintree/PSP mid-teens and Venmo TPV +14% - and the take rate is falling just as reliably, 1.68% a year ago against 1.61% now, because the volume growing fastest is the unbranded processing PayPal earns least on. Revenue growth is the residual between the two and has been running 3-7%.
Latest: $8.78B (2031Q2E)
| Period | Value |
|---|---|
| 2021Q2 | $5.80B |
| 2021Q3 | $5.61B |
| 2021Q4 | $6.38B |
| 2022Q1 | $6.00B |
| 2022Q2 | $6.27B |
| 2022Q3 | $6.23B |
| 2022Q4 | $6.70B |
| 2023Q1 | $6.36B |
| 2023Q2 | $6.56B |
| 2023Q3 | $6.65B |
| 2023Q4 | $7.28B |
| 2024Q1 | $7.03B |
| 2024Q2 | $7.15B |
| 2024Q3 | $7.07B |
| 2024Q4 | $7.59B |
| 2025Q1 | $7.02B |
| 2025Q2 | $7.44B |
| 2025Q3 | $7.52B |
| 2025Q4 | $7.82B |
| 2026Q1 | $7.50B |
| 2026Q2 | $7.83B |
| 2026Q3E | $7.81B |
| 2026Q4E | $8.29B |
| 2027Q1E | $7.80B |
| 2027Q2E | $8.04B |
| 2027Q3E | $8.01B |
| 2027Q4E | $8.50B |
| 2028Q1E | $8.00B |
| 2028Q2E | $8.24B |
| 2028Q3E | $8.20B |
| 2028Q4E | $8.70B |
| 2029Q1E | $8.19B |
| 2029Q2E | $8.43B |
| 2029Q3E | $8.39B |
| 2029Q4E | $8.89B |
| 2030Q1E | $8.36B |
| 2030Q2E | $8.61B |
| 2030Q3E | $8.56B |
| 2030Q4E | $9.08B |
| 2031Q1E | $8.53B |
| 2031Q2E | $8.78B |
Assumptions & reasoning
- Units here are millions of dollars of total payment volume and price per unit is revenue per $1M of TPV, so 487,790 x $16,100 is the 1.61% take rate on $487.8B of deseasonalised volume. The engine reapplies the seasonal factor on top, which is why the units input is deseasonalised and the price input is the as-reported take rate.
- The 39.9% margin is transaction margin after volume-based expense and is ASSUMED, not disclosed. Volume-based expenses of $4,782M (transaction expense $4,385M plus transaction and credit losses $397M) are reported consolidated only; this model puts all of them on this line except the $74M credit loss the deck breaks out, which sits on the other line. The split is constrained to reconcile to the disclosed $3,900M of transaction margin dollars and must not be read as a company disclosure.
- Seasonality is derived, not disclosed: ratio-to-centred-moving-average over the 21 disclosed quarters in two windows, giving [0.974, 0.997, 0.987, 1.041] with a window-to-window spread of 0.005. It decomposes cleanly - TPV factors [0.974, 1.002, 0.997, 1.026] times take-rate factors [1.001, 0.994, 0.988, 1.018] reproduce them within 0.003 - so the December lift is roughly two thirds holiday volume and one third holiday mix.
- The Q4 factor has been decaying: 1.062 in 2021, then 1.043, 1.047, 1.048 and 1.026 in 2025, and almost all of the decay is in the take-rate half as PayPal spent on branded co-marketing and BNPL through the holiday. The risk in the published factor is therefore a Q4 overshoot rather than an undershoot; a creation judging that premium structurally gone would use 1.028 and give up about $110M of 2026 Q4 revenue.
- US TPV grew 14% and international TPV 0% currency-neutral in the basis quarter, and international revenue fell 3% currency-neutral. The growth in this line is domestic and PSP-weighted, which is exactly why the take rate keeps falling.