PayPal reported its second-quarter results on July 28, saying total payment volume reached $486.4 billion for the three months ended June 30.
That was up 10% from a year earlier, or 9% on a currency-neutral basis. The company also placed stablecoins inside its formal innovation plan and confirmed a three-business structure that includes Payment Services & Crypto.
The organizational shift gives crypto a clearer place inside PayPal, but it is not a stand-alone digital asset business. The division also includes Braintree, small-business processing and value-added merchant services. PayPal said the model is designed to combine those capabilities with crypto products, including PayPal USD.
PayPal’s Q2 results give the crypto unit a larger base
Net revenue rose 5% to $8.68 billion, while transaction margin dollars increased 1% to $3.9 billion. Adjusted free cash flow reached $1.83 billion. However, GAAP net income fell 12% to $1.10 billion, and GAAP operating margin contracted to 16.4% from 18.1% a year earlier.
Non-GAAP earnings were $1.38 per share, down 1% year over year. PayPal raised its full-year non-GAAP earnings guidance to about $5.38 per share and lifted its transaction margin dollar outlook to roughly $15.6 billion. Shares gained about 4% on earnings day as investors reacted to the results and updated guidance.
The company also recorded $81 million in net losses on strategic investments and crypto assets held for investment. That figure combines two categories. PayPal did not disclose how much came from crypto alone, so the entire $81 million should not be presented as a digital asset loss.
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PayPal said the combined portfolio reduced GAAP earnings by about $0.07 per share during the quarter. It excludes those gains and losses from non-GAAP results because it says it does not actively trade the investments or use them to fund normal operations.
PayPal stablecoin strategy now sits inside a dedicated division
PayPal’s earnings presentation listed stablecoins alongside agentic commerce and identity and biometrics under its “innovating with discipline” plan. The presentation said the company intends to use its consumer and merchant network, risk systems and trust infrastructure across those areas.
During the earnings call, CEO Enrique Lores said PayPal plans to launch more merchant products supported by $PYUSD and agentic payments over time. He said those capabilities “can support future growth,” making the statement a company forecast rather than a confirmed financial result.
PayPal formally announced the three-business model in April. Payment Services & Crypto now sits alongside Checkout Solutions & PayPal and Consumer Financial Services & Venmo. The crypto division combines $PYUSD with Braintree, merchant processing and other platform services.
However, PayPal has not started reporting separate revenue, profit or transaction volume for the crypto portion of the division. The new structure shows a larger strategic role for stablecoins, but the company has not yet provided figures showing how much $PYUSD contributes to its financial performance.
$PYUSD expansion continues despite lower on-chain supply
$PYUSD’s circulating supply stood near $2.7 billion in early August, according to DefiLlama. That was below the more than $4 billion recorded in March and about 4.9% lower over the previous month. The decline shows that wider distribution has not produced uninterrupted supply growth.
On-chain supply is not the same as PayPal revenue or customer adoption. Tokens can be minted or redeemed as demand changes across exchanges, wallets and decentralized finance platforms. Therefore, the lower supply does not establish that PayPal’s stablecoin business is losing money.
PayPal expanded $PYUSD access to 70 markets in March. Eligible users can buy, hold, send and receive the stablecoin through PayPal, while some can earn rewards. Paxos issues $PYUSD and publishes monthly reserve reports and third-party attestations.
As crypto.news previously reported, $PYUSD also became native on Polygon on July 9 through the network’s Open Money Stack. The integration combines wallets, fiat ramps, compliance tools and blockchain settlement for businesses seeking cross-border payment and payout services.
In related coverage, crypto.news reported that PayPal and MoonPay launched PYUSDx, allowing developers to create application-specific stablecoins backed by $PYUSD. The platform could broaden $PYUSD’s role beyond PayPal’s consumer wallet, although adoption remains unconfirmed.
What comes next for PayPal’s crypto push
PayPal expects to deliver “at least $1.5 billion” in gross annualized cost savings over the next two to three years, including about $400 million by year-end. Those targets are forward-looking and depend on the company completing its reorganization, technology upgrades and spending changes.
The next measurable checkpoints will be PayPal’s third-quarter results, any separate disclosure on Payment Services & Crypto, and monthly $PYUSD reserve and supply data. New merchant integrations would also show whether the stablecoin is gaining use beyond trading and incentive-driven decentralized finance activity.
The U.S. angle centers on whether a large public payments company can turn a regulated dollar token into a merchant service. Paxos issues $PYUSD under a national trust charter supervised by the Office of the Comptroller of the Currency. That structure may support institutional acceptance, but regulatory status alone does not guarantee transaction growth.
For now, PayPal has made stablecoins more visible in its operating model while its core payments network continues to grow. The company still needs to show how $PYUSD contributes to revenue, merchant retention or transaction margins before investors can measure the financial value of the strategy.
