Adyen vs PayPal in 2025: Q4 results, full-year performance, and 2026 outlook

If you only looked at stock price reactions, you might think both Adyen and PayPal had weak quarters. That’s not the full story.

Both companies are still growing. Both are still major players in global payments.

But the market is no longer giving payment companies a free pass for “good enough” growth. Investors now care a lot more about growth quality — where the volume is coming from, how profitable it is, and whether management can defend margins while still investing for the next leg.

That is exactly why Adyen and PayPal, even though they are in the same industry, now look like two very different types of investments.

Before we go further, a quick disclaimer: I am a shareholder of Adyen and PayPal, so this is not investment advice. This is how I think through the business as a long-term investor.

Adyen Q4 2025 and FY 2025 performance

Adyen’s Q4 2025 results are a classic example of a company doing well operationally while still disappointing the market.

The business continued to grow, but expectations were high, and the market focused on one thing: payment volume came in below consensus in the second half of the year. Reuters reported Adyen’s H2 2025 processed volume at about €745 billion, versus analyst expectations of €771 billion, which triggered the sharp reaction in the share price.

That said, the underlying business performance was still strong.

Adyen’s official H2/FY 2025 release showed full-year net revenue of €2,364.2 million, up 18% year-on-year on a reported basis and 21% in constant currency. EBITDA came in at €1,245.7 million, with EBITDA margin expanding to 53%, up from 50% in 2024. For a payments company in a competitive environment, margin expansion like that matters. It tells you the business still has operating leverage and discipline.

The volume headline also needs context.

Adyen reported full-year processed volume of €1,394.3 billion, but it highlighted the difference between reported and underlying growth. Including a single large-volume customer, processed volume growth looked slower. Excluding that customer, the underlying growth rate was much stronger. That detail is important because it changes the narrative from “Adyen is slowing badly” to “the mix is distorting the headline number.”

If you zoom in on Q4 specifically, the quarter was not weak in absolute terms.

Adyen’s Q3 2025 business update reported processed volume of €346.9 billion. Its H2 2025 results then reported total H2 volume of €745.3 billion, implying Q4 volume was roughly €398.4 billion. In other words, Q4 volume increased quarter-on-quarter. The problem was not whether Adyen grew — it did. The problem was that a premium-valued compounder missed what the market had priced in.

What I like about Adyen’s 2025 performance is that the quality of the business still shows up in the right places. In-person payments (POS) continued to scale, with full-year POS volume at €311 billion, up 34% year-on-year.

That supports the broader unified commerce thesis, where Adyen wins by serving large merchants across online and offline channels through a single platform. This is the kind of operating progress I would watch more closely than a single-quarter headline miss.

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Adyen 2026 outlook: Still strong, but more conservative than the market wanted

Adyen’s 2026 outlook is not weak. It is just not exciting enough for investors who expected another upside surprise.

Management guided net revenue growth of 20% to 22% year-on-year on a constant-currency basis for 2026. They also said EBITDA margin in 2026 should remain broadly in line with 2025, while reiterating the longer-term target of more than 55% EBITDA margin by 2028. Capital expenditure is expected to stay disciplined at up to 5% of net revenue. On paper, that is a very solid outlook. It still implies strong growth and good profitability.

So why did the market react negatively?

Because for Adyen, the bar is not “solid.” The bar is “elite and accelerating.”

Reuters highlighted that investors were already focused on softer-than-expected payment volumes, and the 2026 guidance felt cautious relative to prior expectations for low-to-mid-20s growth. When a high-quality company trades on confidence, even a small downgrade in excitement can hurt the stock.

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PayPal Q4 2025 and FY 2025 performance

PayPal’s Q4 2025 results tell a very different story.

This is not a pure compounding narrative. This is a scale-and-execution story, and 2025 made that even clearer.

PayPal’s Q4 2025 Investor Relations newsletter reported total payment volume (TPV) of $475.1 billion, up 9% year-on-year, and net revenue of $8.7 billion, up 4%. Transaction margin dollars were also positive year over year, and PayPal remained highly cash generative. So the business is not collapsing. In fact, on a headline basis, Q4 still showed growth across the core metrics.

The issue was the quality of that growth.

Reuters reported that PayPal’s branded checkout growth slowed to just 1% in Q4, down from 6% in the same period a year earlier. That matters because branded checkout is where PayPal has historically earned better economics and stronger customer relationships.

If branded checkout slows while other lower-margin flows keep growing, the business can still report TPV growth, but the market will question the durability of margins and competitive positioning. That is exactly what happened.

Q4 also came with a major leadership change. PayPal announced that Enrique Lores would become CEO effective March 1, 2026, with Jamie Miller serving as interim CEO until then.

AP and Reuters both covered the transition, and the timing made the market even more sensitive because it arrived alongside a softer 2026 outlook. When a company changes leadership while guiding weakly, investors tend to assume the board wants a faster reset.

For the full year, PayPal’s 2025 results were more stable than the stock action suggested.

PayPal’s 2025 Form 10-K reported TPV of $1.79 trillion, net revenues of $33.172 billion, net income of $5.233 billion, and GAAP diluted EPS of $5.41. Active accounts reached 439 million, up only modestly, which reinforces the idea that PayPal is no longer in its old “hyper-growth” phase.

It is now a mature platform trying to improve monetisation, product quality, and competitive positioning.

PayPal also highlighted areas that are still in progress, including Venmo monetisation and BNPL growth, in its investor materials. So this is not a one-dimensional “bad business” story. It is more nuanced. PayPal remains a giant in payments, but the market wants proof that it can improve branded checkout and defend its economics against Apple Pay, Google, and other competitors.

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PayPal 2026 outlook: A repair year, not a victory lap

PayPal’s 2026 outlook was where management was unusually clear, and, to be honest, that clarity is useful even if the guidance wasn't what investors wanted.

In the Q4/FY 2025 IR newsletter, PayPal guided full-year 2026 transaction margin dollars to a slight decline, with transaction margin dollars excluding interest on customer balances roughly flat.

At the same time, PayPal still expects more than $6 billion in adjusted free cash flow and plans to repurchase around $6 billion in shares. That combination tells you the franchise is still very cash generative even while earnings growth is under pressure.

Management also explained what is causing the pressure.

PayPal pointed to lower interest rates, a headwind from planned transaction-margin investments to improve checkout and product experience, lower contribution from credit, and slower branded checkout growth versus 2025. That is a very important point for an investor.

These are not hidden issues. PayPal is effectively saying: “We know what is wrong, and we are choosing to spend to fix it.”

Reuters added another key detail: the company’s 2026 profit outlook came in below Wall Street expectations, and PayPal also withdrew its previously stated 2027 outlook due to macro uncertainty and weaker retail conditions.

That is exactly why the stock sold off so hard.

The market does not mind short-term pain if management can show a clean path to recovery. What it hates is short-term pain plus lower visibility.

Final take

Adyen still looks like the cleaner operator in 2025.

Revenue growth remained strong, EBITDA margins expanded, and the unified commerce story still appears intact. The market punished the stock because expectations were high and H2 payment volume missed consensus, not because the business stopped working. That is a very different setup from a structurally broken company.

PayPal, on the other hand, still has scale and cash flow, but the key issue is execution.

Q4 showed that branded checkout remains under pressure, and 2026 guidance confirms management is willing to sacrifice near-term margin growth to improve the product and defend the franchise. That can be the right call, but it also means investors need patience and proof.

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