PayPal (PYPL) 2026年第3四半期決算説明会：EPS成長、Venmoの勢い、業績予想の上方修正

ペイパル・ホールディングス（PayPal Holdings, Inc. / PYPL）は、2026年第3四半期のトランザクション・エコノミクスの改善、規律ある経費増加、およびフィナンシャル・サービス、Venmo、決済処理における好調な勢いの持続を発表した。経営陣はまた、2027年における一段の投資を示唆しつつ、通期の業績予想（ガイダンス）を引き上げた。

主要な要点

• トランザクション・マージン・ドルは、顧客残高に対する利息収入を除くベースで約2%増加、あるいは3%増加した。
• Non-GAAP EPSは、トランザクション・マージンの堅調な伸びと非トランザクション営業費用の1%増に支えられ、8%増の1.45ドルとなった。
• 調整後フリー・キャッシュ・フローは20億ドルとなった。ペイパルは当四半期中に15億ドル、過去12か月間で60億ドルの自社株買いを実施した。
• フィナンシャル・サービスは2026年のトランザクション・マージン・ドルの20%以上を占め、2桁の成長率を記録した。
• Venmoは8四半期連続で2桁のTPV成長を維持した。「Pay with Venmo」および「後払い（BNPL）」の取扱高は、それぞれ43%増と25%増となった。
• 経営陣は、2026年通期のガイダンスを非GAAP EPSで約5.60ドル、調整後フリー・キャッシュ・フローで少なくとも65億ドルに引き上げた。

主要財務データ

事業および営業業績

フィナンシャル・サービス

フィナンシャル・サービスは2026年にペイパルのトランザクション・マージン・ドルの20%以上を生み出し、2桁成長を記録した。経営陣は、後払い（BNPL）、クレジット、デビット、タッチ決済（Tap to Pay）、および加盟店向け融資を、このポートフォリオの主要な構成要素として挙げた。

後払い（BNPL）の取扱高は25%増加し、ドイツおよびオーストリアのAmazon、アメリカン・イーグル、ディックス・スポーティング・グッズなどの加盟店を通じて流通網が拡大した。ペイパルは、店頭購入向けの後払い機能を備えたカードを含め、製品および提供地域のカバー範囲を広げる計画である。

経営陣によると、フィナンシャル・サービスを利用する消費者のARPA（ユーザーあたり平均収益）は、それらの製品を利用しない顧客の2〜5倍に達するという。同社は、オンバランスシート型とオフバランスシート型の信用調達の間でバランスの取れたアプローチを維持する意向である。

Venmo

Venmoは8四半期連続で2桁のTPV成長を記録し、ARPAも2桁のペースで増加した。Venmoデビットカードの月間アクティブ口座数は55%以上増加して670万口座に達し、当四半期中に過去最高となる160万人の新規ユーザーを獲得した。

「Pay with Venmo」のTPVは43%増加した。デビットカードと「Pay with Venmo」の両方を利用する月間アクティブ口座数は前年比でほぼ倍増した。経営陣は、現在Venmo顧客のわずか23%しか同社のフィナンシャル・サービス製品を利用しておらず、マネタイズ拡大の余地がさらに残されていると述べた。

ブランデッド・チェックアウト

ブランデッド・チェックアウトのTPV成長率は4四半期連続で1%〜2%の範囲にとどまった。ペイパルは、米国で3四半期連続の改善、ドイツで安定化が見られたと報告した。

同社は、更新されたチェックアウト体験、ペイパルの表示強化、後払い（BNPL）の統合、および共同マーケティングを通じて、高価値の消費者および厳選された加盟店に焦点を当てている。経営陣は、すべての施策（プレイブック）を導入した加盟店コホートにおいて相対的な決済シェアの改善が見られるものの、取り組みはまだ初期段階であり、通常2〜3年の期間で評価されると述べた。

決済処理および付加価値サービス

PSP（決済サービスプロバイダー）全体の取扱高は8%増加し、ブレインツリーのTPVは10%増加した。ペイパルは、単なる取扱高の拡大ではなく、収益性を伴う決済処理の成長を強調した。

付加価値サービスの利用率（アタッチメント・レート）は前年同期の5%から6%に上昇した。同社は、採用拡大とマージン拡大を支援するため、専門の営業チームや、Risk-as-a-Service（リスク管理サービス）、Payouts（送金）、Invoicing（請求書発行）、加盟店向け融資などの製品に投資している。

コスト削減、テクノロジー、およびAI

ペイパルは従業員数を2,000人以上削減し、社内の大半の部署で3つの組織階層を廃止した。管理職の比率は4分の1以上減少した。

同社は2〜3年間で少なくとも15億ドルの総年算（ランレート）コスト削減の目標達成に向けて順調に進んでおり、これには2026年第4四半期末時点での7億ドル以上のランレート削減が含まれる。削減額の大半は成長施策に再投資される予定である。

ペイパルは75億件の顧客記録をクラウドインフラストラクチャに移行した。同社のAIカスタマーサービス・エージェントは現在190カ国・6言語で運用されており、年初来で2,400万件以上の問い合わせに対応・解決した。また、同社はMetaなどのAI企業と連携し、AIパーソナルエージェントやエージェンティック・コマースへのペイパル統合を進めている。

経営陣による業績予想（ガイダンス）

2026年通期について、ペイパルは現在以下の見通しを立てている。

• トランザクション・マージン・ドルは約157億ドル（顧客残高に対する利息収入を除くベースでは146億ドル）。
• 非トランザクション営業費用は1桁台半ばの増加。
• Non-GAAP EPSは約5.60ドル。
• 調整後フリー・キャッシュ・フローは少なくとも65億ドル。
• 自社株買いは約60億ドル。
• オンラインのブランデッド・チェックアウトTPV成長率は、従来の為替変動の影響を除いた予想に一致。

2026年第4四半期について、経営陣は以下の見通しを立てている。

• 為替変動の影響を除いた売上高成長率は1桁台前半。
• 顧客残高に対する利息収入を除くベースを含め、トランザクション・マージン・ドル成長率はわずかにプラス。
• 非トランザクション営業費用は横ばいから1桁台前半の増加。
• Non-GAAP EPSは約1.43ドル。
• 欧州での逆風が続くと想定し、オンラインのブランデッド・チェックアウトTPV成長率は1%〜2%。

2027年について、経営陣はトランザクション・マージン・ドルおよび営業費用への投資を増やしつつ、2026年と同水準のNon-GAAP EPS成長を目標としている。中期的には、1桁台半ばのトランザクション・マージン・ドルの成長、営業レバレッジ、および自社株買いが、持続的な2桁のEPS成長を支えることができると同社は考えている。なお、これらは経営陣の目標であり、達成された実績ではない。

リスクと注力分野

• EUにおける少額免税（デ・ミニミス）制度の撤廃により、ブランデッド・チェックアウト全体で約70ベーシスポイントの逆風が生じた。経営陣はこの影響が2026年第4四半期まで続くと見込んでいる。
• 英国は引き続き厳しい状況であったが、ドイツは安定からわずかに改善傾向にあり、イタリアとフランスは安定した成長を見せていると説明された。
• ブランデッド・チェックアウトの成長率は1%〜2%にとどまり、経営陣は加盟店向けの取り組みがまだ初期段階であり、成果を結実させるには2〜3年かかる可能性があると警告した。
• ペイパルはコスト削減額の相当部分を再投資する計画であり、コスト削減と新たな支出との間で四半期ごとにタイミングのズレが生じる可能性がある。
• 経営陣は、製品、市場、マーケティング、および専門営業チームへの投資が増加しているため、第3四半期の費用実績を単純に年換算すべきではないと述べた。

アナリスト質疑応答のハイライト

経営陣は、株主価値の最大化に向けて現行計画の実行が最も好ましい道筋であるとしつつも、取締役会は戦略的選択肢を客観的に評価することにオープン姿勢を維持していると語った。フィナンシャル・サービス、Venmo、または決済処理を強化し、自社株買いを上回るリターンをもたらし、かつ実現可能な統合計画がある場合には、選択的なM&Aも検討される可能性がある。

Venmoについて、経営陣は選択された業界ベンチマークと比較してARPAが4〜5倍に拡大する機会があると考えており、今後数年間も2桁のTPV成長が続くと見込んでいる。成長の優先事項には、フィナンシャル・サービスの採用拡大、新たなP2P（個人間送金）体験、および「Pay with Venmo」の受入加盟店拡大が含まれる。

欧州市場に関して、ペイパルは現地で消費者向けチームを立ち上げており、2027年には米国の加盟店向け戦略（プレイブック）を国際展開する計画である。経営陣はドイツおよびオーストリアにおけるAmazonとの後払い（BNPL）での初期の勢いに言及したものの、少額免税制度（デ・ミニミス）の影響が続くため、第4四半期については慎重な前提を維持した。

エージェンティック・コマースについて、経営陣はAIエージェント経由で実施される買い手、売り手、および決済の検証において、ペイパルの本人確認（アイデンティティ）、取引履歴、消費者保護、加盟店保護機能が中心的な役割を果たすと位置づけた。

決算説明会（アーニングスコール）全文字起こし

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, and welcome to PayPal's Second (sic) [ Third ] Quarter 2026 Earnings Conference Call. My name is Alexandra, and I will be your conference operator today. As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference. Steve Winoker, PayPal's Chief Investor Relations Officer. Please go ahead.

Steven Winoker

Thanks, Alexandra. Welcome to PayPal's Third Quarter 2026 Earnings Call. I'm joined by CEO, Enrique Lores and Chief Financial and Operating Officer Jamie Miller.

Our remarks today include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from these statements. Our commentary is based on our best view of the world and our businesses as we see them today. As described in our earnings press release, SEC filings and on our website, those elements may change as the world changes. Over to you, Enrique.

Enrique Lores

Thank you, Steve, and good morning. Today, I will discuss our third quarter progress, our multiple growth engines across PayPal and how our work on cost, technology and AI is helping us move faster and deliver for our customers. We are building on PayPal's unique strength. The trust in our brands our global scale and the power of our two-sided network while expanding beyond Checkout into Financial Services. This is an increasingly important part of our value proposition and a larger driver of our growth.

Financial Services expand our total addressable market, deepen customer relationships, increase lifetime value and allow us to become a more relevant financial partner in consumers' everyday lives. Over the past several months, we have moved quickly to simplify PayPal, clarify accountability across 3 businesses and improve our cost structure and productivity. We now have greater clarity on where our biggest opportunities are and how we will capture them. This quarter, we are beginning to see our strategy translate into financial results. We delivered a solid quarter with Transaction Margin dollars growing approximately 2% and non-GAAP earnings per share growing 8%. We also delivered [ $2 billion ] of adjusted free cash [indiscernible] important contributions to Transaction Margin dollar growth.

Branded checkout TPV growth has remained relatively stable in the 1% to 2% range for 4 quarters despite various headwinds, while there is more work to do, we're encouraged by the improvement relative to the market, continued momentum in the U.S. and strength in BNPL and Pay with Venmo. These results show that our financial performance is increasingly coming on multiple parts of the business.

Last quarter, I outlined five changes we are making to build a stronger, more diversified PayPal. We have made good progress. And today, each of our businesses has a clear plan for how it will contribute to durable profitable growth. First, Financial Services are becoming a much more important part of our business. They already represent more than 20% of Transaction Margin Dollars in 2026 and are growing double digits. For example, we continue to see good momentum in Pay Later with broader distribution this quarter through leading merchants like Amazon in Germany and Austria, American Eagle, [indiscernible] and Dick's Sporting Goods, and the momentum extends beyond Pay Later with strong growth across consumer offerings like Credit, Debit and Tap to Pay as well as Merchant Lending.

Second, we continue to build momentum in Venmo and PSP. We are building on the strength of the Venmo brand to broaden adoption of Financial Services, deepen customer relationships and increase ARPA. The Venmo Debit Card reached 6.7 million monthly active accounts up more than 55% with a record 1.6 million first-time users in the third quarter. We also relaunched the Venmo Credit Card with a differentiated value proposition that rewards customers for splitting purchases with friends. In PSP, we are strengthening our position with large enterprises and leading commerce partners through unified processing and a broader portfolio of premium value-add services, such as Risk-as-a-Service, Payouts and Merchant Lending. PSP volume grew 8%, while value-added services attached increased to 6% from [ 5% ] a year ago.

Third, we remain convinced that a consumer-led approach is the right catalyst for durable profitable growth. We have done significant work to understand how highest value consumers are, what they need from PayPal and how we can deepen our relationships with them and become more relevant in the everyday lives. Transaction Margin Dollar growth is our North Star. To drive that growth, we are placing greater emphasis on monthly active accounts and ARPA among these consumers. That means increasing adoption of Financial Services and improving retention while also making PayPal easier to find and use at the merchants where these consumers shop. Over time, our opportunity is to serve more of their financial needs with Checkout increasingly just one part of our broader relationship. This consumer-led approach also informs how we work with merchants.

As you can see on Slide 5, across many of our largest U.S. merchants, we are improving the checkout experience, strengthening [ presentment ] and partnering on consumer marketing to drive PayPal selection. Where we have implemented multiple elements of this playbook, we are beginning to see improvement in our Checkout performance. We are scaling this approach merchant by merchant and country by country.

Fourth, we are changing how we operate to drive better execution. We have clear accountability, faster decision-making and simpler ways of working. We have reduced head count by more than 2,000 and removed three organizational layers across most areas of the company. We're also using AI and automation to drive productivity. For example, our AI chat agents now support customer service across 190 countries and 6 languages and have resolved more than 24 million [ contracts ] year-to-date. Actions like this are creating capacity to reinvest in our highest return opportunities.

We are on track to achieve our target of at least $1.5 billion in gross run rate cost savings over 2 to 3 years, including more than $700 million exiting the fourth quarter.

Fifth, we are modernizing our technology and leveraging AI to innovate faster and at scale for our customers. We are making solid progress. This quarter, we migrated 7.5 billion customer records to cloud infrastructure. Our new modular risk platform is using real-time data and AI to cut credit decision times [indiscernible] in half in Canada, Italy and Spain. Venmo has started processing select payments on PayPal rails, and Venmo authentication now runs entirely on PayPal's identity platform. These are important steps toward a more unified technology foundation. We completed the global rollout of our new PayPal Mobile App built on modern architecture that will enable faster data-driven innovation. And we are building for what comes next, collaborating with Meta and other AI companies to integrate PayPal through AI personal agents and bring our trusted value proposition to Agentic commerce. We are still early in these changes. This is a multiyear transformation, and there is much more work to do, but the progress we are seeing reinforces our conviction in the strategy.

As I look further ahead, I'm increasingly confident in PayPal's earnings growth potential. Over time, we believe the changes I have described can drive sustainable total company Transaction Margin Dollar growth in the mid-single-digit range. Combined with operating leverage and disciplined capital allocation, including share repurchases, this should enable us to deliver solid double-digit EPS growth. Importantly, we are building the business to make that growth durable. The key is a more diversified contribution across the business. We expect Financial Services, Venmo and Payment Services to contribute a significantly greater share of Transaction Margin Dollar growth over time with each growing double digits.

While we expect branded Checkout TPV to improve, this algorithm does not require it to return fully to historical growth rates. The increasing contribution from the rest of the business can drive total company Transaction Margin Dollar growth in the mid-single-digit range. We also have a significant cost opportunity. There are at least $1.5 billion in savings we have identified, gives us the capacity to both pre-invest and drive operating leverage over time. And PayPal remains a strong cash-generating business, giving us flexibility to invest where we see greatest potential while continuing to return capital to shareholders. Getting there will require investment. Our U.S. playbook is showing encouraging early results. And in 2027, we plan to scale what is working across more merchants in the U.S. and internationally. We plan to invest further in both Transaction Margin Dollars and operating expenses.

We are targeting 2027 non-GAAP EPS growth similar to this year as we position the business for faster, more [indiscernible] growth over time. What gives me confidence is that many of the changes we are making are structural. We have a clear strategy, a simpler operating model and we are improving execution, and we have started to see the results.

Thank you to the PayPal team for your hard work and continued focus. Jamie, over to you.

Jamie Miller

Thanks, Enrique. Let me start with the financial performance in the quarter. At a high level, Transaction Margin Dollars came in above our expectations while operating expenses were below our forecast resulting in non-GAAP EPS above our guidance. One point I'd highlight is the tangible progress we're seeing from our transformation. That's showing up not only in the cost structure, but also in technology modernization and in the growth areas Enrique discussed, including Financial Services and Venmo. Importantly, the savings are creating capacity to self-fund more of our growth investments, such as improving the consumer experience, strengthening merchant presentment and building and scaling our Financial Services products. And as we learn what's working, we're being deliberate about where we invest more and where we pull back.

With that context, turning to the next slide, let me give you some additional color across the business. Starting with Branded Checkout, TPV growth remained relatively stable with continued improvement in the U.S. for the third consecutive quarter and stabilization in Germany. As we communicated in September, the removal of the EU de minimis tax exemption impacted select merchants and created about 70 basis points of headwind in total. In U.S. Branded Checkout, we're seeing encouraging evidence that the work on experience presentment and selection focused largely on our high-value consumers and the merchants where they shop is having an impact. Over the last 4 quarters, we have seen a significant improvement in [ relative ] share of checkout at the cohorts of merchants where we have implemented our full playbook. We also maintained strong momentum in Buy Now, Pay Later and Pay with Venmo, which outpaced the market growing 25% and 43%, respectively. We're still early, but what we're learning is increasing our confidence in the playbook and helping us be more targeted about where we invest in 2027.

On Venmo, TPV sustained double-digit growth for our eighth consecutive quarter. More importantly, engagement and monetization continue to deepen with ARPA also growing double digits, driven by strong adoption of our monetized products. We're also seeing newer cohorts ramp their product usage faster with a record number of new users activating the Venmo Debit Card within their first 30 days. Monthly active accounts using both the Debit Card and Pay with Venmo nearly doubled year-over-year, building on similarly robust growth in this cohort last year. At the same time, we're also broadening the places where consumers can use Pay with Venmo, travel and college tuition to prediction markets while maintaining strong retention across our established merchant base. That combination of greater utility, deeper product adoption and higher engagement is the model we're building toward with Venmo.

In PSP, our focus is on profitable growth, not simply volume. Braintree's TPV grew 10%, supported by profitable front book wins, high retention and expansion with existing merchants. We're also driving higher attachment of value-added services to our [ pricing ] relationships, which we expect to support margin expansion over time. Third quarter revenue grew 2% on a spot basis and 1% currency neutral with growth in Braintree and Venmo growth as well as FX favorability contributing to performance, offset in part by higher contra revenue investments made in the quarter and the de minimis headwinds mentioned earlier.

We benefited from a lower transaction expense rate due largely to mix and partner [indiscernible], lower transaction loss, reflecting our team's ongoing work to improve and strengthen on-boarding, fraud prevention and risk management capabilities and lower credit loss driven by a reserve release related to expected credit externalization and supported by disciplined underwriting. Transaction margin dollars grew 2% or 3%, excluding interest on customer balances. What's important is that we're increasingly seeing contribution from multiple areas of the portfolio while continuing to fund both Transaction Margin and OpEx investments required to strengthen Branded Checkout and grow Financial Services, Venmo monetization and PSP value-added services attach. That's the more diversified growth model we're building.

Moving down the P&L operating expenses, we're beginning to see tangible benefits from the operating rigor we've put in place and faster progress on the transformation, including increasing spans of control, reducing management roles by more than a quarter and rightsizing procurement spend. Non-transaction operating expenses grew just 1% in the quarter and helped drive non-GAAP operating income growth of 3%. That said, I would not simply annualize the third quarter expense performance. We intend to remain disciplined on costs while investing where we are seeing results, in places such as Financial Services, product growth, consumer life cycle marketing and specialized sales teams. The combination of stronger transaction margin performance and lower operating expenses resulted in non-GAAP earnings per share growth of 8% to $1.45 above our guidance.

Our cash generation remains a strategic advantage. Adjusted free cash flow, which excludes the timing impact from the origination and sale of [ later ] receivables was $2 billion. We completed $1.5 billion in share repurchases, bringing the trailing 12-month total to $6 billion. More broadly, our strong liquidity and cash generation give us the flexibility to invest in the business without sacrificing our ability to return significant capital to shareholders. That's particularly important as we look towards 2027 and selectively increase investment behind the opportunities where we're building the greatest conviction.

Turning to guidance. For the fourth quarter and the full year 2026 our year-to-date performance demonstrates continued progress across PayPal even as we execute significant organizational change with increasing clarity and confidence in the growth plans for each of our 3 businesses. With that as a backdrop, we are raising guidance for the full year.

We now expect Transaction Margin Dollars to increase to approximately $15.7 billion or $14.6 billion, excluding interest on customer balances. Mid-single-digit growth in non-transaction operating expenses and non-GAAP EPS to increase to approximately $5.60. Our guidance now includes at least $6.5 billion of adjusted free cash flow and continues to incorporate approximately $6 billion in share repurchases. For Online Branded Checkout, we continue to explore single-digit TPV growth on a currency-neutral basis for the full year, in line with our prior expectations. This assumes that headwinds in Europe, including the impact from the removal of the de minimis exemption continue to persist and result in similar 1% to 2% online branded growth throughout the fourth quarter. We remain on track to achieve at least $1.5 million in gross run rate cost savings over the next 2 years to 3 years, and are increasing our expectations exiting the fourth quarter to a run rate of more than $700 million.

As we've shared, we intend to reinvest a significant portion of these savings into our highest priority growth initiatives while improving operating leverage over time. For the fourth quarter, we expect low single-digit revenue growth on a currency-neutral basis, slight positive growth in Transaction Margin Dollars. TM$ excluding interest on customer balance to be slightly positive and flat to low single-digit growth in non-transaction operating expenses and non-GAAP EPS of approximately $1.43.

In summary, we're seeing encouraging signs that the changes we're making are translating into better performance across the business. We have more work ahead of us, but we're operating with greater clarity and discipline, and we're building a stronger foundation for more durable growth and stronger financial performance over time. I'd like to wrap up by thanking the PayPal team for everything they've accomplished this quarter.

With that, Steve, let's go to Q&A.

Steven Winoker

[Operator Instructions]

Operator

[Operator Instructions] Your first question comes from the line of Andrew Schmidt of KeyBanc Capital Markets.

質疑応答

Andrew Schmidt

Maybe just start a little bit higher level, just given your prior comments about strategic alternatives, you and the Board obviously see more value than whatever offers were on the table. Could you just talk about what's driving your view of intrinsic value? And then, of course, the confidence in achieving that? That would be helpful.

Enrique Lores

Sure, Andrew. Thank you for the question. So let me share that we have strong conviction in our ability to execute the plan that we have outlined in our prepared remarks. And to achieve sustainable double-digit EPS growth in the midterm. And this will be driven by, first, sustainable mid-single-digit transaction margin growth, driven by Venmo, Processing and more modestly by Branded Checkout, all supported by the growth of Financial Services that we -- and we have highlighted how critical we think that part of the business is. We expect also to see operating leverage as we drive the cost reduction program. And of course, we will continue to utilize our strong free cash flow to drive share buybacks and, in some cases, selective M&A that will help us accelerate our plan.

But as you said, the Board and the management team have a clear objective to maximize shareholder value, and we have been and we will be open to analyze objectively any option that is presented to us, and we will always choose the alternative that will create more shareholder value. And at this point, that alternative is to execute our plan, and the team is fully focused on driving the [indiscernible] that we have outlined in the call.

Operator

Your next question comes from the line of Dan Dolev with Mizuho.

Dan Dolev

Really nice work here on the OpEx and the [indiscernible] congratulations. I wanted to talk about Venmo. It keeps growing and it looks strong, I think, in the double digits. I mean -- how can we make this a bigger part of their portfolio? And obviously, the usual question on monetization and great work again.

Enrique Lores

Sure. Thank you. I'll take the question. So our goal, as I briefly mentioned in the prepared remarks, is to make Venmo increasingly central to our customer's everyday financial life. And we are doing that by building from the strength that we see today in the business and expanding into Financial Services. The growth that we see today is driven by three things: new experiences. And for example, this quarter, we launched the ability for our customers to do P2P transfer by scanning and splitting [indiscernible] which is having very well reception by continuing to invest in Financial Services that help us to monetize better our customers. And just to mention, only 23% of our customers are using today some of the Financial Services we have today. And this quarter, we saw very strong growth of the Debit Card with more than 60% growth year on year.

And finally, we are seeing also very [indiscernible] progress on Pay with Venmo and Pay with Venmo or TPV grew more than 40% this quarter. So the growth in the future will be driven by continuing to drive these areas, and we expect to continue to see double-digit TPV growth for Venmo in the coming years. What is very exciting for us is that when we look at ARPA, that is going to become one of the key metrics of the business going forward. And we look at -- and we benchmark ourselves with other companies in our space, we have a 4x, 5x opportunity to increase ARPU, which gives us both the conviction about the opportunity and shows us where we need to invest and where we need to grow. So we expect Venmo to continue to grow, and the result just show the potential the business continues to have.

Operator

Your next question comes from the line of Tien-Tsin Huang with JPMorgan.

Tien-Tsin Huang

Just there was good color here on Financial Services. I was hoping maybe you can update us on the product road map here for Financial Services? How do you see Financial Services adding to transaction margin dollars in the near term or even the midterm and is the bias still to stay balance sheet [indiscernible].

Enrique Lores

Let me start and then maybe Jamie wants to complement some of the comments. So yes, we see -- we continue to see Financial Services as a key driver of future transaction margin dollar growth and this is why we highlighted it during the call. And this is true for all segments. So it's true for consumers and merchants, but also for the 3 businesses. Both for Braintree, for Venmo and for PayPal itself. And within Financial Services, we include things like Buy Now, Pay Later, Debit and Credit. Today and in the future, these businesses or these products offer attractive economics, they open a larger TAM and help us to complement our value proposition to customers.

In fact, as I was mentioning before, ARPA is going to become a key metric for us going forward. And we see that when consumers use Financial Services, there [indiscernible] between 2x and 5x bigger than for those consumers that don't.

[indiscernible] continued to invest in this space, for example, with Buy Now, Pay Later, we are going to be extending the portfolio of offerings that we have, both in terms of products and also in terms of geography, to continue to complement our offer in that space. We'll be offering cards that will have the flexibility of Buy Now, Pay Later, so we can extend the value proposition from online to stores. And you will see us expand the portfolio of different credits offerings that we have. So again, a very important business for us, where we see a lot of momentum and a lot of demand from our customers to offer.

Jamie Miller

Yes. And I just chime in on the funding question. We have had a balance sheet-light strategy towards credit funding over the last couple of years. And what I'd say about the next few years is we'll continue to take a balanced approach, between on balance sheet and off balance sheet growth. We have a lot of flexibility in our funding sources, and we've demonstrated that through the European Buy Now, Pay Later, the U.S. Revolve partnership we have. The U.S. [ Pay in 4 ] funding program that we have underway that we started last year. And I think what underpins that, which is really important is that we've got really strong credit underwriting and very attractive paper. So while we'll continue to use a balanced approach with both on and off in some case, retain the economics, in some cases, share those. I think what's important is we have the flexibility going forward to manage that and navigate that depending on what we're doing.

Operator

Your next question comes from the line of Timothy Chiodo with UBS.

Timothy Chiodo

I want to touch on the comments you made around collaborating with Meta and some of the other AI agents. I know from prior discussions, some of the advantages that PayPal might have would relate to the transaction history that you bring to the table. And then also back to PayPal does provide both consumer and merchant protections. I was hoping you could expand upon those or maybe other reasons why PayPal may be well positioned for Agentic Commerce?

Enrique Lores

Yes, I'll take that one. We really see Agentic commerce as a great opportunity in the company. So we really are -- make this a priority for us, both in terms of the internal work that we do and in terms of partnering with other companies such as Meta. The key advantage that is really driven by our core value proposition to consumers and merchants. When PayPal started, the key value proposition was around trust and security. This was needed in e-commerce. This will be even more -- needed more in agentic commerce. And what we are doing is translating that value proportion into the new world. If you think about consumer agents that we'll be buying from [indiscernible] from merchants, both will have to validate that this is a real consumer that can pay. This is a real merchant that has the product and that is the value that we see PayPal playing going forward. So it's really all about trust, and about the security that we will be providing both to merchants and to consumers.

And this is why we are working with all the key leaders in this space on the -- for personal agents to make sure that consumers can transact using PayPal and using AI us as kind of the key vehicle to make sure that these transactions are real. And we look at it at the beginning because what is true for commerce will be expanded to other types of the portfolio of of activities that we provide to customers like P2P or peer-to-peer transfers. All this is part of the value proposition we bring to customers. And this is why we are so excited about the opportunity that AI brings to PayPal.

Operator

Your next question comes from the line of Harshita Rawat with Bernstein.

Harshita Rawat

Can you maybe expand about the market dynamics in Europe? You have the de minimis tracks and competitive pressures in certain markets. But you're also investing in the consumer value position, things like Buy Now, Pay Later. So what's your confidence level with respect to improving brand growth in Europe? And also, Jamie, what's the expectations on the de minimis for the fourth quarter? I know you said headwinds persist, but I just wanted to kind of double check that.

Jamie Miller

Sure. And maybe I'll start with the last part of that first. Our expectation on the EU de minimis tariff impacts is that [indiscernible] into the fourth quarter. When that happened in the U.S. last year, it tended to dissipate within a few months, actually. This, we're still seeing the impacts from the tariff policy change in October and we do expect that to last through the fourth quarter. If I pull back and really look at the market dynamics in Europe and maybe I'll talk through that. And Enrique, maybe you want to talk about the invest side of it.

The core European markets outside of de minimis, really are, I would say, relatively consistent this year and to a degree, stabilizing and in some cases, improving. You look at Germany, for example, that has been stable all year for us. And I would say, as we're moving through the third quarter, I would call it slightly improving. We launched Buy Now, Pay Later in Germany and Austria over the last couple of months, and that's off to -- with Amazon, and that's off to a really nice start. The U.K. continues to be challenging, but it's been consistent this year. And Italy, [ France ] are stable and good growers. So I think what's improving is exactly your question though. We've spent a lot of time in the last 6 months with Enrique, focusing on our country-to-country approach and really strengthening our consumer teams in Europe and are now actively positioning to take the playbook that we talked about on the call with merchants into Europe next year. And all of this is really important to our continued transition in Branded Checkout. But Enrique, you may want to comment a little bit more on the investment side of it.

Enrique Lores

Yes. I think what we have done in Europe is really to invest to create the right local infrastructure, especially to manage our consumer business. We didn't have teams, local teams that understood the local trends that were [indiscernible] drive progress and activities to drive consumer demand. And this is what we have been building during the last 2, 3, 4 months, and we are starting to see the results. As Jamie mentioned, our relative performance in Europe improved. This doesn't mean that we don't have more room for improvement, which we do, and we will continue to do. But we are positive about the progress that we have seen. And especially, as we see the progress that we have made in the U.S. and we highlighted in the call, the progress that we have made with some of our key merchants, applying that same playbook in Europe to help us to drive growth and to continue to improve the performance in those countries.

Operator

Your next question comes from the line of Bryan Keane with Citi.

Bryan Keane

I just also want to follow up on international. It looks like the TPV is relatively flat, the growth on FX neutral. But the revenue growth slipped to negative 4% growth on an FX-neutral basis. It sounds like there's a lot of stability in Germany and Italy and some of the European markets. What's driving, I guess, international down further? Is there Asia markets that are weakening? And then how long will it take to get back to normalized positive growth in international as we get into next year?

Jamie Miller

Yes. So the TPV side of things, we saw some translation minor impacts there. But when you start to look at revenue and in particular, international, that's where you're seeing the impact of the EU tariffs and Branded Checkout. And you have to remember that the number I gave you on impact from the tariffs is 70 bps to Branded Checkout, that's a global number. It's not the international specific numbers. So that number is bigger when you start to apply it just to international revenue. But that's not really the primary difference there.

And then when you start to look at international, going into next year, we've been encouraged by some of the growing -- growth that we've seen. And I mentioned before across Germany, Italy, France and a few other parts of Europe. But I think more importantly the playbook that we started rolling out really over a year ago around not only experience presentment and selection, but also around Buy Now, Pay Later and really reaching into the consumer and greater penetration. While we started that in the U.S. that is moving to Europe. And you're seeing some of that with the actions we talked about with expansion of the Buy Now, Pay Later portfolio across Europe and across other places and with respect to increasing levels of penetration around the [indiscernible] book as well.

Operator

Your next question comes from the line of Andrew Bauch with BMO Capital Markets.

Andrew Bauch

I just wanted to hone-in on the '27 transaction margin dollar algorithm. I know you outlined the eventual path to mid-single digits growth. But then you also said that '27 was going to be an investment year. I guess what should we expect for the TM$ growth to look like in '27 specifically? And what are the -- like the biggest bridges between the 2% growth you're at today in the mid-single-digit target?

Jamie Miller

Okay. So let's first talk about the mid-single-digit point of view is really around our medium term, so over time point of view. And if I start with that, as Enrique talked about before, we [ expect ] Transaction Margin Dollar growth over the next coming years, a more balanced composition with Venmo, PSC and Financial Services increased growth over time. And I think importantly, it doesn't require Branded Checkout to get back to historical growth levels -- levels to really see that mid-single-digit growth. But when I look to '27, I think what I'd say first is it's a little too early for us to give '27 guidance. We'll do that at our next call in February.

But you've seen from us this year, nice performance across multiple areas. So we've seen Branded Checkout stabilization. We've seen Venmo, we've seen processing growth. And we do expect further Transaction Margin Dollar and OpEx investment in 2027 and if I level up, what we're really targeting as a profile is similar non-GAAP earnings per share growth next year what we are guiding to this year. So that's probably how I would talk about it, and '27 being relatively consistent with how we've operated in '26. We are making good progress. Our focus is on building momentum and looking at '28 and beyond.

Enrique Lores

And maybe, just let me emphasize these last two comments. We think we have an opportunity to continue to invest in the areas where we're seeing progress, whether it's transaction margin and [indiscernible]. This is what we are planning to do we think will be critical to drive stronger growth in '28 and beyond. And despite of that we expect and we are targeting to grow EPS at the same rate as we did this [indiscernible] will this year

Operator

Your next question comes from the line of Sanjay Sakhrani with KBW.

Sanjay Sakhrani

I guess when I look at Slide 5 and those cohorts that seemingly are headed in the right direction. When we look at the difference between like the first one and the last one, there seems to be a [ bifurcation ] between when you apply to a direct merchant versus a marketplace. right? So I'm just curious like what are the nuances because it seems like a lot of the technologies are implemented there. So I'm just curious, is it because the marketplace has other options for payment and that merchant doesn't. I'm just curious, as we think about the opportunity ahead and how you implement these changes, like where the opportunity is most significant?

And then just a quick follow-up, Jamie. Just as we think about the comparisons this year versus next year. It seems like the comps are much easier next year. So shouldn't we expect a little bit of an acceleration in TMD growth because the comps are easier. Or maybe you could explain sort of how we should think about it?

Enrique Lores

So let me take the first part of the question on North America. When we look at our playbook, the book has different elements. One element is to improve the experience and to get the merchants to use the latest checkout pages. Another element is to integrate in the offer Buy Now, Pay Later and some of the other Financial Services. Another element is to build co-marketing activities with the merchant. Within the graph, and we don't have the same -- exactly the same formula applied to every merchant. It depends on specific conditions of the merchant and what are the economic situation and the interest that we work with. And this is what is driving the valuation variation across the different customers that you have in the chart.

We thought it was important to share this chart because it shows the trend. And yes, there are different [indiscernible] merchant. But the important thing is how the overall TPV growth is growing and how we are also starting to grow our relative share in this [ account ]. And we have great examples of the progress that we are making, we don't specifically mention them in the call, but for example, with one of the leader U.S. sports entertainment platform where we drove and we renewed our partnership at the beginning of the year, we are seeing more than 40% growth in the last 6 months with Venmo as well growing more than 50%. With one of the leading U.S. omnichannel retailers, we expanded our Pay Later offering to them and growth of BNPL grew from 7% to 20% with significant growth of monthly active users. So we have many examples where we see that the impact of the playbook that we have invented is really starting to gain traction. And again, this is why we think continuing the investment and continuing the work is going to be [indiscernible] for us going forward.

Jamie Miller

Sanjay, when you look at, in particular, fourth quarter or 2027, I would just echo what Enrique is saying. We are really encouraged by the results we're seeing, but it's early. And we've got more work to do. And one of the things I would mention is that in the U.S., in particular, we saw nice sequential growth over the past few quarters in U.S. Branded Checkout TPV growth. So we're seeing good signs, but we also don't want to get ahead of ourselves. We are underwriting these investments generally in Branded Checkout to about a 2- to 3-year time horizon. And on the largest merchants, it really is like 3 years. So it's going to take some time for these to come through. And as we've said before, we're beginning that process in Europe, and we're excited to see where it goes and go from there.

Operator

Your next question comes from the line of Darrin Peller with Wolfe Research.

Darrin Peller

Just a quick two-part on investments in general. First, for Enrique, on M&A, just if you can give us an update again, you touched on it earlier, but your appetite for M&A in terms of size, timing and type, what you're seeing? And then really, Jamie, when we think about the investments you're talking about for next year, I mean, again, you came in strong [indiscernible] better at about 1% growth, I think, a little below what we had thought for OpEx expectations. But how should we think about margin the next year in terms of what you're building into that similar EPS profile?

Enrique Lores

So let me start on the M&A side. And I'm going to start by saying that -- our plan is to maintain our approach, significantly return capital to shareholders through share buybacks and dividend. But that over time, we believe that M&A should also play a role value creation. Any M&A action that we will do will have to go through what I call three filters. Filter#1 is strategy. It will have to support the strategies that we have outlined, for example, to drive growth of financial services or accelerate the growth of Vermo or processing. That's clearly aligned to the strategy that we have explained. Second, it needs to have strong financial case and a strong financial return. And given that share buybacks that we believe that our share is undervalued the minimum value, of course, will have to be -- provide more value than just buying shares, even [indiscernible] the model that we have.

And third and very important, we need to also have a very strong operational plan, and we'll have to have the conviction and the plan that we'll know how to impact the company and how to extract the value that the financial case will bring. So these are the three filters that we will apply in any case. We will remain very disciplined. But with M&A, we can accelerate the plan that we have been discussing today.

Jamie Miller

Great and then Darrin, with respect to 2027 investment, I guess what I'd say is we've had nice performance in the third quarter, and it was much better than we expected, and we expect to have a good profile in this -- in the fourth quarter as well. But I would not run rate the second half OpEx across '27. While we're off to a really strong start, we are ramping investments along the lines of a lot of the things that Enrique and I've talked about here product build, market build, marketing and other things of that. And I think one of the things you're going to see is it's hard to fully synchronize the pace of the cost out with the pace of the investment, and you are going to see some mismatch across the quarters. But overall, if I look at the '27 profile, when you look at transaction margin, when you look at OpEx, when you look at EPS, like I said before, we expect a roughly consistent profile, and we'll unpack that and get into more specifics on the call in February.

Operator

Your next question comes from the line of Dan Perlin with RBC Capital Markets.

Daniel Perlin

I wanted to just hit on PSC for a second. It sounds like part of that strategy is to continue to drive higher attach rates for value-added services. So I guess the first part is just what does that sales motion look like as we sit here today happy to invest in that going forward? Or are you kind of where you want it. You just need to push it harder.

And then I thought I heard you say the percentage of that was high single digits. So if there's any clarification on that, that would be great.

Enrique Lores

So let me take the first part. So in PSP, what we need to do and [indiscernible] with the biggest opportunity is from one side to continue to drive growth or what I would call the basic processing capabilities and we've been making very good progress and making it profitable during the last few quarters, but also to improve attach of value-added services. Services like Payouts or Risk-as-a-services, our Risk-as-a-Service or Invoicing. These are all great services that provide a lot of value to our customers -- and either we have not been able to attach them properly or we have not been able to monetize them properly during the last quarter. And that's going to be a key priority for us going forward.

We are investing not only in the products themselves, but especially in a specialized sales force that will drive an attach that will have a unique code to improve attach and to help value-added services. I want to acknowledge that we have started to make progress. We grew our attach from 5% to 6%, so year-on-year, 1 point, but we have much more room for improvement, and this is where we're going to be focused.

Steven Winoker

Alexandera, we have time for one last question. Can we just put one more in, please.

Operator

You got it. Your last question comes from the line of Jason Kupferberg, Wells Fargo.

Jason Kupferberg

So nice to see some of the broad-based stabilization. Obviously, pockets have improved in the business. I did want to come back to the topic of branded growth. I know we're talking about Q4 being in this kind of steady 1% to 2% range, and you are assuming that the EU tariff headwinds continued, but you did also talk about some U.S. momentum. So just curious why Q4 wouldn't potentially accelerate? I know you've got a materially easier compare? And maybe if you can just quantify some of the U.S. acceleration and recent [indiscernible] that would be great.

Jamie Miller

Sure. I mean the short answer on the fourth quarter is that we expect the EU tariff headwind to continue. And we're really planning for consistency -- if I unpack that a little bit, the forecast is really based on our view of historical performance, and our view of the market. And the holiday season is more heavily retail, but we have a really good and strong depth in services, travel and some of the other verticals. And we've got really good growth rates in areas that we're deep.

But the EU de minimis, we assume that continues to impact us. As I mentioned before, Europe has been consistent year. But it's an area we're watching with some of the macro [indiscernible] and the EU de minimis that I mentioned. And we're really encouraged by the U.S. merchant playbook work we've done, and we do believe that we're entering the holiday season better position than we were last year at this time. But it's all still very early, and we've got more work to do ahead. And I would just say that as we take it all in, that's what's leading us to the guide around the 1% to 2% for fourth quarter.

Steven Winoker

Enrique, any final thoughts?

Enrique Lores

Yes. I want to close by first acknowledging the progress that we have made so far. Last quarter, we outlined five key priorities for the company, and we are making progress in all of them. We have talked about the progress we have made in Financial Services that are growing double digit, and especially around areas like BNPL is showing really our ability to expand and to grow in this area. Second, we have talked about the progress we're making with Venmo and PSP, significant growth, both on revenue and transaction margin and great plans to continue to drive that going forward. Around Branded Checkout, the business has stabilized. We have a clear view, work is a playbook that we need to apply to continue to drive growth and especially centered around high-value customers, we see the -- what we need to do, and we are going to continue to do that in the coming quarter. And finally, both from cost amplification and embracing AI, we have made tangible progress as the results show.

So good progress made in Q3 that show that we are in the right direction, more work, too. But thank you to the PayPal team and also thank all of you for participating with us today.

Operator

Thank you. This concludes today's conference. Thank you for participating. You may now disconnect.