PayPal Holdings, Inc. (NASDAQ: PYPL) shares surged more than 9% intra-day Tuesday after the company announced an agreement with OpenAI to embed PayPal's wallet in ChatGPT and raised full-year guidance alongside its quarterly report.
CNBC first reported the deal, which PayPal said was finalized over the weekend. Users would be able to pay for items discovered within ChatGPT using PayPal, and merchants would be able to sell on the platform starting next year, CEO Alex Chriss told CNBC. PayPal said it would handle merchant routing, payment validation, and back-end orchestration for sellers on ChatGPT and would expand its AI strategy by providing its 24,000-plus employees access to ChatGPT's enterprise offerings.
For the third quarter, PayPal reported adjusted EPS of $1.34, above Bloomberg consensus, and net revenue of $8.42 billion, also ahead of forecasts, aided by stronger-than-expected total payment volume. Transaction margin dollars rose 5.9% year over year to $3.87 billion versus estimates of $3.78 billion.
Citing “another strong quarter,” PayPal raised full-year adjusted EPS guidance to $5.35-$5.39 from $5.15-$5.30, above the Bloomberg consensus of $5.25, and lifted its outlook for full-year transaction margin dollars to $15.45-$15.55 billion from $15.35-$15.50 billion.