After several years of breathtaking growth, PayPal (PYPL 1.65%) stagnated as the COVID-19 pandemic came to an end. The user base stopped growing and there wasn’t much of a cohesive strategy when it came to earnings or revenue growth over time.
In late 2023, PayPal gave its leadership team a complete overhaul. Not only did former Intuit (INTU 1.20%) executive Alex Chriss take over the CEO role, but virtually every member of PayPal’s C-suite and executive leadership team are new.
The early results under the new leaders have been impressive. Thanks to a focus on efficiency, adjusted EPS grew by 22% year-over-year in the most recent quarter. Plus, the company has launched its Fastlane checkout, formed several key partnerships, and rolled out its PayPal Everywhere campaign to boost debit card volume. And all of these are yet to be reflected in the numbers.
PayPal’s ad platform is not to be overlooked
One of the most exciting developments is that PayPal announced that it would create an advertising platform. This certainly makes sense – after all, PayPal has valuable spending data on over 400 million people from PayPal and Venmo that could allow it to target ads more effectively than competitors.
The company announced that development of the platform would be led by Mark Grether, who formerly led Uber’s (UBER 2.25%) ad business, which he grew into a $1 billion revenue stream.
PayPal Ads formally launched in October 2024, so we haven’t seen any actual numbers yet. But other companies that have massive amounts of consumer data have seen success, and none have anywhere close to the spending data PayPal can leverage. For example, Amazon’s (AMZN 1.80%) ad business – which Grether also helped build – brought in $14.3 billion in the third quarter of 2024 alone.
I’m not saying PayPal will have an Amazon-sized ad platform. Not anytime soon, at least. But it would be a mistake to overlook this part of the new leadership team’s strategy.
