PayPal's Strong Q2 2025 Results and Raised Outlook
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PayPal Holdings, Inc. is a leading financial technology company that facilitates digital and mobile payments worldwide, offering services through its PayPal and Venmo platforms, among others, to both consumers and merchants. In its second quarter of 2025, PayPal reported robust financial results, highlighted by a 5% increase in net revenues to $8.3 billion and a significant rise in earnings per share, reflecting the company's strategic initiatives and market expansion. Key performance indicators for PayPal included a 6% increase in total payment volume to $443.5 billion and a 7% growth in transaction margin dollars to $3.8 billion, alongside improvements in operating income and margins. The company also returned $1.5 billion to shareholders through stock repurchases. Looking ahead, PayPal has raised its full-year guidance, indicating confidence in continued growth driven by innovations and strategic transformations in its business model.
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Globe and Mail
6 hours ago
- Globe and Mail
Is QuantumScape a Buy After Battery Breakthroughs?
Key Points QuantumScape has figured out how to make electric vehicle batteries better than the current state of the art. It's still not actually manufacturing these batteries at scale, and it's not clear when it might begin doing so. This stock's inability to hold on to its recent gains is a red flag, but the retracement seems exaggerated. 10 stocks we like better than QuantumScape › The past few weeks have been wild ones for QuantumScape (NYSE: QS) shareholders. After it drifted to a multi-year low in April, something suddenly lit a fire under this electric vehicle (EV) technology stock in late June. Shares were up by more than 200% less than a month later. That something was a breakthrough in how the company manufactures its high-performance EV battery packs. A key step in the process can now be completed about 25 times faster than before, offering the market some assurance that this pre-commercialization outfit will have the production capacity it needs when it needs it. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Nearly half of that gain has unsurprisingly been unwound in the meantime. Investors jumped in response to the news, but eventually remembered that there's more this start-up needs to accomplish before mass commercialization. On the other hand, this pullback could also prove to be a fantastic second chance to dive in at a decent price. What's QuantumScape? First things first. What the heck is QuantumScape? This company makes lithium-based batteries like the ones the majority of modern electric vehicles require. QuantumScape's batteries are better than the standard lithium-ion battery you'll find powering most EVs these days. Not only are its solid-state lithium battery packs capable of storing more energy, they don't require the usual anode, tackling two of the EV battery business' lingering challenges. This simpler design not only translates into lower manufacturing costs, but also lower overall materials costs on a per-watt basis. The only problem? QuantumScape's batteries aren't actually being manufactured at commercial scale yet. It's not entirely clear how much it will cost or how difficult it will be to do so, either. The only powerpacks it's made so far are prototypes provided to carmakers that want to tinker with the technology in their own electric vehicles. Still, the science is quite promising. The solid-state batteries the company has made provide on the order of 15% to 40% more driving range than comparable conventional lithium-ion batteries do. Perhaps more importantly, they're far more durable. QuantumScape's own testing indicates that its powerpacks are capable of holding 95% of their original charge capacity, even after 1,000 recharges. That's about 300,000 miles worth of driving, alleviating one of would-be EV owners' top cost concerns -- the eventual replacement of their electric vehicle's battery at a price tag of anywhere between $10,000 and $20,000. A big leap forward Given all this, the company's story is compelling. The question is: How close is QuantumScape to actually manufacturing an affordable and functional solid-state EV battery at scale? Well, it's at least one step closer to this endzone than it was a little over a month ago. In late June, QuantumScape announced it had successfully integrated its advanced "Cobra" separator process into the production of its baseline lithium cells. That means the ceramic-based separator between its batteries' solid cathodes and the company's anode alternative can now be layered into place about 25 times faster than the company's previous fabrication process. That's the whole reason for July's brilliant burst of bullishness. Welcome to the world of story stocks. Still, it's easy to see why the market suddenly became so excited. This is no small matter. This ceramic material negates the need for a porous polymer separator between the liquid electrolyte and lithium metal material found inside most common lithium-based batteries. Not only is the solid nature of QuantumScape's battery materials more efficient at transferring a charge from one side of the battery to another, there's little loss of this efficiency over time, compared to a fluid material. Liquid electrolytes are also potentially just more dangerous than their solid-state counterparts, since they're more likely to be ignited and burn out of control than solid-state batteries. More to the point for investors, being one (admittedly big) step closer to being able produce its batteries at scale is a big win for QuantumScape, and its shareholders. Even if the bulls did end up getting ahead of themselves and have since cooled their jets, that's what catapulted the stock higher in July, reminding investors that story stocks like this one can be quite unpredictable. Don't waste the in-the-meantime The overarching question remains: Is QuantumScape stock a buy following its battery breakthrough? One of the key details glossed over by the noise of the recent run-up is that this $5 billion company is still bleeding money. It spent over $500 million last year, mostly on research and development, topping 2024's and 2023's outlays. And there's not a stitch of revenue yet. That's not an unusual situation for a start-up that's still refining what could be a game-changing technology; you have to spend money to make money. But it's a concern when there's less than $1 billion worth of cash and liquid assets on the balance sheet. Fund-raising could be in the cards. There's also no assurance that paying customers will actually step up once at-scale production becomes possible. The company's said both should materialize sometime in 2026, but such timelines are difficult to predict when a technological solution is as new as this one is. Either way, meaningful revenue wouldn't likely start to flow until 2027 or even 2028, with profits unlikely for at least a while after that. Nevertheless, Volkswagen -- the world's second-biggest automaker, and one of its biggest EV manufacturers -- has remained interested and financially supportive for years now when it didn't have to do so. It's QuantumScape's single biggest shareholder, in fact. Given how close QuantumScape is to the finish line now, it would be surprising if Volkswagen didn't see the development of these superior EV batteries all the way through. The only catch is that the massive automaker probably doesn't care at this point if QuantumScape ever actually turns a profit. 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Before you buy stock in QuantumScape, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and QuantumScape wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025
Globe and Mail
6 hours ago
- Globe and Mail
American Vanguard (AVD) Q2 Loss Down 93%
Key Points GAAP EPS of $(0.03) for Q2 2025 beat expectations, narrowing GAAP losses from $(0.42) in Q2 2024. Revenue (GAAP) reached $129.3 million, exceeding consensus estimates and increasing 1% year-over-year. These 10 stocks could mint the next wave of millionaires › American Vanguard (NYSE:AVD), a specialty and agricultural chemicals producer with a growing global footprint, released its earnings for the second quarter of fiscal 2025 on August 1, 2025. The company reported a GAAP earnings per share (EPS) loss of $(0.03), which surpassed analyst GAAP estimates of $(0.11). Revenue (GAAP) came in at $129.3 million, topping GAAP forecasts of $125.0 million and slightly up from $128.2 million in GAAP net sales in Q2 2024. Key achievements for the quarter included strong gains in adjusted EBITDA, an expansion in gross profit margins to 31% from 29% in Q2 2024, and continued reductions in operating expenses and debt. The results marked an early turnaround from the prior year's losses, as American Vanguard reported GAAP EPS of $(0.03) compared to $(0.42) in Q2 2024, though Continued net losses (GAAP) and restrained top-line growth in the first half of 2025 highlight that challenges remain. Metric Q2 2025 Q2 2025 Estimate Q2 2024 Y/Y Change EPS (GAAP) ($0.03) ($0.11) ($0.42) N/A Revenue (GAAP) $129.3 million $125.0 million $128.2 million 1% Adjusted EBITDA $11.0 million $6.2 million 77% Gross Profit Margin 31% 29% 2 pp Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Company Overview and Focus American Vanguard is a North America–based manufacturer specializing in crop protection chemicals, including insecticides, herbicides, and soil fumigants for agriculture and turf. Its product portfolio also extends to environmental products and biological solutions, serving customers in the United States and over 40 international markets. In recent years, the company's strategy has centered on innovation—especially 'green' chemistry, regulatory compliance, and expanding its global presence. American Vanguard's performance relies on its ability to develop new formulations, execute cost discipline, comply with evolving regulations, and differentiate its offerings in niche markets. Quarterly Performance: Recovery in Progress Financial results for the period showed tangible progress in operational improvement. GAAP EPS came in well ahead of estimates, narrowing the quarterly net loss (GAAP) to $0.85 million from $11.7 million in the prior-year quarter. While overall sales (GAAP) grew 1%, this reversed the declines of earlier quarters and indicated an easing of the customer destocking cycle. Segment results showed U.S. crop sales rose 1% to $52.7 million (GAAP). Management noted, 'Customer destocking is beginning to subside. Against this backdrop, we were able to increase revenue by approximately 1% year-over-year (GAAP).' The top-line result masked a much stronger recovery in profitability. Adjusted EBITDA, a measure of core operating performance that excludes unusual items, climbed to $11.0 million from $6.2 million year-over-year. The gross profit margin—calculated as gross profit divided by revenue—jumped two percentage points year-over-year to 31% (GAAP). The improvement in gross profit margin came despite flat sales and reflected both lower cost of goods sold and improvements in manufacturing and procurement processes (GAAP). Gross profit itself rose 7% year-over-year on a GAAP basis, assisted by a 2% reduction in cost of sales year-over-year. Cost discipline underpinned these gains. Selling, general, and administrative (SG&A) expense (GAAP) dropped to $28.8 million from $31.1 million. Research, product development, and regulatory costs were also sharply lower at $5.8 million, reflecting reduced spending on transformation initiatives. One-time transformation charges, tied to restructuring efforts, fell to $1.6 million from $7.3 million year-over-year. As a result, operating income improved from a loss of $9.2 million in Q2 2024 to a gain of $4.4 million. Balance sheet trends showed continued focus on liquidity and working capital management. Inventory at the end of Q2 2025 was $191 million, representing a $53 million reduction from a year earlier. Debt outstanding also fell $22 million compared to last year to $189 million at quarter-end. The company highlighted its ongoing plan to use free cash flow primarily to reduce debt going forward. Within its product portfolio, metam sodium (a soil fumigant) and Thimet (a soil insecticide for peanuts and corn) were called out as bright spots. Prior headwinds such as the withdrawal of Dacthal (previously used in certain crops), weaker demand in the agave market in Mexico, and drought in Australia weighed on international results, but did not deepen in the period. There was no material commentary on new product launches for the quarter, though management emphasized an ongoing shift toward differentiated and sustainable solutions. No significant regulatory or compliance events were noted, though costs in this area remain a structural consideration. Cash used in operations for the six months ended June 30, 2025 stood at $39.8 million, an improvement from $49.4 million in the same period of 2024. The company did not announce any dividend changes for the quarter and did not specify a current payout. AVD does not currently pay a dividend. Guidance and Looking Ahead American Vanguard's management reaffirmed its full-year guidance, despite earlier reductions to estimates in the first quarter. For FY2025, the company expects revenue of $535–$545 million (GAAP), and adjusted EBITDA guidance of $40–$44 million for the full year 2025 (non-GAAP). This outlook reflects ongoing caution about the pace of agricultural recovery and the persistence of competitive market dynamics. Leadership continues to focus on cost control, inventory reduction, and margin improvement. Management stated, 'the agriculture economy appears to be in the early stages of a recovery.' Investors will want to monitor revenue trajectory, progress on restoring sustained profitability, and execution on debt reduction in the coming quarters. No new quantitative guidance was issued for dividends or other near-term capital allocation initiatives. Persistent net losses and modest top-line growth remain areas for close scrutiny as the turnaround progresses. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,036%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. See the stocks » *Stock Advisor returns as of July 29, 2025
Globe and Mail
7 hours ago
- Globe and Mail
nVent (NVT) Q2 EPS Up 28 Revenue Up 30
Key Points Adjusted EPS surged 28% to $0.86, topping the $0.79 analyst estimate (non-GAAP) and exceeding expectations by 8.9% on a non-GAAP basis. Revenue (GAAP) climbed 30% to $963 million, beating consensus by 6.0% (GAAP revenue) and reflecting both organic and acquisition-driven growth. Operating margins and free cash flow declined from the prior year, primarily due to acquisition mix and tariff costs. These 10 stocks could mint the next wave of millionaires › nVent Electric Plc (NYSE:NVT), a global provider of electrical connection and protection solutions for infrastructure and industrial markets, published its second quarter 2025 earnings on August 1, 2025. The headline news was a significant beat on both adjusted earnings per share (EPS) (non-GAAP) and revenue (GAAP). Adjusted EPS reached $0.86, up 28% (non-GAAP), outperforming the $0.79 consensus forecast for adjusted EPS (non-GAAP). Reported revenue grew to $963 million (GAAP), outpacing the $908.38 million GAAP estimate and up 30% year-over-year. Most of this growth was driven by large acquisitions in power utilities and data centers, as well as robust product launches. Despite this, both reported and adjusted operating margins (return on sales) and free cash flow (non-GAAP) declined year-over-year. Overall, the quarter demonstrated nVent's ability to deliver on its growth strategy, but also surfaced challenges in margin management and cash flow. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. About nVent Electric Plc and Its Strategy nVent Electric Plc designs and manufactures products that connect and protect electrical systems. Its portfolio includes enclosures, electrical connections, and engineered solutions that serve industries such as data centers, utilities, renewables, and industrial automation. The business supports the growing need for safe and reliable power across global infrastructure. The company's current strategy focuses on acquiring businesses that expand its reach in the rapidly growing sectors of electrical infrastructure, data centers, and renewable energy. nVent has made several large acquisitions, including ECM Industries and Trachte, to bolster these offerings. Key to success are continued innovation, reliable supply chain channels, and operational efficiency using lean principles. A strong culture of employee engagement also supports its long-term strategic aims. Quarter Highlights: Financial and Operational Drivers The second quarter featured standout headline growth, with reported revenue up 30%. Organic sales growth, which strips out the effects of acquired businesses and currency, was 9%. Acquisitions contributed 20.7 percentage points to the reported growth, while currency effects were negligible. This growth strategy has intentionally shifted nVent's business mix toward longer-cycle, high-growth infrastructure domains. As a result, power utilities and data centers now make up an estimated 40% of overall company sales. Earnings (non-GAAP) also exceeded expectations. Adjusted EPS climbed to $0.86, an 8.9% beat over consensus and a 28% year-over-year increase. Adjusted operating income also rose by 18%. These gains were supported by strong performances in newly acquired product families like control buildings, bus systems, and switchgear. These are essential systems for managing power distribution and supporting growth in sectors like data centers, power utilities, and renewables. Across product lines, the business launched 35 new offerings in Q1, aiding both organic growth and the company's push into sustainable, electrification-focused markets. While sales momentum was clear, profitability faced pressure. Both operating margin (GAAP) and adjusted return on sales (non-GAAP) dropped from a year earlier -- the adjusted return on sales margin (non-GAAP) fell to 20.8% from 22.9%. This reduction was attributed to margin dilution from acquisitions, additional costs from tariffs, and investments to support second-half growth. The impact was seen across both major segments. Systems Protection's adjusted return on sales reached 21.7%, down 1.8 percentage points, while Electrical Connections adjusted return on sales fell to 28.7%, down 2.2 percentage points year-over-year. Free cash flow (non-GAAP) was $74 million, declining from $100.6 million in Q2 2024. However, the company continued balanced capital allocation, including $253.1 million in share repurchases year-to-date as of Q1 and a dividend of $0.20 per share, which was a 5% increase from the prior year. Business and Product Developments Strategic acquisitions remained central to nVent's expansion this quarter. The integration of Trachte -- a provider of control building systems -- and Avail EPG enhanced nVent's capabilities in high-growth sectors like utilities and data centers. According to management, both acquisitions performed better than expected and contributed to growth synergies. A direct quote from leadership noted: 'The Trachte and Electrical Products Group acquisitions performed better than expected, further strengthening our position in the high growth infrastructure vertical, including power utilities, data centers and renewables.' Product innovation was another highlight. The company introduced 35 new products in the quarter, helping drive double-digit growth in orders and backlog in Q1. Many solutions were designed to meet the growing global demand for electrification, sustainability, and digital transformation. The business emphasized opportunities in data centers, renewables, and electrical grid expansion, with new products tailored for improved energy efficiency and resiliency. These launches complemented nVent's existing portfolio of enclosures and electrical connectors, keeping it aligned with the latest industry trends. The business relies on an extensive distribution network. Over 60% of nVent's revenue now flows through distribution partners, providing broad market access. Management reported strong double-digit order growth, particularly in infrastructure segments for Q1. Growing backlog -- now more than a four-fold increase -- has given the company good visibility for the rest of the year. Operational efficiency is a key part of nVent's culture, with lean manufacturing practices dating back decades. The company called out the doubling of control building output at Trachte as the result of lean improvements. Management also noted that investments and costs related to tariffs weighed on profit margins, but it expects these to be offset over time through pricing, productivity, and integration benefits as new acquisitions are fully absorbed into operations. Looking Ahead: Guidance and Focus Areas nVent raised its full-year 2025 guidance based on strong results and order momentum. Management now expects reported sales growth of 24–26% and organic sales growth of 8–10%. The adjusted EPS (non-GAAP) range was also lifted to $3.22–$3.30, from $3.03–$3.13 previously. For Q3, the business projects reported sales growth of 27–29%, organic growth of 11–13%, and adjusted EPS between $0.86 and $0.88. The company cited its expanded backlog, double-digit order growth, and robust demand in its core infrastructure markets as reasons for its more optimistic full-year outlook. Investors should keep an eye on several areas in the coming quarters. Management has highlighted a $120 million tariff headwind, with plans to offset these costs through pricing, productivity, and supply chain actions. Margin recovery is a top priority, with expectations that synergy capture and pricing actions will improve profitability in the second half of the year. Additionally, trends toward electrification and digital infrastructure are likely to sustain demand for nVent's solutions in years ahead. The quarterly dividend was raised 5% to $0.20 per share, payable in Q3. Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted. Where to invest $1,000 right now When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor's total average return is 1,036%* — a market-crushing outperformance compared to 181% for the S&P 500. They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor. 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