Stripe will earn US$3.2 billion in free cash flow in 2025, with sufficient funds to start acquisitions
Stripe CEO Patrick Collison Benefiting from the booming artificial intelligence track, Stripe is ushering in a big year of performance. Whether it is a large AI laboratory or a small and medium-sized development team, most transaction payments are completed through this company. The payments giant's revenue surged by a third last year to $6.8 billion, marking its fastest revenue growth since 2021, according to people familiar with the company's financial data. Stripe's cash flow generation is strong, with free cash flow soaring 52% to $3.2 billion in 2025. Abundant cash reserves allow the company to boldly expand its business boundaries. Recently, there were reports that Stripe, together with private equity firm Advent International, had made a $53 billion offer to acquire PayPal. Stripe’s revenue will reach $2 billion in the first quarter of 2026, people familiar with the matter said. The company is vigorously promoting revenue diversification, reducing its reliance on the main payment and settlement business, and gradually launching value-added services such as bill management, invoicing, and tax automation. Stripe said that the annualized revenue of this type of ancillary business is expected to exceed US$1 billion in 2026. The AI craze has brought dividends to Stripe: the subscription payment and pay-per-use billing of leading AI companies such as OpenAI and Anthropic are processed by Stripe. The revenue of AI manufacturers has skyrocketed, and Stripe can extract handling fees from it. At the same time, Stripe has completed an acquisition to improve supporting services and further empower its AI payment business. Stripe was last valued at $159 billion following the completion of an equity tender offer in February 2026. Earlier this year, the company spent about $1 billion to acquire pay-as-you-go service Metronome. AI billing rules are complex, user fees will change in real time based on usage, and tiered pricing is often required. Stripe said that this acquisition can support the implementation of pay-as-you-go billing model for all categories, and pay-as-you-go billing will be the iconic feature of the AI industry in the next decade. Strong financial strength supports Stripe to carry out more high-risk mergers and acquisitions. In recent months, many companies have begun to tighten spending on AI technology. Stripe is also deeply bound to a rapidly developing business model: using an intermediary platform to schedule AI inference requests and allocate computing power requirements to lower-cost model service providers. Several companies disclosed that OpenRouter, an AI model routing platform valued at US$1.3 billion at the beginning of this year, selected Stripe to complete a full range of services such as payment settlement, bill issuance, and tax management. Technology media "The Information" reported last week that large technology companies have offered billions of dollars to acquire OpenRouter, with a valuation much higher than the platform's previous round of financing. OpenRouter is highly compatible with Stripe: the platform charges AI end users, and on top of the fee paid by the user to the model manufacturer, an additional service fee of up to 5.5% is added. Stripe launched its AI gateway service in March this year, allowing developers to call multiple large models and calculate usage in one place, making it easier to bill their customers. Stripe product manager Miles Mathias posted on the social platform Other payment companies such as corporate travel payment service provider Ramp have also launched similar AI gateway functions.
At the same time, Stripe is developing cryptocurrency payment business and taking advantage of the development of AI. Last year, Stripe spent $1.1 billion to acquire crypto startup Bridge, which helps companies convert funds into stablecoins and is responsible for stablecoin issuance and stablecoin payment clearing. In the same year, Stripe invested in Tempo, a public chain project focusing on stablecoin payments. Recently, it also joined forces with Visa, Mastercard, Coinbase and other institutions to become a founding member of the new stablecoin Open USD Alliance. Stripe believes that stablecoins are suitable for small-amount, high-frequency payment scenarios for AI agents and can be used for service payments such as large model calls and computing power rentals. They are more suitable for real-time small-amount payments and can also support fully automatic machine-to-machine payments between software systems. Matthias said on the X platform that Stripe is developing machine automatic payment functions adapted to AI gateways. Stripe declined to comment for this report. Acquisition of PayPal: Reshaping the global payments landscape If the acquisition of PayPal is implemented, the entire payment industry structure will usher in major changes. In addition to its own digital wallet, PayPal also owns Venmo for merchants and back-end payment service provider Braintree. The deal is expected to help Stripe boost profit margins in the long term and ease bargaining pressure from large customers. Stripe early services Lyft, Shopify, DoorDash Waiting for many Silicon Valley start-ups, most of these customers have now grown into industry giants, and their bargaining power has been significantly enhanced. Many large customers have requested lower handling fees and have access to multiple payment service providers such as Braintree, Adyen, and Worldpay to distribute orders. E-commerce giant Shopify added PayPal as a back-end settlement channel two years ago. Even if the overall quote is $53 billion, Stripe’s actual cash outlay is likely to be far less than that amount. Private equity institutions are involved in this merger, and the transaction is likely to be matched with loan financing; according to reports, Stripe really values some of PayPal’s high-quality assets such as Venmo, rather than taking over all of them. According to people familiar with the matter, Stripe has recently made efforts to adjust its transaction structure to reduce the proportion of credit card transactions as much as possible and guide more orders to be directly debited from bank accounts. This move can reduce credit card clearing network fees and inter-bank interchange fees, which have long been a major cost item for Stripe's payments business. Stripe launched Financial Connections, a financial connection product that benchmarks against Plaid, allowing users to securely bind bank cards and authorize account information to enterprises. At the same time, it developed its own digital wallet Stripe Link, which can not only bind credit card payments, but also support direct bank connection for online checkout. However, for C-end consumers, Stripe's brand awareness is far less than that of PayPal wallet and Venmo. The latter has a large number of individual users who bind bank cards. This is also the core reason why PayPal's C-end consumer business is extremely attractive to Stripe. As of now, PayPal has not publicly responded to this acquisition invitation. According to outside judgment, PayPal may request a higher acquisition bid, or choose to continue operating independently under the leadership of a new CEO and turn around its performance. PayPal will release its second-quarter earnings next Tuesday.
At the same time, Stripe is developing cryptocurrency payment business and taking advantage of the development of AI. Last year, Stripe spent $1.1 billion to acquire crypto startup Bridge, which helps companies convert funds into stablecoins and is responsible for stablecoin issuance and stablecoin payment clearing. In the same year, Stripe invested in Tempo, a public chain project focusing on stablecoin payments. Recently, it also joined forces with Visa, Mastercard, Coinbase and other institutions to become a founding member of the new stablecoin Open USD Alliance. Stripe believes that stablecoins are suitable for small-amount, high-frequency payment scenarios for AI agents and can be used for service payments such as large model calls and computing power rentals. They are more suitable for real-time small-amount payments and can also support fully automatic machine-to-machine payments between software systems. Matthias said on the X platform that Stripe is developing machine automatic payment functions adapted to AI gateways. Stripe declined to comment for this report. Acquisition of PayPal: Reshaping the global payments landscape If the acquisition of PayPal is implemented, the entire payment industry structure will usher in major changes. In addition to its own digital wallet, PayPal also owns Venmo for merchants and back-end payment service provider Braintree. The deal is expected to help Stripe boost profit margins in the long term and ease bargaining pressure from large customers. Stripe early services Lyft, Shopify, DoorDash Waiting for many Silicon Valley start-ups, most of these customers have now grown into industry giants, and their bargaining power has been significantly enhanced. Many large customers have requested lower handling fees and have access to multiple payment service providers such as Braintree, Adyen, and Worldpay to distribute orders. E-commerce giant Shopify added PayPal as a back-end settlement channel two years ago. Even if the overall quote is $53 billion, Stripe’s actual cash outlay is likely to be far less than that amount. Private equity institutions are involved in this merger, and the transaction is likely to be matched with loan financing; according to reports, Stripe really values some of PayPal’s high-quality assets such as Venmo, rather than taking over all of them. According to people familiar with the matter, Stripe has recently made efforts to adjust its transaction structure to reduce the proportion of credit card transactions as much as possible and guide more orders to be directly debited from bank accounts. This move can reduce credit card clearing network fees and inter-bank interchange fees, which have long been a major cost item for Stripe's payments business. Stripe launched Financial Connections, a financial connection product that benchmarks against Plaid, allowing users to securely bind bank cards and authorize account information to enterprises. At the same time, it developed its own digital wallet Stripe Link, which can not only bind credit card payments, but also support direct bank connection for online checkout. However, for C-end consumers, Stripe's brand awareness is far less than that of PayPal wallet and Venmo. The latter has a large number of individual users who bind bank cards. This is also the core reason why PayPal's C-end consumer business is extremely attractive to Stripe. As of now, PayPal has not publicly responded to this acquisition invitation. According to outside judgment, PayPal may request a higher acquisition bid, or choose to continue operating independently under the leadership of a new CEO and turn around its performance. PayPal will release its second-quarter earnings next Tuesday.