Stripe Minted $3.2 Billion in Cash in 2025, Setting Up Acquisition Hunt
The Takeaway
- Stripe’s free cash flow surged 52% to $3.2 billion in 2025.
- AI boom boosted Stripe’s payment processing business.
- Stripe reportedly bid $53 billion for PayPal with a private equity partner.
Stripe is coming off a banner year thanks to booming growth in the AI sector, where the company processes payments for big AI labs and small developers alike.
The payment giant’s revenue jumped by a third to $6.8 billion last year, according to a person familiar with its financial figures, marking its fastest revenue growth since 2021. Stripe is also practically printing cash, with free cash flow surging 52% to $3.2 billion in 2025. That likely explains why the company feels comfortable taking big swings to broaden its business, such as its recent reported $53 billion bid for PayPal, in partnership with private equity firm Advent International.
In the first quarter of 2026, Stripe generated revenue of $2 billion, the person said. It’s also been focused on diversifying its revenue beyond payments processing, where it generates most of its revenue, through billing, invoicing, tax and other offerings. The company has said those businesses are on track to hit an annual run rate of $1 billion in 2026.
The AI boom has boosted Stripe because it handles processing for subscription and usage-based payments for AI giants including OpenAI and Anthropic, meaning it’s taking a small cut of the companies’ surging sales. Meanwhile, Stripe already made an acquisition to deepen its add-on services to supplement its AI payments business.
Last valued at $159 billion in a February tender offer, Stripe earlier this year acquired usage-based billing startup Metronome for a reported $1 billion. Billing for AI can be particularly complex because what customers owe can constantly change, and companies may need to apply pricing tiers. Stripe said the deal would position it to process payments for usage-based models, a “defining feature of the next decade.”
But its strong financial position sets it up to pursue even more aggressive bets. In recent months, companies have grown more focused on reining in their spending on AI technology. Stripe also has relationships that tie into the fast-growing practice of using intermediaries to track and route AI inference requests to lower-cost model providers.
Popular model routing startup OpenRouter, valued at $1.3 billion earlier this year, uses Stripe for payments processing, as well as invoicing, tax and other services, the companies said early this year. OpenRouter has been attracting acquisition interest at billions of dollars from at least one larger tech firm, a far higher price tag than in its most recent funding round, The Information reported last week.
OpenRouter could be a good fit for Stripe: OpenRouter collects money from AI users, charging a fee of up to 5.5% to the AI user on top of what users pay model providers.
Stripe in March also added an AI Gateway service, which allows developers to access different models and track usage so they can bill their own customers. Stripe currently doesn’t charge markup fees for the AI service, and it is giving away some AI tokens to users as incentives, according to tweets by Stripe Product Manager Miles Matthias.
Other payments firms, such as corporate card and expense startup Ramp, are also launching AI gateway features.
At the same time, Stripe is positioning its crypto-focused payments business to benefit from the AI boom. Stripe last year acquired Bridge, a startup that helps businesses convert funds into stablecoins, in a $1.1 billion deal. Bridge issues stablecoins and processes stablecoin payments. Stripe has also backed Tempo last year, a blockchain designed for stablecoin payments, and more recently became a founding member of the consortium behind new stablecoin Open USD, alongside Visa, Mastercard, Coinbase and others.
Stripe has promoted stablecoins as a way for AI agents to make small payments for services such as model access and computing, arguing stablecoins are better suited for real-time micropayments. That would include machine-to-machine payments, where software systems pay each other automatically. Stripe is working on enabling those payments for its AI gateway feature, Matthias said on X.
Stripe declined to comment for this story.
Payments Pieces
A PayPal deal, meanwhile, would dramatically reshape the broader payments industry, since PayPal owns Venmo and the behind-the-scenes Braintree processing business in addition to its PayPal-branded digital wallets. It could also accelerate Stripe’s long-running efforts to boost margins as it faces pressure from some of its bigger customers.
While Stripe got its start processing payments for a generation of startups including Lyft, Shopify and DoorDash, some of those early Silicon Valley customers are now mature businesses, giving them more leverage over Stripe. Some have pushed to negotiate lower prices, and many have added processors such as Braintree, Adyen and Worldpay. That includes e-commerce giant Shopify, which added PayPal as a back-end processor two years ago.
Any financial outlay on any PayPal deal would likely be much smaller than the $53 billion overall offer. With a private equity partner, any deal would likely involve some borrowed money, and Stripe is reportedly interested primarily in certain parts of PayPal such as Venmo.
One recent focus for Stripe has been pushing to shift more of its payments volume away from credit card–based transactions toward consumer payments made via direct withdrawals from bank accounts, a person familiar with the effort said. That would allow Stripe to avoid paying some credit card network and interchange fees, which are a major cost in its payments business.
Stripe offers Financial Connections, a product that competes with Plaid by letting customers securely link their bank accounts and share account information with businesses. Stripe also has its own digital wallet, Stripe Link, which stores credit cards but also allows consumers to connect directly with their banks to pay online.
But Stripe isn’t well known as a consumer brand compared to PayPal wallets and Venmo, which have millions of customer accounts that are already linked to bank accounts. That makes PayPal’s consumer businesses particularly attractive to Stripe.
To be sure, PayPal hasn’t responded publicly to the offer yet, suggesting it could seek a higher price or keep trying for a turnaround under its new CEO. PayPal is set to report second-quarter earnings next Tuesday.