PayPal Reports Third Quarter 2026 Results
PayPal Holdings, Inc. (PYPL) filed an SEC Form 8-K — Results of Operations and Financial Condition. PayPal Reports Third Quarter 2026 Results Strategy beginning to translate into results SAN JOSE, Calif., (October 27, 2026) – PayPal Holdings, Inc. (NASDAQ: PYPL) today reported results for the third quarter ended September 30, 2026. “I’m pleased with our third-quarter performanc
How this was made
The 30-second read
Why it matters
The earnings beat on non‑GAAP metrics and the raised guidance provide a fresh catalyst for traders to consider positioning.
Market read
First‑report earnings release with guidance raise for a large fintech firm, offering a clear trading signal.
What to watch
Potential headwinds from regulatory scrutiny of BNPL and crypto exposure could temper upside.
PayPal Reports Third Quarter 2026 Results Strategy beginning to translate into results
Payment activity, transaction margin dollars, non-GAAP operating income and non-GAAP EPS grew, and full-year non-GAAP TM$ and EPS guidance was raised. However, GAAP operating income, net income, diluted EPS, operating cash flow, free cash flow and adjusted free cash flow declined year over year, while total net revenue grew 2%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total payment volume, 3Q'26other | $487.1B | — % | 6% |
| Total payment volume FXN growth, 3Q'26other | 7% | – | 7% |
| GAAP net revenues, 3Q'26GAAP | $8.58B | (1) % | 2% |
| GAAP operating income, 3Q'26GAAP | $1.40B | – | (8)% |
| GAAP operating margin, 3Q'26GAAP | 16.3% | – | (173)bps |
| GAAP effective tax rate, 3Q'26GAAP | 21.9% | – | 3.3pts |
| GAAP net income (loss), 3Q'26GAAP | $1.07B | – | (14)% |
| GAAP diluted earnings per share, 3Q'26GAAP | $1.25 | – | (4)% |
| GAAP basic net income (loss) per share, 3Q'26GAAP | $1.26 | – | – |
| GAAP total operating expenses, 3Q'26GAAP | $7.18B | – | – |
| GAAP transaction expense, 3Q'26GAAP | $4.25B | – | – |
| GAAP transaction and credit losses, 3Q'26GAAP | $386M | – | – |
| GAAP customer support and operations expense, 3Q'26GAAP | $434M | – | – |
| GAAP sales and marketing expense, 3Q'26GAAP | $508M | – | – |
| GAAP technology and development expense, 3Q'26GAAP | $831M | – | – |
| GAAP general and administrative expense, 3Q'26GAAP | $520M | – | – |
| GAAP restructuring and other expense, 3Q'26GAAP | $255M | – | – |
| Number of payment transactions, 3Q'26other | 6,796 | 1 % | 7% |
| Active accounts, 3Q'26other | 440 | — % | 1 % |
| Payment transactions per active account, 3Q'26other | 60.8 | 1 % | 6% |
| Transaction expense rate, 3Q'26other | 0.87 % | – | – |
| Transaction and credit loss rate, 3Q'26other | 0.08 % | – | – |
| Transaction margin, 3Q'26non-GAAP | 46.0 % | – | – |
| Non-GAAP transaction margin dollars, 3Q'26non-GAAP | $3.95B | – | 2% |
| Non-GAAP transaction margin dollars excluding interest on customer balances, 3Q'26non-GAAP | $3.66B | – | 3% |
| Non-GAAP operating income, 3Q'26non-GAAP | $1.61B | – | 3% |
| Non-GAAP operating margin, 3Q'26non-GAAP | 18.8% | – | 16bps |
| Non-GAAP effective tax rate, 3Q'26non-GAAP | 21.6% | – | 3.5pts |
| Non-GAAP net income, 3Q'26non-GAAP | $1.25B | – | (3)% |
| Non-GAAP earnings per diluted share, 3Q'26non-GAAP | $1.45 | – | 8% |
| Net cash provided by operating activities, 3Q'26GAAP | $1.59B | – | (19)% |
| Free cash flow, 3Q'26non-GAAP | $1.43B | – | (17)% |
| Adjusted free cash flow, 3Q'26non-GAAP | $2.05B | – | (10)% |
| GAAP net revenues, nine months ended September 30, 2026GAAP | $25.62B | – | – |
| GAAP operating income, nine months ended September 30, 2026GAAP | $4.32B | – | – |
| GAAP net income (loss), nine months ended September 30, 2026GAAP | $3.29B | – | – |
| GAAP diluted net income (loss) per share, nine months ended September 30, 2026GAAP | $3.71 | – | – |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $4.71B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Transaction revenues, 3Q'2690 % of total net revenues. | $7.71B | (2) % | 3 % |
| Revenues from other value added services, 3Q'2610 % of total net revenues. | $873M | 3 % | (2) % |
| U.S. net revenues, 3Q'2658 % of total net revenues. | $5.00B | (1) % | 5 % |
| International net revenues, 3Q'2642 % of total net revenues; FXN current quarter versus prior year quarter was (4) %. | $3.58B | (1) % | (2) % |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
4Q'26 and FY'26 outlook
- Note4Q'26 GAAP EPS: ~$1.37
- Note4Q'26 non-GAAP EPS: ~$1.43
- NoteFY'26 GAAP EPS: ~$5.07
- NoteFY'26 non-GAAP EPS: ~$5.60
- NoteFY'26 non-GAAP EPS July 2026 Guidance: ~$5.38
- NoteFY'26 GAAP EPS July 2026 Guidance: Mid-single digit decline
Capital returns
- Returned $1.5 billion to stockholders by repurchasing approximately 28 million shares of common stock in 3Q'26.
- On a trailing 12-month basis, returned $6.0 billion to stockholders by repurchasing approximately 117 million shares of common stock.
- PayPal’s Board of Directors declared a cash dividend of $0.14 per share on the Company’s common stock, payable on December 24, 2026, to stockholders of record as of the close of business on December 4, 2026.
- Purchases of treasury stock were $1,501 for the three months ended September 30, 2026 and $4,553 for the nine months ended September 30, 2026.
- Payments of dividends to stockholders were $118 for the three months ended September 30, 2026 and $370 for the nine months ended September 30, 2026.
What drove it
- Total payment volume increased 6% to $487.1 billion; 7% FXN.
- Payment transactions increased 7% to 6.8 billion. Excluding PSP, payment transactions increased 7%.
- Payment transactions per active account on a trailing 12-month basis increased 6% to 60.8. TPA ex-PSP increased 6%.
- Active accounts increased 0.6% to 440 million. On a sequential basis, active accounts increased by 0.4%, or by 1.6 million.
- Transaction and credit losses were $386 in 3Q'26, compared with $483 in 3Q'25.
- Transaction margin dollars excluding interest on customer balances increased 3% to $3.7 billion.
Concerns
- GAAP operating income decreased 8% to $1.4 billion and GAAP operating margin contracted 173 basis points to 16.3%.
- GAAP net income (loss) decreased 14% to $1,073 and GAAP diluted EPS decreased 4% to $1.25.
- Net revenues grew 2%, while total payment volume increased 6%.
- International net revenues decreased 2%, and decreased 4% on an FXN basis.
- Revenues from other value added services decreased 2%.
- Cash flow from operations decreased 19% to $1.6 billion, free cash flow decreased 17% to $1.4 billion, and adjusted free cash flow decreased 10% to $2.0 billion.
- Restructuring and other expense was $255 in 3Q'26, compared with $69 in 3Q'25.
What to watch
- Whether transaction margin dollars excluding interest on customer balances continues to grow faster than reported net revenues.
- The trajectory of international net revenues, which declined 2% and declined 4% on an FXN basis in 3Q'26.
- Whether GAAP operating margin recovers from 16.3% after the 173 basis point year-over-year contraction.
- Execution against 4Q'26 guidance of ~$1.37 GAAP EPS and ~$1.43 non-GAAP EPS.
- Execution against FY'26 guidance of ~$5.07 GAAP EPS and ~$5.60 non-GAAP EPS.
Balance sheet and cash flow
- Cash, cash equivalents, and investments totaled $15.1 billion as of September 30, 2026.
- Debt totaled $13.5 billion as of September 30, 2026.
- Cash and cash equivalents were $7,160 as of September 30, 2026, compared with $8,049 as of December 31, 2025.
- Short-term investments were $3,120 as of September 30, 2026, compared with $2,373 as of December 31, 2025.
- Long-term investments were $4,785 as of September 30, 2026, compared with $4,330 as of December 31, 2025.
- Short-term debt was $2,533 as of September 30, 2026, compared with $1,596 as of December 31, 2025.
- Long-term debt was $10,939 as of September 30, 2026, compared with $9,987 as of December 31, 2025.
- Total assets were $81,622 as of September 30, 2026, compared with $80,173 as of December 31, 2025.
- Total liabilities were $62,139 as of September 30, 2026, compared with $59,917 as of December 31, 2025.
- Total equity was $19,483 as of September 30, 2026, compared with $20,256 as of December 31, 2025.
- Cash, cash equivalents, and restricted cash at end of period were $20,089 for the three months ended September 30, 2026, compared with $23,853 for the three months ended September 30, 2025.
- Purchases of property and equipment were $161 for the three months ended September 30, 2026, compared with $256 for the three months ended September 30, 2025.
Analysis
PayPal reported 3Q'26 GAAP net revenues of $8,584, up 2% from $8,417 in 3Q'25, while total payment volume increased 6% to $487,138 and 7% on an FXN basis. Payment transactions increased 7% to 6,796, payment transactions per active account increased 6% to 60.8, and active accounts reached 440. The operational data show higher platform activity and engagement, but the revenue result grew more slowly than payment volume and transactions.
Revenue mix was uneven. Transaction revenues increased 3% to $7,711 and represented 90% of total net revenues. Revenues from other value added services decreased 2% to $873. U.S. net revenues increased 5% to $5,002, while international net revenues decreased 2% to $3,582 and declined 4% on an FXN basis. Total net revenues decreased 1% sequentially from $8,682 in the June 30, 2026 quarter.
Profitability diverged between GAAP and non-GAAP measures. GAAP operating income decreased 8% to $1,402, GAAP operating margin contracted 173 basis points to 16.3%, and GAAP net income decreased 14% to $1,073. Restructuring and other expense was $255 versus $69 in the prior-year quarter. In contrast, non-GAAP operating income increased 3% to $1,613, non-GAAP operating margin expanded 16 basis points to 18.8%, transaction margin dollars increased 2% to $3,950, and transaction margin dollars excluding interest on customer balances increased 3% to $3,661.
Cash generation weakened in the quarter despite the improvement in non-GAAP operating profitability. Net cash provided by operating activities declined 19% to $1,592, free cash flow declined 17% to $1,431, and adjusted free cash flow declined 10% to $2,047. PayPal reported $15.1 billion of cash, cash equivalents, and investments and $13.5 billion of debt as of September 30, 2026. The company returned $1.5 billion to stockholders through repurchases of approximately 28 million shares during 3Q'26 and declared a $0.14 per-share cash dividend.
Management raised full-year non-GAAP TM$ and EPS guidance and reaffirmed GAAP EPS guidance. The filing guides to FY'26 GAAP EPS of ~$5.07 and FY'26 non-GAAP EPS of ~$5.60, compared with July 2026 non-GAAP EPS guidance of ~$5.38. For 4Q'26, PayPal guides to GAAP EPS of ~$1.37 and non-GAAP EPS of ~$1.43. The central reported tension is improving transaction activity and non-GAAP margin performance against weak reported revenue growth, lower international revenue, GAAP margin contraction and lower cash flow.
Management, verbatim
I’m pleased with our third-quarter performance and the momentum we are seeing across the business, and we are raising our full-year non-GAAP guidance for transaction margin dollars and EPS. We are beginning to see our strategy translate into our financial results, with strong contributions from our key growth areas and increasing diversification. We are making good progress in our multi-year transformation, and while there is more work to do, we are increasingly confident in our path to durable, profitable growth and remain focused on execution.
Enrique Lores, President and CEO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Segment operating income or segment margin
- 4Q'26 revenue guidance
- FY'26 revenue guidance
- 4Q'26 transaction margin dollars guidance
- FY'26 transaction margin dollars guidance
- 4Q'26 operating expense guidance
- FY'26 operating expense guidance
- 4Q'26 tax-rate guidance
- FY'26 tax-rate guidance
- Previous-release outlook section for formal actual-versus-prior-guidance comparisons
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
PayPal disclosed Q3 2026 results, highlighting modest revenue growth, a slight GAAP EPS decline, but a non‑GAAP EPS increase and a raised full‑year non‑GAAP guidance.
Ticker impact
PayPal raised its full‑year non‑GAAP transaction‑margin and EPS guidance in its Q3 2026 earnings release.
upward pressure as investors price in higher margins and EPS.
The company reported higher transaction‑margin dollars and EPS growth, and explicitly raised guidance, which typically lifts sentiment.
Market effects
Payment‑services sector may see modest upside as PayPal signals durable growth.
U.S. fintech stocks could benefit from the positive earnings backdrop.
Limited; impact confined mainly to U.S. equity markets.
Counterpoint
If the guidance raise is already priced in, the stock may face a short‑term pull‑back.
Key entities
- ExecutiveEnrique Lores
President and CEO of PayPal who announced the guidance raise.
