PayPal Reports Slowest Quarterly Net Revenue Growth This Year, Raises Earnings Guidance

• PayPal said revenue rose 2% to $8.58 billion in the third quarter versus analysts' estimate of $8.71 billion.
• Adjusted earnings stood at $1.45 per share, compared with the Koyfin estimate of $1.31.
• PayPal also raised its 2026 adjusted earnings outlook to about $5.60 per share from about $5.38 per share, in line with analysts' estimates.

Shares of PayPal Holdings (PYPL) dipped in morning on Tuesday after the payments firm upped its full-year profit outlook but reported its slowest quarterly net revenue growth of the year.

PayPal said revenue rose 2% to $8.58 billion in the third quarter versus analysts' estimate of $8.71 billion, according to Koyfin.

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Adjusted earnings stood at $1.45 per share, compared with the Koyfin estimate of $1.31. The company reported that restructuring and other charges rose to $255 million from $69 million a year ago.

The company said adjusted net income was down 3% to $1.25 billion. PayPal said it spent $1.5 billion to buy back about 28 million shares during the quarter. Over the past 12 months, it repurchased about 117 million shares for $6 billion. Diluted shares dropped to 858 million from 960 million a year earlier, as most of the adjusted earnings gain came from the smaller share count.

PayPal stock was down over 3% in morning trade. On Stocktwits, it was one of the top trending tickers at the time of writing. Retail sentiment around PayPal improved to ‘extremely bullish from the ‘bearish’ zone over the past day. Chatter around it also improved to ‘extremely high’ from ‘normal’ levels over the past day.

International Revenue Turns Lower

U.S. revenue climbed 5% to $5 billion. Overseas revenue declined 2% to $3.58 billion. Total payment volume, the dollar amount of payments processed through PayPal's platform, grew 6% to $487.1 billion. The company claimed active accounts climbed only 0.6% to 440 million.

Transaction margin dollars rose 2% to $3.95 billion. The measure equals revenue minus transaction costs and credit losses, and PayPal uses it to track the value its platform generates. Interest earned on customer balances fell to $289 million from $321 million. Free cash flow dropped 17% to $1.43 billion.

PYPL Raises Full-Year Outlook

PayPal reaffirmed its GAAP outlook, which it now puts at about $5.07 per share. That is in line with the Koyfin consensus, which points to a 6.3% drop from 2025.

For the fourth quarter, PayPal expects adjusted earnings of about $1.43 per share, up from $1.23 a year earlier.

Chief Executive Officer Enrique Lores said the turnaround is progressing. "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," he said. 

PayPal's board also announced a dividend of $0.14 per share payable Dec. 24 to stockholders of record Dec. 4.

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