Key Highlights
- Second quarter earnings per share reached $1.38, surpassing analyst projections of $1.28
- Quarterly revenue increased 5% to $8.68 billion, exceeding the $8.47 billion consensus forecast
- 2026 adjusted EPS target upgraded to $5.38 from previously flat-to-modestly-positive expectations
- Payment volume across the platform climbed 10% to $486.4 billion during Q2
- User base expanded to 439 million active accounts, reflecting 0.3% annual growth
The digital payments giant delivered second-quarter results that exceeded analyst expectations on both top and bottom lines while simultaneously upgrading its annual profit forecast.
The fintech company disclosed adjusted earnings per share of $1.38 for the second quarter, topping the Street’s $1.28 projection. Total revenue reached $8.68 billion, representing a 5% increase and beating the $8.47 billion analyst consensus.
Shares of PayPal were hovering near $56 prior to the earnings announcement.
The quarterly report marks the company’s first since confirming it received an acquisition proposal from competitor Stripe alongside private equity firm Advent International, with the deal estimated at approximately $53 billion. Management did not comment on the potential takeover in their earnings materials.
Chief Executive Enrique Lores, who assumed leadership in March following Alex Chriss’s exit, indicated the performance demonstrates momentum in PayPal’s restructuring efforts. “We moved with urgency to sharpen our transformation plan and advance our growth strategies across our three businesses,” Lores stated.
Transaction margin dollars edged up 1% to $3.9 billion during the quarter. When excluding interest earned on customer balances, the metric increased 3% to $3.6 billion. Adjusted operating income declined 8% to $1.5 billion, while the adjusted operating margin compressed by 248 basis points to 17.4%.
Overall payment volume surged 10% to $486.4 billion, or 9% when adjusted for foreign exchange fluctuations. The total number of payment transactions advanced 8% to 6.8 billion. On a trailing twelve-month basis, payment transactions per active account rose 3% to 60.0.
The platform’s active account base grew 0.3% from the previous year to 439 million, though it experienced a modest sequential decline of 0.2 million accounts.
Annual Forecast Receives Upgrade
PayPal increased its 2026 adjusted earnings per share projection to $5.38. The prior forecast had anticipated a low-single-digit decrease to marginally positive growth versus 2025’s $5.31. Wall Street analysts had been modeling the figure to remain unchanged at $5.31.
The payments platform also elevated its transaction margin dollar forecast to approximately $15.6 billion for the full year, compared to $15.5 billion in 2025. Previous guidance had suggested a modest contraction in this measure.
Management indicated it anticipates achieving $400 million in gross run-rate cost reductions this year, working toward a long-term objective of $1.5 billion in savings over the upcoming two to three years. The organization previously announced intentions to reduce its workforce by 20% during that timeframe.
Third Quarter Projections Show Conservative Tone
Looking ahead to Q3, PayPal projected adjusted earnings per share would decline by a low-single-digit percentage from the year-ago result of $1.34, aligning with analyst forecasts of $1.33.
Transaction margin dollars in the third quarter are anticipated to experience modest expansion.
Lores emphasized strength in Venmo, Braintree, PayPal’s debit card offering, and its buy now, pay later segment as primary drivers of growth. The company also noted it is expediting artificial intelligence integration as part of its comprehensive restructuring initiative.
Net income for the second quarter totaled $1.1 billion, or $1.25 per diluted share, down from $1.26 billion, or $1.29 per share, in the comparable period last year.
