Highlights

  • Net revenues increased 2% to $8.6 billion, and GAAP earnings per diluted share decreased 4% to $1.25.
  • Total payment volume increased 6% to $487.1 billion, and active accounts increased 0.6% to 440 million.
  • PayPal returned $1.5 billion to stockholders by repurchasing approximately 28 million shares of common stock in the third quarter.
  • Full year 2026 non-GAAP EPS guidance is approximately $5.60, compared with approximately $5.38 in the July 2026 guidance.

PayPal Holdings, Inc. (NASDAQ: PYPL) shares were trading at USD 55.87 on October 27, 2026, up 1.60%, with a relative volume at time of 2.92. The payments company repurchased approximately 28 million shares of common stock in the third quarter, and on October 27 it reported third quarter 2026 results, declared a cash dividend of $0.14 per share and raised its full year non-GAAP guidance.

PayPal is incorporated in Delaware and is headquartered in San Jose, California. The company says it empowers consumers and businesses in approximately 200 markets to move money, sell and shop. Its offerings discussed on the earnings call include branded checkout, Braintree, Venmo and financial services such as credit and debit products. Management described a multi-year transformation and said financial services represent more than 20% of transaction margin dollars in 2026. PayPal reports results by calendar quarter and provides guidance for the full year ending December 31, 2026.

Third Quarter 2026 Results

For the third quarter ended September 30, 2026, net revenues increased 2% to $8.6 billion, or 1% on a currency-neutral basis. GAAP operating income decreased 8% to $1.4 billion, and GAAP operating margin contracted 173 basis points to 16.3%. Net income was $1,073 million, a 14% decrease. GAAP EPS decreased 4% to $1.25, compared with $1.30. For the nine months, diluted EPS was $3.71, compared with $3.88 in the same period of 2025.

On a non-GAAP basis, transaction margin dollars increased 2% to $4.0 billion, and operating income increased 3% to $1.6 billion. Non-GAAP operating margin expanded 16 basis points to 18.8%, and non-GAAP EPS increased 8% to $1.45. The effective tax rate was 21.9% on a GAAP basis, compared with 18.6% a year earlier.

Operating Metrics and Cash Flow

Total payment volume increased 6% to $487.1 billion, or 7% on a currency-neutral basis. Payment transactions increased 7% to 6.8 billion. Payment transactions per active account on a trailing 12-month basis increased 6% to 60.8. Active accounts increased 0.6% to 440 million, an increase of 1.6 million on a sequential basis.

Cash flow from operations was $1.6 billion, compared with $1,974 million in the third quarter of 2025, a 19% decrease. Free cash flow, a non-GAAP measure, was $1.4 billion, down 17%. Adjusted free cash flow was $2.0 billion, down 10%.

Balance Sheet, Capital Returns and Management Commentary

Cash, cash equivalents and investments totaled $15.1 billion as of September 30, 2026, and debt totaled $13.5 billion. Total assets were $81,622 million. On a trailing 12-month basis, PayPal returned $6.0 billion to stockholders by repurchasing approximately 117 million shares. The Board declared a cash dividend of $0.14 per share, payable December 24, 2026 to stockholders as of the close of business on December 4, 2026.

On the call, management said it had reduced headcount by more than 2,000 positions and removed three organizational layers across most areas. It said the Venmo debit card reached 6.7 million monthly active accounts. It said branded checkout total payment volume growth was 1% to 2% for four consecutive quarters, and that the removal of the EU de minimis tax exemption created about 70 basis points of headwind.

Guidance

PayPal raised full year 2026 non-GAAP transaction margin dollars and EPS guidance and reaffirmed GAAP EPS guidance. For the fourth quarter of 2026, it expects GAAP EPS of approximately $1.37 and non-GAAP EPS of approximately $1.43, compared with $1.53 and $1.23 in the prior year period. For the full year, it expects GAAP EPS of approximately $5.07, compared with $5.41, and non-GAAP EPS of approximately $5.60, compared with $5.31. On the call, management said it is targeting 2027 non-GAAP EPS growth similar to 2026.