AddedRisk Factors
website; AI; developments in technologies supporting our regulatory and compliance obligations; and in-store, digital, agentic and social commerce.
The 10-K against last year's
156 changes: 13 added, 12 removed, 123 reworded, 8 quiet changes
10-K 0001633917-26-000024 (2026-02-03) vs 10-K 0001633917-25-000019 (2025-02-04)
The redline
The paragraph that changed most in each section
Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Risk Factors 229 words changed in this paragraph; it is 53% similar to last year's version.
We expect to continue to consider and evaluate a wide array of potential strategic transactions as part of our overall business strategy, including business combinations, acquisitions, and dispositions of certain businesses, technologies, services, products, and other assets; strategic investments; and commercial and strategic partnerships (collectively, “strategic transactions”). At any given time, we may be engaged in discussions or negotiations with respect to one or more strategic transactions, any of which could, individually or in the aggregate, be material to our financial condition and results of operations. There can be no assurance that we will be successful in identifying, negotiating, consummating and consummating, or integrating suitable transaction opportunities. Strategic transactions may involve additional significant challenges, uncertainties, and risks, including challenges of obtaining regulatory or other approvals, integrating new employees, products, systems, technologies, operations, and business cultures; challenges associated with operating acquired businesses in markets or business areas in which we may have limited or no experience; disruption of our ongoing operations and diversion of our management’s attention; inadequate data security, cybersecurity, or operational and information technology resilience; failure to identify, or our underestimation of, commitments, liabilities, deficiencies and other risks associated with acquired businesses or assets; potential exposure to new or incremental risks associated with acquired businesses and entities, strategic investments or other strategic transactions, including potential new or increased regulatory oversight and uncertain or evolving legal, regulatory, and compliance requirements, particularly with respect to companies in new or developing businesses or industries; challenges associated with dispositions of business or operations, including disruption to other parts of our business, potential loss of employees or customers, the transfer of technology and/or certain intellectual property rights to third-party purchasers, or exposure to unanticipated liabilities or ongoing obligations to us following any such dispositions; failure of the transaction to advance our business strategy or for its anticipated benefits to materialize; potential impairment of goodwill or other acquisition-related intangible assets; and the potential for our acquisitions to result in dilutive issuances of our equity securities or the incurrence of significant additional debt. Strategic transactions are inherently risky, may not be successful, and may harm our business, results of operations, and financial condition.
Source: Item 1A, 10-K 0001633917-26-000024 vs Item 1A, 10-K 0001633917-25-000019
Accounting Policies 181 words changed in this paragraph; it is 34% similar to last year's version.
In December 2023, September 2025, the FASB issued ASU 2023-09, Income Taxes (Topic 740): 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to Income Tax Disclosures. the Accounting for Internal-Use Software. The amended guidance enhances income tax disclosures primarily modernizes the accounting for costs related to the effective tax rate reconciliation internal-use software to more closely align with current software development methods. The guidance removes references to project stages and income taxes paid information. This guidance requires disclosure of specific categories in the effective tax rate reconciliation and further information on reconciling items meeting a quantitative threshold. In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes. It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal clarifies when we are required to or greater than 5 percent of total income taxes paid (net of refunds received). start capitalizing eligible costs. The amended new guidance is effective for annual periods fiscal years beginning after December 15, 2024. 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied either prospectively on a prospective basis, a modified basis for in-process projects, or retrospectively. a retrospective basis. We are evaluating the impact this amended guidance may have on the notes to our consolidated financial statements.
Source: 10-K text, Note 1 – OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001633917-26-000024 vs 10-K text, Note 1 – OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, 10-K 0001633917-25-000019
MD&A 119 words changed in this paragraph; it is 38% similar to last year's version.
Transaction revenues grew $2.0 billion, $956 million, or 7%, 3%, in 2024 2025 compared to 2023 2024. The increase in 2025 was driven primarily by an increase in revenues of approximately $1.3 billion, $0.5 billion, $740 million and $0.2 billion $340 million in revenue from our Braintree, core PayPal, PayPal and Venmo products and services, respectively, which resulted from was largely driven by growth in TPV and number of payment transactions, and an increase of approximately $150 million in revenue from Braintree products and services, predominantly attributable to growth in TPV despite a decline in the number of payment transactions. transactions over the same period. The increase in TPV for Braintree products and services despite a decline in the number of payment transactions is due to our strategic shift as we focus on profitable growth. Transaction revenues in 2025 were also impacted by approximately $210 million of unfavorable impact from hedging activities resulting from losses in 2025 compared to gains in 2024.
Source: Item 7, 10-K 0001633917-26-000024 vs Item 7, 10-K 0001633917-25-000019
Legal Proceedings 82 words changed in this paragraph; it is 75% similar to last year's version.
In addition to the protections afforded by applicable law, we provide consumers and merchants with protection programs for certain purchase transactions completed on our payments platform. Our protection programs help protect both consumers and merchants from financial loss resulting from, among other things, counterparty non-performance. These programs are designed to promote confidence on the part of both consumers, who will be reimbursed in certain circumstances, such as not receiving their purchased eligible item in the condition significantly as described, as well as merchants, who will receive payment in certain circumstances, such as establishing proof of shipment or delivery of an eligible item to the customer. These protection programs are considered assurance-type warranties under applicable accounting standards for which we estimate and record associated costs within the allowance for transaction losses. Our protection programs may result in transaction negative customer balances when there are insufficient funds in a customer’s PayPal account to cover charges applied for merchant-related chargebacks within the scope of our protection programs. Negative customer balances can also occur from bank returns and reversals due to insufficient funding sources. The allowance for negative customer balances represents our estimate of current expected credit losses during the period the payment transaction is completed. on negative customer balances.
Source: Item 3, via Note 13 – COMMITMENTS AND CONTINGENCIES, 10-K 0001633917-26-000024 vs Item 3, via Note 13 – COMMITMENTS AND CONTINGENCIES, 10-K 0001633917-25-000019
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of PYPL's Risk Factors and MD&A, 10-K 2026-02-03 against 10-K 2025-02-04. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, wouldAddedRisk Factors
government authorities in different jurisdictions. While we have implemented policies and procedures designed to help ensure compliance with applicable laws and regulations, there can be no assurance that our employees, contractors, and agents will not violate such laws and regulations.
AddedRisk Factors
Evolving laws, regulations and stakeholder expectations with respect to environmental, social and governance matters could harm our reputation and adversely affect our business.
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Various jurisdictions both in the U.S. and internationally have adopted or are developing laws, regulations and policies relating to environmental, social and governance matters (e.g., environmental sustainability and climate change) which include disclosure, reporting and diligence requirements. Compliance with these requirements may involve significant costs, and any actual or perceived failure to comply with applicable (and potentially conflicting) federal, state, local or international laws or regulations concerning environmental, social, and governance matters could subject us to fines, penalties, regulatory or other enforcement actions, and adversely affect our business or financial condition. In addition, various stakeholders, including investors, customers, employees, governmental authorities and regulators, may have differing expectations regarding environmental, social and governance matters related to us (including those supporting and opposing various environmental, social and governance matters), whose expectations and requirements are evolving and varied. Any initiatives, targets, data, or commitments we disclose with respect to these matters involve risks and uncertainties and could be difficult to achieve and costly to implement. Any actual or perceived failure or inaccuracy with respect to such initiatives, targets, data or commitments or to otherwise successfully manage investor or other stakeholder expectations on these matters could result in adverse reaction by consumers or other stakeholders (including, but not limited to, customers choosing not to use our products and services and the commencement of legal and regulatory proceedings against us), harm our reputation, and adversely affect our business, results of operation and financial condition.
AddedRisk Factors
The determination of our worldwide provision for income taxes and other tax liabilities requires estimation and significant judgment, and there are many transactions and calculations for which the ultimate tax determination is uncertain. Our future
AddedRisk Factors
There can be no assurance that we will continue to repurchase stock or declare cash dividends, and stock repurchases or dividends could increase the volatility of our stock price and could diminish our cash reserves.
AddedRisk Factors
We engage in share repurchases of our common stock from time to time, and our stock repurchase programs do not have expiration dates and do not obligate us to repurchase any specific dollar amount or to acquire any specific number of shares. In October 2025, we announced the initiation of a cash dividend program. Future cash dividends are subject to declaration by our Board of Directors at its sole discretion and are therefore subject to numerous factors including, among others, prevailing market conditions, our results of operations, financial condition and liquidity, applicable laws and agreements. Our stock repurchases and our dividends could affect our share trading prices, increase its volatility, reduce our cash reserves and may be suspended or terminated at any time, which may result in a decrease in our share trading price.
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RewordedRisk Factors
Our outstanding indebtedness and any additional indebtedness we incur may have significant consequences, including the need to use a significant portion of our cash flow from operations and other available cash to service our indebtedness, thereby reducing the funds available for other purposes, including working capital, capital expenditures, acquisitions, strategic investments, share repurchases, dividend payments, or other general corporate purposes; limits on our ability to obtain additional financing for such purposes; and share repurchases; the reduction of our flexibility in planning for or reacting to changes in our business, competitive pressures and market conditions; and limits on our ability to obtain additional financing for working capital, capital expenditures, acquisitions, strategic investments, share repurchases, or other general corporate purposes. conditions.
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If the laws or regulations that provide protections for online dissemination of information are invalidated, modified, or supplemented to reduce protections available to us, us or to increase requirements on us to remove certain information or implement other processes, us, we could be directly harmed and may be forced to implement new measures to reduce our potential liability for information provided by exposure to this liability, including expending substantial resources and discontinuing certain product or service offerings, which could harm our customers and carried on our products and services. business.
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Our international operations generate a significant portion of our net revenues and subject us to significant challenges, uncertainties, and risks, including, but not limited to, local regulatory, licensing, reporting, and legal obligations; costs and challenges associated with operating in markets in which we may have limited or no experience, including effectively localizing adapting our products and services and adapting them to local requirements and customer preferences; difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations as a result of distance, language, and cultural differences and in light of varying laws, regulations, and customs; differing employment practices and the existence of works councils; difficulties in recruiting hiring, retaining and retaining integrating qualified employees and maintaining our company culture; fluctuations in foreign exchange rates; exchange control regulations; profit repatriation restrictions; potential changes in or new tariffs, sanctions, fines, or other trade barriers or restrictions; restrictions and the related uncertainty thereof; import or export regulations; compliance with U.S. and foreign anti-bribery, anti-corruption, sanctions, anti-money laundering and counter-terrorist financing laws and regulations; the interpretation and application of laws of multiple jurisdictions; and national or regional political, economic, or social instability.
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While we may seek to recover losses from our protection programs from the merchant, we ultimately may not be able to fully recover such losses (for example, if the merchant is unwilling or unable to pay, the transaction involves a fraudulent merchant, or the merchant provides sufficient evidence that the item was delivered). losses.
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Cross-border trade has been and may be negatively impacted by various factors including foreign exchange rate fluctuations, fluctuations; changes in or new tariffs, trade disputes, barriers or restrictions, sanctions, restrictions threats of such actions, and the related uncertainty thereof; sanctions; import or export controls, controls; and the interpretation and application of laws of multiple jurisdictions in the context of cross-border trade and foreign exchange.
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While we maintain insurance policies intended to help offset the financial impact we may experience from these risks, business interruption insurance, our coverage may be insufficient to compensate us for cover all our losses caused by interruptions in our service due to systems failures and similar events.
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In addition, any failure to successfully implement new information systems and technologies or improvements or upgrades to existing information systems and technologies in a timely manner could lead to regulatory scrutiny, significant fines and penalties, and mandatory and costly changes to our business, adversely impact our business, internal controls, results of operations, and financial condition, and ultimately could cause us to lose existing licenses that we need to operate or prevent or delay us from obtaining additional licenses that may be required for our business.
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Our customer cryptocurrency offerings could may subject us to additional regulations, licensing requirements, or other obligations or liabilities.
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Although we contractually require our custodians to segregate our customer assets and not commingle them with proprietary or other assets, we cannot be certain assure that these contractual obligations, even if duly observed by a custodian, will be effective in preventing such assets from being treated as part of the custodian’s estate under bankruptcy or other insolvency law.
Quiet changesRisk Factors
We are subject to the risk that account holders who use our credit products will may default on their payment obligations.
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AddedMD&A
A deterioration in macroeconomic conditions resulting from uncertainties and effects from tariffs, inflation, international conflicts, and interest rates could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, foreign exchange fluctuations, or other business interruption, which may adversely impact our business. We are unable to reasonably estimate the total potential impact on our financial results that may ultimately result from such changes in the macroeconomic environment.
AddedMD&A
We have entered into forward flow arrangements with third-party investors to sell certain loans receivable portfolios. As of December 31, 2025 and 2024, loans and interest receivable, held for sale was $1.7 billion and $541 million, respectively.
AddedMD&A
During the second quarter of 2025, management undertook a large-scale initiative (the “2Q 2025 Plan”) to reengineer our existing technology infrastructure to improve scalability, reduce network latency, decrease operational costs, and optimize our workforce. The 2Q 2025 Plan is a transformative unified program designed to streamline operations and includes exiting certain data centers to migrate to more efficient cloud-based solutions. The 2Q 2025 Plan is expected to be executed over a period of 18 to 42 months with the workforce component to be substantially completed in 2027 and the technology infrastructure component to be substantially completed in 2028. The associated restructuring charges during the year ended December 31, 2025 were $102 million, consisting of $96 million in employee severance and benefits costs and $6 million in other restructuring costs.
AddedMD&A
In connection with this restructuring, we expect to incur employee severance and benefits costs of approximately $90 million to $100 million, asset impairment and accelerated depreciation charges of approximately $40 million to $60 million, and other restructuring costs of approximately $110 million to $140 million over the term of the 2Q 2025 Plan. Other restructuring costs relate to process re-engineering and one-time migration to cloud solutions and consist of contractor costs, consulting fees, and prepaid software and maintenance costs without future economic benefit. We expect annualized cost savings of approximately $280 million associated with the impacted workforce and operational costs for our technology infrastructure. We expect that we will begin to realize these cost savings upon the completion of the components of the 2Q 2025 Plan, and also expect to reinvest a portion of the reduction in annual costs to drive business priorities. The timing of activities, cost, and savings estimates continue to be developed and are subject to change.
AddedMD&A
In November 2025, we established a commercial paper program that allows us to issue up to $5.0 billion of unsecured commercial paper notes (“Commercial Paper Notes”) through private placement using third-party broker-dealers (the “Commercial Paper Program”). Borrowings under the Commercial Paper Program are supported by the Credit Agreement. The Company intends to maintain availability under the Credit Agreement in an amount at least equal to the aggregate outstanding borrowings under the Commercial Paper Program. Net proceeds from the issuance of the Commercial Paper Notes may be used for general corporate purposes. The maturities of the Commercial Paper Notes may vary but may not exceed 397 days from the date of issuance. There were $200 million in Commercial Paper Notes outstanding as of December 31, 2025.
AddedMD&A
In October 2025, we announced that our Board of Directors approved the initiation of a quarterly cash dividend program and declared a cash dividend of $0.14 per share on our common stock, totaling approximately $130 million. The dividend was payable on December 10, 2025, to stockholders of record of our common stock as of the close of business on November 19, 2025. Dividend payments in future quarters will be subject to and contingent upon market conditions and approval by our Board of Directors at its sole discretion.
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Net cash used in financing activities increased $5.3 decreased $2.3 billion in 2024 2025 compared to 2023 2024 due primarily to a decrease of $3.8 billion from changes related to funds payable and amounts due to customers, an increase customers of $1.0 billion in share repurchases of our common stock, approximately $2.1 billion, and an increase of approximately $590 $600 million in repayments, net of borrowings under financing arrangements. arrangements, net of repayments, partially offset by a decline of approximately $320 million in collateral received related to derivative instruments.
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This decline increase in other income (expense), net was due primarily to net losses and impairments gains on strategic investments in the current period compared to net gains losses and impairments in the prior period, which contributed a decline an increase of approximately $490 million year-over-year, $450 million, partially offset by an increase declines in interest income of approximately $180 $150 million resulting from lower average cash and investment balances, and an increase in average cash balances interest expense of approximately $60 million due to incremental expense from the March 2025 and interest rates year-over-year. May 2024 debt issuances.
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Revenues from other value added services increased $41 $419 million, or 1%, 14%, in 2024 2025 compared to 2023 2024 due primarily to an approximately $380 $350 million increase in interest and fee revenue earned on certain assets underlying customer account balances resulting from higher interest rates and higher customer balances, partially offset by a decline in the revenue our loans receivable portfolios as well as an increase of approximately $160 million from revenue earned from an independent chartered financial institution (“partner institution”).
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The increase was due primarily to growth of approximately $170 $190 million in our PayPal Business Loans (“PPBL”) product in the U.S. and growth in our PayPal Working Capital (“PPWC”) product portfolio, primarily from the U.S., Germany and the U.K., as well as growth portfolio of approximately $110 million $150 million, primarily in our PPBL product Germany, and to a lesser extent, in the U.S. and the U.K.
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Customer support and operations expenses decreased $151 $64 million, or 8%, 4%, in 2024 2025 compared to 2023 2024 due primarily to a decline in employee-related costs of approximately $100 $110 million associated with a headcount reduction. and software expenses of approximately $40 million, partially offset by an increase of approximately $80 million in other operating charges and contractors and consulting costs.
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Year Ended December 31, 2025 2024 2023 (In millions) (Unfavorable) favorable Favorable (unfavorable) impact to net revenues (exclusive of hedging impact) $ 339 $ (18) $ 128 Hedging impact (166) 48 111 Favorable impact to net revenues 173 30 239 Favorable (Unfavorable) favorable impact to operating expense (exclusive of hedging impact) (162) 28 (29) Hedging impact (6) — (Unfavorable) favorable impact to operating expense (168) 28 Net favorable impact to operating income $ 5 $ 58 $ 210
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Total operating expenses increased $1.7 billion, $635 million, or 7%, 2%, in 2024 2025 compared to 2023 2024 due primarily to an increase in transaction expense, sales and to a lesser extent, restructuring marketing expense, and other, transaction and credit losses, partially offset by a reduction decline in transaction general and credit losses. administrative expense, and restructuring and other expenses.
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Net revenues increased $2.0 $1.4 billion, or 7%, 4%, in 2024 2025 compared to 2023 2024 driven primarily by growth in total payment volume (“TPV”, as defined below under “Key Metrics”) of 10%. 7% and an increase in interest and fee revenue earned on our loans receivable portfolio, partially offset by the unfavorable impact of hedging activities.
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As a result of ongoing negotiations with merchants, including our stronger focus on profitable growth, growth and ongoing negotiations with merchants, we expect experienced lower volume and transaction revenue growth from our Braintree offerings in the first half of 2025 followed by revenue and TPV growth in the second half of 2025.
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Transaction revenues growth was lower than the growth in TPV in 2024 2025 due primarily to changes in mix product mix, merchant mix, and unfavorable impact from core PayPal products and services with a higher volume from large merchants, which have lower pricing. foreign exchange hedging activities.
RewordedMD&A
The decrease increase in transaction losses and the associated transaction loss rate in 2024 2025 was primarily due to lower an increase in losses from driven by fraud incidents impacting our Venmo PayPal products and services resulting from enhanced risk mitigation strategies. services.
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Sales and marketing expenses increased $192 $282 million, or 11%, 14%, in 2024 2025 compared to 2023 2024 due primarily to higher spend of approximately $260 $340 million on marketing and brand advertising, including the launch of our PayPal Everywhere and Venmo Everything advertising campaign, campaigns, partially offset by a decline in lower employee-related costs. costs of approximately $50 million.
Quiet changesMD&A
While we have processes in place to mitigate these risks, it is impossible to eliminate the total effects of any possible exposure associated with setting foreign exchange rates on our payments platform.
Quiet changesMD&A
(3) Includes changes in the allowance due to the reclassification of certain loans and interest receivable to or from held for sale.