PayPal Reports Third Quarter 2026 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 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.”
• Transaction margin dollars 1 (“TM$”) increased 2% to $4.0 billion; TM$ excluding interest on customer balances 1,2 increased 3% to $3.7 billion.
• GAAP operating income decreased 8% to $1.4 billion; non-GAAP operating income increased 3% to $1.6 billion.
• GAAP operating margin contracted 173 basis points to 16.3%; non-GAAP operating margin expanded 16 basis points to 18.8%.
• Payment transactions increased 7% to 6.8 billion. Excluding payment service provider transactions 4 (“PSP”), payment transactions increased 7%.
• Payment transactions per active account (“TPA”) on a trailing 12-month basis increased 6% to 60.8. TPA ex-PSP 4 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.
• Adjusted free cash flow of $2.0 billion, which excludes the net timing impact between originating buy now, pay later (“BNPL”) receivables as held for sale and the subsequent repayment and sale of those receivables.
• Cash, cash equivalents, and investments totaled $15.1 billion as of September 30, 2026.
• 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 $0.14 per share on the Company’s common stock, payable on December 24, 2026, to stockholders of record as of the close of business on December 4, 2026.
All growth rates reference 3Q'26 year-over-year growth unless otherwise noted. 1.TM$, TM$ excluding interest on customer balances, non-GAAP operating income, non-GAAP operating margin, non-GAAP EPS, free cash flow, and adjusted free cash flow are non-GAAP financial measures. “Non-GAAP Measures of Financial Performance” and subsequent tables at the end of this press release provide reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. 3Q 2026 Results 1 2. Interest on customer balances is reported within other value added services (“OVAS”) revenue and primarily comprises interest and revenue earned on customer assets. 3. Impact from PayPal’s strategic investment portfolio and crypto assets held for investment was immaterial in 3Q'26 GAAP EPS, compared to a ~$0.01 positive impact in 3Q'25. 4. Payment transactions ex-PSP and TPA ex-PSP exclude unbranded card processing transactions and accounts.
Presented in millions, YoY FXN except per share 3Q'26 3Q'25 Growth YoY Growth data and percentages Total payment volume $487,138 $458,088 6% 7% GAAP Net revenues $8,584 $8,417 2% Operating income $1,402 $1,520 (8)% Operating margin 16.3% 18.1% (173)bps Effective tax rate 21.9% 18.6% 3.3pts Net income (loss) $1,073 $1,248 (14)% Earnings per diluted share $1.25 $1.30 (4)% Net cash provided by operating $1,592 $1,974 (19)% activities Non-GAAP Net revenues $8,584 $8,417 2% 1% Transaction margin dollars $3,950 $3,871 2% Transaction margin dollars excluding $3,661 $3,550 3% interest on customer balances Operating income $1,613 $1,568 3% Operating margin 18.8% 18.6% 16bps Effective tax rate 21.6% 18.1% 3.5pts Net income $1,245 $1,288 (3)% Earnings per diluted share $1.45 $1.34 8% Free cash flow $1,431 $1,718 (17)% Adjusted free cash flow $2,047 $2,279 (10)%
2026 Guidance: Following another strong quarter, PayPal is raising full year non-GAAP TM$ and EPS guidance and reaffirming GAAP EPS guidance. Please see PayPal’s 3Q'26 earnings presentation for more detail.
Please see “Non-GAAP Measures of Financial Performance” for reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures and important additional information.
1. Estimated non-GAAP amounts for the three months ending December 31, 2026 reflect adjustments of approximately $70 million. 2. FY'25 GAAP EPS included a positive impact of ~$0.14 from PayPal’s strategic investment portfolio 3Q 2026 Results 2 and crypto assets held for investment. 3. Estimated non-GAAP amounts for the full year ending December 31, 2026 reflect adjustments of approximately $570 million.
PayPal Holdings, Inc. will host a conference call to discuss third quarter 2026 results at 8:00 a.m. Eastern Time today. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their most directly comparable GAAP measures, can be accessed through the company’s Investor Relations website at https://investor.pypl.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.
PayPal Holdings, Inc. uses the following channels as means of disclosing information about the company and for complying with its disclosure obligations under Regulation FD:
• Steven Winoker’s LinkedIn profile (https://www.linkedin.com/in/steven- winoker-0764548/)
The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these channels in addition to PayPal’s press releases, filings with the Securities and Exchange Commission (“SEC”), public conference calls, and webcasts.
Creating innovative experiences that make moving money, selling, and shopping simple, personalized, and secure, PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy.
All growth rates represent year-over-year comparisons, except as otherwise noted. FXN results are calculated by translating the current period local currency results by the prior period exchange rate. FXN growth rates are calculated by comparing the current period FXN results with the prior period results, excluding the impact from hedging activities. All amounts in tables are presented in U.S. dollars, rounded to the nearest million, except as otherwise noted. As a result, certain amounts and rates may not sum or recalculate using the rounded dollar amounts provided.
This press release includes financial measures defined as “non-GAAP financial measures” by the SEC including: non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, transaction margin dollars, transaction margin dollars excluding interest on customer balances, non-GAAP operating margin, transaction margin, non-GAAP effective tax rate, free cash flow, and adjusted free cash flow. For an explanation of the foregoing non-GAAP measures, please see “Non-GAAP Measures of Financial Performance” included in this press release. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with generally accepted accounting principles (“GAAP”). For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, see “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP Operating Income to Non-GAAP Operating Income, Transaction Margin Dollars, and Transaction Margin Dollars Ex-Interest on Customer Balances and GAAP Operating Margin to Non-GAAP Operating Margin and Transaction Margin,” “Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income, GAAP Diluted EPS to Non-GAAP Diluted EPS, and GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate,” and “Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow.”
This press release contains forward-looking statements relating to, among other things, the future results of operations, financial condition, expectations, and plans of PayPal Holdings, Inc. and its consolidated subsidiaries (“PayPal”) that reflect PayPal’s current projections and forecasts. Forward-looking statements can be identified by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” "continue," “strategy,” “future,” “opportunity,” “plan,” “guidance,” “project,” “forecast,” and other similar expressions. Forward-looking statements may include, but are not limited to, statements regarding our guidance and projected financial and operating results for the fourth quarter and full year 2026; our capital return program, including share repurchases and dividend payments, if any; our plans with respect to PayPal's business structure and operating model, and the anticipated benefits; our plans to reduce our cost structure, including anticipated cost savings; the timing and impact of product launches and acquisitions; and the projected future growth of PayPal’s businesses. Forward-looking statements are based upon various estimates and assumptions, as well as information known to PayPal as of the date of this press release, and are inherently subject to numerous risks and uncertainties.
Our actual results could differ materially from those estimated or implied by forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to compete in markets that are highly competitive and subject to rapid technological change, and to develop and deliver new or enhanced products and services on a timely basis; cyberattacks and security vulnerabilities, and associated impacts; the effect of global and regional political, economic, market and trade conditions, including military conflicts, supply chain issues, tariffs or uncertainty thereof, and related events that affect payments or commerce activity, including inflation and interest rates; the impact of catastrophic events, such as global pandemics, that may disrupt our business, as well as our customers, suppliers, vendors and other business partners; the stability, security and performance of our payments platform; the effect of extensive government regulation and oversight related to our business, products and services in a variety of areas, including, but not limited to, laws covering payments, lending and consumer protection; the impact of complex and changing laws and regulations worldwide, including, but not limited to, laws covering cybersecurity, privacy, data protection, and artificial intelligence; the impact of payment card, bank, or other network rules or practices; risks related to our credit products, including our ability to realize benefits from our agreements with third parties such as our agreements to sell our loan receivables; changes in how consumers fund transactions; our ability to effectively detect and prevent the use of our services for fraud, abusive behaviors, illegal activities, or improper purposes; our ability to manage regulatory and litigation risks, and the outcome of legal and regulatory proceedings; our reliance on third parties in many aspects of our business; damage to our reputation or brands; fluctuations in foreign currency exchange rates; changes in tax rates and exposure to additional tax liabilities; changes to our capital allocation, management of operating cash or incurrence of indebtedness; our ability to timely develop and upgrade our technology systems, infrastructure and customer service capabilities; the impact of proposed or completed acquisitions, divestitures, strategic investments, or entries into new businesses or markets; and our ability to attract, hire, and retain highly talented employees. The forward-looking statements in this release do not include the potential impact of any acquisitions or divestitures that may be announced and/or contemplated after the date hereof.
More information about factors that could adversely affect PayPal’s results of operations, financial condition and prospects, or that could cause actual results to differ from those expressed or implied in forward-looking statements is included under the captions “Risk Factors,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in PayPal’s most recent annual report on Form 10-K and its subsequent quarterly reports on Form 10-Q, copies of which may be obtained by visiting PayPal’s Investor Relations website at https://investor.pypl.com or the SEC’s website at www.sec.gov. All information in this release speaks as of October 27, 2026. For the reasons discussed above, you should not place undue reliance on the forward-looking statements in this press release. PayPal assumes no obligation to update such forward-looking statements. Contacts
Investor Relations Media Relations investorrelations@paypal.com mediarelations@paypal.com
September 30, December 31, 2026 2025 ────────────────────────────────────────────────────────────────────────────── -In millions, except par value ASSETS Current assets: Cash and cash $ 7,160 $ 8,049 equivalents Short-term 3,120 2,373 investments Accounts 716 840 receivable, net Loans and interest receivable, held 3,687 1,726 for sale Loans and interest 5,618 6,746 receivable, net Funds receivable and customer 38,424 38,198 accounts Prepaid expenses and other current 1,824 1,827 assets Total current 60,549 59,759 assets Long-term 4,785 4,330 investments Property and 1,705 1,700 equipment, net Goodwill 10,968 10,864 Intangible assets, 154 208 net Other assets 3,461 3,312 Total assets $ 81,622 $ 80,173 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 152 $ 240 Funds payable and amounts due to 40,924 40,198 customers Short-term debt 2,533 1,596 Accrued expenses and other current 4,281 4,409 liabilities Total current 47,890 46,443 liabilities Other long-term 3,310 3,487 liabilities Long-term debt 10,939 9,987 Total liabilities 62,139 59,917 Equity: Common stock, $0.0001 par value; 4,000 shares authorized; 837 and 920 shares — — outstanding as of September 30, 2026 and December 31, 2025, respectively Preferred stock, $0.0001 par value; 100 — — shares authorized, unissued Treasury stock at cost, 517 and 423 shares as of September 30, 2026 -37,680 -33,138 and December 31, 2025, respectively Additional 22,265 21,582 paid-in-capital Retained earnings 35,384 32,470 Accumulated other comprehensive -486 -658 income (loss) Total equity 19,483 20,256 Total liabilities $ 81,622 $ 80,173 and equity
• Transaction revenues : Net transaction fees charged to merchants and consumers on a transaction basis based on the TPV completed on our payments platform. Growth in TPV is directly impacted by the number of payment transactions that we enable on our payments platform. We generate additional revenue from merchants and consumers: on transactions where we perform currency conversion, when we enable cross-border transactions (i.e., transactions where the merchant and consumer are in different countries), when we facilitate the instant transfer of funds for our customers from their PayPal or Venmo account to their bank account or debit card, when we facilitate the purchase and sale of cryptocurrencies, as contractual compensation from sellers that violate our contractual terms (for example, through fraud or counterfeiting), and other miscellaneous fees.
• Revenues from other value added services : Net revenues derived primarily from revenue earned through partnerships, referral fees, subscription fees, gateway fees, and other services we provide to our consumers and merchants. We also earn revenues from interest and fees earned on our portfolio of loans receivable, and interest earned on certain assets underlying customer balances.
Amounts in the table are rounded to the nearest million, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided. (1) An active account is an account registered directly with PayPal or a platform access partner that has completed a transaction on our platform, not including gateway-exclusive transactions, within the past 12 months. A platform access partner is a third party whose customers are provided access to PayPal’s platform or services through such third-party’s login credentials, including individuals and entities that utilize Hyperwallet’s payout capabilities. A user may register on our platform to access different products and may register more than one account to access a product. Accordingly, a user may have more than one active account. The number of active accounts provides management with additional perspective on the overall scale of our platform, but may not have a direct relationship to our operating results.
(2) Number of payment transactions is the total number of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
(3) Number of payment transactions per active account reflects the total number of payment transactions within the previous 12-month period, divided by active accounts at the end of the period. The number of payment transactions per active account provides management with insight into the average number of times an account engages in payments activity on our payments platform in a given period. The number of times a consumer account or a merchant account transacts on our platform may vary significantly from the average number of payment transactions per active account.
(4) TPV is the value of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
(6) Transaction and credit loss rate is transaction and credit losses divided by TPV.
(7) Transaction margin is a non-GAAP financial measure. Transaction margin is net revenues less transaction expense and transaction and credit losses, divided by net revenues. Subsequent tables at the end of this press release provide reconciliation to the closest GAAP measure.
To supplement the company’s condensed consolidated financial statements presented in accordance with generally accepted accounting principles, or GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, transaction margin dollars, transaction margin dollars excluding interest on customer balances, non-GAAP operating margin, transaction margin, non-GAAP effective tax rate, free cash flow, and adjusted free cash flow.
These non-GAAP measures are not in accordance with, or an alternative to, measures prepared in accordance with GAAP and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the company’s results of operations as determined in accordance with GAAP. These measures should be used to evaluate the company’s results of operations only in conjunction with the corresponding GAAP measures.
Reconciliation of all non-GAAP measures to the most directly comparable GAAP measures can be found in the subsequent tables included in this press release. PayPal does not reconcile forward-looking non-GAAP guidance because certain financial information, the probable significance of which cannot be determined, is not available and cannot be reasonably estimated.
These non-GAAP measures are provided to enhance investors’ overall understanding of the company’s current financial performance and its prospects for the future. Specifically, the company believes the non-GAAP measures provide useful information to both management and investors by excluding certain expenses, gains and losses, as the case may be, that may not be indicative of its core operating results and business outlook. In addition, because the company has historically reported certain non-GAAP results to investors, the company believes that the inclusion of non-GAAP measures provides consistency in the company’s financial reporting.
For its internal budgeting process, and as discussed further below, the company’s management uses financial measures that do not include amortization or impairment of acquired intangible assets, impairment of goodwill, transaction expenses from the acquisition or disposal of a business, restructuring-related charges, gains and losses on strategic investments including related crypto assets held for investment, certain other gains, losses, benefits, or charges that are not indicative of the company’s core operating results, and the income taxes associated with the foregoing. In addition to the corresponding GAAP measures, the company’s management also uses the foregoing non-GAAP measures in reviewing the financial results of the company.
The company excludes the following items from non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP operating income, non-GAAP operating margin, and non-GAAP effective tax rate:
Amortization or impairment of acquired intangible assets, impairment of goodwill, and transaction expenses from the acquisition or disposal of a business. We incur amortization or impairment of acquired intangible assets and goodwill in connection with acquisitions and may incur significant gains or losses or transactional expenses from the acquisition or disposal of a business and therefore exclude these amounts from our non-GAAP measures. We exclude these items because management does not believe they are reflective of our ongoing operating results.
Restructuring. These consist of expenses related to workforce reduction including employee severance and benefits costs and stock-based compensation expense, real estate and facilities charges, other asset impairments, accelerated depreciation charges, and other restructuring costs including non- recurring third-party costs. The company excludes significant restructuring charges primarily because management does not believe they are reflective of ongoing operating results as they are not normal, recurring cash operating expenses necessary to operate our business.
Gains and losses on strategic investments including related crypto assets held for investment . The gains and losses we record on our strategic investments are tied to the performance of the portfolio companies. The gains and losses we record on crypto assets held for investment are influenced by factors like market sentiment including trading, regulatory changes, and underlying company performance. We exclude such gains and losses in full because we do not actively trade our strategic investments or crypto assets nor do we rely on them to fund our ongoing operations.
Certain other significant gains, losses, benefits, or charges that are not indicative of the company’s core operating results. These are significant gains, losses, benefits, or charges during a period that are the result of isolated events or transactions that have not occurred frequently in the past and are not expected to occur regularly in the future. The company excludes these amounts from its non-GAAP results because management does not believe they are indicative of our current or ongoing operating results.
Tax effect of non-GAAP adjustments. This adjustment is made to present the amounts described above on an after-tax basis consistent with the presentation of non-GAAP net income.
Transaction margin dollars represents operating income, excluding the following expenses: (i) Customer support and operations, (ii) Sales and marketing, (iii) Technology and development, (iv) General and administrative, and (v) Restructuring and other. Transaction margin dollars is a measure used by management to evaluate the economic value generated by activity on the company’s platform, including the impact of transaction and credit losses. Accordingly, we believe that transaction margin dollars provides useful information to investors and others in understanding and evaluating our financial results in the same manner as management. Transaction margin dollars can also be calculated as total net revenues less transaction expense and transaction and credit losses.
Transaction margin dollars excluding interest on customer balances: Interest earned on certain assets underlying customer account balances is primarily driven by the movement in interest rates and level of account balances. The company excludes interest revenue earned on customer balances from transaction margin dollars because the impact of changes in interest rates on customer balances is not within the company’s control. Management uses this metric to further isolate the economic value generated by activity on the company’s platform.
Free cash flow represents operating cash flows less purchases of property and equipment. The company uses free cash flow as a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases of property, buildings, and equipment, which can then be used to, among other things, invest in the company’s business, make strategic acquisitions and investments, and repurchase stock. Adjusted free cash flow excludes the net timing impact between originating loan receivables as held for sale and the subsequent repayment and sale of receivables from free cash flow. Excluding this activity provides a clearer picture of the cash generated by the business. A limitation of the utility of free cash flow or adjusted free cash flow as measures of financial performance is that it does not represent the total increase or decrease in the company’s cash balance for the period.
In addition to the non-GAAP measures discussed above, the company also analyzes certain measures, including net revenues and operating expenses, on an FX- neutral basis to better measure the comparability of operating results between periods. The company believes that changes in foreign currency exchange rates are not indicative of the company’s operations and evaluating growth in net revenues and operating expenses on an FX-neutral basis provides an additional meaningful and comparable assessment of these measures to both management and investors. FX-neutral results are calculated by translating the current period’s local currency results with the prior period’s exchange rate. FX-neutral growth rates are calculated by comparing the current period’s FX-neutral results by the prior period’s results, excluding the impact from hedging activities.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income, Transaction Margin Dollars, and Transaction Margin Dollars Ex-Interest on Customer Balances and
Three Months Ended September 30, 2026 (In millions, except percentages) (unaudited) 2025 ────────────────────────────────────────────────────────────────────────────── GAAP operating income $ 1,402 $ 1,520 Amortization of acquired intangible 33 47 assets Restructuring 178 1 Total non-GAAP operating income 211 48 adjustments Non-GAAP operating $ 1,613 $ 1,568 income Transaction margin adjustments: Customer support and 434 447 operations Sales and marketing 485 482 Technology and 829 800 development General and 512 506 administrative Restructuring and 77 68 other Non transaction-related 2,337 2,303 expense Transaction margin 3,950 3,871 dollars Interest on customer 289 321 balances Transaction margin dollars ex-interest $ 3,661 $ 3,550 on customer balances GAAP net revenues $ 8,584 $ 8,417 GAAP operating margin 16 % 18 % Non-GAAP operating 19 % 19 % margin Transaction margin 46 % 46 %
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income, GAAP Diluted EPS to Non-GAAP Diluted EPS, and
Three Months Ended September 30, 2026 (In millions, except per share data and percentages) (unaudited) 2025 ────────────────────────────────────────────────────────────────────────────── GAAP income before $ 1,374 $ 1,533 income taxes GAAP income tax 301 285 expense GAAP net income (loss) 1,073 1,248 Non-GAAP adjustments to net income (loss): Non-GAAP operating income adjustments 211 48 (see table above) Net (gains) losses on strategic investments and crypto 3 -9 assets held for investment Tax effect of non-GAAP -42 1 adjustments Non-GAAP net income $ 1,245 $ 1,288 Diluted net income (loss) per share: GAAP $ 1.25 $ 1.30 Non-GAAP $ 1.45 $ 1.34 Shares used in GAAP diluted share 858 960 calculation Shares used in non-GAAP diluted share 858 960 calculation GAAP effective tax 22 % 19 % rate Tax effect of non-GAAP adjustments to — % -1 % net income (loss) Non-GAAP effective tax 22 % 18 % rate
Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow
Full text with the tables
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 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
—————————————————————————————————————————————
3Q'26 Financial Results
• Net revenues increased 2% to $8.6 billion; 1% currency-neutral (“FXN”).
• Transaction margin dollars 1 (“TM$”) increased 2% to $4.0 billion; TM$
excluding interest on customer balances 1,2 increased 3% to $3.7 billion.
• GAAP operating income decreased 8% to $1.4 billion; non-GAAP operating income
increased 3% to $1.6 billion.
• GAAP operating margin contracted 173 basis points to 16.3%; non-GAAP operating
margin expanded 16 basis points to 18.8%.
• GAAP EPS decreased 4% to $1.25 3 ; non-GAAP EPS increased 8% to $1.45.
3Q'26 Operating Results
• Total payment volume (“TPV”) increased 6% to $487.1 billion; 7% FXN.
• Payment transactions increased 7% to 6.8 billion. Excluding payment service
provider transactions 4 (“PSP”), payment transactions increased 7%.
• Payment transactions per active account (“TPA”) on a trailing 12-month basis
increased 6% to 60.8. TPA ex-PSP 4 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.
Cash Flow
• Cash flow from operations of $1.6 billion and free cash flow of $1.4 billion.
• Adjusted free cash flow of $2.0 billion, which excludes the net timing impact
between originating buy now, pay later (“BNPL”) receivables as held for sale and
the subsequent repayment and sale of those receivables.
Balance Sheet and Liquidity
• Cash, cash equivalents, and investments totaled $15.1 billion as of September
30, 2026.
• Debt totaled $13.5 billion as of September 30, 2026.
• 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.
Dividend Program
• PayPal’s Board of Directors declared a cash dividend of $0.14 per share on the
Company’s common stock, payable on December 24, 2026, to stockholders of record
as of the close of business on December 4, 2026.
All growth rates reference 3Q'26 year-over-year
growth unless otherwise noted.
1.TM$, TM$ excluding interest on customer balances,
non-GAAP operating income, non-GAAP operating
margin, non-GAAP EPS, free cash flow, and adjusted
free cash flow are non-GAAP financial measures.
“Non-GAAP Measures of Financial Performance” and
subsequent tables at the end of this press release
provide reconciliations of non-GAAP financial
measures to the most directly comparable GAAP
financial measures. 3Q 2026 Results 1
2. Interest on customer balances is reported within
other value added services (“OVAS”) revenue and
primarily comprises interest and revenue earned on
customer assets.
3. Impact from PayPal’s strategic investment
portfolio and crypto assets held for investment was
immaterial in 3Q'26 GAAP EPS, compared to a ~$0.01
positive impact in 3Q'25.
4. Payment transactions ex-PSP and TPA ex-PSP
exclude unbranded card processing transactions and
accounts.
3Q'26 Financial Results
Presented in millions, YoY FXN
except per share 3Q'26 3Q'25 Growth YoY Growth
data and percentages
Total payment volume $487,138 $458,088 6% 7%
GAAP
Net revenues $8,584 $8,417 2%
Operating income $1,402 $1,520 (8)%
Operating margin 16.3% 18.1% (173)bps
Effective tax rate 21.9% 18.6% 3.3pts
Net income (loss) $1,073 $1,248 (14)%
Earnings per diluted share $1.25 $1.30 (4)%
Net cash provided by
operating $1,592 $1,974 (19)%
activities
Non-GAAP
Net revenues $8,584 $8,417 2% 1%
Transaction margin dollars $3,950 $3,871 2%
Transaction margin dollars
excluding $3,661 $3,550 3%
interest on customer
balances
Operating income $1,613 $1,568 3%
Operating margin 18.8% 18.6% 16bps
Effective tax rate 21.6% 18.1% 3.5pts
Net income $1,245 $1,288 (3)%
Earnings per diluted share $1.45 $1.34 8%
Free cash flow $1,431 $1,718 (17)%
Adjusted free cash flow $2,047 $2,279 (10)%
Financial Guidance
2026 Guidance: Following another strong quarter, PayPal is raising full year
non-GAAP TM$ and EPS guidance and reaffirming GAAP EPS guidance. Please see
PayPal’s 3Q'26 earnings presentation for more detail.
October 2026
Guidance July 2026 Guidance Prior year period
──────────────────────────────────────────────────────────────────────────────
4Q'26
GAAP EPS ~$1.37 N/A $1.53
Non-GAAP EPS1 ~$1.43 N/A $1.23
FY'26
GAAP EPS2 ~$5.07 Mid-single digit $5.41
decline
Non-GAAP EPS3 ~$5.60 ~$5.38 $5.31
Please see “Non-GAAP Measures of Financial Performance” for reconciliations of
non-GAAP financial measures to the most directly comparable GAAP financial
measures and important additional information.
1. Estimated non-GAAP amounts for the three months
ending December 31, 2026 reflect adjustments of
approximately $70 million.
2. FY'25 GAAP EPS included a positive impact of
~$0.14 from PayPal’s strategic investment portfolio 3Q 2026 Results 2
and crypto assets held for investment.
3. Estimated non-GAAP amounts for the full year
ending December 31, 2026 reflect adjustments of
approximately $570 million.
Conference Call & Webcast
PayPal Holdings, Inc. will host a conference call to discuss third quarter 2026
results at 8:00 a.m. Eastern Time today. A live webcast of the conference call,
together with a slide presentation that includes supplemental financial
information and reconciliations of certain non-GAAP measures to their most
directly comparable GAAP measures, can be accessed through the company’s
Investor Relations website at https://investor.pypl.com. In addition, an archive
of the webcast will be accessible for 90 days through the same link.
Disclosure Channels
PayPal Holdings, Inc. uses the following channels as means of disclosing
information about the company and for complying with its disclosure obligations
under Regulation FD:
• Investor Relations website (https://investor.pypl.com)
• PayPal Newsroom (https://newsroom.paypal-corp.com/)
• PayPal Corporate website (https://about.pypl.com)
• PayPal’s LinkedIn page (https://www.linkedin.com/company/paypal)
• Enrique Lores’ LinkedIn profile (https://www.linkedin.com/in/enriquelores)
• Jamie Miller’s LinkedIn profile (https://www.linkedin.com/in/jamiesmiller/)
• Steven Winoker’s LinkedIn profile (https://www.linkedin.com/in/steven-
winoker-0764548/)
The information that is posted through these channels may be deemed material.
Accordingly, investors should monitor these channels in addition to PayPal’s
press releases, filings with the Securities and Exchange Commission (“SEC”),
public conference calls, and webcasts.
About PayPal
Creating innovative experiences that make moving money, selling, and shopping
simple, personalized, and secure, PayPal empowers consumers and businesses in
approximately 200 markets to join and thrive in the global economy.
Presentation
All growth rates represent year-over-year comparisons, except as otherwise
noted. FXN results are calculated by translating the current period local
currency results by the prior period exchange rate. FXN growth rates are
calculated by comparing the current period FXN results with the prior period
results, excluding the impact from hedging activities. All amounts in tables are
presented in U.S. dollars, rounded to the nearest million, except as otherwise
noted. As a result, certain amounts and rates may not sum or recalculate using
the rounded dollar amounts provided.
Non-GAAP Financial Measures
This press release includes financial measures defined as “non-GAAP financial
measures” by the SEC including: non-GAAP net income, non-GAAP earnings per
diluted share, non-GAAP operating income, transaction margin dollars,
transaction margin dollars excluding interest on customer balances, non-GAAP
operating margin, transaction margin, non-GAAP effective tax rate, free cash
flow, and adjusted free cash flow. For an explanation of the foregoing non-GAAP
measures, please see “Non-GAAP Measures of Financial Performance” included in
this press release. These measures may be different from non-GAAP financial
measures used by other companies. The presentation of this financial
information, which is not prepared under any comprehensive set of accounting
rules or principles, is not intended to be considered in isolation of, or as a
substitute for, the financial information prepared and presented in accordance
with generally accepted accounting principles (“GAAP”). For a reconciliation of
these non-GAAP financial measures to the most directly comparable GAAP measures,
see “Non-GAAP Measures of Financial Performance,” “Reconciliation of GAAP
Operating Income to Non-GAAP Operating Income, Transaction Margin Dollars, and
Transaction Margin Dollars Ex-Interest on Customer Balances and GAAP Operating
Margin to Non-GAAP Operating Margin and Transaction Margin,” “Reconciliation of
GAAP Net Income (Loss) to Non-GAAP Net Income, GAAP Diluted EPS to Non-GAAP
Diluted EPS, and GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate,” and
“Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash
Flow.”
3Q 2026 Results 3
Forward-looking statements
This press release contains forward-looking statements relating to, among other
things, the future results of operations, financial condition, expectations, and
plans of PayPal Holdings, Inc. and its consolidated subsidiaries (“PayPal”) that
reflect PayPal’s current projections and forecasts. Forward-looking statements
can be identified by words such as “may,” “will,” “would,” “should,” “could,”
“expect,” “anticipate,” “believe,” “estimate,” “intend,” "continue," “strategy,”
“future,” “opportunity,” “plan,” “guidance,” “project,” “forecast,” and other
similar expressions. Forward-looking statements may include, but are not limited
to, statements regarding our guidance and projected financial and operating
results for the fourth quarter and full year 2026; our capital return program,
including share repurchases and dividend payments, if any; our plans with
respect to PayPal's business structure and operating model, and the anticipated
benefits; our plans to reduce our cost structure, including anticipated cost
savings; the timing and impact of product launches and acquisitions; and the
projected future growth of PayPal’s businesses. Forward-looking statements are
based upon various estimates and assumptions, as well as information known to
PayPal as of the date of this press release, and are inherently subject to
numerous risks and uncertainties.
Our actual results could differ materially from those estimated or implied by
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to: our ability to compete in markets
that are highly competitive and subject to rapid technological change, and to
develop and deliver new or enhanced products and services on a timely basis;
cyberattacks and security vulnerabilities, and associated impacts; the effect of
global and regional political, economic, market and trade conditions, including
military conflicts, supply chain issues, tariffs or uncertainty thereof, and
related events that affect payments or commerce activity, including inflation
and interest rates; the impact of catastrophic events, such as global pandemics,
that may disrupt our business, as well as our customers, suppliers, vendors and
other business partners; the stability, security and performance of our payments
platform; the effect of extensive government regulation and oversight related to
our business, products and services in a variety of areas, including, but not
limited to, laws covering payments, lending and consumer protection; the impact
of complex and changing laws and regulations worldwide, including, but not
limited to, laws covering cybersecurity, privacy, data protection, and
artificial intelligence; the impact of payment card, bank, or other network
rules or practices; risks related to our credit products, including our ability
to realize benefits from our agreements with third parties such as our
agreements to sell our loan receivables; changes in how consumers fund
transactions; our ability to effectively detect and prevent the use of our
services for fraud, abusive behaviors, illegal activities, or improper purposes;
our ability to manage regulatory and litigation risks, and the outcome of legal
and regulatory proceedings; our reliance on third parties in many aspects of our
business; damage to our reputation or brands; fluctuations in foreign currency
exchange rates; changes in tax rates and exposure to additional tax liabilities;
changes to our capital allocation, management of operating cash or incurrence of
indebtedness; our ability to timely develop and upgrade our technology systems,
infrastructure and customer service capabilities; the impact of proposed or
completed acquisitions, divestitures, strategic investments, or entries into new
businesses or markets; and our ability to attract, hire, and retain highly
talented employees. The forward-looking statements in this release do not
include the potential impact of any acquisitions or divestitures that may be
announced and/or contemplated after the date hereof.
More information about factors that could adversely affect PayPal’s results of
operations, financial condition and prospects, or that could cause actual
results to differ from those expressed or implied in forward-looking statements
is included under the captions “Risk Factors,” “Legal Proceedings” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in PayPal’s most recent annual report on Form 10-K and its
subsequent quarterly reports on Form 10-Q, copies of which may be obtained by
visiting PayPal’s Investor Relations website at https://investor.pypl.com or the
SEC’s website at www.sec.gov. All information in this release speaks as of
October 27, 2026. For the reasons discussed above, you should not place undue
reliance on the forward-looking statements in this press release. PayPal assumes
no obligation to update such forward-looking statements.
Contacts
Investor Relations Media Relations
investorrelations@paypal.com mediarelations@paypal.com
© 2026 PayPal Holdings, Inc. All rights reserved.
3Q 2026 Results 4
PayPal Holdings, Inc.
Unaudited Condensed Consolidated Balance Sheets
September 30, December 31,
2026 2025
──────────────────────────────────────────────────────────────────────────────
-In millions,
except par value
ASSETS
Current assets:
Cash and cash $ 7,160 $ 8,049
equivalents
Short-term 3,120 2,373
investments
Accounts 716 840
receivable, net
Loans and interest
receivable, held 3,687 1,726
for
sale
Loans and interest 5,618 6,746
receivable, net
Funds receivable
and customer 38,424 38,198
accounts
Prepaid expenses
and other current 1,824 1,827
assets
Total current 60,549 59,759
assets
Long-term 4,785 4,330
investments
Property and 1,705 1,700
equipment, net
Goodwill 10,968 10,864
Intangible assets, 154 208
net
Other assets 3,461 3,312
Total assets $ 81,622 $ 80,173
LIABILITIES AND
EQUITY
Current
liabilities:
Accounts payable $ 152 $ 240
Funds payable and
amounts due to 40,924 40,198
customers
Short-term debt 2,533 1,596
Accrued expenses
and other current 4,281 4,409
liabilities
Total current 47,890 46,443
liabilities
Other long-term 3,310 3,487
liabilities
Long-term debt 10,939 9,987
Total liabilities 62,139 59,917
Equity:
Common stock,
$0.0001 par value;
4,000
shares authorized;
837 and 920 shares — —
outstanding as of
September 30, 2026
and
December 31, 2025,
respectively
Preferred stock,
$0.0001 par value;
100 — —
shares authorized,
unissued
Treasury stock at
cost, 517 and 423
shares as of
September 30, 2026 -37,680 -33,138
and
December 31, 2025,
respectively
Additional 22,265 21,582
paid-in-capital
Retained earnings 35,384 32,470
Accumulated other
comprehensive -486 -658
income
(loss)
Total equity 19,483 20,256
Total liabilities $ 81,622 $ 80,173
and equity
3Q 2026 Results 5
PayPal Holdings, Inc.
Unaudited Condensed Consolidated Statements of Income (Loss)
Three
Months
Ended
Septem…
30,
2026
(In Nine
millio… Months
except Ended
per Septemb…
share 30,
amount… 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 8,584 $ 8,417 $ 25,619 $ 24,496
revenu…
Operat…
expens…
Transa… 4,248 4,063 12,798 11,735
expense
Transa…
and 386 483 1,161 1,330
credit
losses
Custom…
support 434 447 1,342 1,258
and
operat…
Sales
and 508 521 1,572 1,592
market…
Techno…
and 831 801 2,473 2,299
develo…
General
and 520 513 1,514 1,477
admini…
Restru…
and 255 69 442 251
other
Total
operat… 7,182 6,897 21,302 19,942
expens…
Operat… 1,402 1,520 4,317 4,554
income
Other
income -28 13 -240 111
(expen…
net
Income
before 1,374 1,533 4,077 4,665
income
taxes
Income
tax 301 285 787 869
expense
Net
income $ 1,073 $ 1,248 $ 3,290 $ 3,796
(loss)
Net
income
(loss)
per
share:
Basic $ 1.26 $ 1.31 $ 3.74 $ 3.92
Diluted $ 1.25 $ 1.30 $ 3.71 $ 3.88
Weight…
average
shares:
Basic 849 950 880 968
Diluted 858 960 887 978
3Q 2026 Results 6
PayPal Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
Three
Months
Ended Nine
Cash Septe… Months
flows 30, Ended
from 2026 Septe…
opera… (In 30,
activ… milli… 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
income $ 1,073 $ 1,248 $ 3,290 $ 3,796
(loss)
Adjus…
to
recon…
net
income
(loss)
to net
cash
provi…
by
opera…
activ…
Trans…
and 386 483 1,161 1,330
credit
losses
Depre…
and 251 245 735 729
amort…
Stock… 233 257 767 792
compe…
Defer…
income 85 182 -90 93
taxes
Net
(gain…
losses 6 -10 181 -69
on
strat…
inves…
Accre…
of
disco…
on
inves… -2 -20 -21 -77
net of
amort…
of
premi…
Adjus…
to
loans
and
inter… 80 70 206 122
recei…
held
for
sale
Other 37 52 116 -245
Origi…
of
loans
recei… -12,647 -9,682 -36,426 -24,0…
held
for
sale
Proce…
from
repay…
and
sales
of
loans 12,185 9,048 35,558 23,160
recei…
origi…
class…
as
held
for
sale
Chang…
in
assets
and
liabi…
Accou… 46 126 124 11
recei…
Trans…
loss
allow…
for -378 -419 -980 -1,074
cash
losse…
net
Other
curre…
assets 121 18 178 -371
and
non-c…
assets
Accou… -55 44 -53 -6
payab…
Other
curre…
liabi… 171 332 -37 -119
and
non-c…
liabi…
Net
cash
provi… 1,592 1,974 4,709 4,032
by
opera…
activ…
Cash
flows
from
inves…
activ…
Purch…
of
rever… -10 — -10 -201
repur…
agree…
Matur…
of
rever… 10 — 10 288
repur…
agree…
Purch…
of
prope… -161 -256 -600 -658
and
equip…
Proce…
from
sales
of 2 — 21 3
prope…
and
equip…
Purch…
and
origi… -4,296 -4,414 -12,322 -15,9…
of
loans
recei…
Proce…
from
repay…
and
sales
of
loans 4,067 4,735 11,662 15,945
recei…
origi…
class…
as
held
for
inves…
Purch…
of -5,572 -4,387 -18,555 -15,9…
inves…
Matur…
and
sales 4,559 7,432 14,218 19,027
of
inves…
Acqui…
net of — — -122 —
cash
acqui…
Funds 408 1,553 -416 -1,232
recei…
Colla…
posted
relat…
to -2 109 134 -207
deriv…
instr…
net
Other — — — -15
Net
cash
provi…
by -995 4,772 -5,980 1,095
(used
in)
inves…
activ…
Cash
flows
from
finan…
activ…
Borro…
from 27 2,544 27 2,949
repur…
agree…
Repay…
of -27 -2,544 -27 -2,949
repur…
agree…
Proce…
from
issua… — — 60 74
of
common
stock
Purch…
of -1,501 -1,500 -4,553 -4,551
treas…
stock
Tax
withh…
relat…
to net
share -53 -68 -238 -317
settl…
of
equity
awards
Borro…
under 410 746 3,924 2,237
finan…
arran…
Repay…
under -424 -747 -2,100 -1,954
finan…
arran…
Funds
payab…
and -815 -250 508 663
amoun…
due to
custo…
Colla…
recei…
relat…
to
deriv…
instr… 11 -10 129 -155
and
rever…
repur…
agree…
net
Payme…
of
divid… -118 — -370 —
to
stock…
Other — — -6 -6
Net
cash
used -2,490 -1,829 -2,646 -4,009
in
finan…
activ…
3Q 2026 Results 7
PayPal Holdings, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows—(continued)
Effect
of
excha…
rate
chang…
on
cash,
cash
equiv…
and
restr…
cash
Net
change
in
cash,
cash
equiv…
and
restr…
cash
Cash,
cash
equiv…
and
restr…
cash
at
begin…
of
period
Cash,
cash
equiv…
and
restr…
cash Three
at end Months
of Ended Nine
period Septem… Months
Suppl… 30, 9 (44) Ended (12) 245
cash 2026 (1,88… 4,873 Septem… (3,92… 1,363
flow (In 21,973 18,980 30, 24,018 22,490
discl… millio… 20,089 2025 23,853 2026 20,089 2025 23,853
──────────────────────────────────────────────────────────────────────────────
Cash
paid $ 18 $ 19 $ 230 $ 210
for
inter…
Cash
paid
for $ 195 $ 196 $ 420 $ 1,033
income
taxes,
net
3Q 2026 Results 8
PayPal Holdings, Inc.
Unaudited Summary of Consolidated Net Revenues
Our revenues are classified into the following two categories:
• Transaction revenues : Net transaction fees charged to merchants and consumers
on a transaction basis based on the TPV completed on our payments platform.
Growth in TPV is directly impacted by the number of payment transactions that we
enable on our payments platform. We generate additional revenue from merchants
and consumers: on transactions where we perform currency conversion, when we
enable cross-border transactions (i.e., transactions where the merchant and
consumer are in different countries), when we facilitate the instant transfer of
funds for our customers from their PayPal or Venmo account to their bank account
or debit card, when we facilitate the purchase and sale of cryptocurrencies, as
contractual compensation from sellers that violate our contractual terms (for
example, through fraud or counterfeiting), and other miscellaneous fees.
• Revenues from other value added services : Net revenues derived primarily from
revenue earned through partnerships, referral fees, subscription fees, gateway
fees, and other services we provide to our consumers and merchants. We also earn
revenues from interest and fees earned on our portfolio of loans receivable, and
interest earned on certain assets underlying customer balances.
Net
Re… Thr… Sep… June Mar… Dec… Sep…
by Mon… 30, 30, 31, 31, 30,
Ty… End… 2026 2026 2026 2025 2025
──────────────────────────────────────────────────────────────────────────────
-In
mil…
exc…
per…
Tr… $ 7,7… $ 7,8… $ 7,5… $ 7,8… $ 7,5…
re…
Cu…
qu…
vs -2 % 4 % -4 % 4 % 1 %
pr…
qu…
Cu…
qu…
vs 3 % 5 % 7 % 3 % 6 %
pr…
ye…
qu…
Pe…
of 90 % 90 % 90 % 90 % 89 %
to…
Re…
fr…
ot… $ 873 $ 850 $ 852 $ 857 $ 895
va…
ad…
se…
Cu…
qu…
vs 3 % — % -1 % -4 % 6 %
pr…
qu…
Cu…
qu…
vs -2 % — % 10 % 10 % 15 %
pr…
ye…
qu…
Pe…
of 10 % 10 % 10 % 10 % 11 %
to…
To…
net $ 8,5… $ 8,6… $ 8,3… $ 8,6… $ 8,4…
re…
Cu…
qu…
vs -1 % 4 % -4 % 3 % 2 %
pr…
qu…
Cu…
qu…
vs 2 % 5 % 7 % 4 % 7 %
pr…
ye…
qu…
Net
Re… Thr… Sep… June Mar… Dec… Sep…
by Mon… 30, 30, 31, 31, 30,
Ge… End… 2026 2026 2026 2025 2025
──────────────────────────────────────────────────────────────────────────────
-In
mil…
exc…
per…
U.…
net $ 5,0… $ 5,0… $ 4,8… $ 4,9… $ 4,7…
re…
Cu…
qu…
vs -1 % 3 % -1 % 4 % 1 %
pr…
qu…
Cu…
qu…
vs 5 % 7 % 9 % 4 % 5 %
pr…
ye…
qu…
Pe…
of 58 % 58 % 58 % 57 % 56 %
to…
In…
net $ 3,5… $ 3,6… $ 3,4… $ 3,7… $ 3,6…
re…
Cu…
qu…
vs -1 % 5 % -7 % 2 % 2 %
pr…
qu…
Cu…
qu…
vs -2 % 2 % 4 % 3 % 10 %
pr…
ye…
qu…
(F…
Cu…
qu…
vs -4 % -3 % — % 1 % 7 %
pr…
ye…
qu…
Pe…
of 42 % 42 % 42 % 43 % 44 %
to…
To…
net $ 8,5… $ 8,6… $ 8,3… $ 8,6… $ 8,4…
re…
Cu…
qu…
vs -1 % 4 % -4 % 3 % 2 %
pr…
qu…
Cu…
qu…
vs 2 % 5 % 7 % 4 % 7 %
pr…
ye…
qu…
(F…
Cu…
qu…
vs 1 % 3 % 5 % 3 % 6 %
pr…
ye…
qu…
3Q 2026 Results 9
PayPal Holdings, Inc.
Unaudited Supplemental Operating Data
Thr… Sep… June Mar… Dec… Sep…
Mon… 30, 30, 31, 31, 30,
End… 2026 2026 2026 2025 2025
──────────────────────────────────────────────────────────────────────────────
-In
mil…
exc…
per…
Ac… 440 439 439 439 438
ac…
Cu…
qu…
vs — % — % — % — % — %
pr…
qu…
Cu…
qu…
vs 1 % — % 1 % 1 % 1 %
pr…
ye…
qu…
Nu…
of 6,7… 6,7… 6,4… 6,7… 6,3…
pa…
tr…
Cu…
qu…
vs 1 % 4 % -4 % 7 % 2 %
pr…
qu…
Cu…
qu…
vs 7 % 8 % 7 % 2 % -5 %
pr…
ye…
qu…
Pa…
tr…
per 60.8 60.0 58.7 57.7 57.6
ac…
ac…
Cu…
qu…
vs 1 % 2 % 2 % — % -1 %
pr…
qu…
Cu…
qu…
vs 6 % 3 % -1 % -5 % -6 %
pr…
ye…
qu…
TP… $ 487… $ 486… $ 463… $ 475… $ 458…
Cu…
qu…
vs — % 5 % -2 % 4 % 3 %
pr…
qu…
Cu…
qu…
vs 6 % 10 % 11 % 9 % 8 %
pr…
ye…
qu…
(F…
Cu…
qu…
vs 7 % 9 % 8 % 6 % 7 %
pr…
ye…
qu…
Tr…
Ex… 0.87 % 0.90 % 0.90 % 0.89 % 0.89 %
Ra…
Tr…
and
Cr… 0.08 % 0.08 % 0.08 % 0.08 % 0.11 %
Lo…
Ra…
Tr… 46.0 % 44.9 % 45.6 % 46.5 % 46.0 %
Ma…
Amounts in the table are rounded to the nearest million, except as otherwise
noted. As a result, certain amounts may not recalculate using the rounded
amounts provided.
(1) An active account is an account registered directly with PayPal or a
platform access partner that has completed a transaction on our platform, not
including gateway-exclusive transactions, within the past 12 months. A platform
access partner is a third party whose customers are provided access to PayPal’s
platform or services through such third-party’s login credentials, including
individuals and entities that utilize Hyperwallet’s payout capabilities. A user
may register on our platform to access different products and may register more
than one account to access a product. Accordingly, a user may have more than one
active account. The number of active accounts provides management with
additional perspective on the overall scale of our platform, but may not have a
direct relationship to our operating results.
(2) Number of payment transactions is the total number of payments, net of
payment reversals, successfully completed on our payments platform or enabled by
PayPal via a partner payment solution, not including gateway-exclusive
transactions.
(3) Number of payment transactions per active account reflects the total number
of payment transactions within the previous 12-month period, divided by active
accounts at the end of the period. The number of payment transactions per active
account provides management with insight into the average number of times an
account engages in payments activity on our payments platform in a given period.
The number of times a consumer account or a merchant account transacts on our
platform may vary significantly from the average number of payment transactions
per active account.
(4) TPV is the value of payments, net of payment reversals, successfully
completed on our payments platform or enabled by PayPal via a partner payment
solution, not including gateway-exclusive transactions.
(5) Transaction expense rate is transaction expense divided by TPV.
(6) Transaction and credit loss rate is transaction and credit losses divided by
TPV.
(7) Transaction margin is a non-GAAP financial measure. Transaction margin is
net revenues less transaction expense and transaction and credit losses, divided
by net revenues. Subsequent tables at the end of this press release provide
reconciliation to the closest GAAP measure.
3Q 2026 Results 10
PayPal Holdings, Inc.
Non-GAAP Measures of Financial Performance
To supplement the company’s condensed consolidated financial statements
presented in accordance with generally accepted accounting principles, or GAAP,
the company uses non-GAAP measures of certain components of financial
performance. These non-GAAP measures include non-GAAP net income, non-GAAP
earnings per diluted share, non-GAAP operating income, transaction margin
dollars, transaction margin dollars excluding interest on customer balances,
non-GAAP operating margin, transaction margin, non-GAAP effective tax rate, free
cash flow, and adjusted free cash flow.
These non-GAAP measures are not in accordance with, or an alternative to,
measures prepared in accordance with GAAP and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP measures are not
based on any comprehensive set of accounting rules or principles. Non-GAAP
measures have limitations in that they do not reflect all of the amounts
associated with the company’s results of operations as determined in accordance
with GAAP. These measures should be used to evaluate the company’s results of
operations only in conjunction with the corresponding GAAP measures.
Reconciliation of all non-GAAP measures to the most directly comparable GAAP
measures can be found in the subsequent tables included in this press release.
PayPal does not reconcile forward-looking non-GAAP guidance because certain
financial information, the probable significance of which cannot be determined,
is not available and cannot be reasonably estimated.
These non-GAAP measures are provided to enhance investors’ overall understanding
of the company’s current financial performance and its prospects for the future.
Specifically, the company believes the non-GAAP measures provide useful
information to both management and investors by excluding certain expenses,
gains and losses, as the case may be, that may not be indicative of its core
operating results and business outlook. In addition, because the company has
historically reported certain non-GAAP results to investors, the company
believes that the inclusion of non-GAAP measures provides consistency in the
company’s financial reporting.
For its internal budgeting process, and as discussed further below, the
company’s management uses financial measures that do not include amortization or
impairment of acquired intangible assets, impairment of goodwill, transaction
expenses from the acquisition or disposal of a business, restructuring-related
charges, gains and losses on strategic investments including related crypto
assets held for investment, certain other gains, losses, benefits, or charges
that are not indicative of the company’s core operating results, and the income
taxes associated with the foregoing. In addition to the corresponding GAAP
measures, the company’s management also uses the foregoing non-GAAP measures in
reviewing the financial results of the company.
The company excludes the following items from non-GAAP net income, non-GAAP
earnings per diluted share, non-GAAP operating income, non-GAAP operating
margin, and non-GAAP effective tax rate:
Amortization or impairment of acquired intangible assets, impairment of
goodwill, and transaction expenses from the acquisition or disposal of a
business. We incur amortization or impairment of acquired intangible assets and
goodwill in connection with acquisitions and may incur significant gains or
losses or transactional expenses from the acquisition or disposal of a business
and therefore exclude these amounts from our non-GAAP measures. We exclude these
items because management does not believe they are reflective of our ongoing
operating results.
Restructuring. These consist of expenses related to workforce reduction
including employee severance and benefits costs and stock-based compensation
expense, real estate and facilities charges, other asset impairments,
accelerated depreciation charges, and other restructuring costs including non-
recurring third-party costs. The company excludes significant restructuring
charges primarily because management does not believe they are reflective of
ongoing operating results as they are not normal, recurring cash operating
expenses necessary to operate our business.
Gains and losses on strategic investments including related crypto assets held
for investment . The gains and losses we record on our strategic investments are
tied to the performance of the portfolio companies. The gains and losses we
record on crypto assets held for investment are influenced by factors like
market sentiment including trading, regulatory changes, and underlying company
performance. We exclude such gains and losses in full because we do not actively
trade our strategic investments or crypto assets nor do we rely on them to fund
our ongoing operations.
Certain other significant gains, losses, benefits, or charges that are not
indicative of the company’s core operating results. These are significant gains,
losses, benefits, or charges during a period that are the result of isolated
events or transactions that have not occurred frequently in the past and are not
expected to occur regularly in the future. The company excludes these amounts
from its non-GAAP results because management does not believe they are
indicative of our current or ongoing operating results.
Tax effect of non-GAAP adjustments. This adjustment is made to present the
amounts described above on an after-tax basis consistent with the presentation
of non-GAAP net income.
Transaction margin dollars represents operating income, excluding the following
expenses: (i) Customer support and operations, (ii) Sales and marketing, (iii)
Technology and development, (iv) General and administrative, and (v)
Restructuring and other. Transaction margin dollars is a measure used by
management to evaluate the economic value generated by activity on the company’s
platform, including the impact of transaction and credit losses. Accordingly, we
believe that transaction margin dollars provides useful information to investors
and others in understanding and evaluating our financial results in the same
manner as management. Transaction margin dollars can also be calculated as total
net revenues less transaction expense and transaction and credit losses.
Transaction margin dollars excluding interest on customer balances: Interest
earned on certain assets underlying customer account balances is primarily
driven by the movement in interest rates and level of account balances. The
company excludes interest revenue earned on customer balances from transaction
margin dollars because the impact of changes in interest rates on customer
balances is not within the company’s control. Management uses this metric to
further isolate the economic value generated by activity on the company’s
platform.
3Q 2026 Results 11
PayPal Holdings, Inc.
Non-GAAP Measures of Financial Performance—(continued)
Free cash flow represents operating cash flows less purchases of property and
equipment. The company uses free cash flow as a liquidity measure that provides
useful information to management and investors about the amount of cash
generated by the business after the purchases of property, buildings, and
equipment, which can then be used to, among other things, invest in the
company’s business, make strategic acquisitions and investments, and repurchase
stock. Adjusted free cash flow excludes the net timing impact between
originating loan receivables as held for sale and the subsequent repayment and
sale of receivables from free cash flow. Excluding this activity provides a
clearer picture of the cash generated by the business. A limitation of the
utility of free cash flow or adjusted free cash flow as measures of financial
performance is that it does not represent the total increase or decrease in the
company’s cash balance for the period.
In addition to the non-GAAP measures discussed above, the company also analyzes
certain measures, including net revenues and operating expenses, on an FX-
neutral basis to better measure the comparability of operating results between
periods. The company believes that changes in foreign currency exchange rates
are not indicative of the company’s operations and evaluating growth in net
revenues and operating expenses on an FX-neutral basis provides an additional
meaningful and comparable assessment of these measures to both management and
investors. FX-neutral results are calculated by translating the current period’s
local currency results with the prior period’s exchange rate. FX-neutral growth
rates are calculated by comparing the current period’s FX-neutral results by the
prior period’s results, excluding the impact from hedging activities.
3Q 2026 Results 12
PayPal Holdings, Inc.
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income,
Transaction Margin Dollars, and Transaction Margin Dollars Ex-Interest on
Customer Balances and
GAAP Operating Margin to Non-GAAP Operating Margin and Transaction Margin
Three Months Ended
September 30,
2026
(In millions, except
percentages)
(unaudited) 2025
──────────────────────────────────────────────────────────────────────────────
GAAP operating income $ 1,402 $ 1,520
Amortization of
acquired intangible 33 47
assets
Restructuring 178 1
Total non-GAAP
operating income 211 48
adjustments
Non-GAAP operating $ 1,613 $ 1,568
income
Transaction margin
adjustments:
Customer support and 434 447
operations
Sales and marketing 485 482
Technology and 829 800
development
General and 512 506
administrative
Restructuring and 77 68
other
Non
transaction-related 2,337 2,303
expense
Transaction margin 3,950 3,871
dollars
Interest on customer 289 321
balances
Transaction margin
dollars ex-interest $ 3,661 $ 3,550
on customer balances
GAAP net revenues $ 8,584 $ 8,417
GAAP operating margin 16 % 18 %
Non-GAAP operating 19 % 19 %
margin
Transaction margin 46 % 46 %
3Q 2026 Results 13
PayPal Holdings, Inc.
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income, GAAP Diluted
EPS to Non-GAAP Diluted EPS, and
GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate
Three Months Ended
September 30,
2026
(In millions, except
per share data and
percentages)
(unaudited) 2025
──────────────────────────────────────────────────────────────────────────────
GAAP income before $ 1,374 $ 1,533
income taxes
GAAP income tax 301 285
expense
GAAP net income (loss) 1,073 1,248
Non-GAAP adjustments
to net income
(loss):
Non-GAAP operating
income adjustments 211 48
(see table above)
Net (gains) losses on
strategic
investments and crypto 3 -9
assets held for
investment
Tax effect of non-GAAP -42 1
adjustments
Non-GAAP net income $ 1,245 $ 1,288
Diluted net income
(loss) per share:
GAAP $ 1.25 $ 1.30
Non-GAAP $ 1.45 $ 1.34
Shares used in GAAP
diluted share 858 960
calculation
Shares used in
non-GAAP diluted share 858 960
calculation
GAAP effective tax 22 % 19 %
rate
Tax effect of non-GAAP
adjustments to — % -1 %
net income (loss)
Non-GAAP effective tax 22 % 18 %
rate
Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash
Flow
Three Months Ended
September 30,
2026
(In millions)
(unaudited) 2025
──────────────────────────────────────────────────────────────────────────────
Net cash provided by
operating $ 1,592 $ 1,974
activities
Less: Purchases of
property and -161 -256
equipment
Free cash flow 1,431 1,718
Net timing impact for
loan receivables 616 561
held for sale
Adjusted free cash flow $ 2,047 $ 2,279
3Q 2026 Results 14