Skip to Main ContentSkip to Search
This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.
PayPal Beats Earnings Estimates and Hikes Guidance as Turnaround Takes Root
Updated July 28, 2026, 10:40 am EDT / Original July 28, 2026, 7:03 am EDT
Share
Add us on Google
Choose Barron's as a preferred source of financial news
Resize
Reprints
In this article
Key Points
About This Summary
-
PayPal reports second-quarter adjusted earnings of $1.38 a share on revenue of $8.68 billion, beating Wall Street expectations.
-
PayPal raises its full-year adjusted earnings guidance to $5.38 a share, up from $5.31 in 2025.
-
Investors are waiting for a strategic reorganization under PayPal CEO Enrique Lores, who took over in early 2026.
Just months into its turnaround, PayPal needs all the help it can get to show investors that things are progressing smoothly. Second-quarter earnings just delivered.
The latest numbers, posted ahead of Tuesday’s opening bell, beat management’s own guidance as well as Wall Street expectations. PayPal reported adjusted earnings of $1.38 a share for the quarter, topping analysts’ calls for $1.28. Revenue came to $8.68 billion, ahead of the $8.47 billion consensus estimate.
The company highlighted improvement in several key metrics including transaction margin dollars, a measure of profitability. Second-quarter transaction margin dollars ticked 1% higher to $3.9 billion—up 3% when excluding interest on customer balances.
Total payment volume grew 9% on a currency-neutral basis to $486.4 billion. The metric, which measures the total value of transactions processed, is seen as a sign of how effectively PayPal monetizes its platform.
Advertisement - Scroll to Continue
Perhaps most encouraging was a full-year guidance hike. PayPal now expects full-year adjusted earnings of $5.38 a share, up from $5.31 in 2025.
This compares with previous guidance calling for “low-single-digit decline to slightly positive growth,” which the company reiterated as recently as May. Analysts anticipate earnings will stay flat year over year.
Additionally, PayPal now expects roughly $15.6 billion in transaction margin dollars for the full year—a slight increase over 2025’s $15.5 billion. Just last month, the company had anticipated a “slight decline.”
Advertisement - Scroll to Continue
While the raised outlook was modest, the optimism is encouraging for a turnaround that is still in its early stages. As of Monday’s close, PayPal was down nearly 4% in 2026, trailing an 8.3% gain for the S&P 500.
Fintech stocks have generally experienced a tumultuous year, but PayPal has come under particular pressure. A steep drop in February, sparked by disappointing fourth-quarter earnings and a CEO transition, erased nearly half its value.
Most of those losses were wiped out in mid-July after rumors of a takeover bid sent the stock sharply higher. Over the past month alone, shares have rallied 35%, headed for their best monthly performance on record.
Still, investors are cautiously waiting for a “strategic reorganization” to gather pace after CEO Enrique Lores first announced it earlier this year. Lores himself is a fresh face at the company, having taken over in early 2026 following Alex Chriss’s brief tenure.
Following his appointment, Lores—formerly the head of HP Inc. —moved quickly to drive change. He reshuffled PayPal into three distinct operating divisions, including a unit dedicated to Venmo and another handling cryptocurrency.
PayPal said Tuesday that it expects to achieve $400 million in gross run-rate savings this year as it paces toward Lores’s longer-term goal of $1.5 billion over the next two to three years.
Advertisement - Scroll to Continue
“We believe that executing the transformation strategy I have outlined will create significant value for our shareholders,” Lores said on the earnings call. “That remains our focus.”
At the same time, PayPal remains open to opportunities including strategic deals, Lores continued. “If we see a path that we believe would create superior value for our shareholders at executing our current strategy, we would, of course, carefully consider it.”
Recent turbulence at the company—marked by executive turnover and a sluggish first quarter—has only deepened Wall Street’s concerns. In fact, Evercore analyst Adam Fritsch characterized first-quarter earnings, released in May, as merely a “placeholder” until PayPal’s board outlines a clearer path forward.
Lores told analysts on Tuesday that the company was targeting untapped customer segments and expanding Venmo beyond peer-to-peer payments into a “money-management platform.”
Shares reversed losses in premarket trading and climbed 3.4%, outpacing the benchmark S&P 500, which traded slightly lower.
Advertisement - Scroll to Continue
It remains to be seen if the latest report will soothe investors. Either way, it’s clear that a full transformation won’t happen overnight.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.comExternal link
Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Chart of the Day: Verizon’s Turnaround Takes Shape \
\
0·35 minutes ago\
\
