PayPal raises 2026 earnings outlook as third-quarter revenue grows 2 percent

PayPal reported third-quarter net revenue of $8.6 billion on October 27, up 2 percent from a year earlier and up 1 percent on a currency-neutral basis, according to the company’s results release. Non-GAAP earnings were $1.45 per share, up 8 percent, while GAAP earnings fell 4 percent to $1.25 per share. Adjusted earnings topped the $1.31 analysts expected, but revenue of $8.58 billion fell short of the $8.71 billion forecast, according to Investing.com, which reported that shares fell in premarket trading.

Transaction margin dollars rose 2 percent to $4.0 billion, and rose 3 percent to $3.7 billion excluding interest on customer balances, the release said. Non-GAAP operating income rose 3 percent to $1.6 billion with a margin of 18.8 percent, while GAAP operating income fell 8 percent to $1.4 billion. Payment transactions rose 7 percent to 6.8 billion, and adjusted free cash flow was $2.0 billion.

PayPal raised its full-year non-GAAP earnings outlook to about $5.60 per share from about $5.38 in July, according to the release, and Investing.com reported that its adjusted free cash flow outlook is now at least $6.5 billion. Chief executive Enrique Lores said in the release that the company is beginning to see its strategy translate into financial results, while adding that there is more work to do.

Adjusted net income fell 3 percent in the quarter while the diluted share count fell 11 percent, which lifted adjusted earnings per share, according to StockTitan’s analysis of the company’s reconciliations. The analysis put a restructuring charge, excluded from the adjusted figures, at $178 million.

Stripe and Advent International walked away from their pursuit of PayPal on August 28. PayPal reported second-quarter results on July 28, with adjusted earnings of $1.38 per share.