PayPal Holdings, Inc. (PYPL) delivered robust second-quarter results that surpassed Wall Street estimates, while the company also lifted its full-year 2026 adjusted earnings guidance. The news sparked a rally in the stock, which was trading around $56 ahead of the announcement.
For the quarter ended June 30, PayPal reported adjusted earnings per share of $1.38, comfortably exceeding the average analyst forecast of $1.28. Revenue climbed 5% year-over-year to $8.68 billion, topping the consensus estimate of $8.47 billion. Total payment volume (TPV) surged 10% to $486.4 billion, or 9% on a currency-neutral basis, while payment transactions rose 8% to 6.8 billion. Active accounts grew slightly to 439 million, up 0.3% from the same quarter last year, though they dipped marginally on a sequential basis.
The quarter was notable as the first under new CEO Enrique Lores, who took over in March following the departure of Alex Chriss. Lores emphasized progress in PayPal’s turnaround strategy. "We moved with urgency to sharpen our transformation plan and advance our growth strategies across our three businesses," he said. Transaction margin dollars rose 1% to $3.9 billion—or 3% excluding interest on customer balances—while adjusted operating income fell 8% to $1.5 billion, with the adjusted operating margin contracting 248 basis points to 17.4%.
Looking ahead, PayPal raised its full-year 2026 adjusted EPS guidance to ~$5.38, up from a prior outlook of flat-to-slightly-positive growth relative to 2025’s $5.31. The company also now expects transaction margin dollars of approximately $15.6 billion, an improvement from the previously anticipated slight decline. Gross run-rate savings are projected to reach $400 million this year, with a longer-term target of $1.5 billion in savings over the next two to three years—part of a broader restructuring that includes a planned 20% workforce reduction. For the third quarter, however, PayPal guided for a low-single-digit percentage decline in adjusted EPS compared to the prior-year figure of $1.34, in line with analyst expectations of $1.33.
Lores highlighted growth in Venmo, Braintree, the PayPal debit card, and the buy-now-pay-later business as key momentum drivers. The company also confirmed it is accelerating artificial-intelligence adoption as part of its restructuring push. The results arrived against the backdrop of a reported takeover offer from rival Stripe and buyout firm Advent International, which valued PayPal at around $53 billion; management did not address the offer in the earnings release. Net income for the quarter came in at $1.1 billion, or $1.25 per share, compared to $1.26 billion, or $1.29 per share, a year ago.
