- PayPal raised its 2026 adjusted earnings guidance to about $5.60 a share from the $5.38 given in July, an increase of roughly 4% (Lumida calculation). Third-quarter adjusted EPS of $1.45 beat the $1.31 average estimate, a beat of about 11% (Lumida calculation).
- Revenue of $8.58 billion missed the $8.71 billion estimate, and CFO Jamie Miller said tariffs in Europe will keep dragging on fourth-quarter results. Still, transaction margin dollars reached $3.95 billion against the $3.89 billion expected, and total payment volume rose 6.3% to $487.1 billion.
- CEO Enrique Lores is reorganizing the company after the board ousted his predecessor, cutting headcount by more than 2,000 while management roles were reduced by more than a quarter. PayPal is diversifying beyond its core checkout business and “rebalancing” toward high-value consumers.
- The stock rose 1.7% in early New York trading but is down 5.1% this year, giving PayPal a market value of $47 billion, below the more than $50 billion that an Advent and Stripe consortium had offered before abandoning its pursuit. Lores said PayPal remains open to analyzing “any option” that creates more shareholder value.
What Happened?
PayPal Holdings reported third-quarter results on Tuesday that beat on profit but missed on revenue, and raised its full-year adjusted EPS guidance to about $5.60. Adjusted earnings came in at $1.45 a share versus the $1.31 estimate, while revenue of $8.58 billion fell short of the $8.71 billion expected. Transaction margin dollars, a key measure of what PayPal earns from processing after expenses, totaled $3.95 billion. “We are beginning to see our strategy translate into our financial results,” Lores said.
Why It Matters?
The results show the turnaround is so far a margin story rather than a growth story, with cost cuts and mix driving profit while the top line lags. Beating on transaction margin dollars matters because it is the clearest signal that PayPal can earn more per transaction even as revenue disappoints. With the market value at $47 billion, below the abandoned takeover offer, the stock still carries a discount that management has to close through execution.
What’s Next?
Investors will watch whether the European tariff drag fades after the fourth quarter and whether the key growth units keep offsetting softer checkout trends. Lores said mergers and acquisitions should play a role in value creation as long as deals fit the strategy and make financial sense, which keeps strategic options on the table. Further restructuring savings and progress on high-value consumers will be key to sustaining the guidance raise.
Affected Tickers and Coins: PYPL
Source: Bloomberg
