PayPal Raises Full-Year Earnings Forecast as Payment Volumes Climb

October 28, 2026 | By Semahegn Nigatu

PayPal raised its full-year 2026 earnings forecast after payment volumes increased in the third quarter, although its net income and operating cash flow declined from a year earlier.

The US-based digital payments company reported net revenue of 8.58 billion US dollars for the three months ended September 30, up two percent from 8.42 billion US dollars in the same period last year. Total payment volume rose six percent to 487.1 billion US dollars, while the number of transactions increased seven percent to 6.8 billion.

The company lifted its full-year forecast for non-GAAP earnings per share to about 5.60 US dollars, from its previous guidance of approximately 5.38 US dollars. It also reaffirmed its full-year GAAP earnings-per-share forecast of about 5.07 US dollars.

PayPal’s third-quarter net income, however, fell 14 percent to 1.07 billion US dollars from 1.25 billion US dollars a year earlier. Earnings per diluted share declined four percent to 1.25 US dollars, while operating income dropped eight percent to 1.40 billion US dollars.

On a non-GAAP basis, which excludes certain expenses and other items, operating income increased three percent to 1.61 billion US dollars, while earnings per diluted share rose eight percent to 1.45 US dollars.

The company’s operating margin narrowed to 16.3 percent from 18.1 percent a year earlier. Its non-GAAP operating margin, by contrast, edged up to 18.8 percent from 18.6 percent.

PayPal’s active accounts increased by 0.6 percent to 440 million, including a net addition of 1.6 million accounts from the previous quarter. The average number of payment transactions per active account over the trailing 12 months rose six percent to 60.8.

Cash generation weakened during the quarter. Cash flow from operating activities fell 19 percent to 1.59 billion US dollars, while free cash flow declined 17 percent to 1.43 billion US dollars. Adjusted free cash flow, which excludes the net timing impact associated with certain buy-now-pay-later receivables, fell 10 percent to 2.05 billion US dollars.

PayPal returned 1.5 billion US dollars to shareholders through the repurchase of approximately 28 million shares during the quarter. Over the preceding 12 months, it repurchased about 117 million shares, returning a total of 6 billion US dollars through buybacks.

The company also declared a cash dividend of 14 US cents per share, payable on December 24 to shareholders of record as of December 4.

Chief executive Enrique Lores said the company was beginning to see its strategy translate into financial results, citing contributions from key growth areas and increasing diversification. He said the company was raising its full-year guidance for transaction margin dollars and non-GAAP earnings per share as it continued a multi-year transformation.

PayPal ended September with 15.1 billion US dollars in cash, cash equivalents and investments, against total debt of 13.5 billion US dollars.

Source: FSX Business News