PayPal raised its full-year 2026 adjusted earnings forecast to roughly $5.60 per share on Tuesday, up from $5.38, after third-quarter profit beat Wall Street estimates.
Adjusted earnings came in at $1.45 per share for the quarter ended Sept. 30, ahead of the $1.31 analysts expected. Revenue rose 2% to $8.58B, short of an $8.71B consensus.
Analysts had penciled in full-year adjusted earnings of $5.39, so the new outlook clears the bar. The company also lifted its full-year transaction margin dollars target to roughly $15.7B from roughly $15.6B, and held capital spending at roughly $1B.
PayPal Q3 2026 results versus analyst estimates
Reported figures compared with Wall Street consensus, quarter ended Sept. 30, 2026
| Metric | Reported | Consensus estimate |
|---|---|---|
| Adjusted earnings per share | $1.45 | $1.31 |
| Revenue | $8.58B | $8.71B |
| Total payment volume | $487.1B | $491.3B |
| Transaction margin dollars | $3.95B | $3.89B |
| Q4 adjusted EPS guidance | $1.43 | $1.35 |
| FY2026 adjusted EPS guidance | $5.60 | $5.39 |
Volume grew faster than revenue
Total payment volume rose 6.3% to $487.1B, still under the $491.3B analysts modeled. Payment transactions climbed 7.3% to 6.8B, and transactions per active account rose 6% to 60.8 on a trailing 12-month basis.
Active customer accounts reached 440M, up 0.5% from a year earlier and 1.6M from the prior quarter. US net revenue rose 5.2% to $5.00B, while international revenue slipped 2.2% to $3.58B.
Transaction margin dollars, the figure management points investors toward, rose 2% to $3.95B, beating the $3.89B consensus. Adjusted operating margin widened to 18.8% from 18.6%, though reported operating margin narrowed 173 basis points to 16.3%.
Cost cuts are doing the heavy lifting
PayPal says it's on track for $700M in gross run-rate cost savings by the end of 2026, driven by more than 2K job cuts and a reduction of over 25% in managerial roles.
Management has set a longer target of at least $1.5B in gross run-rate savings over the next two to three years, helped by streamlined operations and wider use of artificial intelligence, including chat agents handling customer service.
"We are making good progress in our multi-year transformation."
Enrique Lores, PayPal
Lores took over earlier in 2026 after the board ousted Alex Chriss over the pace of change. He's running the company against competition from Apple, Alphabet, and newer fintechs. Earlier this year, a buyout offer from Stripe and Advent International valued PayPal at roughly $53B, and the board judged it inadequate.
Cash generation stayed solid, with $1.59B in operating cash flow and $1.43B in free cash flow, though adjusted free cash flow fell to $2.05B from $2.28B a year earlier.
The company returned $1.5B to shareholders by repurchasing roughly 28M shares and declared a quarterly dividend of 14 cents, payable Dec. 24.
Fourth-quarter guidance calls for adjusted earnings of $1.43 per share versus $1.35 expected and $1.23 a year earlier, with the holiday shopping stretch deciding whether volume growth finally catches up with revenue.
