PayPal lifts full-year profit guidance; shares gain
PayPal on Tuesday raised its full-year profit guidance after reporting better-than-expected third-quarter earnings per share, while quarterly revenue fell short of market expectations.
Adjusted earnings per share were $1.45, ahead of the $1.31 consensus, while revenue came in at $8.58 billion, up 2%, or 1% excluding currency effects, below the $8.71 billion analysts expected.
The company’s shares rose 1.2% in early U.S. trading by 09:39 ET (13:39 GMT).
Transaction revenue rose 2.5% to $7.71 billion, while other value-added services revenue fell 2.5% to $873 million.
U.S. net revenue rose 5.2% to $5.00 billion, but international revenue fell 2.2% to $3.58 billion. Transaction margin dollars rose 2% to $3.95 billion.
Total payment volume rose 6.3% to $487.14 billion, and payment transactions rose 7.3% to 6.80 billion. Active customer accounts rose 0.5% to 440 million.
Adjusted operating income rose 2.9% to $1.61 billion, and the adjusted operating margin widened to 18.8% from 18.6%. Total operating expenses (opex) rose 4.1% to $7.18 billion.
“PYPL reported a stronger than expected Q3 on both stronger than expected transaction margins and lower opex,” Goldman Sachs analysts said.
“We believe the moving pieces in the quarter were more or less in line with investor expectations, and with lower transaction costs and higher cost savings driving the stronger results.”Adjusted free cash flow fell to $2.05 billion from $2.28 billion a year earlier.
“I’m pleased with our third-quarter performance and the momentum we are seeing across the business, and we are raising our full-year non-GAAP guidance for transaction margin dollars and EPS,” said CEO Enrique Lores.
PayPal now expects 2026 adjusted earnings per share of $5.60, up from $5.38 previously and above the $5.39 consensus. It also raised its full-year transaction margin dollars forecast to about $15.7 billion from about $15.6 billion, and kept capital expenditure at about $1 billion.
For the fourth quarter, it guided for earnings per share of $1.43, versus the $1.35 consensus, and said it expects transaction margin dollars to be slightly positive, with and without interest on customer balances.
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