PayPal reported stronger-than-expected second-quarter results on Tuesday, raising its 2026 adjusted earnings outlook and driving PYPL stock up more than 4%. The company posted Q2 revenue of $8.68 billion for the period ended June 30, beating estimates of $8.47 billion, and adjusted EPS of $1.38 per share, above the $1.28 consensus. The beat followed continued speculation about a reported $60.50-per-share acquisition offer from Stripe and Advent. PayPal operates in a competitive digital payments market where margin trends and transformation progress remain key investor concerns.
PayPal Reports Q2 Revenue and EPS Beat
PayPal reported second-quarter revenue of $8.68 billion for the period ended June 30. The figure beat analyst expectations of $8.47 billion and rose 5% from a year earlier.
Adjusted earnings reached $1.38 per share, above estimates of $1.28 per share. Total payment volume climbed 10% year over year to $486.4 billion, beating forecasts near $473.93 billion.
The company processed 6.8 billion payment transactions during the quarter, up 8% from last year. Active accounts reached 439 million, while transactions per active account rose 3% to 60 over the past 12 months.
PayPal also generated $2 billion in operating cash flow and $1.8 billion in free cash flow. The company ended the quarter with $15.3 billion in cash and investments against $13.4 billion in debt.
PayPal Raises 2026 Adjusted Earnings Outlook Amid Margin Pressure
PayPal raised its full-year 2026 non-GAAP earnings outlook after the stronger quarter. The company now expects adjusted EPS of about $5.38, above the earlier outlook and prior-year EPS of $5.31.
The company also lifted its full-year non-GAAP transaction margin dollar guidance. PayPal maintained its GAAP EPS forecast for a mid-single-digit decline.
Profitability weakened during the quarter. GAAP operating income fell 5% to $1.4 billion, while non-GAAP operating income declined 8% to $1.5 billion.
GAAP operating margin narrowed to 16.4%, while non-GAAP operating margin fell to 17.4%. GAAP EPS declined to $1.25 from $1.29, and adjusted EPS slipped slightly from $1.40 last year.
PayPal said its strategic investment portfolio and crypto assets held for investment reduced results by about $0.07 per share. The same category provided a slight positive contribution in the second quarter of 2025.
The company returned $1.5 billion to shareholders through buybacks during the quarter. PayPal repurchased 33 million shares and declared a $0.14 quarterly dividend payable on September 25.
CEO Enrique Lores Reaffirms Transformation Plan
PayPal CEO Enrique Lores said the company continues to work through its business transformation. He said, "While there is still significant work ahead, I have strong conviction in our direction and in our ability to execute."
Lores said PayPal moved quickly to sharpen its transformation plan and support growth across three units. Those units include checkout solutions and PayPal, consumer financial services and Venmo, and payment services and crypto.
The company said branded checkout has further stabilised, while Venmo and Braintree continue to show momentum. Management expects investments in technology and consumer services to build more momentum during 2027.
PayPal also aims to expand beyond its core Venmo checkout business inside financial services. Lores said that area could become the company's largest future source of transaction margin growth.
Stripe and Advent Acquisition Speculation Continues
PayPal shares also moved amid continued speculation about potential acquisition interest. Reports earlier this month said Stripe and Advent made a joint offer near $60.50 per share.
The reported offer would value PayPal at more than $53 billion. PayPal's board reportedly viewed the proposal as undervaluing the company and facing financing and regulatory hurdles.
Lores declined to comment directly on the reported offer during the earnings call. He said PayPal does not comment on market speculation or possible merger discussions as a matter of policy.
He added, "At the same time, we remain open and objective in evaluating opportunities." Lores said PayPal would consider paths that may create superior shareholder value.
FAQ
What did PayPal report for second-quarter revenue and earnings?
PayPal reported second-quarter revenue of $8.68 billion for the period ended June 30, beating analyst expectations of $8.47 billion. Adjusted earnings reached $1.38 per share, above estimates of $1.28 per share. Total payment volume climbed 10% year over year to $486.4 billion.
What is PayPal's 2026 adjusted earnings outlook?
PayPal raised its full-year 2026 non-GAAP earnings outlook to about $5.38 per share, above the earlier outlook and prior-year EPS of $5.31. The company also lifted its full-year non-GAAP transaction margin dollar guidance.
What did PayPal's CEO say about the reported acquisition offer?
CEO Enrique Lores declined to comment directly on the reported Stripe and Advent offer during the earnings call. He said PayPal does not comment on market speculation or possible merger discussions as a matter of policy, but added that the company remains "open and objective in evaluating opportunities" that may create superior shareholder value.
