PayPal $PYPL reported second-quarter adjusted earnings of $1.38 a share on Tuesday, beating analyst expectations of $1.28, and raised its full-year profit guidance as CEO Enrique Lores's turnaround effort showed early signs of progress.
The payments company now expects full-year adjusted earnings of $5.38 a share, up from prior guidance that called for a slight decline
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PayPal $PYPL reported second-quarter adjusted earnings of $1.38 a share on Tuesday, beating analyst expectations of $1.28, and raised its full-year profit guidance as CEO Enrique Lores's turnaround effort showed early signs of progress.
Revenue for the quarter rose 5% year over year to $8.68 billion. Analysts had expected $8.47 billion, according to The Wall Street Journal.
PayPal now expects full-year adjusted earnings of $5.38 a share, compared with $5.31 in 2025. The company had previously guided for a low-single-digit decline to slightly positive growth. For the full year, PayPal also expects transaction margin dollars — a key profitability measure — of roughly $15.6 billion, up from $15.5 billion in 2025 and a reversal of prior guidance that had called for a slight decline.
In the second quarter, transaction margin dollars increased 1% to $3.9 billion, a figure that climbs to 3% growth once interest on customer balances is stripped out. On a currency-neutral basis, total payment volume reached $486.4 billion, a 9% year-over-year increase. Non-GAAP operating margin contracted 248 basis points year over year to 17.4%, as non-transaction-related expenses rose 9%.
On a GAAP basis, the company posted net income of $1.1 billion, or $1.25 a share, down from $1.26 billion, or $1.29 a share, a year earlier.
Lores, who took the top job in March after succeeding Alex Chriss, pointed to progress across PayPal's three newly formed business divisions. "We moved with urgency to sharpen our transformation plan and advance our growth strategies across our three businesses," Lores said in a statement. "Branded checkout has further stabilized and we're building on the strong momentum in Venmo and Braintree as well as diversifying our business model through financial services."
The company said Venmo Debit Card monthly active accounts grew more than 50% year over year, while Braintree total payment volume grew in the mid-teens. The company also said it is on course to achieve $400 million in gross run-rate savings in 2026, with a longer-term target of at least $1.5 billion to be realized over the following two to three years.
Looking ahead to the third quarter, PayPal projected that adjusted earnings would slip by a low-single-digit percentage against the $1.34 a share it posted in the year-ago period.
PayPal stock fell roughly 2% in premarket trading Tuesday.
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