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PYPL reported Q4 non-GAAP EPS of $1.23 and $8.68B revenues, both missing estimates as shares fell about 17%.
PYPL saw payment transactions per active account drop 4.8% to 57.7, even as TPV and revenues rose Y/Y.
PayPal guided to a mid-single-digit Q1 EPS decline and softer transaction margin dollar.
After reporting a mixed quarter last week, PayPal ((PYPL - Free Report) ) not only cratered 20% but shares fell into the cellar of the Zacks Rank as most analysts lowered full year 2026 and 2027 EPS estimates.
This year's Zacks EPS consensus dropped from $5.83 to $5.38, representing projected growth of only 1.3%. And next year was clipped 11% from $6.64 to $5.91 in the past two months.
And this week, the analyst continue to condemn to the business with Truist Securities maintaining a "Sell" rating and slashing their price target from $58 to $39.
Quarter Highlights
Paypal reported $8.68 billion in revenue for the quarter ended December 2025, representing a year-over-year increase of 3.7%. But EPS of only $1.23 for the same period barely limped over the $1.19 post a year ago.
The reported revenue represents a surprise of -1.07% over the Zacks Consensus Estimate of $8.77 billion. With the consensus EPS estimate being $1.29, the EPS surprise was -4.36%.
This article explains more about the company's business...
TPV was $475.14 billion for the fourth quarter, up 8.5% year over year on a reported basis and 6% on a forex-neutral basis.
The transaction margin in dollar terms was $4.03 billion, which grew 2.5% on a reported basis. Excluding interest on customer balances, transaction margin dollars increased 3.8% to $3.74 billion.
Transaction revenues were $7.82 billion (90.1% of net revenues), up 3% year over year. Value Added Services revenues were $857 million (9.9% of net revenues), which rose 10.2% year over year.
Net revenues from the United States totaled $4.94 billion (57% of net revenues), up 4.5% on a year-over-year basis. International net revenues were $3.73 billion (43% of net revenues), up 2.7% year over year on a reported basis and 1% on a forex-neutral basis.
PayPal witnessed year-over-year growth of 1.2% in total active accounts to 439 million in the reported quarter. The total number of payment transactions was 6.75 billion, up 2% on a year-over-year basis. However, PYPL’s payment transactions per active account were 57.7, which dropped 4.8% year over year.
Bottom line: As banks become more agile and mobile with services, there's been lots of disruption in the fintech space for an early pioneer like PayPal, to say nothing of all the new competition. According to analysts, expect that trend to continue.
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Bear of the Day: PayPal (PYPL)
Key Takeaways
After reporting a mixed quarter last week, PayPal ((PYPL - Free Report) ) not only cratered 20% but shares fell into the cellar of the Zacks Rank as most analysts lowered full year 2026 and 2027 EPS estimates.
This year's Zacks EPS consensus dropped from $5.83 to $5.38, representing projected growth of only 1.3%. And next year was clipped 11% from $6.64 to $5.91 in the past two months.
And this week, the analyst continue to condemn to the business with Truist Securities maintaining a "Sell" rating and slashing their price target from $58 to $39.
Quarter Highlights
Paypal reported $8.68 billion in revenue for the quarter ended December 2025, representing a year-over-year increase of 3.7%. But EPS of only $1.23 for the same period barely limped over the $1.19 post a year ago.
The reported revenue represents a surprise of -1.07% over the Zacks Consensus Estimate of $8.77 billion. With the consensus EPS estimate being $1.29, the EPS surprise was -4.36%.
This article explains more about the company's business...
PayPal Reports Q4: What Key Metrics Have to Say
PYPL’s Revenue Details
TPV was $475.14 billion for the fourth quarter, up 8.5% year over year on a reported basis and 6% on a forex-neutral basis.
The transaction margin in dollar terms was $4.03 billion, which grew 2.5% on a reported basis. Excluding interest on customer balances, transaction margin dollars increased 3.8% to $3.74 billion.
Transaction revenues were $7.82 billion (90.1% of net revenues), up 3% year over year. Value Added Services revenues were $857 million (9.9% of net revenues), which rose 10.2% year over year.
Net revenues from the United States totaled $4.94 billion (57% of net revenues), up 4.5% on a year-over-year basis. International net revenues were $3.73 billion (43% of net revenues), up 2.7% year over year on a reported basis and 1% on a forex-neutral basis.
PayPal witnessed year-over-year growth of 1.2% in total active accounts to 439 million in the reported quarter. The total number of payment transactions was 6.75 billion, up 2% on a year-over-year basis. However, PYPL’s payment transactions per active account were 57.7, which dropped 4.8% year over year.
Bottom line: As banks become more agile and mobile with services, there's been lots of disruption in the fintech space for an early pioneer like PayPal, to say nothing of all the new competition. According to analysts, expect that trend to continue.