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PayPal's Q2 Earnings Beat Estimates on TPV & Revenue Growth
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Key Takeaways
PYPL posted Q2 revenues of $8.68 billion and EPS of $1.38, both above estimates.
Venmo TPV rose 14%, while Braintree grew in the mid-teens and PSP volume increased 13%.
PayPal raised its 2026 EPS and TM$ outlook, backed by strong cash flow and $1.5 billion in buybacks.
PayPal Holdings, Inc. (PYPL - Free Report) reported second-quarter 2026 non-GAAP earnings per share (EPS) of $1.38, which beat the Zacks Consensus Estimate of $1.28 by 7.81%. The metric declined 1% year over year. Revenues of $8.68 billion surpassed the consensus mark of $8.51 billion by 2.02% and increased 5% year over year.
The quarter benefited from solid growth in total payment volume (TPV), along with continued momentum in Venmo and Braintree. TPV increased 10% to $486.45 billion, or 9% on a currency-neutral basis.
PYPL’s Revenue Growth Reflects Transaction Gains
Transaction revenues increased 5% year over year to $7.83 billion, supported by Braintree, Venmo and favorable foreign exchange. Revenues from other value-added services were flat at $850 million, as higher credit revenues were offset by lower interest earned on customer balances.
U.S. revenues rose 7% to $5.05 billion, while international revenues increased 2% to $3.63 billion. On a currency-neutral basis, international revenues declined 3%, indicating that domestic growth remained the stronger contributor.
PYPL’s Payment Activity Gains Momentum
The company processed 6.75 billion payment transactions in the second quarter, up 8% year over year. Excluding payment service provider (PSP) transactions, payment transactions increased 7%, reflecting growth across the portfolio.
Transactions per active account rose 3% to 60.0 on a trailing 12-month basis. Excluding PSP, the metric increased 7% to 37.9, marking a second straight quarter of acceleration and highlighting stronger Venmo engagement.
PYPL’s Platform Mix Shows Broad-Based Strength
Venmo TPV advanced 14% year over year to $93.81 billion and represented 19% of total payment volume. Management noted that Venmo delivered a second consecutive quarter of mid-teens growth.
Branded checkout volume grew 2% on a currency-neutral basis, remaining stable with the first quarter. PSP volume increased 13% on a currency-neutral basis, with Braintree growing in the mid-teens, while peer-to-peer and other consumer volume rose 10%.
PYPL’s Margin Profile Faces Investment Pressure
Transaction margin dollars (TM$) increased 1% year over year to $3.90 billion. Excluding interest on customer balances, TM$ rose 3% to $3.62 billion, supported by Venmo, credit and Braintree, along with favorable foreign exchange and lower losses.
Non-transaction-related expenses increased 9% to $2.39 billion. Non-GAAP operating income declined 8% to $1.51 billion, while non-GAAP operating margin contracted 248 basis points to 17.4%, reflecting continued investment in growth and platform initiatives.
PYPL’s Account Metrics Remain Stable
Active accounts were 439 million at quarter-end, up 0.3% year over year. Monthly active accounts (MAA) increased 1% to 228 million, with Venmo driving much of the growth.
Management also highlighted stronger adoption across newer financial services products. Buy now, pay later TPV increased 26%, while MAA for the offering rose more than 20%. Venmo Debit Card MAA grew more than 50%, and Pay with Venmo MAA increased approximately 30%.
PYPL’s Cash Generation Supports Capital Returns
Net cash provided by operating activities surged 121% year over year to $1.98 billion. Free cash flow soared 157% to $1.78 billion, while adjusted free cash flow climbed 179% to $1.83 billion.
PayPal repurchased approximately 33 million shares for $1.5 billion during the reported quarter. The company also paid $122 million in dividends and declared a cash dividend of 14 cents per share, payable Sept. 25, 2026.
PYPL Raises Its Full-Year Outlook
For 2026, PayPal now expects non-GAAP EPS of about $5.38, up from $5.31 in 2025. The Zacks Consensus Estimate for the same is pegged at $5.32.
The company also raised its TM$ outlook to approximately $15.6 billion and expects TM$, excluding interest on customer balances, of about $14.5 billion. Management reiterated adjusted free cash flow of more than $6 billion and share repurchases of roughly $6 billion.
For the third quarter, PayPal expects non-GAAP EPS to decline at a low-single-digit rate from the year-ago levels of $1.34. The Zacks Consensus Estimate for the same is pegged at $1.34.
We now look forward to the earnings release of other stocks in the Financial Transaction Services industry, Fidelity National Information Services, Inc. (FIS - Free Report) and Sezzle, Inc. (SEZL - Free Report) . While Fidelity National Information Services is scheduled to report on Aug. 4, Sezzle is slated to report on Aug. 6.
The consensus mark for Fidelity National Information Services’ second-quarter 2026 EPS is pegged at $1.47, implying a 8.1% increase year over year. The Zacks Consensus Estimate for Sezzle’s second-quarter 2026 EPS is pinned at 95 cents, indicating a 37.7% increase year over year.
FIS has a Zacks Rank #3, SEZL carries a Zacks Rank #2 (Buy).
View the Zacks #1 Rank List
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PayPal's Q2 Earnings Beat Estimates on TPV & Revenue Growth
Key Takeaways
PayPal Holdings, Inc. (PYPL - Free Report) reported second-quarter 2026 non-GAAP earnings per share (EPS) of $1.38, which beat the Zacks Consensus Estimate of $1.28 by 7.81%. The metric declined 1% year over year. Revenues of $8.68 billion surpassed the consensus mark of $8.51 billion by 2.02% and increased 5% year over year.
The quarter benefited from solid growth in total payment volume (TPV), along with continued momentum in Venmo and Braintree. TPV increased 10% to $486.45 billion, or 9% on a currency-neutral basis.
PYPL’s Revenue Growth Reflects Transaction Gains
Transaction revenues increased 5% year over year to $7.83 billion, supported by Braintree, Venmo and favorable foreign exchange. Revenues from other value-added services were flat at $850 million, as higher credit revenues were offset by lower interest earned on customer balances.
U.S. revenues rose 7% to $5.05 billion, while international revenues increased 2% to $3.63 billion. On a currency-neutral basis, international revenues declined 3%, indicating that domestic growth remained the stronger contributor.
PYPL’s Payment Activity Gains Momentum
The company processed 6.75 billion payment transactions in the second quarter, up 8% year over year. Excluding payment service provider (PSP) transactions, payment transactions increased 7%, reflecting growth across the portfolio.
Transactions per active account rose 3% to 60.0 on a trailing 12-month basis. Excluding PSP, the metric increased 7% to 37.9, marking a second straight quarter of acceleration and highlighting stronger Venmo engagement.
PYPL’s Platform Mix Shows Broad-Based Strength
Venmo TPV advanced 14% year over year to $93.81 billion and represented 19% of total payment volume. Management noted that Venmo delivered a second consecutive quarter of mid-teens growth.
Branded checkout volume grew 2% on a currency-neutral basis, remaining stable with the first quarter. PSP volume increased 13% on a currency-neutral basis, with Braintree growing in the mid-teens, while peer-to-peer and other consumer volume rose 10%.
PYPL’s Margin Profile Faces Investment Pressure
Transaction margin dollars (TM$) increased 1% year over year to $3.90 billion. Excluding interest on customer balances, TM$ rose 3% to $3.62 billion, supported by Venmo, credit and Braintree, along with favorable foreign exchange and lower losses.
Non-transaction-related expenses increased 9% to $2.39 billion. Non-GAAP operating income declined 8% to $1.51 billion, while non-GAAP operating margin contracted 248 basis points to 17.4%, reflecting continued investment in growth and platform initiatives.
PYPL’s Account Metrics Remain Stable
Active accounts were 439 million at quarter-end, up 0.3% year over year. Monthly active accounts (MAA) increased 1% to 228 million, with Venmo driving much of the growth.
Management also highlighted stronger adoption across newer financial services products. Buy now, pay later TPV increased 26%, while MAA for the offering rose more than 20%. Venmo Debit Card MAA grew more than 50%, and Pay with Venmo MAA increased approximately 30%.
PYPL’s Cash Generation Supports Capital Returns
Net cash provided by operating activities surged 121% year over year to $1.98 billion. Free cash flow soared 157% to $1.78 billion, while adjusted free cash flow climbed 179% to $1.83 billion.
PayPal repurchased approximately 33 million shares for $1.5 billion during the reported quarter. The company also paid $122 million in dividends and declared a cash dividend of 14 cents per share, payable Sept. 25, 2026.
PYPL Raises Its Full-Year Outlook
For 2026, PayPal now expects non-GAAP EPS of about $5.38, up from $5.31 in 2025. The Zacks Consensus Estimate for the same is pegged at $5.32.
The company also raised its TM$ outlook to approximately $15.6 billion and expects TM$, excluding interest on customer balances, of about $14.5 billion. Management reiterated adjusted free cash flow of more than $6 billion and share repurchases of roughly $6 billion.
For the third quarter, PayPal expects non-GAAP EPS to decline at a low-single-digit rate from the year-ago levels of $1.34. The Zacks Consensus Estimate for the same is pegged at $1.34.
PYPL’s Zacks Rank
Currently, PayPal carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PayPal Holdings, Inc. Price, Consensus and EPS Surprise
PayPal Holdings, Inc. price-consensus-eps-surprise-chart | PayPal Holdings, Inc. Quote
Upcoming Earnings Releases
We now look forward to the earnings release of other stocks in the Financial Transaction Services industry, Fidelity National Information Services, Inc. (FIS - Free Report) and Sezzle, Inc. (SEZL - Free Report) . While Fidelity National Information Services is scheduled to report on Aug. 4, Sezzle is slated to report on Aug. 6.
The consensus mark for Fidelity National Information Services’ second-quarter 2026 EPS is pegged at $1.47, implying a 8.1% increase year over year. The Zacks Consensus Estimate for Sezzle’s second-quarter 2026 EPS is pinned at 95 cents, indicating a 37.7% increase year over year.
FIS has a Zacks Rank #3, SEZL carries a Zacks Rank #2 (Buy).