It has been about a month since the last earnings report for Paypal (PYPL Quick QuotePYPL - Free Report) . Shares have added about 5.9% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Paypal due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

PayPal's Q2 Earnings Beat Estimates on TPV & Revenue Growth

PayPal Holdings 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 TPV, along with continued momentum in Venmo and Braintree. TPV increased 10% to $486.45 billion, or 9% on a currency-neutral basis.

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.

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.

PayPal’s Platform Mix Shows Broad-Based Strength

Venmo TPV advanced 14% year over year to $93.81 billion and represented 19% of overall TPV. 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%.

Margin Profile Faces Investment Pressure

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.

PayPal’s Account Metrics Remain Stable

Active accounts were 439 million at quarter-end, up 0.3% year over year. 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 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.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

Currently, Paypal has a average Growth Score of C, a score with the same score on the momentum front. However, the stock has a grade of A on the value side, putting it in the top quintile for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Paypal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Paypal belongs to the Zacks Financial Transaction Services industry. Another stock from the same industry, Wex (WEX Quick QuoteWEX - Free Report) , has gained 5.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.

Wex reported revenues of $753.5 million in the last reported quarter, representing a year-over-year change of +14.2%. EPS of $5.35 for the same period compares with $3.95 a year ago.

For the current quarter, Wex is expected to post earnings of $5.60 per share, indicating a change of +22% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Wex. Also, the stock has a VGM Score of D.