PayPal Holdings 8-K
EarningsNew guidance
Enrique Lores is simplifying PayPal’s organization and focusing investment as payment volume grows but operating margins shrink.
Filed 2026-05-05 07:03 ET
- 2.02 Results of Operations
- 9.01 Financial Statements and Exhibits
Summary
Q1 2026 results with Q2 and FY2026 EPS guidance. Revenue and payment volume grew, while operating income, net income and margins declined. CEO Enrique Lores said PayPal is sharpening its strategy, simplifying its organization and focusing investment to improve growth and cost structure.
Key Figures
| Metric | Q1 2026 | Q1 2025 | Y/Y |
|---|---|---|---|
| Net revenue | $8.35B | $7.79B | 7% |
| GAAP operating income | $1.49B | $1.53B | (3%) |
| Non-GAAP operating income | $1.54B | $1.62B | (5%) |
| GAAP net income | $1.11B | $1.29B | (14%) |
| Non-GAAP net income | $1.23B | $1.33B | (7%) |
| GAAP diluted EPS | $1.21 | $1.29 | (6%) |
| Non-GAAP diluted EPS | $1.34 | $1.33 | 1% |
| Operating cash flow | $1.13B | $1.16B | (2%) |
| Free cash flow | $903M | $964M | (6%) |
| Total payment volume | $464B | $417B | 11% |
- Operating margin contracted 182 bp to 17.8% GAAP and 229 bp to 18.4% non-GAAP. Transaction margin dollars rose 3% to $3.81B; excluding interest on customer balances, they rose 3% to $3.54B. GAAP EPS included an approximately $0.08 negative impact from strategic investments and crypto assets, vs an approximately $0.03 positive impact a year earlier.
- Adjusted free cash flow increased 25% to $1.72B, excluding an $817M net timing impact from originating and selling receivables (vs $417M in Q1 2025). Cash, cash equivalents and investments totaled $13.5B; debt was $11.6B.
- PayPal repurchased approximately 34M shares for $1.5B; common shares outstanding fell from 920M at 12/31/2025 to 892M at 3/31/2026. The board declared a $0.14/share dividend, payable 6/25/2026 to holders of record 6/4/2026.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| GAAP EPS | Q2 2026 | Mid-single-digit decline Y/Y | — | — |
| Non-GAAP EPS | Q2 2026 | High-single-digit decline Y/Y, or ≈9% decline | — | — |
| GAAP EPS | FY2026 | Mid-single-digit decline Y/Y | Mid-single-digit decline Y/Y | Reaffirmed |
| Non-GAAP EPS | FY2026 | Low-single-digit decline to slightly positive Y/Y | Low-single-digit decline to slightly positive Y/Y | Reaffirmed |
Investor Takeaways
- Q2 EPS results will show how performance compares with the stated GAAP and non-GAAP outlook.
- Watch whether PayPal’s strategic focus and cost-structure efforts translate into improved growth and operating performance.
The summary is written by an AI model reading the filing.
Model 005 · prompt 01d34d48e3