Key Highlights

  • Net revenues rose 2% to USD 8.6 billion, and transaction margin dollars rose 2% to USD 4.0 billion.
  • Non-GAAP EPS rose 8% to USD 1.45, while GAAP EPS fell 4% to USD 1.25.
  • Total payment volume rose 6% to USD 487.1 billion, and active accounts reached 440 million.
  • Full-year non-GAAP EPS guidance rose to about USD 5.60 from about USD 5.38, with GAAP EPS at about USD 5.07.

Quarter Results

PayPal (NASDAQ:PYPL) reported third quarter 2026 results on Tuesday. Net revenues rose 2% to USD 8.6 billion, or 1% on a currency-neutral basis, from USD 8.42 billion. Transaction margin dollars rose 2% to USD 3.95 billion, and excluding interest on customer balances they rose 3% to USD 3.66 billion. Management attributed growth to Braintree and Venmo plus favorable foreign exchange.

GAAP operating income fell 8% to USD 1.40 billion, with the operating margin down 173 basis points to 16.3%. Non-GAAP operating income rose 3% to USD 1.61 billion, with the margin up 16 basis points to 18.8%. GAAP net income was USD 1.07 billion and GAAP EPS was USD 1.25, down 4%. Non-GAAP net income was USD 1.25 billion and non-GAAP EPS was USD 1.45, up 8%, which management tied to higher transaction margins and lower than forecast operating expenses. The GAAP effective tax rate rose to 21.9% from 18.6%.

President and Chief Executive Enrique Lores said the strategy is beginning to translate into financial results, with strong contributions from key growth areas and increasing diversification.

Volume and Accounts

Total payment volume rose 6% to USD 487.1 billion, or 7% on a currency-neutral basis. Payment transactions rose 7% to 6.8 billion, and transactions per active account on a trailing twelve-month basis rose 6% to 60.8. Active accounts increased 0.6% to 440 million, up 1.6 million, or 0.4%, from the prior quarter.

Cash Flow and Capital Return

Cash flow from operations was USD 1.59 billion, down 19%, and free cash flow was USD 1.43 billion, down 17%. Adjusted free cash flow, which excludes the net timing impact of buy now, pay later receivables held for sale, was USD 2.05 billion. Cash, cash equivalents and investments totaled USD 15.1 billion, and debt totaled USD 13.5 billion.

The company repurchased about 28 million shares for USD 1.5 billion in the quarter and about 117 million shares for USD 6.0 billion over the trailing twelve months. The board declared a cash dividend of USD 0.14 per share, payable on Dec. 24 to stockholders of record on Dec. 4.

Guidance

For the fourth quarter, management guided to GAAP EPS of about USD 1.37 and non-GAAP EPS of about USD 1.43, against USD 1.53 and USD 1.23 a year earlier. For 2026, non-GAAP EPS is guided to about USD 5.60, up from about USD 5.38 in July and compared with USD 5.31 in 2025. GAAP EPS guidance was reaffirmed at about USD 5.07, against USD 5.41 in 2025 and a July outlook of a mid-single-digit decline. The company also raised full-year non-GAAP transaction margin dollar guidance. Estimated full-year non-GAAP adjustments are about USD 570 million.

Payments Markers to Follow

Tracking points include transaction margin dollars excluding interest on customer balances against 3% growth, active account growth against 0.6%, and the pace of buybacks relative to USD 1.5 billion per quarter. Further items are the gap between GAAP and non-GAAP EPS, the effective tax rate, and cash flow after the buy now, pay later timing effects.