PayPal Holdings said on Oct. 27, 2026, that it has raised its full‑year adjusted earnings guidance after reporting third‑quarter results that beat profit expectations, even as revenue fell short of analyst estimates.
What the company reported
PayPal reported adjusted earnings per share of $1.45 for the third quarter, above the year‑ago figure of $1.34 and ahead of a consensus expectation of $1.31 compiled by Zacks, the company said. Revenue came in at $8.58 billion, below the consensus of $8.70 billion but up from $8.42 billion a year earlier. Net income under U.S. accounting rules was $1.07 billion, or $1.25 a share.
“The progress we have seen reinforces our conviction in the strategy. As I look further ahead, I am increasingly confident in PayPal's earnings growth potential,” Enrique Lores, chief executive, said on a post‑earnings call.
Following the quarter, PayPal lifted its full‑year adjusted profit forecast to about $5.60 per share, up from the prior guide of $5.38 and above analysts’ compiled estimates of $5.38, according to LSEG estimates reported by Reuters. The company also gave a fourth‑quarter adjusted earnings guidance of $1.43, above last year’s $1.23.
Cost cuts and margins
Management said cost reductions and margin improvements underpinned the guidance raise. PayPal expects to reach $700 million in gross run‑rate cost savings by the end of 2026, driven by headcount reductions of more than 2,000 jobs and a one‑quarter drop of over 25% in managerial roles. The company has set a target of at least $1.5 billion in gross run‑rate savings over the next two to three years.
Adjusted operating margin widened 16 basis points to 18.8% in the quarter, a key metric for investors. PayPal said it is also accelerating adoption of artificial intelligence for customer service, including AI chat agents, and is optimizing its product portfolio.
Market reaction and context
Shares initially rose after the announcement, reversing premarket losses, though the stock remains well below its 2021 high. Analysts at Evercore ISI said the company’s faster‑than‑expected cost reductions were a positive development for investors.
- Q3 adjusted EPS: $1.45 (reported)
- Q3 revenue: $8.58 billion (reported)
- Full‑year adjusted EPS guidance: about $5.60 (raised)
- Run‑rate cost savings: $700 million target for 2026; $1.5 billion target over 2–3 years
| Metric | Company report | Consensus |
|---|---|---|
| Q3 adjusted EPS | $1.45 | $1.31 (Zacks) |
| Q3 revenue | $8.58 billion | $8.70 billion (Zacks) |
| Full‑year adjusted EPS guidance | About $5.60 | $5.38 (LSEG) |
PayPal's results come as the company pursues a multi‑year turnaround to counter mounting competition from Apple, Google and fintech rivals. Management said the company is streamlining operations, trimming management, and pursuing AI and product changes to improve margins and return to stronger growth.
Analysts and investors will watch whether PayPal can sustain margin gains and convert planned cost savings into durable earnings growth while addressing competitive pressure in digital payments and expanding services such as Venmo and business payouts.
