Published Tue, Oct 27, 2026 · 07:51 PM
PAYPAL lifted its annual adjusted profit forecast on Tuesday (Oct 27), as a years-long turnaround starts to bear fruit, with improving margins and resilient consumer spending providing fresh momentum.
The company has stepped up efforts to revive growth, most recently under CEO Enrique Lores, as it struggles to sustain its pandemic-era popularity amid intense competition from Apple and Google and newer fintechs.
“We are making good progress in our multi-year transformation,” Lores, who took the helm earlier this year after the board ousted Alex Chriss over dissatisfaction with the pace of change and execution, said in a statement.
“While there is more work to do, we are increasingly confident in our path to durable, profitable growth and remain focused on execution,” he added.
The payments company now expects full-year adjusted profit of about US$5.60 per share, compared with its previous forecast and Wall Street analysts’ expectations of US$5.38, according to estimates compiled by LSEG.
Adjusted profit came in at US$1.45 per share in the three months ended Sep 30, sailing past estimates of US$1.31.
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Revenue of US$8.6 billion in the third quarter was a tad below estimates of US$8.7 billion. Shares of the company fell 1.2 per cent in premarket trading.
Revival on strike
The company said it was on track to achieve US$700 million in gross run-rate cost savings by the end of 2026, driven by cuts to more than 2,000 jobs and a reduction of over 25 per cent in managerial roles.
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Efforts to streamline operations, optimise its portfolio and accelerate AI adoption, including using AI chat agents to support customer service, are also supporting the cost-management efforts, PayPal said.
The company has set a goal of securing at least US$1.5 billion in gross run-rate savings over the next two to three years.
Adjusted operating margin, a key metric for investors, expanded 16 basis points to 18.8 per cent in the third quarter.
Earlier this year, Reuters reported, citing sources, that PayPal had received a buyout offer of US$60.50 per share from Stripe and private equity firm Advent International, a bid that many analysts described as “low-ball.”
The offer, which valued PayPal at about US$53 billion, was reportedly deemed inadequate by the board and represented a fraction of the roughly US$360 billion valuation the company commanded at its peak in 2021.
Spending engine keeps humming
More broadly, US consumers have continued to open their wallets despite economic uncertainty and sticky inflation, helping sustain spending growth across the payments industry.
PayPal’s total payment volume grew 7 per cent on a foreign exchange-neutral basis to US$487.1 billion in the third quarter.
The year-end holiday season brings a crucial sales period for the payments sector, as retailers roll out eye-catching discounts and doorbuster deals online and in stores for Black Friday, Cyber Monday and Christmas.
PayPal expects adjusted profit in the fourth quarter to come in at US$1.43 per share, well above Street expectations of US$1.35 and US$1.23 a year earlier. REUTERS