$PYPL · PayPal Holdings, Inc.
PayPal reported Q3 2026 results with net revenues up 2% YoY to $8.6B and TPV up 6% to $487.1B. GAAP EPS fell 4% to $1.25, weighed by a $255M restructuring charge and a higher tax rate. Non-GAAP EPS rose 8% to $1.45. The company raised FY2026 non-GAAP EPS guidance to ~$5.60 from ~$5.38 and reaffirmed GAAP EPS guidance at ~$5.07.
- GAAP net income fell 14% YoY to $1,073M; GAAP EPS declined 4% to $1.25.
- Non-GAAP EPS rose 8% YoY to $1.45; non-GAAP operating margin expanded 16 bps to 18.8%.
- Total payment volume grew 6% YoY to $487.1B; payment transactions rose 7% to 6.8B.
- FY2026 non-GAAP EPS guidance raised to ~$5.60 from ~$5.38; GAAP EPS guidance reaffirmed at ~$5.07.
- Free cash flow dropped 17% YoY to $1,431M; adjusted free cash flow fell 10% to $2,047M.
Markets closed — no regular-session reaction yet. Extended-hours last trade at $54.65, down 0.62% vs regular close of $54.99, suggesting mild negative bias on the GAAP earnings decline and free cash flow contraction despite the guidance raise.
The GAAP/non-GAAP divergence is stark: GAAP EPS fell 4% while non-GAAP rose 8%, with $255M in restructuring costs and a 3.3-point tax-rate jump masking underlying operational improvement.
PayPal's 6% TPV growth and 7% transaction growth show steady volume expansion, but the GAAP/non-GAAP divergence — with restructuring costs and tax headwinds masking underlying margin improvement — mirrors patterns at other mature fintech platforms navigating multi-year transformations.
GAAP operating income fell 8% YoY with operating margin contracting 173 bps to 16.3%, driven by a $255M restructuring charge (up from $69M in 3Q'25). Free cash flow declined 17% YoY, and the effective tax rate jumped 3.3 points to 21.9%, compressing GAAP net income.