PayPal raised its full-year 2026 non-GAAP earnings forecast after third-quarter non-GAAP diluted EPS climbed, even as net income declined under both GAAP and non-GAAP accounting, underscoring a mixed profit picture.
For the quarter to Sept. 30, revenue rose 2% to $8.584 billion and total payment volume grew 6% to $487.138 billion; excluding foreign-exchange effects, volume growth was 7%. GAAP net income came to $1.073 billion, down 14%, while non-GAAP net income was $1.245 billion, down 3%. GAAP diluted EPS fell 4% to $1.25; non-GAAP diluted EPS increased 8% to $1.45. Reuters reported analysts had expected revenue of about $8.7 billion and adjusted EPS of $1.31.
PayPal reported that its non-GAAP operating margin widened 16 basis points to 18.8%, while its GAAP operating margin narrowed 173 basis points to 16.3%. The company repurchased about 28 million shares for $1.5 billion during the quarter. Its earnings presentation reported the weighted-average share count was 11% lower than a year earlier.
PayPal set its 2026 non-GAAP diluted EPS forecast at about $5.60, up from roughly $5.38 in July, extending its earlier increase to the annual target. Its GAAP EPS projection is about $5.07, below the $5.41 reported for 2025. For the fourth quarter, the company expects non-GAAP EPS of about $1.43 and GAAP EPS of about $1.37.
The company expects gross run-rate savings above $700 million by the end of 2026 and at least $1.5 billion over the following two to three years. PayPal linked the nearer-term target to reducing its workforce by more than 2,000 people, cutting managerial roles by over 25%, changing operations and expanding AI use. Those workforce cuts place the direct employment impact on affected staff. PayPal also said its customer-service chat agents had resolved more than 24 million contacts year to date and were available in 190 countries and six languages.
PayPal declared a $0.14-per-share dividend, payable Dec. 24. President and CEO Enrique Lores said contributions from key growth businesses and a broader mix of activity were beginning to show in the company’s results. PayPal’s presentation lists Feb. 2, 2027, as the release date for its fourth-quarter results.
