SAN JOSE, California, May 5, 2026, 05:10 PDT
• PayPal topped Wall Street’s forecasts with its first-quarter revenue and adjusted earnings.
• Shares moved higher ahead of the bell, though the company is looking at an adjusted profit decline of about 9% for the second quarter.
• New CEO Enrique Lores is slashing costs and funneling money into AI, all while splitting the company into three divisions and working to stabilize both checkout and Venmo.
PayPal stock edged higher in early U.S. hours on Tuesday, up 1.3% to $51.06 at 8:03 a.m. EDT, according to MarketScreener. The payments giant delivered first-quarter revenue and adjusted earnings that beat forecasts. Still, a softer profit outlook for the second quarter kept the rally in check.
This latest report lands as Chief Executive Enrique Lores, on the job since March, faces his first full quarter at the helm. He’s working to revive a company that’s seen its pandemic-era digital payments boom fade. The big question for investors: can heavier spending volume make up for softness in PayPal’s higher-margin checkout business?
The overall payments environment remains strong. Visa and Mastercard, for instance, have posted robust spending numbers. But PayPal’s challenge is distinct—holding onto both shoppers and merchants as its branded checkout button faces stiffer competition from the likes of Apple, which continues to make inroads into digital wallets and ecommerce payments.
PayPal posted $8.35 billion in revenue for the quarter ending March 31, a 7% jump from $7.79 billion in the same period last year. Adjusted earnings came in at $1.34 per share, topping analyst estimates of $1.27. On a GAAP basis, net income slipped 14% to $1.11 billion, or $1.21 per diluted share, according to a filing.
PayPal’s total payment volume jumped 11% to $464.0 billion. The company processed 6.5 billion payment transactions, up 7%. Active accounts edged up 1% to 439 million. Transaction margin dollars, which reflects revenue after covering transaction expenses and credit losses, came in at $3.81 billion, a 3% increase.
German outlets stuck with the same angle: solid beats on both sales and earnings, but investors aren’t getting a full green light yet. According to finanzen.net, PayPal’s adjusted results outpaced forecasts, and premarket trading pointed to gains for the stock ahead of the Nasdaq session.
Lores said PayPal is “sharpening our strategy” and working to “simplify our organization,” stressing the company’s urgency. That statement lands as PayPal aims to prove stronger volume growth will actually mean improved economics, rather than simply racking up transaction counts. MarketScreener
PayPal is aiming for at least $1.5 billion in gross run-rate cost savings over the next two to three years, leaning harder on artificial intelligence to get there. The company hasn’t detailed exactly which business segments might see cuts or if job losses are in the cards.
The move comes after PayPal unveiled plans last week to split into three divisions: Checkout Solutions & PayPal, Consumer Financial Services & Venmo, and Payment Services & Crypto. The company also disclosed that executive vice presidents Michelle Gill and Diego Scotti will be departing, effective June 2.
The outlook isn’t pretty. PayPal is now projecting adjusted earnings per share will drop by roughly 9% in the second quarter, with transaction margin dollars also sliding about 3%. For the full year, management still sees adjusted earnings coming in anywhere from a small decline to just barely positive growth.
That leaves the company with little room to maneuver. Should consumer spending falter, branded checkout lose momentum again, or those cost cuts drag out before hitting margins, even a strong first-quarter result might not be enough to shift the conversation on the stock.
PayPal handed $1.5 billion back to shareholders through buybacks in the quarter and announced a $0.14 per share dividend, set for June 25 to anyone on record as of June 4. Over the last year, share repurchases totaled about $6.0 billion.
