PayPal (PYPL) Q3 2026 earnings summary

Executive summary

• Q3 TPV was $487.1B, up 6% reported and 7% FXN; revenue was $8.584B, up 2% reported and 1% FXN.

• Transaction margin dollars grew 2% to $3.950B, or 3% excluding interest on customer balances; non-GAAP EPS rose 8% to $1.45.

• GAAP operating income fell 8% to $1.402B and net income declined 14% to $1.073B, while non-GAAP operating income grew 3%.

• Growth broadened across financial services, Venmo and Braintree; branded checkout remained in the 1%-2% growth range amid European tariff-related pressure.

Financial highlights

• Transaction revenue increased 3% to $7.711B; other value-added services revenue declined 2% to $873M.

• Non-GAAP operating income was $1.613B, up 3%; non-GAAP operating margin expanded 16 bps to 18.8%.

• GAAP diluted EPS was $1.25, down 4%; non-GAAP diluted EPS was $1.45, up 8%.

• Adjusted free cash flow was $2.047B, down 10% YoY; operating cash flow was $1.592B and free cash flow was $1.431B.

• Non-transaction operating expenses grew 1% to $2.337B.

Outlook and guidance

• FY2026 transaction margin dollar guidance rose to ~$15.7B, or ~$14.6B excluding interest on customer balances; mid-single-digit growth is a medium-term target.

• FY2026 non-GAAP EPS guidance rose to ~$5.60 and adjusted FCF guidance to at least $6.5B; GAAP EPS guidance was reaffirmed at ~$5.07.

• FY2026 share repurchase guidance is $6B and CAPEX guidance is ~$1B; non-transaction OpEx is expected to grow mid-single digits.

• Q4 outlook: currency-neutral revenue growth in the low double digits, slightly positive transaction margin dollar growth, flat-to-low-single-digit non-transaction OpEx growth and non-GAAP EPS of ~$1.43.

• At least $1.5B in gross annualized run-rate savings is targeted over 2-3 years, including >$700M exiting Q4 2026; a significant portion will be reinvested in priority growth initiatives.