PayPal Holdings, Inc.
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ITEM 1. BUSINESS
OVERVIEW
At PayPal Holdings, Inc., our mission is to revolutionize commerce globally. Our products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, and secure, whether online or in-person.
We operate a global, two-sided network at scale that connects consumers and merchants with 439 million active accounts across approximately 200 markets as of December 31, 2025.
•Consumers: We provide consumers with digital wallets and other solutions that allow them to shop and pay with PayPal and Venmo—both online and in-person—manage their finances (including saving and buying and selling cryptocurrencies), and send and receive money between friends and family. When shopping, we offer consumers flexibility in how they pay, which may include a bank account, a PayPal or Venmo account balance, PayPal-branded consumer credit and debit products, other credit and debit cards, certain cryptocurrencies, or other stored value products such as gift cards, and eligible rewards.
•Merchants: We help merchants connect with customers, increase conversion rates and sales, and grow their businesses in the markets where our services are available. We provide large enterprises and small and medium businesses with online branded checkout solutions, including PayPal and Venmo; online unbranded payments processing; PayPal buy now, pay later (“BNPL”) solutions; in-person point of sale solutions; business financing; payouts capabilities; and risk tools.
We earn revenues primarily by charging fees for completing payment transactions for our customers and other payment-related services, which are typically based on the volume of activity processed on our payments platform. We also generate revenue from customers for currency conversion, for instant transfers from their PayPal or Venmo account to their bank account or debit card, and to facilitate the purchase and sale of cryptocurrencies; however, we generally do not charge customers to fund or draw from their accounts. We also earn revenue by providing other value-added services, which primarily comprise revenue earned through partnerships, interest and fees from our consumer and merchant credit products, interest earned on certain assets underlying customer balances, referral fees, subscription fees, and gateway services.
Unless otherwise expressly stated or the context otherwise requires, references to “we,” “our,” “us,” “the Company,” or “PayPal” refer to PayPal Holdings, Inc. and its consolidated subsidiaries.
FY 2025 FORM 10-K | 4 | ||||||||||
KEY PERFORMANCE METRICS
In 2025, we processed $1.79 trillion of total payment volume (“TPV”), an increase of 7% compared to 2024, and 25.4 billion payment transactions, a decrease of 4% compared to 2024. As of December 31, 2025, we had 439 million active accounts, an increase of 1% compared to December 31, 2024.
We measure the scale of our platform and the relevance of our products and services to our customers through certain metrics, including TPV, payment transactions, and active accounts:
TPV is the value of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
Number of payment transactions is the total number of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
An active account is an account registered directly with PayPal or a platform access partner that has completed a transaction on our platform, not including gateway-exclusive transactions, within the past 12 months. A platform access partner is a third party whose customers are provided access to PayPal’s platform or services through such third-party’s login credentials, including individuals and entities that utilize Hyperwallet’s payout capabilities. A user may register on our platform to access different products and may register more than one account to access a product. Accordingly, a user may have more than one active account. The number of active accounts provides management with additional perspective on the overall scale of our platform, but may not have a direct relationship to our operating results.
OUR STRENGTHS
Our business is built on a strong foundation designed to drive profitable growth and differentiate us from our competitors. We believe that our competitive strengths include the following:
•Two-sided platform—we facilitate online and offline transactions for millions of consumers and merchants. Our relationship on both sides of a transaction enables us to utilize data to innovate and offer unique product experiences designed to remove friction, drive sales, and enhance shopping experiences.
•Trusted brands—we have built well-recognized and trusted brands, including PayPal and Venmo. Our communications and marketing efforts across multiple geographies and demographic groups play an important role in building brand visibility, usage, and overall preference among customers.
•Platform agnostic—we are technology and platform agnostic. This approach allows our merchants to offer and use a variety of our branded and unbranded payment processing solutions and business financing products, alongside other tools. We give consumers flexibility to make and receive payments using a wide variety of funding options and digital wallet solutions, including their bank account, PayPal and Venmo account balance, BNPL, certain cryptocurrencies, and debit and credit card options.
•Scale—our global scale helps us to drive organic growth. As of December 31, 2025, we had 439 million active accounts across approximately 200 markets1 around the world.
•Customer-back innovation—we are orienting and transforming our culture towards innovating in ways that benefit our customers and drive profitable growth. We have released numerous products, services, and improvements to our platform in 2025.
•Risk and compliance management—our enterprise risk and compliance management program is designed to help keep customer information secure and to help ensure we process legitimate transactions around the world, while identifying and minimizing illegal, high-risk, or fraudulent transactions.
•Regulatory licenses—we believe that our regulatory licenses, which enable us to operate in markets around the world, are a distinct advantage and help support business growth.
1A market is a geographic area or political jurisdiction, such as a country, territory, or protectorate, in which we offer some or all of our products and services. A country, territory, or protectorate is identified by a distinct set of laws and regulations.
FY 2025 FORM 10-K | 5 | ||||||||||
CONSUMER AND MERCHANT PAYMENT SOLUTIONS
Consumer solutions
We help consumers transact securely with merchants, manage their finances, and send to and receive money from friends and family around the globe. Our goal is to create the simplest checkout experience possible for consumers online or in-person including mobile. We drive increased consumer engagement by providing them with a wide range of services to manage their finances and enhance their ability to shop online and offline. Our PayPal and Venmo branded checkout experiences allow consumers to complete purchases in just a few steps without having to enter payment and address information. We also focus on simplifying and personalizing shopping experiences for our consumers by offering tools for product discovery, price tracking, saving through deals and offers, convenient package tracking, and earning and redeeming of shopping rewards. The PayPal- and Venmo-branded debit and credit cards, as well as our contactless mobile wallet using near-field communication (“NFC”) capabilities, give consumers the ability to transact in-person through our platform and earn incentives, including cash-back rewards.
We also offer consumers person-to-person (“P2P”) payment solutions for domestic and international transfers through our PayPal, Venmo, and Xoom products and services. Our Venmo digital wallet in the United States (“U.S.”) is a leading mobile application used to move money between friends and family. Our Xoom international money transfer service enables our customers to send money to bank accounts, mobile wallets, and cash pick-up destinations around the world in a secure, fast, and cost-effective way. P2P is an important source of customer engagement and also serves as a customer acquisition channel that facilitates organic growth by enabling potential users to establish active accounts with PayPal or Venmo at the time they make or receive a P2P payment.
We offer credit products to eligible consumers in certain markets as a funding source at checkout. Our consumer credit offerings include our BNPL products in the U.S., Germany, France, United Kingdom (“U.K.”), and Australia, among other markets, and in Japan through our Paidy brand. A key attribute of our short-term BNPL products is the absence of interest or consumer late fees for missed payments in most of the geographies where we offer them. Further, we offer interest-bearing installment products for consumers in the U.S. (issued by an independent chartered financial institution) and in Germany, among other markets. In the U.S., consumers may apply for the PayPal- and Venmo-branded consumer credit cards, including the PayPal Credit revolving consumer credit product, which are issued through a partnership with an independent chartered financial institution. We offer a PayPal-issued PayPal Credit product in the U.K. We believe that our consumer credit products help us to increase engagement with consumers and merchants on our two-sided network.
We generate revenue from consumers from: foreign currency conversions, instant transfers from their PayPal or Venmo account to their bank account or debit card, and facilitating the purchase and sale of cryptocurrencies; interest, fees, or other revenue from our credit products; and other miscellaneous fees. We also earn revenue from interest earned on certain assets underlying customer balances.
Merchant solutions
Merchants use our solutions to increase conversion rates and grow and manage their business. We employ a technology and platform agnostic approach intended to enable merchants of all sizes to utilize our various products. Our diversified suite of products and services is tailored to meet the needs of merchants regardless of their size or business complexity. We offer a seamless omnichannel solution that helps merchants manage and grow their business.
Our PayPal and Venmo branded checkout experiences allow customers to complete purchases in just a few steps without having to enter payment and address information. These seamless experiences reduce cart abandonment and drive higher conversion rates for merchants. Our BNPL solutions are embedded into our branded checkout experiences, which can help increase consumer spend and enable merchants to grow sales.
Our unbranded payments processing solutions allow merchants to quickly and easily provide digital checkout online with a variety of popular ways to pay, including debit and credit cards, digital wallets, BNPL, certain cryptocurrencies, and local payment methods.
We offer a suite of value added services, including payouts, payments orchestration, and fraud prevention and risk management solutions that help reduce merchant losses through our proprietary protection programs. We also offer omnichannel solutions that allow merchants to make sales in person using our PayPal Point of Sale app, card reader, or point of sale systems.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve expectations, plans, or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, mergers or acquisitions, or management strategies). These forward-looking statements can be identified by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” “continue,” “strategy,” “future,” “opportunity,” “plan,” “guidance,” “project,” “forecast,” “outlook,” and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), as supplemented in the risk factors set forth below in Part II, Item 1A, Risk Factors, of this Form 10-Q, as well as in our unaudited condensed consolidated financial statements, related notes, and the other information appearing in this report and our other filings with the Securities and Exchange Commission. We do not intend, and undertake no obligation except as required by law, to update any of our forward-looking statements after the date of this report to reflect actual results, new information, or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. You should read the following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in conjunction with the unaudited condensed consolidated financial statements and the related notes that appear in this report. Unless otherwise expressly stated or the context otherwise requires, references to “we,” “our,” “us,” “the Company,” and “PayPal” refer to PayPal Holdings, Inc. and its consolidated subsidiaries.
BUSINESS ENVIRONMENT
THE COMPANY
At PayPal, our mission is to revolutionize commerce globally. Our products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, and secure, whether online or in-person. Our two-sided platform serves millions of consumers and merchants worldwide.
Regulatory environment
We operate globally and in a rapidly evolving regulatory environment characterized by a heightened focus by regulators globally on all aspects of the payments industry, including anti-money laundering, countering terrorist financing, privacy, cybersecurity, and consumer protection. The laws and regulations applicable to us, including those enacted prior to the advent of digital payments, continue to evolve through legislative and regulatory action and judicial interpretation. New or changing laws and regulations, including changes to their interpretation and implementation, as well as increased penalties and enforcement actions related to non-compliance, could have a material adverse impact on our business, results of operations, and financial condition. We monitor these areas closely and are focused on designing compliant solutions for our customers.
Cybersecurity and information security
Cybersecurity and information security risks for global payments and technology companies like us have increased significantly in recent years. Although we have developed systems and processes designed to protect the data we manage, prevent data loss and other security incidents, and enable us to effectively respond to known and potential risks, and expect to continue to expend significant resources to bolster these protections, we have experienced and expect to continue to experience cybersecurity and data privacy incidents and remain subject to these risks. There can be no assurance that our security measures will provide sufficient protection or security to prevent breaches or attacks. For additional information regarding our cybersecurity and information security risks, see Part I, Item 1A, Risk Factors in our 2025 Form 10-K, as supplemented and, to the extent inconsistent, superseded below (if applicable) in Part II, Item 1A, Risk Factors of this Form 10-Q.
2Q 2026 FORM 10-Q | 47 | ||||||||||
Recent developments
In April 2026, the Company announced a strategic reorganization of its business and executive leadership team intended to accelerate execution of its long-term growth priorities, simplify its operating structure, streamline decision-making, and drive innovation. This strategic reorganization and business simplification program, which will focus on realigning our operating structure and accelerating the adoption of artificial intelligence and automation across the company, is expected to deliver at least $1.5 billion in gross annualized run-rate savings over the next two to three years. The Company intends to reinvest a significant portion of these savings back into its highest-priority growth initiatives. As part of this program, certain actions have been identified that are expected to be completed by the end of this year and which have the potential to generate approximately $400 million of run-rate gross savings, with a portion to be realized in the fourth quarter. The Company is still finalizing plans but this first phase of actions could result in a transformation related charge within the range of approximately $120 million to $140 million during the second half of 2026. The Company expects to provide additional details regarding the structure of the program and anticipated phasing of savings realization in future periods as the program is developed and implemented.
MACROECONOMIC ENVIRONMENT
A deterioration in macroeconomic conditions resulting from uncertainties and effects from tariffs, inflation, international conflicts, and interest rates could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, foreign exchange fluctuations, or other business interruption, which may adversely impact our business. We are unable to reasonably estimate the total potential impact on our financial results that may ultimately result from such changes in the macroeconomic environment.
OVERVIEW OF RESULTS OF OPERATIONS
The following table provides a summary of our condensed consolidated financial results for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Increase/(Decrease) | Six Months Ended June 30, | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages and per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
| Net revenues | $ | 8,682 | $ | 8,288 | $ | 394 | 5 | % | $ | 17,035 | $ | 16,079 | $ | 956 | 6 | % | |||||||||||||||||||||||||||||||
| Operating expenses | 7,255 | 6,784 | 471 | 7 | % | 14,120 | 13,045 | 1,075 | 8 | % | |||||||||||||||||||||||||||||||||||||
| Operating income | 1,427 | 1,504 | (77) | (5) | % | 2,915 | 3,034 | (119) | (4) | % | |||||||||||||||||||||||||||||||||||||
| Operating margin | 16 | % | 18 | % | ** | ** | 17 | % | 19 | % | ** | ** | |||||||||||||||||||||||||||||||||||
| Other income (expense), net | (117) | 25 | (142) | (568) | % | (212) | 98 | (310) | (316) | % | |||||||||||||||||||||||||||||||||||||
| Income tax expense | 206 | 268 | (62) | (23) | % | 486 | 584 | (98) | (17) | % | |||||||||||||||||||||||||||||||||||||
| Effective tax rate | 16 | % | 18 | % | ** | ** | 18 | % | 19 | % | ** | ** | |||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 1,104 | $ | 1,261 | $ | (157) | (12) | % | $ | 2,217 | $ | 2,548 | $ | (331) | (13) | % | |||||||||||||||||||||||||||||||
| Net income (loss) per diluted share | $ | 1.25 | $ | 1.29 | $ | (0.04) | (3) | % | $ | 2.46 | $ | 2.58 | $ | (0.12) | (5) | % | |||||||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 1,983 | $ | 898 | $ | 1,085 | 121 | % | $ | 3,117 | $ | 2,058 | $ | 1,059 | 51 | % | |||||||||||||||||||||||||||||||
All amounts in tables are rounded to the nearest million, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided.
** Not meaningful.
THREE MONTHS ENDED JUNE 30, 2026 AND 2025
The increase in net revenues was driven primarily by growth in total payment volume (“TPV”) of 10% and favorable impact from hedging activities.
The increase in operating expenses was due primarily to an increase in transaction expense and, to a lesser extent, an increase in technology and development expense, partially offset by a decline in transaction and credit losses.
Our operating margin declined, reflecting the unfavorable impact of a higher transaction expense growth rate, partially offset by the decline in transaction and credit losses.
2Q 2026 FORM 10-Q | 48 | ||||||||||
The decrease in net income was due to a decrease in operating income and a decrease in other income (expense), net, which was primarily attributable to net losses and impairments on strategic investments in the current period compared to net gains in the prior period, partially offset by a decrease in income tax expense driven by a lower level of pre-tax income and U.S income taxed at different rates.
SIX MONTHS ENDED JUNE 30, 2026 AND 2025
The increase in net revenues was driven primarily by growth in TPV of 10% and growth in revenue earned from an independent chartered financial institution (“partner institution”).
The increase in operating expenses was due primarily to an increase in transaction expense and, to a lesser extent, increases in technology and development expense and customer support and operations expense, partially offset by a decline in transaction and credit losses.
Our operating margin declined, reflecting the unfavorable impact of a higher transaction expense growth rate.
The decrease in net income was due to a decrease in operating income and a decrease in other income (expense), net, which was primarily attributable to net losses and impairments on strategic investments in the current period compared to net gains in the prior period, partially offset by a decrease in income tax expense driven by a lower level of pre-tax income and U.S income taxed at different rates.
IMPACT OF FOREIGN EXCHANGE RATES
We have significant international operations that are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, Canadian dollar, and Indian rupee, subjecting us to foreign exchange risk which may adversely impact our financial results. The strengthening or weakening of the United States (“U.S.”) dollar versus foreign currencies in which we conduct our international operations impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar. We generated approximately 42% and 43% of our net revenues from customers domiciled outside of the U.S. in the three and six months ended June 30, 2026 and 2025, respectively. Because we generate substantial net revenues internationally, we are subject to the risks of doing business outside of the U.S. See Part I, Item 1A, Risk Factors in our 2025 Form 10-K, as supplemented and, to the extent inconsistent, superseded (if applicable) below in Part II, Item 1A, Risk Factors of this Form 10-Q.
We calculate the year-over-year impact of foreign exchange rate movements on our business using prior period foreign exchange rates applied to current period transactional currency amounts. While changes in foreign exchange rates affect our reported results, we have a foreign currency exposure management program in which we use foreign exchange contracts, designated as cash flow hedges, intended to reduce the impact on earnings from foreign exchange rate movements. Gains and losses from these foreign exchange contracts are recognized as a component of transaction revenues or operating expenses (as applicable) in the same period the forecasted transactions impact earnings.
In the three and six months ended June 30, 2026, year-over-year foreign exchange rate movements relative to the U.S. dollar had the following impact on our reported results:
| Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 | ||||||||||
| (In millions) | |||||||||||
Favorable impact to net revenues (exclusive of hedging impact) | $ | 74 | $ | 331 | |||||||
| Hedging impact | 6 | (80) | |||||||||
Favorable impact to net revenues | 80 | 251 | |||||||||
| Unfavorable impact to operating expenses (exclusive of hedging impact) | (20) | (157) | |||||||||
| Hedging impact | (5) | (7) | |||||||||
| Unfavorable impact to operating expenses | (25) | (164) | |||||||||
| Net favorable impact to operating income | $ | 55 | $ | 87 | |||||||
2Q 2026 FORM 10-Q | 49 | ||||||||||
KEY METRICS AND FINANCIAL RESULTS
KEY METRICS
TPV, number of payment transactions, active accounts, and number of payment transactions per active account are key non-financial performance metrics (“key metrics”) that management uses to measure the scale of our platform and the relevance of our products and services to our customers, and are defined as follows:
•TPV is the value of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
•Number of payment transactions is the total number of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.
•An active account is an account registered directly with PayPal or a platform access partner that has completed a transaction on our platform, not including gateway-exclusive transactions, within the past 12 months. A platform access partner is a third party whose customers are provided access to PayPal’s platform or services through such third-party’s login credentials, including individuals and entities that utilize Hyperwallet’s payout capabilities. A user may register on our platform to access different products and may register more than one account to access a product. Accordingly, a user may have more than one active account. The number of active accounts provides management with additional perspective on the overall scale of our platform, but may not have a direct relationship to our operating results.
•Number of payment transactions per active account reflects the total number of payment transactions within the previous 12-month period, divided by active accounts at the end of the period. The number of payment transactions per active account provides management with insight into the average number of times an account engages in payments activity on our payments platform in a given period. The number of times a consumer account or a merchant account transacts on our platform may vary significantly from the average number of payment transactions per active account.
As our transaction revenue growth is typically correlated with TPV growth and the number of payment transactions completed on our payments platform, management uses these metrics to gain insights into the scale and strength of our payments platform, the engagement level of our customers, and underlying activity and trends which may be indicators of current and future performance. We present these key metrics to enhance investors’ evaluation of the performance of our business and operating results.
Our key metrics are calculated using internal company data based on the activity we measure on our payments platform and compiled from multiple systems, including systems that are internally developed or acquired through business combinations. While the measurement of our key metrics is based on what we believe to be reasonable methodologies and estimates, there are inherent challenges and limitations in measuring our key metrics globally at scale. The methodologies used to calculate our key metrics require significant judgment. We regularly review our processes for calculating these key metrics, and from time to time we may make adjustments to improve the accuracy or relevance of our metrics. For example, we continuously apply models, processes, and practices designed to detect and prevent fraudulent account creation on our platforms, and work to improve and enhance those capabilities. When we detect a significant volume of illegitimate activity, we generally remove the activity identified from our key metrics. Although such adjustments may impact key metrics reported in prior periods, we generally do not update previously reported key metrics to reflect these subsequent adjustments unless the retrospective impact of process improvements or enhancements is determined by management to be material.
2Q 2026 FORM 10-Q | 50 | ||||||||||
NET REVENUES
Our revenues are classified into the following two categories:
•Transaction revenues: Net transaction fees charged to merchants and consumers on a transaction basis based on the TPV completed on our payments platform. Growth in TPV is directly impacted by the number of payment transactions that we enable on our payments platform. We generate additional revenue from merchants and consumers: on transactions where we perform currency conversion, when we enable cross-border transactions (i.e., transactions where the merchant and consumer are in different countries), when we facilitate the instant transfer of funds for our customers from their PayPal or Venmo account to their bank account or debit card, when we facilitate the purchase and sale of cryptocurrencies, as contractual compensation from sellers that violate our contractual terms (for example, through fraud or counterfeiting), and other miscellaneous fees.
•Revenues from other value added services: Net revenues derived primarily from revenue earned through partnerships, referral fees, subscription fees, gateway fees, and other services we provide to our consumers and merchants. We also earn revenues from interest and fees earned on our portfolio of loans receivable, and interest earned on certain assets underlying customer balances.
Net revenue analysis
The components of our net revenues for the three and six months ended June 30, 2026 and 2025 were as follows:
| Three Months Ended June 30, | Increase/(Decrease) | Six Months Ended June 30, | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Transaction revenues | $ | 7,832 | $ | 7,441 | $ | 391 | 5 | % | $ | 15,333 | $ | 14,457 | $ | 876 | 6 | % | |||||||||||||||||||||||||||||||
| Revenues from other value added services | 850 | 847 | 3 | — | % | 1,702 | 1,622 | 80 | 5 | % | |||||||||||||||||||||||||||||||||||||
| Total revenues | $ | 8,682 | $ | 8,288 | $ | 394 | 5 | % | $ | 17,035 | $ | 16,079 | $ | 956 | 6 | % | |||||||||||||||||||||||||||||||
Transaction revenues
The increase in transaction revenues for the three months ended June 30, 2026 compared to the same period of the prior year was primarily attributable to:
•an increase of approximately $400 million in revenue from Braintree products and services, which was largely driven by growth in TPV and number of payment transactions;
•approximately $80 million of favorable impact from hedging activities resulting from net gains in the current period compared to net losses in the prior period;
•an increase of approximately $60 million in revenue from Venmo products and services, which was largely due to growth in TPV and number of payment transactions; and
•partially offset by a decline in revenue from PayPal products and services of approximately $130 million primarily attributable to higher co-marketing campaigns with large merchants, which are recorded as reductions to revenues, and lower foreign exchange fee revenue.
The increase in transaction revenues for the six months ended June 30, 2026 compared to the same period of the prior year was primarily attributable to:
•an increase of approximately $810 million and $130 million in revenue from Braintree and Venmo products and services, respectively, which was largely driven by growth in TPV and number of payment transactions;
•an increase of $130 million in revenue from PayPal products and services, which was offset by a $120 million decline due to higher co-marketing campaigns with large merchants; and
•partially offset by approximately $50 million of unfavorable impact from hedging activities resulting from higher net losses in the current period compared to the prior period.
2Q 2026 FORM 10-Q | 51 | ||||||||||
The following table provides a summary of key metrics:
| Three Months Ended June 30, | Percent Increase/(Decrease) | Six Months Ended June 30, | Percent Increase/(Decrease) | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (In millions, except percentages and number of payment transactions per active account) | |||||||||||||||||||||||||||||||||||
Active accounts(1) | 439 | 438 | — | % | 439 | 438 | — | % | |||||||||||||||||||||||||||
| Number of payment transactions | 6,750 | 6,226 | 8 | % | 13,225 | 12,271 | 8 | % | |||||||||||||||||||||||||||
| Number of payment transactions per active account | 60.0 | 58.3 | 3 | % | 60.0 | 58.3 | 3 | % | |||||||||||||||||||||||||||
| TPV | $ | 486,448 | $ | 443,547 | 10 | % | $ | 950,403 | $ | 860,755 | 10 | % | |||||||||||||||||||||||
| Percent of TPV generated outside of the U.S. | 35 | % | 38 | % | ** | 35 | % | 36 | % | ** | |||||||||||||||||||||||||
(1) Reflects active accounts at the end of the applicable period.
** Not meaningful.
Transaction revenues growth was lower than the growth in TPV in the three and six months ended June 30, 2026 compared to the same periods in the prior year due primarily to changes in product mix, higher co-marketing campaigns, lower foreign exchange fee revenue, and lower partner incentives.
Revenues from other value added services
Revenues from other value added services for the three months ended June 30, 2026 remained relatively consistent compared to the same period in the prior year due to:
•an increase of approximately $40 million from interest and fee revenue earned from our loans receivable portfolios; and
•offset by approximately $40 million lower revenues from interest earned on certain assets underlying customer account balances resulting from lower interest rates on higher average cash and investment balances.
The increase in revenues from other value added services for the six months ended June 30, 2026 compared to the same period in the prior year was primarily attributable to:
•an increase of approximately $100 million in revenue earned from a partner institution;
•an increase of approximately $80 million from interest and fee revenue earned from our loans receivable portfolios;
•partially offset by approximately $60 million lower revenues from interest earned on certain assets underlying customer account balances resulting from lower interest rates on higher average cash and investment balances; and
•a decline of approximately $40 million from lower revenues from Honey and other value added services.
Revenue from the partner institution is earned primarily through a revenue share arrangement based on the economic performance of the program related to our U.S. revolving consumer credit product and PayPal and Venmo branded credit cards, when such performance exceeds a minimum threshold.
2Q 2026 FORM 10-Q | 52 | ||||||||||
OPERATING EXPENSES
The following table summarizes our operating expenses and related metrics we use to assess the trends in each:
| Three Months Ended June 30, | Increase/(Decrease) | Six Months Ended June 30, | Increase/(Decrease) | ||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Dollar | Percent | 2026 | 2025 | Dollar | Percent | ||||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | |||||||||||||||||||||||||||||||||||||||||||||||
| Transaction expense | $ | 4,385 | $ | 3,968 | $ | 417 | 11 | % | $ | 8,550 | $ | 7,672 | $ | 878 | 11 | % | |||||||||||||||||||||||||||||||
| Transaction and credit losses | 397 | 476 | (79) | (17) | % | 775 | 847 | (72) | (9) | % | |||||||||||||||||||||||||||||||||||||
| Customer support and operations | 462 | 413 | 49 | 12 | % | 908 | 811 | 97 | 12 | % | |||||||||||||||||||||||||||||||||||||
| Sales and marketing | 546 | 583 | (37) | (6) | % | 1,064 | 1,071 | (7) | (1) | % | |||||||||||||||||||||||||||||||||||||
| Technology and development | 849 | 767 | 82 | 11 | % | 1,642 | 1,498 | 144 | 10 | % | |||||||||||||||||||||||||||||||||||||
| General and administrative | 503 | 461 | 42 | 9 | % | 994 | 964 | 30 | 3 | % | |||||||||||||||||||||||||||||||||||||
| Restructuring and other | 113 | 116 | (3) | (3) | % | 187 | 182 | 5 | 3 | % | |||||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 7,255 | $ | 6,784 | $ | 471 | 7 | % | $ | 14,120 | $ | 13,045 | $ | 1,075 | 8 | % | |||||||||||||||||||||||||||||||
Transaction expense rate(1) | 0.90 | % | 0.89 | % | ** | ** | 0.90 | % | 0.89 | % | ** | ** | |||||||||||||||||||||||||||||||||||
Transaction and credit loss rate(2) | 0.08 | % | 0.11 | % | ** | ** | 0.08 | ||||||||||||||||||||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-08-18 | Kereere Suzan | President, Global Markets | Sell | -4,162 ×2 | $60.96 | -$253,723 |
| 2026-07-29 | Natali Chris | SVP, Chief Accounting Officer | Sell | -1,337 | $58.10 | -$77,680 |
| 2026-07-29 | Keller Frank | Pres., Checkout Sol. & PayPal | Sell | -732 | $58.10 | -$42,529 |
| 2026-06-15 | Miller Jamie S | Chief Fin & Op Officer | Buy | -6,129 | $41.53 | -$254,537 |
| 2026-06-03 | Natali Chris | SVP, Chief Accounting Officer | Sell | -552 | $42.65 | -$23,543 |
| 2026-06-03 | Kereere Suzan | President, Global Markets | Sell | -3,379 | $42.79 | -$144,579 |
| 2026-06-03 | Keller Frank | Pres., Checkout Sol. & PayPal | Sell | -4,612 | $42.54 | -$196,194 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-10-27 10-Q expected by 2026-11-06 (in 65 days)
- ~2027-02-02 10-K expected by 2027-02-25 (in 163 days)
- ~2027-05-04 10-Q expected by 2027-05-14 (in 254 days)
- ~2027-07-27 10-Q expected by 2027-08-06 (in 338 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-07-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-28 10-Q Quarterly Report
- 2026-05-21 8-K Officer/Director Change; Shareholder Vote Results; Financial Statements and Exhibits
- 2026-05-19 S-8 Employee Benefit Plan Registration
- 2026-05-15 8-K Other Events; Financial Statements and Exhibits
- 2026-05-13 424B2 Prospectus Supplement
- 2026-05-05 8-K Earnings Release; Financial Statements and Exhibits
- 2026-05-05 10-Q Quarterly Report
- 2026-04-30 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-07 DEF 14A Proxy Statement
- 2026-03-25 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-02-03 10-K Annual Report
- 2026-02-03 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-17 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits