PayPal Reports Disappointing Earnings; Shares Drop
PayPal (NASDAQ: PYPL) experienced a 9% drop in shares on Tuesday following a lackluster first-quarter 2026 earnings report, deepening a year-to-date loss of approximately 14%. Despite reporting a 7% year-over-year revenue increase to $8.4 billion and adjusted earnings per share of $1.34, the online payments company’s key metrics revealed troubling trends. Online branded checkout growth stalled at just 2%, and total payment volume grew 11% to $464 billion, revealing underlying weaknesses.
PayPal’s adjusted operating income fell 5% year-over-year to $1.5 billion, with an adjusted operating margin contracting by 229 basis points to 18.4%. The company’s second-quarter outlook projects a further decline in adjusted earnings per share by about 9%. Additionally, international revenue growth was stagnant at 4%, raising concerns about its competitive positioning against rivals like Apple and Block. New CEO Enrique Lores announced a significant reorganization plan to achieve at least $1.5 billion in cost savings over the next few years, citing years of underinvestment in technology.
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