PayPal Holdings (PYPL) stock tumbled 16% in Tuesday premarket trading after the fintech issued disappointing guidance, delivered weaker-than-expected Q4 earnings and revenue, and replaced its CEO.
Separately, the company named HP Inc. veteran Enrique Lores as its president and CEO as of March 1. The board replaced Alex Chriss, who led PayPal (PYPL) for two and a half years, after it conducted a detailed review of the company’s position in comparison with its competition and the broader industry landscape.
During 20205, “We grew revenue, transaction margin dollars, and earnings per share, underscoring the strength of our increasingly diversified platform,” said interim CEO Jamie Miller. “At the same time, our execution has not been where it needs to be, particularly in branded checkout.”
For 2026, the payments technology company expects non-GAAP EPS to decline in the low single digits or be slightly positive, compared with its 2025 non-GAAP EPS of $5.31. By comparison, the average analyst estimate was for $5.73. The company anticipates Q1 2026 non-GAAP EPS to decline in the mid-single digits vs. $1.33 in Q1 2025, well below the $1.38 consensus.
Q4 results fell short of the Wall Street consensus estimates on both the bottom and top lines. While total payment volume grew faster than the consensus, expenses climbed higher than the average analyst estimate. Net cash provided by operating activities also disappointed.
Q4 non-GAAP EPS of $1.23, trailing the $1.29 consensus, fell from $1.34 in Q3 and rose from $1.19 in Q4 2024.
Q4 revenue of $8.68B, missing the $8.79B consensus, increased from $8.42B in the prior quarter and $8.37B in the year-ago period.
Total payment volume of $475.1B, vs. the Visible Alpha consensus of $469.1B, climbed from $458.1B in the previous quarter and $437.8B in Q4 2024.
Total active accounts were 439M at Dec. 31, 2025, up from 438M at Sept. 30 and in line with the 439M Visible Alpha estimate.
“Their operating metrics showed payment transactions only +2% in 4Q, which is not good,” said Danil Sereda, Investing Group Leader for Beyond the Wall Investing. “And on the year, payment transactions fell 4% (even though ‘ex-PSP’ was +6%), with transactions per active account down 5% to 57.7. I see generally softer frequency/engagement, and it’s not what bulls have been waiting for. The management agrees — they explicitly called out that execution ‘has not been where it needs to be,’ particularly in branded checkout. The premarket move is well deserved, and I’d likely downgrade PYPL to Hold now (from my previous Buy), as the core assumptions I was waiting for haven’t materialized.”
PayPal’s transaction margin dollars rose 3% Y/Y to $4.03B, slowing from the 6% Y/Y growth in Q3. Excluding interest on customer balances, transaction margin dollars rose 4% Y/Y to $3.74B vs. 7% growth in the previous quarter.
Total operating expenses of $7.17B, higher than the $6.91B Visible Alpha consensus, increased from $6.90B in Q3 and $6.93B in the year-ago Q4.
Net cash provided by operating activities was $2.38B (vs. Visible Alpha estimate of $2.52B) vs. $1.97B in the previous quarter and $2.39B a year ago. Adjusted free cash flow of $2.10B compared with $2.28B in Q3 and $2.10B in Q4 2024.
Conference call at 8:00 AM ET.