PayPal’s second-quarter 2026 results showed revenue, volume and cash generation all moving higher, while profit and margins moved lower.
Net revenues rose 5% from a year earlier to $8.682 billion, up from $8.288 billion in the prior-year quarter. Total payment volume climbed 10% to $486.4 billion from $443.5 billion. Payment transactions increased 8% to 6.8 billion.
Transaction margin dollars increased 1% to $3.9 billion, while transaction margin dollars excluding interest on customer balances rose 3% to $3.619 billion.
Operating profit fell. GAAP operating income dropped 5% to $1.427 billion from $1.504 billion, and non-GAAP operating income declined 8% to $1.507 billion from $1.644 billion. GAAP operating margin narrowed to 16.4% from 18.1%, a decline of 171 basis points. Non-GAAP operating margin fell to 17.4% from 19.8%, down 248 basis points.
Earnings also slipped. GAAP earnings per diluted share decreased 3% to $1.25 from $1.29. Non-GAAP earnings per diluted share edged down 1% to $1.38 from $1.40.
Cash generation strengthened sharply. Net cash provided by operating activities jumped to $1.983 billion from $898 million a year earlier. Free cash flow rose to $1.775 billion from $692 million, and adjusted free cash flow increased to $1.832 billion from $656 million.
On the balance sheet, PayPal ended the quarter with $15.3 billion in cash, cash equivalents and investments, against $13.4 billion of debt.
Share repurchases totaled about $1.5 billion in the quarter, covering roughly 33 million shares. Over the trailing 12 months, the company returned $6.0 billion to stockholders by repurchasing about 111 million shares.
Active accounts were essentially flat at 439 million, up 0.3% year over year, while sequentially they slipped by 0.04%, or 0.2 million. Payment transactions per active account on a trailing 12-month basis rose 3% to 60.0; excluding PSP transactions, that measure increased 7%.
PayPal raised its full-year 2026 non-GAAP guidance. It now expects full-year non-GAAP EPS of about $5.38, compared with the prior outlook of low-single-digit decline to slightly positive versus $5.31 a year earlier. For the third quarter, it guided to low-single-digit declines in both GAAP and non-GAAP EPS, with non-GAAP EPS at $1.34 versus $1.30 in the prior-year period. Following these announcements, the company's shares moved 4.48%, and are now trading at a price of $58.58. For the full picture, make sure to review PayPal's 8-K report.
