PayPal finds itself on the back foot, contending with two significant pressures simultaneously: a subdued financial forecast for 2026 and the initiation of parallel legal investigations. The central issue under examination is whether the company adequately and timely disclosed material headwinds to investors, challenges that have now crystallized in its latest guidance.
The market’s reaction was swift and severe, driven not only by the future outlook but also by recently disappointing quarterly results.
- Projected revenue growth for 2026: 3–4%
- Transaction Margin Dollars are expected to decline in Q1 and for the full year 2026
- For Q1 2026, PayPal anticipates a mid-single-digit percentage decrease in adjusted earnings per share
- Planned share repurchase program for 2026: $6 billion
Legal Probes Follow Disappointing Guidance
The announcement of a challenging 2026 operational outlook has triggered formal legal reviews. The company’s projection for the fiscal year now points to only 3–4% revenue expansion. Furthermore, management expects a contraction in Transaction Margin Dollars during both the first quarter and across the full year.
This guidance, coupled with fourth-quarter 2025 results that fell short of consensus estimates for both revenue and profit, sparked a sharp sell-off. On February 3, the stock plunged as much as 20%, reaching a 12-month low.
Management Cites Competitive and Macroeconomic Headwinds
Company executives attributed the cautious forecast to a confluence of negative factors. These include softer growth in its Branded Checkout business, a difficult macroeconomic climate, and heightened rivalry within the digital payments sector.
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Competition has intensified notably. Rivals mentioned encompass Apple Pay, Google Wallet, Stripe, and a range of buy-now-pay-later service providers.
Leadership Transition Set for March 2026
Coinciding with the weak forecast, PayPal announced a change at the helm. CEO Alex Chriss is slated to be replaced by Enrique Lores, the former CEO of HP Inc. and a current member of the PayPal board, effective March 1, 2026.
The board of directors stated that “the pace of change and execution” had not met expectations. In connection with the leadership change, the company acknowledged that execution—particularly within the Branded Checkout segment—had been insufficient.
For the full 2026 fiscal year, PayPal’s adjusted earnings per share are projected to range from a slight single-digit decline to a modest single-digit increase. This guidance is accompanied by plans for a $6 billion share repurchase program scheduled for the current year.
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