PayPal forecasts weak 2026 profit outlook, misses Q4 revenue, stock plunges nearly 16%

American payments giant PayPal on Tuesday announced a disappointing profit outlook for 2026 and released fourth quarter results that fell short of Wall Street estimates.

The corporation also announced the appointment of HP's Enrique Lores as its incoming president and CEO.

PayPal stock plunged nearly 16% in pre-market trading after the company’s board indicated that the pace of transformation and strategic delivery under current CEO Alex Chriss failed to meet their targets.

Chriss was responsible for guiding PayPal through a turbulent phase as post-pandemic commerce activity slowed and competitive threats in its primary sector from major tech firms and emerging fintech challengers grew more intense.

PayPal announced that Chief Financial Officer Jamie Miller would act as temporary CEO until Lores takes over the position on March 1.

At the hardware giant HP, Lores served as president and CEO for over six years.

Weak Consumer Spending

Consumer spending has weakened as buyers, burdened by high interest rates, persistent living expenses and signs of a cooling jobs market, reduce non-essential outlays and favor daily requirements, a trend noted by prominent retailers and consumer brands as families manage stricter budgets.

PayPal anticipates 2026 adjusted earnings to vary between a low-single digit dip and a marginal gain, trailing Wall Street projections of approximately 8% growth, reported Reuters citing LSEG analytics.

Q4 Earnings

The firm reported $8.68 billion in holiday quarter (October to December) revenue, missing the $8.80 billion forecast.

Aggregate payment volumes climbed 6% on a forex-neutral basis to reach $475.1 billion.

Adjusted profit reached $1.23 per share for the quarter ending December 31, also missing the $1.28 analyst consensus.

These results diverge from the standard holiday performance for payment processors, as shoppers typically increase spending on gifts, travel and winter deals.

Expanding PayPal’s high-margin branded checkout unit was a central goal for outgoing CEO Chriss, who advocated for “profitable growth” while seeking to reduce overhead from unbranded transactions.

Digital branded checkout expansion slowed to 1% during the fourth quarter, down from 6% in the previous year.

Management attributed this to a sluggish US retail environment, global economic pressures and difficult year-over-year comparisons.

Stakeholders have remained concerned that the entry of Big Tech entities like Apple and Google into PayPal’s core transaction space could diminish its market presence despite its historical dominance.

While PayPal maintains it is executing effectively in its primary segments despite rising competition, these anxieties have weighed on its stock valuation recently, with investors scrutinizing branded checkout performance.

The firm stated it is implementing immediate measures to revitalize online branded checkout growth.