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PayPal has shared a weak profit outlook for 2026, raising concerns about its future growth. The digital payments company also missed earnings expectations for the last quarter of the year. After the update, PayPal shares fell sharply in early trading.
The company said its profit next year may fall slightly or grow only a little. This outlook came in well below what analysts expected. Many investors were disappointed by the forecast and reacted quickly by selling the stock.
For the fourth quarter ended December 31, PayPal reported revenue of $8.68 billion. Analysts had expected $8.80 billion. Adjusted earnings came in at $1.23 per share, compared with estimates of $1.28. Total payment volume reached $475.1 billion, showing a 6% rise after adjusting for currency changes. The growth in payments did not help profits enough.
The holiday season is usually strong for payment companies. People often spend more on gifts, travel, and online shopping. This year was different. Many consumers cut back on spending. High interest rates, rising prices, and job worries pushed people to focus on daily needs instead of extra purchases. This slowdown hurt PayPal’s business.
One of the biggest problems came from PayPal’s branded checkout service. This is the option that lets shoppers pay using PayPal at online stores. It is an important part of the company’s profits. Growth in this segment slowed to just 1% in the quarter. A year earlier, it grew at 6%. PayPal said weak U.S. shopping demand and global challenges caused the slowdown. The company said it is taking steps to improve this business.
PayPal also faces strong competition from big companies like Apple and Google, which are growing fast in digital payments. This has increased pressure on PayPal’s core services and raised worries about losing market share.
Along with the earnings news, PayPal announced a leadership change. Enrique Lores will become the new chief executive officer on March 1. Lores is the former CEO of HP and has been part of PayPal’s board for several years. The company said new leadership is needed to move faster and improve performance.
Outgoing CEO Alex Chriss focused on cost control but could not bring growth back on track. With Lores stepping in, investors will watch closely for signs of improvement.
PayPal now faces an important period. The company must boost growth, strengthen its core services, and win back investor confidence in a tough market.
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