PayPal Holdings Inc (NASDAQ:PYPL, XETRA:2PP) stock fell sharply after the payments company reported fourth-quarter results that missed Wall Street expectations, overshadowing otherwise steady full-year growth and ongoing platform diversification efforts.
Shares were down 18% at about $43 in early trading.
PayPal reported fourth quarter revenue of $8.68 billion, below analysts’ estimates of $8.79 billion, while non-GAAP earnings per share came in at $1.23 versus the $1.29 consensus.
Operationally, total payment volume increased 9% in the quarter to $475.1 billion, and payment transactions rose 2% to 6.8 billion.
Active accounts increased 1.1% year over year to 439 million, though payment transactions per active account declined 5% on a trailing 12-month basis.
For the full year, PayPal posted revenue of $33.2 billion, up 4% from 2024, and total payment volume (TPV) of $1.79 trillion, an increase of 7%. Non-GAAP EPS rose 14% year over year to $5.31, reflecting improved profitability despite modest top-line growth.
Interim CEO Jamie Miller said PayPal delivered “solid performance across multiple areas of the business,” but acknowledged execution challenges. “Our execution has not been where it needs to be, particularly in branded checkout,” Miller said.
PayPal also provided guidance that suggests near-term pressure on earnings. The company expects mid-single-digit declines in GAAP and non-GAAP EPS for the first quarter of 2026 and projects full-year non-GAAP EPS to range from a low-single-digit decline to slightly positive growth, citing lower interest rates and increased investment in product improvements.
Additionally, the company announced the appointment of Enrique Lores as CEO, effective March 1. Miller said the appointment “reflects a clear commitment to strengthening execution, innovation, and results.”