Abstract
PayPal will report fourth-quarter results on February 03, 2026 Pre-Market, with investors watching top-line growth, margins, and adjusted EPS after a solid third quarter and improved guidance.
Market Forecast
For the current quarter, PayPal’s management-guided and market-aligned projections indicate total revenue of $8.80 billion, up 6.62% year over year, EBIT of $1.59 billion, up 12.53% year over year, and adjusted EPS of $1.29, up 14.47% year over year. Based on the latest reported mix and margin trajectory, the gross profit margin is expected to be near the low-40.00% range, with net profit margin tracking the mid-teens; adjusted EPS growth outpacing revenue reflects operating efficiency.
The main business continues to be Transaction revenue, supported by resilient Total Payment Volume and gradual take-rate stabilization, while value-added services provide incremental contribution. The most promising segment is Transaction, which generated $7.52 billion last quarter and demonstrated solid year-over-year growth, positioning it to drive revenue this quarter.
Last Quarter Review
PayPal’s previous quarter delivered revenue of $8.42 billion, a gross profit margin of 40.68%, GAAP net profit attributable to the parent company of $1.25 billion, a net profit margin of 14.83%, and adjusted EPS of $1.34, with year-over-year adjusted EPS growth of 11.67%.
A key highlight was upside versus consensus across revenue, EBIT, and adjusted EPS, underscoring improving execution and cost discipline. The main business highlights showed Transaction revenue of $7.52 billion and Value-Added Services revenue of $0.90 billion, anchored by a sustained recovery in core checkout and branded PayPal usage.
Current Quarter Outlook
Main Business: Transaction Revenue
Transaction revenue remains PayPal’s largest driver and the critical lens through which investors assess near-term earnings. With last quarter’s $7.52 billion base, the segment benefits from active account engagement, branded checkout share, and merchant adoption of PayPal’s features such as One-Click and PayPal Pay Later. Take-rate trends are a central factor; while competitive pressure and mix effects can compress take rates, the company’s pricing optimization and product bundling are positioned to preserve monetization. Volume resilience tied to holiday-season spending in the United States and Europe should support sequential strength, although currency fluctuations and normalization of discretionary goods demand are watch points. Operating leverage from transaction processing efficiencies and risk management improvements can sustain margin support even if volume growth moderates.
Most Promising Business: Value-Added Services
Value-Added Services at $0.90 billion last quarter continue to scale and diversify revenue beyond pure payment processing. Key product areas include merchant value-adds, Braintree capabilities, and consumer financial services that elevate user stickiness and cross-sell opportunities. As PayPal invests in platform enhancements and data-driven risk tools, these services provide recurring revenue streams that tend to be less sensitive to take-rate movements. Growth may be aided by broader adoption among medium and large merchants, as APIs and developer support make integration simpler. Increased contribution from value-added services can help smooth overall margin volatility, since these lines often carry favorable unit economics relative to raw processing revenue.
Stock Price Drivers This Quarter
Investors will focus on whether adjusted EPS growth of 14.47% materializes alongside revenue growth of 6.62%, substantiating margin discipline. Commentary around gross margin trajectory near the low-40.00% range and net margin tracking mid-teens will be scrutinized, especially in relation to take-rate trends and risk costs. Guidance for Total Payment Volume growth and qualitative updates on branded checkout momentum versus unbranded volumes could steer sentiment. Management’s color on cost structure initiatives, including automation and infrastructure optimization, will shape the durability of margin improvements. Any signals on product roadmap, cross-border recovery, and merchant mix will influence expectations for sustained operating leverage into the next fiscal year.
Analyst Opinions
Across recent institutional commentaries, the majority skew cautiously optimistic, citing improving earnings quality, incremental margin progress, and stable top-line growth into the holiday quarter. Notable analysts highlight alignment between revenue and EPS forecasts and the company’s ability to execute on cost controls while reinvesting in core checkout. The bullish camp emphasizes the potential for upside if take-rate stabilization and value-added services growth persist, while acknowledging competitive dynamics in payments. Overall, the prevailing view expects PayPal to deliver in-line to modestly better-than-consensus results, with sentiment driven by clarity on margin sustainability and disciplined capital allocation.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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