PayPal Is Open to Buyout, but Focused on Turnaround -- Update
Dow Jones2026/07/28 13:59By Dean Seal and Elias Schisgall
PayPal bumped up its profitability forecast Tuesday and signaled an openness to a potential deal if it came at the right price.
In its first earnings release since receiving a takeover offer from rival fintech Stripe and buyout firm Advent International, the company said it now expects transaction margin dollars to grow this year to around $15.6 billion, from $15.5 billion in 2025. PayPal had previously said the metric, a key measure of profitability, would decline slightly in 2026.
Management declined to comment specifically on Stripe's proposal, which values the company at $53 billion. Chief Executive Enrique Lores instead said that the company would evaluate all opportunities to maximize shareholder value.
"Our board and management team are open, and have a clear responsibility, to objectively evaluate every opportunity that is presented to us, compare it with our own plan, and choose the option that creates more value," Lores said.
For now, the company is focused on its turnaround strategy, the CEO said. "We have a very clear view of the value that we can create in the coming years," he said.
Shares rose 3.5% to $58 in early trading. Stripe and Advent have offered to buy the company at $60.50 a share.
Lores, the former CEO of HP, assumed PayPal's top job in March, succeeding former CEO Alex Chriss. He quickly reshuffled PayPal's operations into three distinct business lines and said the company will accelerate its adoption of artificial intelligence. PayPal also plans to lay off 20% of staff over the next two to three years in a cost-cutting push, The Wall Street Journal reported in May.
PayPal on Tuesday said Lores's strategy is beginning to bear fruit. It highlighted growth in Venmo and Braintree, as well as PayPal's debit card and buy now, pay later businesses. The company said it expects to hit $400 million in gross run-rate savings this year and is on track to reach Lores's goal of $1.5 billion in gross run-rate savings over the next two to three years.
The company reported a second-quarter profit of $1.1 billion, or $1.25 a share, down from $1.26 billion, or $1.29 a share, a year earlier.
Stripping out certain one-time items, the company logged adjusted earnings of $1.38 a share. Analysts surveyed by FactSet were expecting $1.28 a share.
Revenue rose 5% to $8.68 billion, beating analyst estimates of $8.47 billion. Transaction margin dollars grew 1% to $3.9 billion.
PayPal said it now expects full-year adjusted earnings of $5.38 a share. It had previously forecast adjusted earnings would fall by low-single digits or inflect slightly positive compared with $5.31 a share a year earlier. Analysts are expecting adjusted earnings to stay flat at $5.31 a share.
For the current third quarter, the company said it expects a low-single-digit decline in adjusted earnings with slightly positive growth in transaction margin dollars.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
July 28, 2026 09:59 ET (13:59 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Wall Street giants collectively raise rate hike forecasts, US Treasury futures continue to fall, gold drops over 1% to break 4000
After the US October CPI exceeded expectations, Goldman Sachs and Nomura added a forecast for an interest rate hike in March next year, while Deutsche Bank included a forecast for a rate hike in January next year. Currently, the market has fully priced in a 25 basis point rate hike in December, with a 13% probability for a 50 basis point hike. On Wednesday, the US Treasury spot market was closed, but Treasury futures continued to fall, with corresponding yields rising by about 2 to 4 basis points, and spot gold came under pressure, dropping by 1.1%.
No Need to Worry About the Cooling Down of AI Data Center Construction? The US Import Boom Is Unlikely to Subside in the Short Term, Real Impact May Come in 2029
It takes an average of 4.8 years from finalizing investment to starting construction of a data center project, and an additional 2.6 years from construction start to becoming operational. Servers usually cannot be installed until after the building structure and racks are completed. For trade partners such as Taiwan (China), South Korea, and Mexico who rely on US data center supply chain demand, the inertia in construction timelines provides at least a one- to two-year buffer for future exports.
Federal Reserve Major Debate: When Should the Tenure of “Number Three” Williams End?
The main point of contention is whether Williams should step down in June 2028, upon completing a full 10-year term, or in June 2027, when he reaches the mandatory retirement age of 65. Analysts point out that the Federal Reserve Board holds ultimate discretion; if he leaves early, Fed Chair Waller would be able to assert greater control over the appointment to this critical position. However, forcing Williams to shorten his term could easily be interpreted as political manipulation. Williams himself is expected to serve until June 2028.
Crypto prices
More
