Revenue Growth Driven by Transaction Volume
Total revenue increased 7.2% YoY from $7.79B to $8.35B in Q1 FY2026, reflecting continued growth in payment volumes and transaction activity across PayPal's platform.
Source: 10-Q Income Statement Data
Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
PayPal's Q1 FY2026 revenue grew 7.2% YoY to $8.35B, but net income fell 13.5% to $1.11B as margin compression and higher costs weighed on profitability despite continued top-line expansion.
Revenue
$8.35B
+7.21% YoY
EPS (Diluted)
$1.21
-6.20% YoY
Operating Income
$1.49B
-2.75% YoY
Source: SEC XBRL
PayPal Holdings (PYPL) reported Q1 FY2026 revenue of $8.35B, up 7.2% year over year. Operating margin was 17.8%, down 1.8 points from 19.6% a year earlier. Operating cash flow was $1.13B, down 2.2% year over year. PYPL's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 3 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 1.38 | 1.30 | Beat +5.9% |
| Mar 2026This filing | 1.34 | 1.29 | Beat +3.6% |
| Dec 2025 | 1.23 | 1.31 | Miss -6.1% |
| Sep 2025 | 1.34 | 1.23 | Beat +9.4% |
Adjusted (non-GAAP) EPS of $1.34 versus the $1.29 analyst consensus — a +3.6% beat for Mar 2026. Analyst consensus is quoted on the adjusted (non-GAAP) basis the street uses. GAAP diluted EPS for this quarter was $1.21.
Compiled by AI from this SEC filing
Total revenue increased 7.2% YoY from $7.79B to $8.35B in Q1 FY2026, reflecting continued growth in payment volumes and transaction activity across PayPal's platform.
Source: 10-Q Income Statement Data
Operating margin declined approximately 1.8 percentage points YoY to 17.8% (from 19.6%), as operating income fell 2.7% to $1.49B despite higher revenues, indicating cost growth outpacing revenue growth.
Source: 10-Q Income Statement & Key Ratios Data
Net income dropped 13.5% YoY to $1.11B from $1.29B, with net margin at 13.3%, suggesting elevated expenses below the operating line — such as interest costs or tax items — further compressed earnings.
Source: 10-Q Income Statement Data
PayPal repurchased $1.50B in shares (flat YoY) and initiated dividend payments of $130M in Q1 FY2026 (vs. $0 in the prior year period), signaling a commitment to returning capital to shareholders.
Source: 10-Q Cash Flow Statement Data
Investing cash outflows improved by 42.3% YoY to -$2.10B from -$3.64B, suggesting reduced acquisition or investment spending compared to the prior year period, which may reflect a more disciplined capital allocation approach.
Source: 10-Q Cash Flow Statement Data
Compiled by AI from this SEC filing · 2 high, 3 medium, 0 low
Operating margin fell from 19.6% to 17.8% YoY, and net margin stands at 13.3%, reflecting cost growth that is outpacing revenue expansion. If this trend continues, profitability could deteriorate further even as top-line growth persists.
Source: 10-Q Income Statement & Key Ratios Data
Long-term debt stands at $10.88B with a debt-to-equity ratio of 3.02, indicating significant financial leverage. Rising interest rates or refinancing needs could increase interest expense and further pressure net income.
Source: 10-Q Balance Sheet & Key Ratios Data
Cash and equivalents fell 7.8% YoY to $6.98B, while current liabilities rose 2.2% to $47.64B. Although the current ratio of 1.26 remains above 1.0, the narrowing liquidity buffer warrants monitoring.
Source: 10-Q Balance Sheet & Key Ratios Data
ROE of 5.6% and ROA of 1.4% are relatively low for a fintech company of PayPal's scale, suggesting the company is not generating strong returns on its asset base or shareholder equity, which may concern long-term investors.
Source: 10-Q Key Ratios Data
Operating cash flow declined 2.2% YoY to $1.13B, nearly flat despite 7.2% revenue growth, indicating that cash conversion efficiency is weakening and that earnings quality may be declining.
Source: 10-Q Cash Flow Statement Data
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $B | 8.35 $B | 7.79 $B | +7.21% |
Operating Income $B | 1.49 $B | 1.53 $B | -2.75% |
Net Income $B | 1.11 $B | 1.29 $B | -13.52% |
EPS (Basic) $ | 1.22 $ | 1.31 $ | -6.87% |
EPS (Diluted) $ | 1.21 $ | 1.29 $ | -6.20% |
Answers draw on this SEC filing and the data on this page
Other companies in Transaction & Payment Processing Services