Its lower surplus is due to weaker US retail spending and slower growth in its branded checkout segment
Published Tue, Feb 3, 2026 · 10:46 PM
[BENGALURU] PayPal issued a lacklustre profit forecast for 2026 and reported fourth-quarter earnings below Wall Street expectations on Tuesday (Feb 3), pressured by weaker US retail spending and slower growth in its branded checkout segment.
The company’s shares fell 9 per cent in premarket trading after the results. It also named HP’s Enrique Lores as its president and chief executive officer, effective Mar 1.
Retail spending has softened as cautious consumers cut back on discretionary purchases and prioritise everyday necessities. This pattern is highlighted by major retailers and consumer goods companies, as households navigate tighter budgets.
The consumers are squeezed by still-high interest rates, stubbornly high living costs and signs of a softening labour market.
PayPal reported a revenue of US$8.7 billion for the holiday quarter, missing the estimate of US$8.8 billion. Its total payment volume rose 6 per cent on a foreign exchange-neutral basis to US$475.1 billion.
Its adjusted profit was US$1.23 a share during the three months ended Dec 31, also below analysts’ view of US$1.28.
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The fourth-quarter results stand in contrast to a typical holiday quarter for payments firms, as consumers usually spend more freely on gifts, travel and seasonal promotions.
Spotlight on branded checkout
Growing PayPal’s higher-margin branded checkout business has been a key focus for outgoing CEO Alex Chriss, who is pushing for “profitable growth” while aiming to streamline costs tied to unbranded processing.
Online branded checkout growth decelerated to 1 per cent in the fourth quarter, against 6 per cent a year before. The company said this was driven by weakness in US retail, international headwinds and tougher comparisons.
Investors have long worried that the entry of Big Tech companies, such as Apple and Google, into PayPal’s core payments business could erode the company’s market share, despite its status as the legacy market leader.
Though the payments firm says that it continues to perform well in its core products despite rising competition, the concerns have pressured its stock in recent years, with investors closely monitoring the branded checkout results.
The company said that it was taking near-term action to restore online branded checkout momentum. REUTERS
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