PayPal's first quarter 2026 revenue of $8.4B beat estimates, but transaction margins continued to decline.

PayPal reported first quarter 2026 revenue and earnings that exceeded analyst expectations, driven by solid growth in total payment volume. However, the results were accompanied by continued margin compression and weakening user engagement metrics, with the company guiding for a second-quarter earnings decline.

Key Highlights

• Total Payment Volume (TPV) grew 11% year-over-year to $464.0 billion, a key driver of the top-line beat.
• Reflecting ongoing competitive pressure, the key Transaction Margin metric contracted to 45.6% from 47.7% in the prior year, missing analyst estimates of 45.9%.
• User engagement metrics showed signs of weakness, with Active Accounts flat sequentially at 439 million and Transactions Per Active account declining 1% year-over-year to 58.7.
• Management guided second quarter non-GAAP EPS to a high-single-digit decline, or approximately -9% year-over-year.