PayPal's second quarter EPS beat estimates, but transaction margin growth slowed to 1%

PayPal reported second quarter revenue of $8.68 billion, in line with analyst expectations, while non-GAAP EPS of $1.38 beat estimates of $1.28. Total Payment Volume (TPV) grew 10% year-over-year to $486.4 billion. The company raised its full-year 2026 non-GAAP EPS guidance to approximately $5.38.

Key Highlights

• The key metric of Transaction Margin Dollars grew just 1% year-over-year to $3.9 billion, indicating continued pressure on profitability per transaction.
• Non-GAAP operating margin contracted by 248 basis points to 17.4%, as transaction expenses grew faster than revenues.
• Active accounts were essentially flat year-over-year at 439 million and declined by 0.2 million from the prior quarter, signaling stalled user growth.