PayPal Raises Earnings Forecast to $5.60 a Share Despite 31% Contraction in PYUSD Supply
Key Facts
PayPal raised its forecast for adjusted earnings per share in 2026 to about $5.60, compared with about $5.38 in its July guidance, according to its third-quarter results filing with the U.S. Securities and Exchange Commission. The chief executive said the strategy was beginning to show in the financial results, with “strong contributions from key growth areas and increased diversification.” The annual revision puts earnings per share at the forefront of the quarter’s positive indicators, despite limited revenue growth and a year-on-year decline in net income. At the same time, figures cited by Startup Fortune showed a contraction in the supply of the PYUSD stablecoin, placing growth in payments and profitability alongside challenges in expanding digital currencies.
The company reported revenue of $8.584 billion in the third quarter of 2026, compared with $8.417 billion in the corresponding period of 2025, an annual increase of 2%, according to the filing. Net income was $1.073 billion, down 14% from $1.248 billion a year earlier. The divergence between revenue growth and lower net income stands out in the period’s results, while management said key growth areas and increased diversification supported performance. The filing did not cite cost cuts or operating efficiency as a direct reason for the quarter’s higher earnings per share.
Non-GAAP transaction margin dollars rose 2% to $3.950 billion in the third quarter, from $3.871 billion a year earlier. Excluding interest on customer balances, the margin increased 3% to $3.661 billion, compared with $3.550 billion in the same period of 2025, the company said. This measure provides a view of activity after isolating interest on customer balances, and management included it in the guidance it raised alongside its annual earnings-per-share forecast. The indicators thus combine an improvement in adjusted margin with 2% revenue growth, while net income recorded an annual decline.
As for the stablecoin, PYUSD supply fell 31% from a peak of nearly $4.2 billion in March 2026 to about $2.9 billion on October 29, according to a Startup Fortune report citing stablecoin tracker figures. The report attributed the decline to reduced incentive programs and liquidity shifting to larger stablecoins, including USDT and USDC. These figures and the reasons for the contraction are attributed to the report and tracker data, and are not an announcement by PayPal. Separate data on the Solana Foundation website showed PYUSD supply on its network at $702 million on October 8. The stablecoin’s reported reserves were $2.89 billion on August 31, while redeemable supply issued on Solana accounted for 25.8% on the same date.
Issuance responsibilities for the stablecoin are divided between two companies. According to the Solana Foundation, Paxos issues PYUSD and holds its reserves, mints and redeems it, while PayPal markets and distributes it. This means supply and reserve data relate to a currency issued by Paxos and distributed by PayPal, with figures varying according to the measurement date and network scope: about $2.9 billion overall on October 29, and $702 million on Solana on October 8. These details provide context for reading the decline in total supply alongside the currency’s spread on the Solana network, without changing the contraction rate reported.
On shareholder returns, PayPal returned $1.5 billion to shareholders by repurchasing about 28 million shares in the third quarter of 2026. For the 12 months ended with the quarter, repurchases totaled $6.0 billion, according to the filing. The stock closed at $56.09 on October 27, 2026, according to EL7 data. An Investing.com summary reported a close of $54.99 on the same date and said the stock fell 2.64% in premarket trading to $53.54; those are figures separate from the closing price recorded by EL7 data.
For the fourth quarter of 2026, PayPal expects revenue growth at a low double-digit rate on a currency-neutral basis, and slight positive growth in transaction margin dollars. It also forecast adjusted earnings per share of about $1.43, compared with $1.23 in the fourth quarter of 2025, according to the filing. The company said it expects its run rate of recurring gross cost savings to exceed $700 million exiting the fourth quarter, as part of a target of at least $1.5 billion over two to three years. These forecasts set the next milestone for tracking whether revenue and margin growth align with guidance, alongside the company’s progress toward its announced savings target.