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EsPayPal Lifts 2026 Outlook, Maps Cost Cuts After $53B Bid
PayPal lifted its 2026 profit outlook and mapped $400 million in cost cuts after a $60.50-per-share, $53 billion bid from Stripe and Advent that the board views as inadequate.
PayPal lifted its 2026 profit outlook and detailed new cost reductions on Tuesday, following a $60.50-per-share takeover proposal from Stripe and Advent International that values the company at about $53 billion. The board views the offer as inadequate.
The update is part of a turnaround plan aimed at improving growth and profitability after a slowdown in e-commerce and rising competition in digital payments. PayPal plans to simplify its operating model and reduce organizational layers through 2027, improve marketing efficiency and productivity through 2028, and continue technology modernization and AI integration through 2029. It expects about $400 million of cost savings by year-end.
The offer compares with PayPal’s roughly $360 billion market value at its 2021 peak. The company pointed to its forecast and operating changes as support for remaining independent.
Second-quarter results accompanied the outlook. On an adjusted basis, PayPal earned $1.38 per share for the three months ended June 30, above the $1.28 average analyst estimate. Revenue rose 3% on a currency-neutral basis to $8.68 billion, ahead of expectations of $8.47 billion. Total payment volume increased 9% on a currency-neutral basis to $486.4 billion.
Adjusted operating margin was 17.4% in the quarter, compared with 19.8% a year earlier. For the third quarter, the company forecast a low single-digit decline in adjusted profit. On average, analysts expect earnings to fall about 0.4% from $1.34 per share a year earlier.
For 2024, PayPal now projects adjusted earnings of about $5.38 per share, above the $5.31 consensus. It raised its 2026 profit outlook from prior guidance that had ranged from a low single-digit decline to a slight increase.
Shares were volatile in premarket trading after the update, last down 0.8% before the opening bell.
PayPal has been working to revive growth after the pandemic-driven surge in online shopping cooled. Competition has intensified as Apple and Google expanded their payment tools and integrated them into smartphones. In recent years, PayPal has pursued management changes, workforce reductions and a focus on higher-margin products.
