PayPal Is Open to Buyout, but Focused on Turnaround -- Update

By Dean Seal and Elias Schisgall

PayPal bumped up its profitability forecast Tuesday and signaled an openness to a potential deal if it came at the right price.

In its first earnings release since receiving a takeover offer from rival fintech Stripe and buyout firm Advent International, the company said it now expects transaction margin dollars to grow this year to around $15.6 billion, from $15.5 billion in 2025. PayPal had previously said the metric, a key measure of profitability, would decline slightly in 2026.

Management declined to comment specifically on Stripe's proposal, which values the company at $53 billion. Chief Executive Enrique Lores instead said that the company would evaluate all opportunities to maximize shareholder value.

"Our board and management team are open, and have a clear responsibility, to objectively evaluate every opportunity that is presented to us, compare it with our own plan, and choose the option that creates more value," Lores said.

For now, the company is focused on its turnaround strategy, the CEO said. "We have a very clear view of the value that we can create in the coming years," he said.

Shares rose 3.5% to $58 in early trading. Stripe and Advent have offered to buy the company at $60.50 a share.

Lores, the former CEO of HP, assumed PayPal's top job in March, succeeding former CEO Alex Chriss. He quickly reshuffled PayPal's operations into three distinct business lines and said the company will accelerate its adoption of artificial intelligence. PayPal also plans to lay off 20% of staff over the next two to three years in a cost-cutting push, The Wall Street Journal reported in May.

PayPal on Tuesday said Lores's strategy is beginning to bear fruit. It highlighted growth in Venmo and Braintree, as well as PayPal's debit card and buy now, pay later businesses. The company said it expects to hit $400 million in gross run-rate savings this year and is on track to reach Lores's goal of $1.5 billion in gross run-rate savings over the next two to three years.

The company reported a second-quarter profit of $1.1 billion, or $1.25 a share, down from $1.26 billion, or $1.29 a share, a year earlier.

Stripping out certain one-time items, the company logged adjusted earnings of $1.38 a share. Analysts surveyed by FactSet were expecting $1.28 a share.

Revenue rose 5% to $8.68 billion, beating analyst estimates of $8.47 billion. Transaction margin dollars grew 1% to $3.9 billion.

PayPal said it now expects full-year adjusted earnings of $5.38 a share. It had previously forecast adjusted earnings would fall by low-single digits or inflect slightly positive compared with $5.31 a share a year earlier. Analysts are expecting adjusted earnings to stay flat at $5.31 a share.

For the current third quarter, the company said it expects a low-single-digit decline in adjusted earnings with slightly positive growth in transaction margin dollars.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

July 28, 2026 09:59 ET (13:59 GMT)