The news: PayPal’s revenues grew 7% YoY to $8.4 billion, per its earnings release, up from 1% in Q1 2025, clearing analysts’ expectations for the quarter, per MarketWatch.

However, the company projected a 9% decline in adjusted earnings for Q2 2026—roughly 5 percentage points below FactSet analysts’ benchmark.

To correct course, new CEO Enrique Lores anticipates reorganizing and slashing 20% of PayPal’s workforce over the next two to three years to cut costs, per Bloomberg, while leaning into AI. Lores said the cost-cutting program could save PayPal $1.5 billion.

Diving into the results: While some metrics improved over past quarters, PayPal’s not out of the woods yet.

• Total payment volume rose 11% YoY.
• Transaction margin dollars—PayPal’s key measure of profitability—only inched up 3% YoY, down from 7% YoY the year prior.
• And active accounts and monthly active accounts both experienced 1% growth YoY.

While total payment volume uptick has promise, flagging transaction margin dollars shows the fintech is slipping on measurement of profitability.

What’s working? Venmo TPV notched its sixth consecutive quarter of double-digit growth (up 14% YoY), signalling the effectiveness of PayPal’s marketing to Gen Z through universities, celebrity-backed campaigns, and rewards. 

Buy now, pay later (BNPL) TPV also grew 23% YoY, outperforming market growth rates. This cements PayPal’s position as a major installments player: We forecast that PayPal will command $30.86 billion in US BNPL volume this year.