PayPal shares plunged 16% in premarket trading after forecasting weak 2026 earnings and reporting disappointing fourth-quarter results. The payments giant named HP's Enrique Lores as its new president and CEO, effective March 1.
The company expects full-year adjusted profit to decline in low-single-digit percentages or increase slightly, according to LSEG data. This falls well below Wall Street expectations of approximately 8% growth.
Fourth-quarter revenue reached $8.68 billion, missing the $8.80 billion estimate. Adjusted profit was $1.23 per share, below analysts' $1.28 target. Total payment volume rose 6% to $475.1 billion on an FX-neutral basis.
PayPal's board said the pace of change under current CEO Alex Chriss did not meet expectations. Chief Financial Officer Jamie Miller will serve as interim CEO until Lores assumes leadership on March 1.
Lores joins from consumer electronics giant HP, where he served as president and CEO for more than six years. His appointment comes as PayPal faces intensified competition from Apple, Google, and newer fintech rivals.
Online branded checkout growth decelerated to 1% in the fourth quarter, down from 6% a year earlier. The company cited weakness in U.S. retail, international headwinds, and tougher comparisons for the slowdown.
Retail spending has softened as consumers navigate elevated interest rates and high living costs. Households are cutting back on discretionary purchases and prioritizing everyday necessities, a pattern highlighted by major retailers.
The fourth-quarter results contrast with typical holiday periods for payments firms, when consumers traditionally spend more freely on gifts, travel, and seasonal promotions.
PayPal said it is taking near-term action to restore online branded checkout momentum.
Chriss was tasked with steering PayPal through a challenging period as post-pandemic trading volumes declined. Growing the higher-margin branded checkout business had been a key focus for the outgoing CEO, who pushed for profitable growth while streamlining costs tied to unbranded processing.
Investors have long worried that Big Tech's entry into payments could erode PayPal's market share despite its legacy leadership position. The company maintains it continues to perform well in core products despite rising competition.
