PayPal (PYPL) Q3 2026 Earnings Call: Q&A Summary

Q: Andrew Schmidt from KeyBanc Capital Markets asked what is driving management's view of intrinsic value and confidence in the plan given prior strategic alternatives.

A: CEO Enrique Lores stated that management has strong conviction in achieving sustainable double-digit EPS growth in the midterm driven by mid-single-digit transaction margin growth, cost reductions, and share buybacks, while remaining open to any option that maximizes shareholder value.

Q: Dan Dolev from Mizuho asked how Venmo can become a larger part of the portfolio and how monetization is progressing.

A: CEO Enrique Lores answered that Venmo is becoming central to customers' financial lives through new P2P experiences, strong adoption of Financial Services like the Debit Card, and 40% TPV growth in Pay with Venmo, with ARPU having a 4x to 5x expansion opportunity.

Q: Tien-Tsin Huang from JPMorgan asked for an update on the product road map for Financial Services and whether the funding bias remains balance sheet light.

A: CEO Enrique Lores explained that Financial Services are a key driver of transaction margin dollars and ARPU. CFO Jamie Miller added that PayPal maintains a balanced approach between on-balance-sheet and off-balance-sheet funding sources.

Q: Timothy Chiodo from UBS asked why PayPal is well positioned for Agentic commerce regarding transaction history and consumer protections.

A: CEO Enrique Lores stated that PayPal's core value proposition of trust and security is critical for agentic commerce, and they are collaborating with companies like Meta so consumers can transact securely using AI personal agents.

Q: Harshita Rawat from Bernstein asked about market dynamics in Europe, the impact of de minimis tariffs, and confidence in improving brand growth.

A: CFO Jamie Miller stated that EU de minimis tariff headwinds are expected to persist through the fourth quarter, while CEO Enrique Lores added that local infrastructure investments in Europe are improving consumer trends and relative performance.

Q: Bryan Keane from Citi asked what is driving international revenue down further despite stable markets like Germany and Italy.

A: CFO Jamie Miller responded that international revenue is seeing the localized impact of EU tariffs and Branded Checkout, but the merchant playbook being applied in the U.S. is now rolling out across Europe.

Q: Andrew Bauch from BMO Capital Markets asked what to expect for transaction margin dollar growth in 2027 and the bridges to the mid-single-digit target.

A: CFO Jamie Miller noted it is too early to give specific 2027 guidance, but expects a non-GAAP EPS growth profile similar to 2026 as they continue investing in growth.

Q: Sanjay Sakhrani from KBW asked about the nuances between direct merchants versus marketplaces in Slide 5 and how to think about TMD growth acceleration.

A: CEO Enrique Lores explained that the playbook varies by merchant based on specific conditions and co-marketing efforts, while CFO Jamie Miller noted that Branded Checkout investments have a 2 to 3-year horizon.

Q: Darrin Peller from Wolfe Research asked about the appetite for M&A and how to think about operating margins and expenses for next year.

A: CEO Enrique Lores stated M&A must pass strategy, financial return, and operational filters. CFO Jamie Miller added that 2027 operating expenses will ramp up based on product and market investments.

Q: Dan Perlin from RBC Capital Markets asked what the sales motion looks like for driving higher attach rates for value-added services in PSP.

A: CEO Enrique Lores answered that PSP is driving both basic processing and value-added services like Payouts and Risk-as-a-Service, having grown attach rates from 5% to 6% with the help of a specialized sales force.

Q: Jason Kupferberg from Wells Fargo asked why Branded Checkout growth in the fourth quarter would not accelerate despite an easier comparison and U.S. momentum.

A: CFO Jamie Miller answered that the fourth quarter forecast accounts for ongoing EU de minimis tariff headwinds and a prudent approach to the holiday season despite encouraging U.S. progress.