PayPal is changing leaders after admitting it has not executed fast enough — especially at the online checkout button that still funds the rest of its empire. The numbers show why the board lost patience, and what investors should watch next.
On February 3, 2026, PayPal’s board made an unusually blunt move for a company that has spent two years promising an operational turnaround: it replaced CEO Alex Chriss and appointed Enrique Lores (most recently HP’s CEO) as president and chief executive, effective March 1. Until then, Jamie Miller, PayPal’s chief financial and operating officer, will run the company as interim CEO. The board also split roles at the top, naming David W. Dorman as independent chair.
The message was not dressed up as a “next chapter” story — even if the press release used those words. PayPal said the board’s decision followed a review of the company’s competitive position and that the “pace of change and execution was not in line with the Board’s expectations.” That is corporate language for something more specific: the company is still big, still profitable, but is failing to move quickly in the part of the business that matters most.
The uncomfortable truth: PayPal is still huge — and still slowing where it counts
Start with the scale. In 2025, PayPal processed $1.79tn of total payment volume (TPV), generated $33.2bn of revenue, and delivered $15.5bn in “transaction margin dollars” (its preferred profitability metric). Non-GAAP earnings per share rose 14% to $5.31. PayPal finished the year with 439m active accounts, up about 1%.
Now the part that triggered the reset: PayPal’s own leadership team told investors it has not executed well in branded checkout — the PayPal button that appears at the point of purchase online. In its investor note alongside earnings, the company said online branded checkout TPV grew just 1% (FX-neutral) in Q4 and called that performance “below our expectations”.
That 1% matters because it is the “high-intent” moment where PayPal can do three things at once: stay visible to consumers, reinforce trust, and earn better economics than it typically does in unbranded processing.
PayPal’s 2025 results show a company that is increasingly diversified — but also one whose core engine is not pulling as hard as it should. In Q4, PayPal reported $475.1bn of TPV (up 9%), $8.7bn of revenue (up 4%) and $4.0bn of transaction margin dollars (up 3%). In plain terms: volume is growing faster than revenue, and revenue is growing faster than transaction profit.
You can see this in a simple ratio: revenue divided by TPV (a rough “yield” on each dollar of payments processed). Using PayPal’s reported numbers, that yield fell from about 1.91% in Q4 2024 to about 1.83% in Q4 2025 — a sign that growth is coming from lower-take-rate rails and a tougher pricing environment.
None of this means PayPal is collapsing. It means PayPal is becoming more normal — and “normal” is dangerous for a company built on the idea that it is special at checkout.
The paradox: the rest of PayPal is doing fine
One reason the board’s tone jarred the market is that PayPal can point to real progress elsewhere.
In 2025, PayPal said Venmo revenue reached $1.7bn, up about 20% (excluding interest on customer balances). It also said it delivered more than $40bn of buy now, pay later TPV, growing more than 20%, and that its enterprise payments business returned to double-digit volume growth.
This is the heart of PayPal’s strategic story since 2023: become a broader commerce platform, not just a button. But the board is effectively saying the strategy is not the problem. The problem is speed — product decisions, merchant rollout, consumer experience, and the ability to win placement in a world where checkout is increasingly controlled by ecosystems.
Even PayPal’s engagement metrics suggest the platform is not pulling users through as frequently as it once did. In Q4, PayPal’s transactions per active account (trailing 12 months) fell 5% to 57.7 — a reminder that having hundreds of millions of accounts is not the same as having hundreds of millions of habit-forming users.
Why branded checkout is a bigger problem than it sounds
“Branded checkout” can sound like a marketing phrase. It is not. It is a proxy for PayPal’s power at the most valuable inch of digital commerce: the moment a consumer chooses how to pay.
If PayPal is not the default — or at least a prominent option — the company risks becoming the infrastructure behind someone else’s relationship. That can still be a good business, but it tends to be a lower-margin one. In practice, unbranded processing is easier to commoditise: it is priced aggressively, negotiated by large merchants, and increasingly crowded.
PayPal knows this. Its own investor note says it is taking “deliberate steps” to restore momentum by pushing biometric login, scaling a redesigned paysheet, improving presentment (surfacing PayPal earlier in the checkout flow), and strengthening “selection” with rewards, BNPL and the PayPal app.
Those words sound technical, but the goal is simple: win back the right to be chosen.
Enter Enrique Lores: an “operator” for a platform business
So why Lores? The board is betting that PayPal does not need a new vision as much as it needs an execution machine.
PayPal emphasised Lores’s experience running large transformations at HP — expanding beyond PCs and printers, simplifying costs, and pushing into subscriptions and services — and framed him as a leader who can balance long-term innovation with near-term delivery. Lores promised “greater speed and precision” and “consistent delivery quarter on quarter.”
This is also a governance story. Lores had been PayPal’s chair since July 2024 and has been on the board for about five years. PayPal is now separating the chair role again by appointing Dorman as independent chair. The board is signalling both urgency and oversight: change the leader, keep the supervision tight.
One detail from the earnings day underlines the mood. In PayPal’s Q4 webcast, neither the outgoing CEO nor the incoming CEO appeared; Miller fronted the call and said the company “has not moved fast enough.” In many boardrooms, that is the moment when the operating story becomes a governance story.
The bill for fixing checkout arrives in 2026
PayPal is not promising an easy 2026. It is, in effect, telling investors they should expect a “repair year.”
For 2026, PayPal guided to transaction margin dollars being in slight decline, with transaction margin dollars excluding interest on customer balances roughly flat. It also guided to non-GAAP EPS being low-single digit decline to slightly positive, and flagged multiple headwinds: lower interest rates, less contribution from credit, and lower branded checkout volume growth relative to 2025.
Buried in that guidance is the real trade-off: PayPal said its outlook includes an “approximate 3-point headwind” from transaction margin dollar investments intended to improve “experience, presentment and consumer selection” over time. In other words, PayPal is spending margin today to rebuild checkout power tomorrow.
This is a familiar arc in consumer technology: you can buy growth with incentives, product redesign, and distribution deals — but the key question is whether those investments become habit and retention, or whether they simply become another cost line.
A dividend is not just a dividend
PayPal also announced something it has historically avoided: a regular cash dividend. The board declared a $0.14 per share dividend payable March 25, 2026, and said it intends to pay dividends quarterly (subject to conditions and board approval).
There are two ways to read this.
The optimistic view is that PayPal is confident enough in its cash generation to broaden its investor base and combine reinvestment with direct shareholder returns.
The more cautious view is that a dividend is also a sign of maturity: a way to keep shareholders onside while the company works through a slower growth period. Either way, it fits the theme of 2026: discipline, measurable delivery, and fewer grand narratives.
PayPal’s market value suggests how far sentiment has fallen. As of February 5, 2026, PayPal shares traded around $41 with a market capitalisation of roughly $64bn. Fortune noted the stock is down roughly 80% from five years ago, a bruising reference point that helps explain the board’s impatience.
What to watch if you want to know whether this reset is working
PayPal’s problem is not a lack of initiatives. It is whether initiatives turn into visible momentum at checkout.
Three near-term indicators matter more than slogans:
- Online branded checkout TPV growth — does it lift meaningfully from Q4’s 1% FX-neutral pace as presentment and paysheet changes roll out?
- Engagement — do transactions per active account stabilise, and do monthly active accounts continue to rise (PayPal said they increased 2%)?
- Profit mix — do transaction margin dollars (and especially the ex-interest version) hold up while PayPal invests, or does the mix shift further towards lower-yield volume?
Then there is the harder question: can PayPal still be a consumer brand at the moment of choice, rather than a utility in the background?
PayPal’s board appears to believe the answer is “yes”, but only with faster execution. That is why it has chosen a leader known for operational discipline and why it has been explicit about where the company is underperforming.
In the end, PayPal is trying to solve a modern platform problem: the best distribution is no longer the web browser. It is the operating system, the merchant platform, the app, the identity layer — and increasingly, the AI interface that decides what you buy and how you pay.
PayPal says it wants to lead in “agentic commerce” and has highlighted partnerships with major AI platforms. That may be the future. But the board has made clear what it thinks is the present: fix the checkout button first — because it is still paying for everything else.
