PayPal's Q1 performance exceeded expectations, but the Q2 guidance is weak, and it fell more than 10% during the trading session

Digital payment company PayPal (PYPL) announced its Q1 2026 financial report, with net revenue of $8.35 billion, exceeding market expectations of $8.05 billion; adjusted earnings per share were $1.34, higher than the estimated $1.27.

However, the company provided cautious guidance for Q2, expecting adjusted earnings per share to decline by about 9% quarter-over-quarter, with guidance set at $1.34. It also provided full-year guidance for fiscal year 2026, with adjusted earnings per share of $5.32 and revenue of $34.06 billion.

Affected by the Q2 guidance falling short of expectations, PayPal's stock price briefly dropped over 10% during trading, but the decline has since narrowed to about 8%.