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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026.


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to .

Commission file number 001-36859

PayPal Holdings, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Delaware			47-2989869
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification No.)
2211 North First Street	San Jose,	California	95131
(Address of Principal Executive Offices)			(Zip Code)

(408) 967-7000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	PYPL	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of April 29, 2026, there were 882,105,493 shares of the registrant’s common stock, $0.0001 par value, outstanding, which is the only class of common or voting stock of the registrant issued.

PayPal Holdings, Inc.

TABLE OF CONTENTS


			Page Number
Part I.	Financial Information		4
	Item 1.	Condensed Consolidated Balance Sheets	4
		Condensed Consolidated Statements of Income (Loss)	5
		Condensed Consolidated Statements of Comprehensive Income (Loss)	6
		Condensed Consolidated Statements of Stockholders’ Equity	7
		Condensed Consolidated Statements of Cash Flows	8
		Notes to Condensed Consolidated Financial Statements	10
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
	Item 4.	Controls and Procedures	58
Part II.	Other Information		59
	Item 1.	Legal Proceedings	59
	Item 1A.	Risk Factors	59
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
	Item 3.	Defaults Upon Senior Securities	63
	Item 4.	Mine Safety Disclosures	63
	Item 5.	Other Information	63
	Item 6.	Exhibits	64
Signatures			65

Table of Contents

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS


	March 31, 2026		December 31, 2025
	(In millions, except par value)
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	6,977	$	8,049
Short-term investments	2,365		2,373
Accounts receivable, net	843		840
Loans and interest receivable, held for sale	1,825		1,726
Loans and interest receivable, net of allowances of $560 and $539 as of March 31, 2026 and December 31, 2025, respectively	6,705		6,746
Funds receivable and customer accounts	39,501		38,198
Prepaid expenses and other current assets	1,779		1,827
Total current assets	59,995		59,759
Long-term investments	4,125		4,330
Property and equipment, net	1,708		1,700
Goodwill	10,946		10,864
Intangible assets, net	206		208
Other assets	3,566		3,312
Total assets	$	80,546	$	80,173
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	162	$	240
Funds payable and amounts due to customers	41,501		40,198
Accrued expenses and other current liabilities	5,974		6,005
Total current liabilities	47,637		46,443
Other long-term liabilities	3,476		3,487
Long-term debt	9,409		9,987
Total liabilities	60,522		59,917
Commitments and contingencies (Note 13)
Equity:
Common stock, $0.0001 par value; 4,000 shares authorized; 892 and 920 shares outstanding as of March 31, 2026 and December 31, 2025, respectively	—		—
Preferred stock, $0.0001 par value; 100 shares authorized, unissued	—		—
Treasury stock at cost, 457 and 423 shares as of March 31, 2026 and December 31, 2025, respectively	(34,651)		(33,138)
Additional paid-in-capital	21,735		21,582
Retained earnings	33,453		32,470
Accumulated other comprehensive income (loss)	(513)		(658)
Total equity	20,024		20,256
Total liabilities and equity	$	80,546	$	80,173

The accompanying notes are an integral part of these condensed consolidated financial statements.

1Q 2026 FORM 10-Q

Table of Contents

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)


	Three Months Ended March 31,
	2026		2025
	(In millions, except per share amounts)
	(Unaudited)
Net revenues	$	8,353	$	7,791
Operating expenses:
Transaction expense	4,165		3,704
Transaction and credit losses	378		371
Customer support and operations	446		398
Sales and marketing	518		488
Technology and development	793		731
General and administrative	491		503
Restructuring and other	74		66
Total operating expenses	6,865		6,261
Operating income	1,488		1,530
Other income (expense), net	(95)		73
Income before income taxes	1,393		1,603
Income tax expense	280		316
Net income (loss)	$	1,113	$	1,287

Net income (loss) per share:
Basic	$	1.22	$	1.31
Diluted	$	1.21	$	1.29

Weighted average shares:
Basic	913		986
Diluted	920		999

The accompanying notes are an integral part of these condensed consolidated financial statements.

1Q 2026 FORM 10-Q

Table of Contents

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


	Three Months Ended March 31,
	2026		2025
	(In millions)
	(Unaudited)
Net income (loss)	$	1,113	$	1,287
Other comprehensive income (loss), net of reclassification adjustments:
Foreign currency translation adjustments (“CTA”), net	(34)		109
Tax benefit (expense) on foreign CTA, net	4		(7)


Unrealized gains (losses) on cash flow hedges, net	192		(176)
Tax (expense) benefit on unrealized gains (losses) on cash flow hedges, net	(13)		9
Unrealized losses on available-for-sale debt securities, net	(5)		(9)
Tax benefit on unrealized losses on available-for-sale debt securities, net	1		2
Other comprehensive income (loss), net of tax	145		(72)
Comprehensive income (loss)	$	1,258	$	1,215

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


	Common Stock Shares	Treasury Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Equity

	(In millions)
	(Unaudited)































Balances at December 31, 2025	920	$	(33,138)	$	21,582	$	(658)	$	32,470	$	20,256
Net income	—	—		—		—		1,113		1,113
Foreign CTA, net	—	—		—		(34)		—		(34)
Tax benefit on foreign CTA, net	—	—		—		4		—		4


Unrealized gains on cash flow hedges, net	—	—		—		192		—		192
Tax expense on unrealized gains on cash flow hedges, net	—	—		—		(13)		—		(13)
Unrealized losses on available-for-sale debt securities, net	—	—		—		(5)		—		(5)
Tax benefit on unrealized losses on available-for-sale debt securities, net	—	—		—		1		—		1
Common stock and stock-based awards issued, net of shares withheld for employee taxes	6	—		(139)		—		—		(139)
Common stock repurchased	(34)	(1,513)		—		—		—		(1,513)
Cash dividends declared ($0.14 per share)	—	—		—		—		(130)		(130)

Stock-based compensation	—	—		292		—		—		292
Balances at March 31, 2026	892	$	(34,651)	$	21,735	$	(513)	$	33,453	$	20,024


	Common Stock Shares	Treasury Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Equity

	(In millions)
	(Unaudited)




























Balances at December 31, 2024	993	$	(27,085)	$	20,705	$	(550)	$	27,347	$	20,417
Adoption of crypto asset accounting standard	—	—		—		—		20		20
Net income	—	—		—		—		1,287		1,287
Foreign CTA, net	—	—		—		109		—		109
Tax expense on foreign CTA, net	—	—		—		(7)		—		(7)


Unrealized losses on cash flow hedges, net	—	—		—		(176)		—		(176)
Tax benefit on unrealized losses on cash flow hedges, net	—	—		—		9		—		9
Unrealized losses on available-for-sale debt securities, net	—	—		—		(9)		—		(9)
Tax benefit on unrealized losses on available-for-sale debt securities, net	—	—		—		2		—		2
Common stock and stock-based awards issued, net of shares withheld for employee taxes	5	—		(171)		—		—		(171)
Common stock repurchased	(19)	(1,512)		—		—		—		(1,512)

Stock-based compensation	—	—		285		—		—		285
Balances at March 31, 2025	979	$	(28,597)	$	20,819	$	(622)	$	28,654	$	20,254

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2026		2025
	(In millions)
	(Unaudited)
Cash flows from operating activities:
Net income (loss)	$	1,113	$	1,287
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Transaction and credit losses	378		371
Depreciation and amortization	238		245
Stock-based compensation	259		249
Deferred income taxes	(290)		(6)
Net (gains) losses on strategic investments	101		(48)
Accretion of discounts on investments, net of amortization of premiums	(8)		(30)
Adjustments to loans and interest receivable, held for sale	61		25
Other	70		(73)
Originations of loans receivable, held for sale	(11,306)		(6,629)
Proceeds from repayments and sales of loans receivable, originally classified as held for sale	11,073		6,445
Changes in assets and liabilities:
Accounts receivable	(2)		(98)
Transaction loss allowance for cash losses, net	(313)		(311)
Other current assets and non-current assets	249		64
Accounts payable	(52)		(52)
Other current liabilities and non-current liabilities	(437)		(279)
Net cash provided by operating activities	1,134		1,160
Cash flows from investing activities:
Purchases of reverse repurchase agreements	—		(200)
Maturities of reverse repurchase agreements	—		87
Purchases of property and equipment	(231)		(196)
Proceeds from sales of property and equipment	8		2
Purchases and originations of loans receivable	(3,865)		(5,508)
Proceeds from repayments and sales of loans receivable, originally classified as held for investment	3,754		5,477
Purchases of investments	(5,923)		(5,970)
Maturities and sales of investments	4,521		5,465


Acquisitions, net of cash acquired	(122)		—
Funds receivable	(352)		(2,741)
Collateral posted related to derivative instruments, net	110		(53)

Net cash used in investing activities	(2,100)		(3,637)
Cash flows from financing activities:



Purchases of treasury stock	(1,500)		(1,500)
Tax withholdings related to net share settlements of equity awards	(127)		(277)
Borrowings under financing arrangements	930		1,491
Repayments under financing arrangements	(932)		—
Funds payable and amounts due to customers	1,094		1,417
Collateral received related to derivative instruments and reverse repurchase agreements, net	108		(135)
Payments of dividends to stockholders	(130)		—
Other	(2)		(2)
Net cash (used in) provided by financing activities	(559)		994

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PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(continued)


	Three Months Ended March 31,
	2026		2025
	(In millions)
	(Unaudited)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(50)		94
Net change in cash, cash equivalents, and restricted cash	(1,575)		(1,389)
Cash, cash equivalents, and restricted cash at beginning of period	24,018		22,490
Cash, cash equivalents, and restricted cash at end of period	$	22,443	$	21,101

Supplemental cash flow disclosures:
Cash paid for interest	$	18	$	2
Cash paid for income taxes, net	$	7	$	95

The table below reconciles cash, cash equivalents, and restricted cash as reported in the condensed consolidated balance sheets to the total of the same amounts shown in the condensed consolidated statements of cash flows:
Cash and cash equivalents	$	6,977	$	7,569

Funds receivable and customer accounts	15,466		13,532
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$	22,443	$	21,101

The accompanying notes are an integral part of these condensed consolidated financial statements.

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

OVERVIEW AND ORGANIZATION

PayPal Holdings, Inc. (“PayPal,” the “Company,” “we,” “us,” or “our”) was incorporated in Delaware in January 2015. At PayPal, our mission is to revolutionize commerce globally. Our products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, and secure, whether online or in-person. Our two-sided platform serves millions of consumers and merchants worldwide.

SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The accompanying condensed consolidated financial statements include the financial statements of PayPal and our wholly- and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

We determine at the inception of each investment, and re-evaluate if certain events occur, whether an entity in which we have made an investment is considered a variable interest entity (“VIE”). If we determine an investment is in a VIE, we then assess if we are the primary beneficiary, which would require consolidation. As of March 31, 2026 and December 31, 2025, no VIEs qualified for consolidation as the structures of these entities do not provide us with both the ability to direct activities that would significantly impact their economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

As of both March 31, 2026 and December 31, 2025, the carrying value of our investments in nonconsolidated VIEs that are primarily investments in funds that are limited partnerships or similar structures which are focused on increasing access to capital for underserved communities was $202 million, and is included as non-marketable equity securities applying the equity method of accounting in long-term investments on our condensed consolidated balance sheets. Our maximum exposure to loss related to these nonconsolidated VIEs, which represents funded commitments and any future funding commitments, was $246 million as of both March 31, 2026 and December 31, 2025.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the United States (“U.S.”) Securities and Exchange Commission on February 3, 2026.

In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the condensed consolidated financial statements for all interim periods presented. Certain amounts for prior periods have been reclassified to conform to the financial statement presentation as of and for the three months ended March 31, 2026.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate our estimates, including those related to provisions for transaction and credit losses, income taxes, loss contingencies, revenue recognition, and the evaluation of strategic investments for impairment. We base our estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. Actual results could materially differ from these estimates.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Recently issued accounting guidance

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amended guidance requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the financial statements. In addition, the guidance requires disclosure of selling expenses and its definition. The new guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The guidance can be applied either prospectively or retrospectively. We are evaluating the impact this amended guidance may have on the notes to our condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amended guidance modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when we are required to start capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. We are evaluating the impact this amended guidance may have on our condensed consolidated financial statements.

There are other new accounting pronouncements issued by the FASB that we have adopted or will adopt, as applicable. We do not believe any of these new accounting pronouncements have had, or will have, a material impact on our condensed consolidated financial statements or disclosures.

NOTE 2—REVENUE

We enable our customers to send and receive payments. We earn revenue primarily by completing payment transactions for our customers on our payments platform and from other value added services. Our revenues are classified into two categories: transaction revenues and revenues from other value added services.

We record a contract asset when we have a conditional right to consideration for services we have already transferred to our customer. These contract assets are included in other assets in our condensed consolidated balance sheets and were $231 million and $238 million as of March 31, 2026 and December 31, 2025, respectively.

DISAGGREGATION OF REVENUE

We believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary geographical markets and types of revenue categories (transaction revenues and revenues from other value added services). Revenues recorded within these categories are earned from similar products and services for which the nature of associated fees and the related revenue recognition models are substantially similar.

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following table presents our revenue disaggregated by primary geographical market and category:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Primary geographical markets
U.S.	$	4,882	$	4,463
Other countries(1)	3,471		3,328
Total net revenues(2)	$	8,353	$	7,791

Revenue category
Transaction revenues	$	7,501	$	7,016
Revenues from other value added services	852		775
Total net revenues(2)	$	8,353	$	7,791

(1) No single country included in the other countries category generated more than 10% of total net revenues.

(2) Total net revenues include $473 million and $573 million for the three months ended March 31, 2026 and 2025, respectively, which do not represent revenues recognized in the scope of Accounting Standards Codification Topic 606, Revenue from contracts with customers. Such revenues relate to interest and fees earned on loans and interest receivable, including loans and interest receivable held for sale, hedging gains or losses, and interest earned and gains or losses on certain assets underlying customer balances.

Net revenues are attributed to the country in which the party paying our fee is located.

NOTE 3—NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period. The dilutive effect of outstanding equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares. During periods when we report net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items would decrease the net loss per share.

The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated:


	Three Months Ended March 31,
	2026		2025
	(In millions, except per share amounts)
Numerator:
Net income (loss)	$	1,113	$	1,287
Denominator:
Weighted average shares of common stock - basic	913		986
Dilutive effect of equity incentive awards	7		13
Weighted average shares of common stock - diluted	920		999
Net income (loss) per share:
Basic	$	1.22	$	1.31
Diluted	$	1.21	$	1.29
Common stock equivalents excluded from net income (loss) per diluted share because their effect would have been anti-dilutive or potentially dilutive	21		2

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 4—BUSINESS COMBINATIONS

In the three months ended March 31, 2026, we completed an acquisition with a total purchase price of $134 million, consisting primarily of cash consideration, which was accounted for as a business combination. There were no acquisitions accounted for as business combinations completed in the three months ended March 31, 2025.

NOTE 5—GOODWILL AND INTANGIBLE ASSETS

GOODWILL

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2026:


	December 31, 2025		Goodwill Acquired		Foreign CTA		March 31, 2026
	(In millions)
Total goodwill	$	10,864	$	104	$	(22)	$	10,946

The goodwill acquired during the three months ended March 31, 2026 was associated with one acquisition as described in “Note 4—Business Combinations.”

INTANGIBLE ASSETS

The components of identifiable intangible assets were as follows:


	March 31, 2026						December 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
	(In millions)
Intangible assets(1):
Customer lists and user base	$	377	$	(233)	$	144	$	372	$	(224)	$	148
Marketing related	59		(52)		7		60		(50)		10

Developed technology	23		(3)		20		9		(2)		7
All other	210		(175)		35		208		(165)		43
Intangible assets, net	$	669	$	(463)	$	206	$	649	$	(441)	$	208

(1) Excludes intangible assets which have been fully amortized, but are still in use.

Amortization expense for intangible assets was $32 million and $47 million for the three months ended March 31, 2026 and 2025, respectively.

Expected future intangible asset amortization as of March 31, 2026 was as follows:


Fiscal years:	(In millions)
Remaining 2026	$	77
2027	68
2028	53
2029	2
2030	2
Thereafter	4
Total	$	206

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 6—LEASES

PayPal enters into various leases, which are primarily real estate operating leases. We use these properties for executive and administrative offices, customer services and operations centers, product development offices, and data centers. PayPal also enters into computer equipment finance leases.

While a majority of our lease agreements do not contain an explicit interest rate, certain of our lease agreements are subject to changes based on the Consumer Price Index or another referenced index. In the event of changes to the relevant index, lease liabilities are not remeasured and are instead treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.

The short-term lease exemption has been adopted for all leases with a duration of less than 12 months.

PayPal’s lease portfolio includes a small number of subleases. A sublease situation can arise when currently leased real estate space is available and is surplus to operational requirements.

The components of lease expense were as follows:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Operating lease expense	$	40	$	41
Finance lease expense - amortization of right-of-use (“ROU”) lease assets	4		4





Sublease income	(2)		(2)
Total lease expense, net	$	42	$	43

Supplemental cash flow information related to leases during the three months ended March 31, 2026 and 2025 was as follows:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	45	$	42

Financing cash flows from finance leases	$	2	$	2
ROU lease assets obtained in exchange for operating lease liabilities	$	(5)	$	5

Supplemental balance sheet information related to leases was as follows:


	March 31, 2026						December 31, 2025
	(In millions, except weighted-average figures)
	Operating leases			Finance leases			Operating leases			Finance leases
ROU lease assets	$	499		$	52		$	539		$	56
Current lease liabilities	147			5			148			7
Long-term lease liabilities	505			10			548			10
Total lease liabilities	$	652		$	15		$	696		$	17
Weighted-average remaining lease term	5.3 years			3.1 years			5.4 years			3.4 years
Weighted-average discount rate	5		%	5		%	4		%	5		%

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Future minimum lease payments for our leases as of March 31, 2026 were as follows:


	Operating leases		Finance leases
Fiscal years:	(In millions)
Remaining 2026	$	129	$	6
2027	168		6
2028	114		4
2029	96		—
2030	82		—

Thereafter	150		—
Total	$	739	$	16
Less: present value discount	(87)		(1)
Lease liability	$	652	$	15

Operating lease amounts include minimum lease payments under our non-cancelable operating leases primarily for office and data center facilities. Finance lease amounts include minimum lease payments under our non-cancelable finance leases primarily for computer equipment. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases.

As of March 31, 2026, we have an additional operating lease for an office, which will commence in the second quarter of 2026 or later with minimum lease payments aggregating to $284 million and a lease term of twelve years. As of March 31, 2026, we did not have any additional finance leases which have not yet commenced.

NOTE 7—OTHER FINANCIAL STATEMENT DETAILS

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2026:


	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-sale Debt Securities		Foreign Currency Translation Adjustment (“CTA”)		Net Investment Hedges CTA Gains (Losses)		Estimated Tax (Expense) Benefit		Total
	(In millions)
Beginning balance	$	(110)	$	13	$	(832)	$	313	$	(42)	$	(658)
Other comprehensive income (loss) before reclassifications	104		(5)		(34)		—		(8)		57
Less: Amount of net gains (losses) reclassified from accumulated other comprehensive income (loss) (“AOCI”)	(88)		—		—		—		—		(88)
Net current period other comprehensive income (loss)	192		(5)		(34)		—		(8)		145
Ending balance	$	82	$	8	$	(866)	$	313	$	(50)	$	(513)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2025:


	Unrealized Gains (Losses) on Cash Flow Hedges		Unrealized Gains (Losses) on Available-for-sale Debt Securities		Foreign CTA		Net Investment Hedges CTA Gains (Losses)		Estimated Tax (Expense) Benefit		Total
	(In millions)
Beginning balance	$	147	$	14	$	(949)	$	313	$	(75)	$	(550)
Other comprehensive income (loss) before reclassifications	(143)		(8)		109		—		4		(38)
Less: Amount of net gains (losses) reclassified from AOCI	33		1		—		—		—		34
Net current period other comprehensive income (loss)	(176)		(9)		109		—		4		(72)
Ending balance	$	(29)	$	5	$	(840)	$	313	$	(71)	$	(622)

The following table provides details about reclassifications from AOCI for the periods presented below:


Details about AOCI Components	Amount of Gains (Losses) Reclassified from AOCI				Affected Line Item in the Statements of Income (Loss)
	Three Months Ended March 31,
	2026		2025
	(In millions)
Net gains (losses) on cash flow hedges—foreign exchange contracts	$	(86)	$	35		Net revenues
Net gains (losses) on cash flow hedges—foreign exchange contracts	(1)		(1)			Customer support and operations
Net gains (losses) on cash flow hedges—foreign exchange contracts	(1)		(1)			Technology and development

Net gains (losses) on investments	—		1			Net revenues

	(88)		34			Income before income taxes
	—		—			Income tax expense
Total reclassifications for the period	$	(88)	$	34		Net income (loss)

OTHER INCOME (EXPENSE), NET

The following table reconciles the components of other income (expense), net for the periods presented below:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Interest income	$	107	$	145
Interest expense	(111)		(103)
Net gains (losses) on strategic investments	(101)		48
Other	10		(17)
Other income (expense), net	$	(95)	$	73

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 8—CASH AND CASH EQUIVALENTS, FUNDS RECEIVABLE AND CUSTOMER ACCOUNTS, AND INVESTMENTS

The following table summarizes the assets underlying our cash and cash equivalents, funds receivable and customer accounts, short-term investments, and long-term investments as of March 31, 2026 and December 31, 2025:


	March 31, 2026		December 31, 2025
	(In millions)
Cash and cash equivalents(1)	$	6,977	$	8,049
Funds receivable and customer accounts:
Cash and cash equivalents(2)	$	15,466	$	15,969
Time deposits	77		94
Available-for-sale debt securities	15,827		14,457
Funds receivable	8,131		7,678
Total funds receivable and customer accounts	$	39,501	$	38,198
Short-term investments:
Time deposits	$	79	$	88
Available-for-sale debt securities	2,286		2,285


Total short-term investments	$	2,365	$	2,373
Long-term investments:
Time deposits	$	6	$	5
Available-for-sale debt securities	2,313		2,421

Strategic investments	1,806		1,904
Total long-term investments	$	4,125	$	4,330

(1) Includes $250 million and nil of available-for-sale debt securities with original maturities of three months or less as of March 31, 2026 and December 31, 2025, respectively.

(2) Includes $187 million and $374 million of available-for-sale debt securities with original maturities of three months or less as of March 31, 2026 and December 31, 2025, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of March 31, 2026 and December 31, 2025, the estimated fair value of our available-for-sale debt securities included within cash and cash equivalents, funds receivable and customer accounts, short-term investments, and long-term investments was as follows:


	March 31, 2026(1)
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value





	(In millions)
Cash and cash equivalents:
U.S. government and agency securities	$	250	$	—	$	—	$	250

Funds receivable and customer accounts:
U.S. government and agency securities	4,173		1		—		4,174
Foreign government and agency securities	85		—		—		85
Corporate debt securities	2,411		2		(1)		2,412
Mortgage-backed and asset-backed securities	4,232		9		(4)		4,237
Municipal securities	33		—		—		33
Commercial paper	4,475		1		(1)		4,475
Short-term investments:
U.S. government and agency securities	395		—		—		395
Foreign government and agency securities	110		—		—		110
Corporate debt securities	809		—		(1)		808
Mortgage-backed and asset-backed securities	404		—		(1)		403
Commercial paper	570		—		—		570
Long-term investments:
U.S. government and agency securities	480		—		—		480

Corporate debt securities	542		1		—		543
Mortgage-backed and asset-backed securities	1,288		3		(1)		1,290
Total available-for-sale debt securities(2)	$	20,257	$	17	$	(9)	$	20,265

(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position.

(2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. Refer to “Note 9—Fair Value Measurement of Assets and Liabilities.”

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	December 31, 2025(1)
	Gross Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In millions)




Funds receivable and customer accounts:
U.S. government and agency securities	$	3,529	$	1	$	—	$	3,530
Foreign government and agency securities	81		—		—		81
Corporate debt securities	2,438		4		(1)		2,441
Mortgage-backed and asset-backed securities	3,825		7		(1)		3,831
Municipal securities	98		—		—		98
Commercial paper	4,229		1		—		4,230
Short-term investments:
U.S. government and agency securities	443		—		—		443
Foreign government and agency securities	60		—		—		60
Corporate debt securities	985		1		(2)		984
Mortgage-backed and asset-backed securities	448		—		—		448
Commercial paper	350		—		—		350
Long-term investments:
U.S. government and agency securities	400		—		—		400
Foreign government and agency securities	50		—		—		50
Corporate debt securities	648		2		—		650
Mortgage-backed and asset-backed securities	1,320		2		(1)		1,321
Total available-for-sale debt securities(2)	$	18,904	$	18	$	(5)	$	18,917

(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position.

(2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. Refer to “Note 9—Fair Value Measurement of Assets and Liabilities.”

Gross amortized cost and estimated fair value balances exclude accrued interest receivable on available-for-sale debt securities, which totaled $97 million and $101 million at March 31, 2026 and December 31, 2025, respectively, and were included in other current assets on our condensed consolidated balance sheets.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of March 31, 2026 and December 31, 2025, the gross unrealized losses and estimated fair value of our available-for-sale debt securities included within cash and cash equivalents, funds receivable and customer accounts, short-term investments, and long-term investments for which an allowance for credit losses was not deemed necessary in the current period, aggregated by the length of time those individual securities have been in a continuous loss position, was as follows:


	March 31, 2026(1)
	Less than 12 months				12 months or longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In millions)
Cash and cash equivalents:
U.S. government and agency securities	$	250	$	—	$	—	$	—	$	250	$	—

Funds receivable and customer accounts:
U.S. government and agency securities	2,159		—		15		—		2,174		—
Foreign government and agency securities	49		—		—		—		49		—
Corporate debt securities	1,000		(1)		—		—		1,000		(1)
Mortgage-backed and asset-backed securities	1,661		(4)		57		—		1,718		(4)

Commercial paper	1,999		(1)		—		—		1,999		(1)
Short-term investments:
U.S. government and agency securities	295		—		—		—		295		—
Foreign government and agency securities	25		—		20		—		45		—
Corporate debt securities	233		—		94		(1)		327		(1)
Mortgage-backed and asset-backed securities	247		(1)		53		—		300		(1)
Commercial paper	470		—		—		—		470		—
Long-term investments:
U.S. government and agency securities	210		—		—		—		210		—

Corporate debt securities	235		—		—		—		235		—
Mortgage-backed and asset-backed securities	389		(1)		6		—		395		(1)
Total available-for-sale debt securities	$	9,222	$	(8)	$	245	$	(1)	$	9,467	$	(9)

(1) “—” Denotes gross unrealized loss or fair value of less than $1 million in a given position.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	December 31, 2025(1)
	Less than 12 months				12 months or longer				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In millions)


Funds receivable and customer accounts:
U.S. government and agency securities	$	1,261	$	—	$	50	$	—	$	1,311	$	—
Foreign government and agency securities	56		—		—		—		56		—
Corporate debt securities	309		(1)		—		—		309		(1)
Mortgage-backed and asset-backed securities	1,000		(1)		206		—		1,206		(1)

Commercial paper	1,375		—		—		—		1,375		—
Short-term investments:
U.S. government and agency securities	443		—		—		—		443		—
Foreign government and agency securities	—		—		20		—		20		—
Corporate debt securities	94		(1)		109		(1)		203		(2)
Mortgage-backed and asset-backed securities	354		—		6		—		360		—
Commercial paper	200		—		—		—		200		—
Long-term investments:

Foreign government and agency securities	25		—		—		—		25		—
Corporate debt securities	20		—		—		—		20		—
Mortgage-backed and asset-backed securities	368		(1)		35		—		403		(1)
Total available-for-sale debt securities	$	5,505	$	(4)	$	426	$	(1)	$	5,931	$	(5)

(1) “—” Denotes gross unrealized loss or fair value of less than $1 million in a given position.

Unrealized losses have not been recognized into income as we neither intend to sell, nor anticipate that it is more likely than not that we will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value was due primarily to changes in market interest rates, rather than credit losses. We will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred.

The table below presents cash inflows related to available-for-sale debt securities:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Proceeds from sales and maturities of available-for-sale debt securities	$	5,279	$	5,472

During the three months ended March 31, 2026 and 2025, we incurred gross realized gains and losses which were de minimis. Gross realized gains and losses were determined using the specific identification method.

Our available-for-sale debt securities included within cash and cash equivalents, funds receivable and customer accounts, short-term investments, and long-term investments classified by date of contractual maturity were as follows:


	March 31, 2026
	Amortized Cost		Fair Value
	(In millions)
One year or less	$	10,214	$	10,213
After one year through five years	4,579		4,582
After five years through ten years	2,391		2,387
After ten years	3,073		3,083
Total	$	20,257	$	20,265

Actual maturities may differ from contractual maturities as certain securities may be prepaid.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

STRATEGIC INVESTMENTS

Our strategic investments include marketable equity securities, which are publicly traded, and non-marketable equity securities, which are primarily investments in privately held companies. Our marketable equity securities have readily determinable fair values and are recorded as long-term investments on our condensed consolidated balance sheets at fair value with changes in fair value recorded in other income (expense), net on our condensed consolidated statements of income (loss). Marketable equity securities totaled $106 million and $180 million as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, we held marketable equity securities with a fair value of $94 million with a time-based contractual sale restriction, which is set to expire in May 2026.

Our non-marketable equity securities are recorded as long-term investments on our condensed consolidated balance sheets. The carrying value of our non-marketable equity securities totaled $1.7 billion as of both March 31, 2026 and December 31, 2025. As of both March 31, 2026 and December 31, 2025, we had non-marketable equity securities of $215 million for which we have the ability to exercise significant influence, but not control, over the investee. We account for these equity securities using the equity method of accounting. The remaining non-marketable equity securities do not have a readily determinable fair value and we measure these equity investments at cost minus impairment, if any, and adjust for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer (the “Measurement Alternative”). All gains and losses on these investments, realized and unrealized, and our share of earnings or losses from investments accounted for using the equity method are recognized in other income (expense), net on our condensed consolidated statements of income (loss).

Measurement Alternative adjustments

The adjustments to the carrying value of our non-marketable equity securities accounted for under the Measurement Alternative in the three months ended March 31, 2026 and 2025 were as follows:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Carrying amount, beginning of period	$	1,509	$	1,336
Adjustments related to non-marketable equity securities:
Net additions (reductions)(1)	(1)		22
Gross unrealized gains	45		55
Gross unrealized losses and impairments	(68)		—
Carrying amount, end of period	$	1,485	$	1,413

(1) Net additions (reductions) include purchases, reductions due to sales of securities, and reclassifications when the Measurement Alternative is subsequently elected or no longer applies.

The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses and impairment related to non-marketable equity securities accounted for under the Measurement Alternative held at March 31, 2026 and December 31, 2025, respectively:


	March 31, 2026		December 31, 2025
	(In millions)
Cumulative gross unrealized gains	$	917	$	872
Cumulative gross unrealized losses and impairments	$	(421)	$	(353)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Unrealized gains (losses) on strategic investments, excluding those accounted for using the equity method

The following table summarizes the net unrealized gains (losses) on marketable and non-marketable equity securities, excluding those accounted for using the equity method, held at March 31, 2026 and 2025, respectively:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Net unrealized gains (losses)	$	(97)	$	48

Supplemental cash flow information related to investments

Non-cash investing transactions that were not reflected in the condensed consolidated statement of cash flows for the three months ended March 31, 2026 and 2025 include the purchase of investments of $25 million and $125 million, respectively, that have not yet settled.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 9—FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

FINANCIAL ASSETS AND LIABILITIES MEASURED AND RECORDED AT FAIR VALUE ON A RECURRING BASIS

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:


	March 31, 2026		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents(1)
U.S. government and agency securities	$	250	$	—	$	250

Money market fund	48		48		—
Total cash and cash equivalents	298		48		250
Short-term investments(2):

U.S. government and agency securities	395		—		395
Foreign government and agency securities	110		—		110
Corporate debt securities	808		—		808
Mortgage-backed and asset-backed securities	403		—		403
Commercial paper	570		—		570

Total short-term investments	2,286		—		2,286
Funds receivable and customer accounts(3):
U.S. government and agency securities	4,174		—		4,174
Foreign government and agency securities	298		—		298
Corporate debt securities	2,763		—		2,763
Mortgage-backed and asset-backed securities	4,237		—		4,237
Municipal securities	33		—		33
Commercial paper	4,509		—		4,509
Total funds receivable and customer accounts	16,014		—		16,014
Derivatives(4)	188		—		188

Long-term investments(2),(5):
U.S. government and agency securities	480		—		480

Corporate debt securities	543		—		543
Mortgage-backed and asset-backed securities	1,290		—		1,290
Marketable equity securities	106		106		—
Total long-term investments	2,419		106		2,313
Total financial assets	$	21,205	$	154	$	21,051
Liabilities:
Derivatives(4)	$	60	$	—	$	60

(1) Excludes cash and cash equivalents of $6.7 billion not measured and recorded at fair value.

(2) Excludes time deposits of $85 million not measured and recorded at fair value.

(3) Excludes cash, time deposits, and funds receivable of $23.5 billion underlying funds receivable and customer accounts not measured and recorded at fair value.

(4) Derivative assets and liabilities are included within “prepaid expenses and other current assets” and “other assets” and “accrued expenses and other current liabilities” and “other long-term liabilities,” respectively, on our condensed consolidated balance sheets.

(5) Excludes non-marketable equity securities of $1.7 billion measured using the Measurement Alternative or equity method accounting.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


	December 31, 2025		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
	(In millions)
Assets:
Cash and cash equivalents(1)


Money market fund	$	4	$	4	$	—

Short-term investments(2):
U.S. government and agency securities	443		—		443
Foreign government and agency securities	60		—		60
Corporate debt securities	984		—		984
Mortgage-backed and asset-backed securities	448		—		448
Commercial paper	350		—		350
Total short-term investments	2,285		—		2,285
Funds receivable and customer accounts(3):
U.S. government and agency securities	3,530		—		3,530
Foreign government and agency securities	371		—		371
Corporate debt securities	2,736		—		2,736
Mortgage-backed and asset-backed securities	3,831		—		3,831
Municipal securities	98		—		98
Commercial paper	4,265		—		4,265
Total funds receivable and customer accounts	14,831		—		14,831
Derivatives(4)	20		—		20

Long-term investments(2), (5):
U.S. government and agency securities	400		—		400
Foreign government and agency securities	50		—		50
Corporate debt securities	650		—		650
Mortgage-backed and asset-backed securities	1,321		—		1,321
Marketable equity securities	180		180		—
Total long-term investments	2,601		180		2,421
Total financial assets	$	19,741	$	184	$	19,557
Liabilities:
Derivatives(4)	$	158	$	—	$	158

(1) Excludes cash and cash equivalents of $8.0 billion not measured and recorded at fair value.

(2) Excludes time deposits of $93 million not measured and recorded at fair value.

(3) Excludes cash, time deposits, and funds receivable of $23.4 billion underlying funds receivable and customer accounts not measured and recorded at fair value.

(5) Excludes non-marketable equity securities of $1.7 billion measured using the Measurement Alternative or equity method accounting.

Our financial assets classified within Level 1 are valued using quoted prices for identical assets in active markets. All other financial assets and liabilities are valued using quoted prices for identical instruments in less active markets, readily available pricing sources for comparable instruments, or models using market observable inputs (Level 2).

A majority of our derivative instruments are valued using pricing models that take into account the contractual terms as well as multiple observable inputs where applicable, such as currency rates, interest rate yield curves, option volatility, and equity prices (Level 2).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of March 31, 2026 and December 31, 2025, we did not have any assets or liabilities requiring measurement at fair value on a recurring basis with significant unobservable inputs that would require a high level of judgment to determine fair value (Level 3).

We elect to account for available-for-sale debt securities denominated in currencies other than the functional currency of our subsidiaries under the fair value option. Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the condensed consolidated statements of income (loss) to significantly reduce the accounting asymmetry that would otherwise arise when recognizing the corresponding foreign exchange gains and losses relating to customer liabilities. The following table summarizes the estimated fair value and amortized cost of our available-for-sale debt securities under the fair value option as of March 31, 2026 and December 31, 2025:


	March 31, 2026				December 31, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In millions)
Funds receivable and customer accounts	$	600	$	598	$	621	$	620

The following table summarizes the gains (losses) from fair value changes recognized in other income (expense), net related to the available-for-sale debt securities under the fair value option for the three months ended March 31, 2026 and 2025:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Funds receivable and customer accounts	$	(15)	$	31

ASSETS MEASURED AND RECORDED AT FAIR VALUE ON A NON-RECURRING BASIS

The following tables summarize our assets held as of March 31, 2026 and December 31, 2025 for which a non-recurring fair value measurement was recorded during the three months ended March 31, 2026 and the year ended December 31, 2025, respectively:


	March 31, 2026		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In millions)
Loans and interest receivable, held for sale	$	1,287	$	1,233	$	54
Non-marketable equity securities measured using the Measurement Alternative(1)	208		117		91

Total	$	1,495	$	1,350	$	145

(1) Excludes non-marketable equity securities of $1.3 billion accounted for under the Measurement Alternative for which no observable price changes occurred during the three months ended March 31, 2026.


	December 31, 2025		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
	(In millions)
Loans and interest receivable, held for sale	$	1,223	$	1,182	$	41
Non-marketable equity securities measured using the Measurement Alternative(1)	690		679		11

Total	$	1,913	$	1,861	$	52

(1) Excludes non-marketable equity securities of $819 million accounted for under the Measurement Alternative for which no observable price changes occurred during the year ended December 31, 2025.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

We measure loans and interest receivable, held for sale that are comparable to loans receivable sold to third-party investors using observable inputs, such as the most recent executed prices. These loans and interest receivable, held for sale are classified within Level 2 in the fair value hierarchy. Certain loans and interest receivable, held for sale are valued using significant unobservable inputs, such as adjustments to recently executed prices. These loans and interest receivable, held for sale are classified within Level 3 in the fair value hierarchy. Refer to “Note 11—Loans and Interest Receivable” for additional information on loans and interest receivable, held for sale.

We measure the non-marketable equity securities accounted for under the Measurement Alternative at cost minus impairment, if any, adjusted for observable price changes in orderly transactions for an identical or similar investment in the same issuer. Non-marketable equity securities that have been remeasured during the period based on observable price changes are classified within Level 2 in the fair value hierarchy because we estimate the fair value based on valuation methods which only include significant inputs that are observable, such as the observable transaction price at the transaction date. The fair value of non-marketable equity securities are classified within Level 3 when we estimate fair value using significant unobservable inputs, such as when we remeasure due to impairment and use discount rates, forecasted cash flows, and market data of comparable companies, among others.

FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AND RECORDED AT FAIR VALUE

Our financial instruments, including cash, PayPal USD stablecoin (“PYUSD”), time deposits, certain loans and interest receivable, held for sale, loans and interest receivable, net, notes receivable, commercial paper, and debt related to borrowings on our credit facilities are carried at amortized cost, which approximates their fair value. Our term debt (including current portion) had a carrying value of approximately $10.8 billion and fair value of approximately $10.1 billion as of March 31, 2026. Our term debt (including current portion) had a carrying value of approximately $10.8 billion and fair value of approximately $10.3 billion as of December 31, 2025. If these financial instruments were measured at fair value in the financial statements, cash and PYUSD would be classified as Level 1; time deposits, certain loans and interest receivable, held for sale, commercial paper, and term debt (including current portion) would be classified as Level 2; and the remaining financial instruments would be classified as Level 3 in the fair value hierarchy.

NOTE 10—DERIVATIVE INSTRUMENTS

SUMMARY OF DERIVATIVE INSTRUMENTS

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign exchange rates. Our derivatives expose us to credit risk to the extent that our counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions and by entering into collateral security arrangements. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. We do not use any derivative instruments for trading or speculative purposes.

Cash flow hedges

We have significant international revenues and expenses denominated in foreign currencies, which subjects us to foreign exchange risk. We have a foreign currency exposure management program in which we designate certain foreign exchange contracts, generally with maturities of 12 months or less, to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in certain foreign currencies. The objective of these foreign exchange contracts is to help mitigate the risk that the U.S. dollar-equivalent cash flows are adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. These derivative instruments are designated as cash flow hedges and accordingly, the derivative’s gain or loss is initially reported as a component of AOCI and subsequently reclassified into revenue or the applicable expense line item in the condensed consolidated statements of income (loss) in the same period the forecasted transaction affects earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis by comparing the critical terms of the derivative instruments with the critical terms of the forecasted cash flows of the hedged item; if the critical terms are the same, we conclude the hedge will be perfectly effective. We do not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. We report cash flows arising from derivative instruments consistent with the classification of cash flows from the underlying items that these derivatives are hedging. Accordingly, the cash flows associated with derivatives designated as cash flow hedges are classified in cash flows from operating activities on our condensed consolidated statements of cash flows.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

As of March 31, 2026, we estimated that $82 million of net derivative gains related to our cash flow hedges included in AOCI are expected to be reclassified into earnings within the next 12 months. During the three months ended March 31, 2026 and 2025, we did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction. If we elect to discontinue our cash flow hedges and it is probable that the original forecasted transaction will occur, we will continue to report the derivative’s gain or loss in AOCI until the forecasted transaction affects earnings, at which point we will also reclassify it into earnings. Gains and losses on derivatives held after we discontinue our cash flow hedges and on derivative instruments that are not designated as cash flow hedges are recorded in the same financial statement line to which the derivative relates.

Net investment hedges

Prior to 2025, we used foreign exchange contracts to reduce the foreign exchange risk related to our investment in certain foreign subsidiaries. These derivatives were designated as net investment hedges and accordingly, the gains and losses on the portion of the derivatives included in the assessment of hedge effectiveness were recorded in AOCI as part of foreign currency translation. We excluded forward points from the assessment of hedge effectiveness and recognized them in other income (expense), net on a straight-line basis over the life of the hedge. The accumulated gains and losses associated with these instruments will remain in AOCI until the foreign subsidiaries are sold or substantially liquidated, at which point they will be reclassified into earnings. The cash flows associated with derivatives designated as a net investment hedge are classified in cash flows from investing activities on our condensed consolidated statements of cash flows.

We have not reclassified any gains or losses related to net investment hedges from AOCI into earnings for any of the periods presented.

Foreign exchange contracts not designated as hedging instruments

We have a foreign currency exposure management program in which we use foreign exchange contracts to offset the foreign exchange risk of our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts are not designated as hedging instruments and reduce, but do not entirely eliminate, the impact of foreign exchange rate movements on our assets and liabilities. The gains and losses due to remeasurement of certain foreign currency denominated monetary assets and liabilities are recorded in other income (expense), net, which are offset by the gains and losses on these foreign exchange contracts. The cash flows associated with our non-designated derivatives used to hedge foreign currency denominated monetary assets and liabilities are classified in cash flows from operating activities on our condensed consolidated statements of cash flows.

FAIR VALUE OF DERIVATIVE CONTRACTS

The fair value of our outstanding derivative instruments as of March 31, 2026 and December 31, 2025 was as follows:


	Balance Sheet Location	March 31, 2026		December 31, 2025
		(In millions)
Derivative Assets:
Foreign exchange contracts designated as hedging instruments	Other current assets	$	107	$	7

Foreign exchange contracts not designated as hedging instruments	Other current assets	81		13
Total derivative assets		$	188	$	20

Derivative Liabilities:
Foreign exchange contracts designated as hedging instruments	Other current liabilities	$	25	$	118

Foreign exchange contracts not designated as hedging instruments	Other current liabilities	35		40
Total derivative liabilities		$	60	$	158

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

EFFECT OF DERIVATIVE CONTRACTS ON CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide the location in the condensed consolidated statements of income (loss) and amount of recognized gains or losses related to our derivative instruments:


	Three Months Ended March 31,
	2026
	(In millions)
	Net revenues		Customer support and operations		Technology and development		Other income (expense), net
Total amounts presented in the condensed consolidated statements of income (loss) in which the effects of cash flow hedges are recorded	$	8,353	$	446	$	793	$	(95)

Gains (losses) on derivatives in cash flow hedging relationship:
Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI	(86)		(1)		(1)		—


Gains (losses) on derivatives not designated as hedging instruments:
Amount of net gains (losses) on foreign exchange contracts	—		—		—		53

Total net gains (losses)	$	(86)	$	(1)	$	(1)	$	53


	Three Months Ended March 31,
	2025
	(In millions)
	Net revenues		Customer support and operations		Technology and development		Other income (expense), net
Total amounts presented in the condensed consolidated statements of income (loss) in which the effects of cash flow hedges are recorded	$	7,791	$	398	$	731	$	73

Gains (losses) on derivatives in cash flow hedging relationship:
Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI	35		(1)		(1)		—


Gains (losses) on derivatives not designated as hedging instruments:
Amount of net gains (losses) on foreign exchange contracts	—		—		—		(83)

Total net gains (losses)	$	35	$	(1)	$	(1)	$	(83)

The following table provides the amount of pre-tax unrealized gains or losses included in the assessment of hedge effectiveness related to our derivative instruments designated as hedging instruments that are recognized in other comprehensive income (loss):


	Three Months Ended March 31,
	2026		2025
	(In millions)
Unrealized net gains (losses) on foreign exchange contracts designated as cash flow hedges	$	104	$	(143)

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTIONAL AMOUNTS OF DERIVATIVE CONTRACTS

Derivative transactions are measured in terms of the notional amount; however, this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the derivative instruments. The notional amount is generally not exchanged, and used only as the underlying basis on which the value of foreign currency exchange payments under these contracts is determined. The following table provides the notional amounts of our outstanding derivative instruments:


	March 31, 2026		December 31, 2025
	(In millions)
Foreign exchange contracts designated as hedging instruments	$	7,469	$	5,878
Foreign exchange contracts not designated as hedging instruments	8,628		11,932
Total	$	16,097	$	17,810

MASTER NETTING AGREEMENTS - RIGHTS OF SET-OFF

Under master netting agreements with certain counterparties to our derivative contracts, repurchase agreements, and reverse repurchase agreements, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. PayPal has not elected to offset for balance sheet presentation and we present the derivative assets, derivative liabilities, repurchase agreements and reverse repurchase agreements on a gross basis on our condensed consolidated balance sheets.

We have entered into collateral security arrangements with certain counterparties that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. Receivables related to cash collateral posted and payables related to cash collateral received are recognized in other current assets and other current liabilities, respectively, on our condensed consolidated balance sheets.

The following tables present the derivative assets and derivative liabilities not offset on the condensed consolidated balance sheets but available for offset in the event of default. The tables also present the cash and non-cash collateral received or pledged relating to these positions. The amount of collateral presented is limited to the amount presented on our condensed consolidated balance sheets; therefore, instances of over-collateralization are excluded from the table below.


			Amounts Not Offset on the Condensed Consolidated Balance Sheets
	Amounts Presented on the Condensed Consolidated Balance Sheets		Financial Instruments(1)		Collateral Received(2)		Net Amounts
	(In millions)
As of March 31, 2026
Derivative assets(3)	$	188	$	25	$	107	$	56


As of December 31, 2025
Derivative assets(3)	$	20	$	13	$	2	$	5

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


			Amounts Not Offset on the Condensed Consolidated Balance Sheets
	Amounts Presented on the Condensed Consolidated Balance Sheets		Financial Instruments(1)		Collateral Pledged(2)		Net Amounts
	(In millions)
As of March 31, 2026
Derivative liabilities(3)	$	60	$	25	$	24	$	11


As of December 31, 2025
Derivative liabilities(3)	$	158	$	13	$	122	$	23

(1) For derivative positions, this includes any derivative fair value that could be offset in the event of counterparty default.

(2) Includes cash and the fair value of securities exchanged with the counterparty.

(3) We received cash collateral from derivative counterparties totaling $110 million and $2 million as of March 31, 2026 and December 31, 2025, respectively, and securities from derivative counterparties with a fair value of $61 million and $90 million as of March 31, 2026 and December 31, 2025, respectively. We posted $46 million and $156 million of cash collateral as of March 31, 2026 and December 31, 2025, respectively, and securities to derivative counterparties with a fair value of $77 million and $91 million as of March 31, 2026 and December 31, 2025, respectively.

NOTE 11—LOANS AND INTEREST RECEIVABLE

LOANS AND INTEREST RECEIVABLE, HELD FOR SALE

As of March 31, 2026 and December 31, 2025, loans and interest receivable, held for sale was $1.8 billion and $1.7 billion, respectively, and include both loans reclassified to held for sale and loans originated as held for sale. During the three months ended March 31, 2026, we derecognized loans with an unpaid balance of $7.5 billion and had net proceeds of $7.4 billion from loans and interest receivable sold. During the three months ended March 31, 2025, we derecognized loans with both an unpaid balance and net proceeds of $5.3 billion from loans and interest receivable sold.

LOANS AND INTEREST RECEIVABLE, NET

Consumer receivables

We offer revolving and installment credit products as a funding option for consumers in certain checkout transactions on our payments platform. Our revolving credit product consists of PayPal Credit in the United Kingdom (“U.K.”), which is made available to consumers as a funding source in their PayPal wallet once they are approved for credit. Additionally, we offer installment credit products at the time of checkout in various markets, including the U.S., several markets across Europe, Australia, and Japan. We offer non interest-bearing installment credit products in these markets as well as interest-bearing installment credit products in the U.S. and Germany, among other markets. We purchase receivables related to interest-bearing installment loans extended to U.S. consumers by an independent chartered financial institution (“partner institution”) and are responsible for the servicing functions related to that portfolio. During the three months ended March 31, 2026 and 2025, we purchased approximately $369 million and $277 million in consumer receivables, respectively. As of March 31, 2026 and December 31, 2025, the outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $5.4 billion and $5.5 billion, respectively, net of the participation interest sold to the partner institution of $33 million for both March 31, 2026 and December 31, 2025.

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Consumer receivables delinquency and allowance

The following tables present the delinquency status and gross charge-offs of revolving and installment loans and interest receivable by year of origination, as applicable. The amounts are based on the number of days past the billing date for revolving loans or contractual repayment date for installment loans. The “current” category represents balances that are within 29 days of the billing date or contractual repayment date, as applicable.


March 31, 2026
(In millions, except percentages)

	Revolving Loans Amortized Cost Basis		Installment Loans Amortized Cost Basis
			2026		2025		2024		2023		2022		Total		Percent
Consumer loans and interest receivable:
Current	$	2,692	$	1,078	$	1,091	$	280	$	74	$	—	$	5,215	96.3%
30 - 59 Days	28		15		19		4		1		—		67		1.2%
60 - 89 Days	21		—		21		3		1		—		46		0.9%
90 - 179 Days	40		—		40		4		2		—		86		1.6%
Total	$	2,781	$	1,093	$	1,171	$	291	$	78	$	—	$	5,414	100%
Gross charge-offs for the three months ended March 31, 2026	$	35	$	—	$	33	$	3	$	—	$	—	$	71


December 31, 2025
(In millions, except percentages)

	Revolving Loans Amortized Cost Basis		Installment Loans Amortized Cost Basis
			2025		2024		2023		2022		2021		Total		Percent
Consumer loans and interest receivable:
Current	$	2,767	$	2,043	$	360	$	114	$	—	$	—	$	5,284	96.4%
30 - 59 Days	29		34		5		2		—		—		70		1.3%
60 - 89 Days	19		22		4		2		—		—		47		0.9%
90 - 179 Days	39		31		6		2		—		—		78		1.4%
Total	$	2,854	$	2,130	$	375	$	120	$	—	$	—	$	5,479	100%
Gross charge-offs for the year ended December 31, 2025	$	136	$	36	$	107	$	20	$	1	$	—	$	300

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The following table summarizes the activity in the allowance for consumer loans and interest receivable for the three months ended March 31, 2026 and 2025:


	March 31, 2026						March 31, 2025
	Consumer Loans Receivable		Interest Receivable		Total Allowance		Consumer Loans Receivable		Interest Receivable		Total Allowance
	(In millions)
Beginning balance	$	366	$	3	$	369	$	341	$	7	$	348

Provisions	55		3		58		55		3		58
Charge-offs	(68)		(3)		(71)		(71)		(5)		(76)
Recoveries	26		—		26		12		—		12
Other(1)	(6)		—		(6)		10		—		10
Ending balance	$	373	$	3	$	376	$	347	$	5	$	352

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at March 31, 2026 for our consumer receivable portfolio remained relatively consistent with the allowance for credit losses at December 31, 2025. In the first quarter of 2026, we updated our expected credit loss model for interest bearing installment loans in the U.S. to reflect current risk characteristics. This change did not have a material impact on our allowance for credit losses in the period.

Merchant receivables

We offer access to merchant finance products for certain small and medium-sized businesses through our PayPal Working Capital (“PPWC”) product in the U.S., Germany, and U.K., among other markets, and our PayPal Business Loan (“PPBL”) product in the U.S., which we collectively refer to as our merchant finance offerings. We purchase receivables related to credit extended to U.S. merchants by a partner institution and are responsible for the servicing functions related to that portfolio. During the three months ended March 31, 2026 and 2025, we purchased approximately $570 million and $494 million in merchant receivables, respectively. As of March 31, 2026 and December 31, 2025, the total outstanding balance in our pool of merchant loans, advances, and fees receivable was $1.9 billion and $1.8 billion, respectively, net of the participation interest sold to the partner institution of $66 million and $65 million, respectively.

Merchant receivables delinquency and allowance

The following tables present the delinquency status and gross charge-offs of merchant loans, advances, and fees receivable by year of origination. The amounts are based on the number of days past the expected or contractual repayment date for amounts outstanding. The “current” category represents balances that are within 29 days of the expected repayment date or contractual repayment date, as applicable.


March 31, 2026
(In millions, except percentages)
	2026		2025		2024		2023		2022		Total		Percent
Merchant loans, advances, and fees receivable:
Current	$	818	$	803	$	26	$	3	$	4	$	1,654	89.4%
30 - 59 Days	10		57		13		1		—		81		4.4%
60 - 89 Days	2		32		8		1		—		43		2.3%
90 - 179 Days	—		50		11		2		—		63		3.4%
180+ Days	—		4		5		1		—		10		0.5%
Total	$	830	$	946	$	63	$	8	$	4	$	1,851	100.0%
Gross charge-offs for the three months ended March 31, 2026	$	—	$	25	$	13	$	2	$	—	$	40

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)


December 31, 2025
(In millions, except percentages)
	2025		2024		2023		2022		2021		Prior		Total		Percent
Merchant loans, advances, and fees receivable:
Current	$	1,558	$	53	$	5	$	3	$	—	$	2	$	1,621	89.8%
30 - 59 Days	63		17		1		1		—		—		82		4.5%
60 - 89 Days	27		10		1		1		—		—		39		2.2%
90 - 179 Days	34		18		2		1		—		—		55		3.0%
180+ Days	2		5		2		—		—		—		9		0.5%
Total	$	1,684	$	103	$	11	$	6	$	—	$	2	$	1,806	100%
Gross charge-offs for the year ended December 31, 2025	$	25	$	87	$	19	$	4	$	—	$	2	$	137

The following table summarizes the activity in the allowance for merchant loans, advances, and fees receivable for the three months ended March 31, 2026 and 2025:


	March 31, 2026						March 31, 2025
	Merchant Loans and Advances		Fees Receivable		Total Allowance		Merchant Loans and Advances		Fees Receivable		Total Allowance
	(In millions)
Beginning balance	$	156	$	14	$	170	$	107	$	6	$	113
Provisions	47		4		51		38		3		41
Charge-offs	(37)		(3)		(40)		(23)		(2)		(25)
Recoveries	4		—		4		6		—		6
Other(1)	(1)		—		(1)		—		—		—
Ending balance	$	169	$	15	$	184	$	128	$	7	$	135

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at March 31, 2026 for our merchant receivable portfolio remained relatively consistent with the allowance for credit losses at December 31, 2025.

1Q 2026 FORM 10-Q

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PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

NOTE 12—DEBT

NOTES

The following table summarizes total long-term debt:


	Maturities	Effective Interest Rate	March 31, 2026	December 31, 2025
			(in millions)

September 2019 debt issuance:


Fixed-rate 2.650% notes	10/1/2026	2.78%		$	1,250	$	1,250
Fixed-rate 2.850% notes	10/1/2029	2.96%		1,500		1,500

PayPal Holdings, Inc. 10-Q