TLDRs;
- PayPal shares tumble 20% after missing Q4 revenue and earnings expectations.
- Online checkout growth slows to 1%, highlighting challenges in high-margin business.
- CEO Alex Chriss replaced by HP’s Enrique Lores, signaling focus on steady management.
- PayPal shifts to dividends and buybacks, prioritizing shareholder returns over risky growth.
PayPal Holdings Inc. saw its stock plummet nearly 20% following the release of disappointing fourth-quarter results and a sudden CEO change. The fintech giant reported Q4 revenue of $8.7 billion and earnings per share of $1.23, both falling short of Wall Street expectations.
Investors reacted sharply as the company also announced that Enrique Lores, CEO of HP Inc., will take over from Alex Chriss on March 1. Chriss, who was appointed in 2023 to lead a turnaround, had concentrated on improving profits and enhancing the checkout experience. However, his efforts failed to meet targets, prompting the board to seek new leadership.
Jamie Miller, PayPal’s interim CEO and current chief financial and operating officer, acknowledged that the company “had not moved fast enough” to adapt to market pressures, highlighting the urgency behind the leadership change.
Slowing Checkout Growth Raises Concerns
One of the key drivers of PayPal’s slowdown has been the deceleration in online checkout growth. In Q4, branded checkout usage expanded by just 1%, down sharply from 6% growth in the same period a year earlier. This high-margin business line, crucial to PayPal’s long-term profitability, is facing headwinds in an increasingly competitive digital payments market.
Analysts have also lowered expectations for the coming year. PayPal projects that full-year 2026 adjusted profit could see a low-single-digit percentage decline or a small gain, compared with Wall Street forecasts of roughly 8% growth. The subdued outlook underscores the challenges facing the company as the fintech sector matures and competition intensifies.
New CEO Brings Hardware Expertise
Enrique Lores, who has guided HP through multiple industry challenges, is tasked with steering PayPal through this difficult phase. At HP, Lores delivered six consecutive quarters of revenue growth despite broader market pressures, though the company’s stock dropped 36% over the past year.
$PYPL PayPal down 16.5% pre-market after announcing that CEO, Alex Chriss, will be stepping down after just two years on the job.
The company also announced Q4 results, where EPS and Revenue came in below analyst estimates. pic.twitter.com/HLaAnmPFNI
— Koyfin (@KoyfinCharts) February 3, 2026
PayPal’s board highlighted that the decision to replace Chriss was driven by the need for faster execution and consistent follow-through on strategic initiatives. Bringing in a hardware-focused CEO over a fintech specialist signals the board’s prioritization of operational discipline and steady management over ambitious transformation plans.
Shift Toward Shareholder Returns
Beyond leadership changes, PayPal is signaling a strategic pivot toward shareholder-friendly policies. The company recently announced its first dividend and approved a $6 billion stock buyback program. This mirrors a broader trend among mature tech companies, where the emphasis is shifting from aggressive growth to cost control, cash returns, and disciplined capital allocation.
This strategy is increasingly common among legacy technology firms facing saturated markets and slowing growth. By focusing on steady operations and shareholder value, PayPal is aiming to weather the current fintech slowdown while maintaining a strong financial foundation for the future.
PayPal’s recent challenges highlight the evolving landscape for first-generation fintech giants. With growth slowing, leadership changes, and a renewed emphasis on shareholder returns, the company is positioning itself for a more cautious and disciplined phase, reflecting the realities of a competitive and maturing digital payments market.
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