What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-07-29 compared with 2025-04-29 · 379 added, 231 removed, 1136 unchanged (35% of the section changed)

9 unchanged sentences

Loans and interest receivable, held for sale 817 541

Loans and interest receivable, net of allowances of $ 487 and $ 461 as of March 31, 2025 and December 31, 2024, respectively

Loans and interest receivable, net of allowances of $ 524 and $ 461 as of June 30, 2025 and December 31, 2024, respectively

Funds receivable and customer accounts 38,923 37,671

19 unchanged sentences

4,000 shares authorized;

979 and 993 shares outstanding as of March 31, 2025 and December 31, 2024, respectively

960 and 993 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

Preferred stock, $ 0.0001 par value;

100 shares authorized, unissued

Treasury stock at cost, 356 and 337 shares as of March 31, 2025 and December 31, 2024, respectively

Treasury stock at cost, 378 and 337 shares as of June 30, 2025 and December 31, 2024, respectively

( 30,111 ) ( 27,085 )

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions, except per share amounts)

23 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

1 unchanged sentence

Other comprehensive income (loss), net of reclassification adjustments:

Foreign currency translation adjustments (“CTA”) 102 ( 143 )

Foreign currency translation adjustments (“CTA”), net

162 ( 126 ) 289 ( 287 )

Tax (expense) benefit on foreign CTA, net

( 34 ) 1 ( 59 ) 19

Net investment hedges CTA gains, net

Tax expense on net investment hedges CTA gains, net

— ( 24 ) — ( 47 )

Unrealized (losses) gains on cash flow hedges, net

( 248 ) 3 ( 424 ) 99

Tax benefit (expense) on unrealized (losses) gains on cash flow hedges, net

11 — 20 ( 5 )

Unrealized (losses) gains on available-for-sale debt securities, net

( 11 ) 15 ( 20 ) 98

Tax benefit (expense) on unrealized (losses) gains on available-for-sale debt securities, net

3 ( 3 ) 5 ( 23 )

Other comprehensive income (loss), net of tax ( 117 ) ( 34 ) ( 189 ) 53

10 unchanged sentences

Net income — — — — 1,287 1,287

Foreign CTA — — — 102 — 102

Foreign CTA, net

— — — 127 — 127

Tax expense on foreign CTA, net

— — — ( 25 ) — ( 25 )

Unrealized losses on cash flow hedges, net

5 unchanged sentences

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 )

1 unchanged sentence

Balances at March 31, 2025 979 $ ( 28,597 ) $ 20,819 $ ( 622 ) $ 28,654 $ 20,254

Net income — — — — 1,261 1,261

Foreign CTA, net

— — — 162 — 162

Tax expense on foreign CTA, net

— — — ( 34 ) — ( 34 )

Unrealized losses on cash flow hedges, net

— — — ( 248 ) — ( 248 )

Tax benefit on unrealized losses on cash flow hedges, net

— — — 11 — 11

Unrealized losses on available-for-sale debt securities, net

— — — ( 11 ) — ( 11 )

Tax benefit on unrealized losses on available-for-sale debt securities, net

Common stock and stock-based awards issued, net of shares withheld for employee taxes 3 — ( 2 ) — — ( 2 )

Common stock repurchased ( 22 ) ( 1,514 ) — — — ( 1,514 )

Stock-based compensation — — 319 — — 319

Balances at June 30, 2025 960 $ ( 30,111 ) $ 21,136 $ ( 739 ) $ 29,915 $ 20,201

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—(continued)

Common Stock Shares Treasury Stock Additional Paid-In Capital Accumulated Other

3 unchanged sentences

Net income — — — — 888 888

Foreign CTA — — — ( 143 ) — ( 143 )

Foreign CTA, net

— — — ( 161 ) — ( 161 )

Tax benefit on foreign CTA, net

— — — 18 — 18

Net investment hedges CTA gains, net

— — — 99 — 99

Tax expense on net investment hedges CTA gains, net

— — — ( 23 ) — ( 23 )

Unrealized gains on cash flow hedges, net

— — — 96 — 96

Tax expense on unrealized gains on cash flow hedges, net

— — — ( 5 ) — ( 5 )

Unrealized gains on available-for-sale-debt securities, net

— — — 83 — 83

Tax expense on unrealized gains on available-for-sale-debt securities, net

— — — ( 20 ) — ( 20 )

Common stock and stock-based awards issued, net of shares withheld for employee taxes

6 — ( 193 ) — — ( 193 )

Common stock repurchased ( 25 ) ( 1,511 ) — — — ( 1,511 )

2 unchanged sentences

Balances at March 31, 2024 1,053 $ ( 22,552 ) $ 19,825 $ ( 659 ) $ 24,088 $ 20,702

Net income — — — — 1,128 1,128

Foreign CTA, net

— — — ( 126 ) — ( 126 )

Tax benefit on foreign CTA, net

Net investment hedges CTA gains, net — — — 100 — 100

Tax expense on net investment hedges CTA gains, net — — — ( 24 ) — ( 24 )

Unrealized gains on cash flow hedges, net — — — 3 — 3

Unrealized gains on available-for-sale debt securities, net — — — 15 — 15

Tax expense on unrealized gains on available-for-sale debt securities, net — — — ( 3 ) — ( 3 )

Common stock and stock-based awards issued, net of shares withheld for employee taxes 3 — 13 — — 13

Common stock repurchased ( 24 ) ( 1,516 ) — — — ( 1,516 )

Treasury stock reissuance — 4 — — — 4

Stock-based compensation — — 325 — — 325

Balances at June 30, 2024 1,032 $ ( 24,064 ) $ 20,163 $ ( 693 ) $ 25,216 $ 20,622

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(In millions)

29 unchanged sentences

Other ( 15 ) —

Net cash (used in) provided by investing activities

Net cash used in investing activities

( 3,677 ) ( 3,567 )

2 unchanged sentences

Repayments of repurchase agreements ( 405 ) ( 190 )

Proceeds from issuance of common stock 74 55

Purchases of treasury stock ( 3,051 ) ( 3,002 )

5 unchanged sentences

Other ( 6 ) ( 20 )

Net cash provided by (used in) financing activities

Net cash used in financing activities

( 2,180 ) ( 2,162 )

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(continued)

Three Months Ended March 31,

Six Months Ended June 30,

(In millions)

27 unchanged sentences

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, 2025 and December 31, 2024, no VIEs qualified for consolidation as the structures of these entities do not provide us with the ability to direct activities that would significantly impact their economic performance.

As of March 31, 2025 and December 31, 2024, the carrying value of our investments in nonconsolidated VIEs was $ 190 million and $ 187 million, respectively, and is included as non-marketable equity securities applying the equity method of accounting in long-term investments on our condensed consolidated balance sheets.

As of June 30, 2025 and December 31, 2024, no VIEs qualified for consolidation as the structures of these entities do not provide us with the ability to direct activities that would significantly impact their economic performance.

As of June 30, 2025 and December 31, 2024, the carrying value of our investments in nonconsolidated VIEs was $ 190 million and $ 187 million, respectively, and is included as non-marketable equity securities applying the equity method of accounting in long-term investments on our condensed consolidated balance sheets.

The investments in nonconsolidated VIEs are primarily investments in funds that are limited partnerships or similar structures which are focused on increasing access to capital for underserved communities.

Our maximum exposure to loss related to our nonconsolidated VIEs, which represents funded commitments and any future funding commitments, was $ 246 million as of both March 31, 2025 and December 31, 2024.

Our maximum exposure to loss related to our nonconsolidated VIEs, which represents funded commitments and any future funding commitments, was $ 246 million as of both June 30, 2025 and December 31, 2024.

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, 2024 (the “2024 Form 10-K”) filed with the United States (“U.S.”) Securities and Exchange Commission (“SEC”) on February 4, 2025.

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, 2025.

Certain amounts for prior periods have been reclassified to conform to the financial statement presentation as of and for the three and six months ended June 30, 2025.

Use of estimates

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cash and cash equivalents

Cash and cash equivalents are short-term, highly liquid investments and are primarily comprised of bank deposits, PayPal USD stablecoin (“PYUSD”), money market funds and debt securities with original maturities of three months or less when purchased.

PYUSD is a stablecoin pegged to the U.S.

dollar and fully backed by U.S.

dollar deposits, U.S.

treasuries, and similar cash equivalents.

Each token of PYUSD held by PayPal represents a contractual right to redeem with the third-party issuer of PYUSD for one U.S.

Recently issued accounting guidance

7 unchanged sentences

The guidance can be applied either prospectively or retrospectively.

We are evaluating the impact this amended guidance may have on the footnotes to our consolidated financial statements.

We are evaluating the impact this amended guidance may have on the notes to our consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

18 unchanged sentences

122 is effective for annual periods beginning after December 15, 2024 and is required to be applied on a fully retrospective basis, with early adoption permitted.

We have adopted this guidance as of March 31, 2025 and derecognized the crypto asset safeguarding liability and corresponding safeguarding asset on our condensed consolidated balance sheet as of December 31, 2024.

We adopted this guidance as of March 31, 2025 and derecognized the crypto asset safeguarding liability and corresponding safeguarding asset on our condensed consolidated balance sheet as of December 31, 2024.

Additionally, we derecognized the associated deferred tax asset and liability as of December 31, 2024.

The adoption of this guidance did not impact our condensed consolidated statements of income (loss), comprehensive income (loss), stockholders’ equity or cash flows.

The following table presents the effects of the changes on the presentation of the balance sheet:

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table presents the effects of the changes on the presentation of our condensed consolidated balance sheet:

December 31, 2024

2 unchanged sentences

Adjustments As Adjusted

Prepaid expenses and other current assets

$ 4,651 $ ( 2,886 ) $ 1,765

$ 81,611 $ ( 2,886 ) $ 78,725

Accrued expenses and other current liabilities

Total assets (2)

$ 81,611 $ ( 2,886 ) $ 78,725

2 unchanged sentences

(1) As reported in our 2024 Form 10-K filed with the SEC on February 4, 2025.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(2) Financial statement lines impacted within total assets and total liabilities were “prepaid expenses and other current assets” and “accrued expenses and other current liabilities”, respectively.

There are other new accounting pronouncements issued by the FASB that we have adopted or will adopt, as applicable.

6 unchanged sentences

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 $ 190 million and $ 207 million as of March 31, 2025 and December 31, 2024, respectively.

These contract assets are included in other assets in our condensed consolidated balance sheets and were $ 193 million and $ 207 million as of June 30, 2025 and December 31, 2024, respectively.

DISAGGREGATION OF REVENUE

2 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

2 unchanged sentences

Other countries (1)

3,579 3,335 6,907 6,567

Total net revenues (2)

6 unchanged sentences

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

(2) Total net revenues include $ 573 million and $ 468 million for the three months ended March 31, 2025 and 2024, 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, as well as hedging gains or losses, and interest earned on certain assets underlying customer balances.

(2) Total net revenues include $ 506 million and $ 520 million for the three months ended June 30, 2025 and 2024, respectively, and $ 1.1 billion and $ 988 million for the six months ended June 30, 2025 and 2024, 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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 3— NET INCOME (LOSS) PER SHARE

4 unchanged sentences

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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions, except per share amounts)

8 unchanged sentences

NOTE 4— BUSINESS COMBINATIONS AND DIVESTITURES

There were no acquisitions accounted for as business combinations or divestitures completed in the three months ended March 31, 2025 and 2024.

In the second quarter of 2025, we completed an acquisition with a total purchase price of $ 19 million, consisting of cash consideration, which was accounted for as a business combination.

There were no acquisitions accounted for as business combinations in the six months ended June 30, 2024.

There were no divestitures completed in the six months ended June 30, 2025 and 2024.

NOTE 5— GOODWILL AND INTANGIBLE ASSETS

The following table presents goodwill balances and adjustments to those balances during the three months ended March 31, 2025:

2024 Goodwill Acquired Adjustments March 31,

The following table presents goodwill balances and adjustments to those balances during the six months ended June 30, 2025:

2024 Goodwill Acquired Adjustments June 30,

(In millions)

Total goodwill $ 10,837 $ 7 $ 132 $ 10,976

The adjustments to goodwill during the three months ended March 31, 2025 pertained to foreign currency translation adjustments.

The adjustments to goodwill during the six months ended June 30, 2025 pertained to foreign currency translation adjustments.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

INTANGIBLE ASSETS

The components of identifiable intangible assets were as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Gross Carrying Amount Accumulated Amortization

6 unchanged sentences

Marketing related 65 ( 48 ) 17 60 ( 38 ) 22

Developed technologies

9 ( 1 ) 8 — — —

All other 186 ( 147 ) 39 182 ( 131 ) 51

1 unchanged sentence

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

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amortization expense for intangible assets was $ 47 million and $ 56 million for the three months ended March 31, 2025 and 2024, respectively.

Expected future intangible asset amortization as of March 31, 2025 was as follows (in millions):

Amortization expense for intangible assets was $ 48 million and $ 52 million for the three months ended June 30, 2025 and 2024, respectively.

Amortization expense for intangible assets was $ 95 million and $ 108 million for the six months ended June 30, 2025 and 2024, respectively.

Expected future intangible asset amortization as of June 30, 2025 was as follows (in millions):

Fiscal years:

9 unchanged sentences

A sublease situation can arise when currently leased real estate space is available and is surplus to operational requirements.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The components of lease expense were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

3 unchanged sentences

Total lease expense, net

Supplemental cash flow information related to leases during the three months ended March 31, 2025 and 2024 were as follows:

Three Months Ended March 31,

$ 42 $ 37 $ 85 $ 71

Supplemental cash flow information related to leases during the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

3 unchanged sentences

ROU lease assets obtained in exchange for new operating lease liabilities

$ — $ 134 $ 5 $ 277

ROU lease assets obtained in exchange for new finance lease liabilities $ — $ 39 $ — $ 55

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Supplemental balance sheet information related to leases was as follows:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(In millions, except weighted-average figures)

9 unchanged sentences

Weighted-average discount rate 4 % 5 % 4 % 5 %

Future minimum lease payments for our leases as of March 31, 2025 were as follows:

Future minimum lease payments for our leases as of June 30, 2025 were as follows:

Operating leases Finance leases

6 unchanged sentences

Lease liability $ 701 $ 16

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Operating lease amounts include minimum lease payments under our non-cancelable operating leases primarily for office and data center facilities.

1 unchanged sentence

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, 2025, we have additional operating leases, primarily for offices and data centers, which will commence in the second quarter of 2025 or later with minimum lease payments aggregating to $ 42 million and lease terms ranging from three to ten years .

As of March 31, 2025, we did no t have any additional finance leases which have not yet commenced.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of June 30, 2025, we have additional operating leases, primarily for offices, which will commence in the third quarter of 2025 or later with minimum lease payments aggregating to $ 58 million and lease terms ranging from three to ten years .

As of June 30, 2025, we did no t 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, 2025:

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended June 30, 2025:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities

10 unchanged sentences

Ending balance $ ( 277 ) $ ( 6 ) $ ( 774 ) $ 313 $ 5 $ ( 739 )

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended March 31, 2024:

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the three months ended June 30, 2024:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities

8 unchanged sentences

Ending balance $ 43 $ ( 36 ) $ ( 1,061 ) $ 390 $ ( 29 ) $ ( 693 )

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

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the six months ended June 30, 2025:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities

Net Investment Hedges CTA Gains (Losses)

Estimated Tax (Expense) Benefit Total

(In millions)

Beginning balance $ 147 $ 14 $ ( 1,063 ) $ 313 $ 39 $ ( 550 )

Other comprehensive income (loss) before reclassifications ( 459 ) ( 18 ) 289 — ( 34 ) ( 222 )

Amount of net gains (losses) reclassified from AOCI

( 35 ) 2 — — — ( 33 )

Net current period other comprehensive income (loss) ( 424 ) ( 20 ) 289 — ( 34 ) ( 189 )

Ending balance $ ( 277 ) $ ( 6 ) $ ( 774 ) $ 313 $ 5 $ ( 739 )

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the six months ended June 30, 2024:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities

Net Investment Hedges CTA Gains (Losses)

Estimated Tax (Expense) Benefit Total

(In millions)

Beginning balance $ ( 56 ) $ ( 134 ) $ ( 774 ) $ 191 $ 27 $ ( 746 )

Other comprehensive income (loss) before reclassifications 121 57 ( 287 ) 199 ( 56 ) 34

Amount of net gains (losses) reclassified from AOCI

22 ( 41 ) — — — ( 19 )

Net current period other comprehensive income (loss) 99 98 ( 287 ) 199 ( 56 ) 53

Ending balance $ 43 $ ( 36 ) $ ( 1,061 ) $ 390 $ ( 29 ) $ ( 693 )

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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

3 unchanged sentences

— 1 1 ( 41 ) Net revenues

Net gains (losses) on investments

1 — 1 — Other income (expense), net

( 69 ) 23 ( 33 ) ( 19 ) Income before income taxes

5 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

5 unchanged sentences

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, 2025 and December 31, 2024:

2025 December 31,

13 unchanged sentences

Restricted cash — 1

Strategic investments 98 —

Total short-term investments $ 3,320 $ 4,262

4 unchanged sentences

Total long-term investments $ 3,645 $ 4,583

(1) Includes $ 971 million and nil of available-for-sale debt securities with original maturities of three months or less as of March 31, 2025 and December 31, 2024, respectively.

(2) Includes nil and $ 149 million of available-for-sale debt securities with original maturities of three months or less as of March 31, 2025 and December 31, 2024, respectively.

(1) Includes $ 265 million and $ 149 million of available-for-sale debt securities with original maturities of three months or less as of June 30, 2025 and December 31, 2024, respectively.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of March 31, 2025 and December 31, 2024, 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, 2025 (1)

As of June 30, 2025 and December 31, 2024, 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:

June 30, 2025 (1)

Losses Estimated

(In millions)

Cash and cash equivalents:

government and agency securities $ 599 $ — $ — $ 599

Commercial paper 372 — — 372

Funds receivable and customer accounts:

51 unchanged sentences

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 $ 129 million and $ 140 million at March 31, 2025 and December 31, 2024, respectively, and were included in other current assets on our condensed consolidated balance sheets.

Gross amortized cost and estimated fair value balances exclude accrued interest receivable on available-for-sale debt securities, which totaled $ 117 million and $ 140 million at June 30, 2025 and December 31, 2024, respectively, and were included in other current assets on our condensed consolidated balance sheets.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of March 31, 2025 and December 31, 2024, 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, 2025 (1)

As of June 30, 2025 and December 31, 2024, 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:

June 30, 2025 (1)

Less than 12 months 12 months or longer Total

3 unchanged sentences

(In millions)

Cash and cash equivalents:

government and agency securities $ 599 $ — $ — $ — $ 599 $ —

Commercial paper 372 — — — 372 —

Funds receivable and customer accounts:

6 unchanged sentences

Short-term investments:

government and agency securities — — 51 — 51 —

Foreign government and agency securities — — 34 — 34 —

Corporate debt securities 246 ( 1 ) 10 — 256 ( 1 )

2 unchanged sentences

Long-term investments:

Foreign government and agency securities — — 34 — 34 —

government and agency securities 45 — — — 45 —

Corporate debt securities 281 ( 1 ) 10 — 291 ( 1 )

2 unchanged sentences

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

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2024 (1)

26 unchanged sentences

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

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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.

2 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

1 unchanged sentence

$ 7,069 $ 8,985 $ 12,541 $ 20,237

During the three months ended March 31, 2025, we incurred gross realized losses and gains which were de minimis.

During the three months ended March 31, 2024, we incurred gross realized losses of $ 42 million.

During the three and six months ended June 30, 2025 and the three months ended June 30, 2024, we incurred gross realized losses and gains which were de minimis.

During the six months ended June 30, 2024, we incurred gross realized losses of $ 42 million.

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, 2025

June 30, 2025

Amortized Cost Fair Value

6 unchanged sentences

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

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2025 and 2024 include the purchase of investments of $ 125 million and $ 413 million, respectively, that have not yet settled.

Non-cash investing transactions that were not reflected in the condensed consolidated statement of cash flows for the six months ended June 30, 2025 and 2024 include the purchase of investments, net of sales, of $ 29 million and $ 126 million, respectively, that have not yet settled.

STRATEGIC INVESTMENTS

1 unchanged sentence

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 $ 16 million and $ 23 million as of March 31, 2025 and December 31, 2024, respectively.

Our non-marketable equity securities are recorded as short-term and long-term investments on our condensed consolidated balance sheets.

The carrying value of our non-marketable equity securities totaled $ 1.6 billion and $ 1.5 billion as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, we had non-marketable equity securities of $ 203 million and $ 200 million, respectively, for which we have the ability to exercise significant influence, but not control, over the investee.

Marketable equity securities totaled $ 14 million and $ 23 million as of June 30, 2025 and December 31, 2024, respectively.

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 $ 1.6 billion and $ 1.5 billion as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, we had non-marketable equity securities of $ 203 million and $ 200 million, respectively, 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.

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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).

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2025 and 2024 were as follows:

Three Months Ended March 31,

The adjustments to the carrying value of our non-marketable equity securities accounted for under the Measurement Alternative in the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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Adjustments related to non-marketable equity securities:

Net additions (1)

Net (reductions) additions (1)

( 76 ) 25 ( 54 ) 65

Gross unrealized gains 28 3 83 3

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Carrying amount, end of period $ 1,359 $ 1,635 $ 1,359 $ 1,635

(1) Net additions 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, 2025 and December 31, 2024, respectively:

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

2025 December 31,

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Cumulative gross unrealized losses and impairments $ ( 445 ) $ ( 562 )

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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, 2025 and 2024, respectively:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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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, 2025 and December 31, 2024:

March 31, 2025 Quoted Prices in

The following tables summarize our financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

June 30, 2025 Quoted Prices in

Active Markets for

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Cash and cash equivalents (1)

government and agency securities $ 599 $ — $ 599

Commercial paper 372 — 372

Money market fund $ 14 $ 14 $ —

Total cash and cash equivalents 985 14 971

Short-term investments (2),(5) :

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Total financial liabilities $ 404 $ — $ 404

(1) Excludes cash of $ 6.5 billion not measured and recorded at fair value.

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

(2) Excludes time deposits of $ 127 million not measured and recorded at fair value.

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Total financial liabilities $ 37 $ — $ 37

(1) Excludes cash of $ 6.5 billion not measured and recorded at fair value.

(1) Excludes cash and cash equivalents of $ 6.6 billion not measured and recorded at fair value.

(2) Excludes restricted cash of $ 1 million and time deposits of $ 129 million not measured and recorded at fair value.

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

As of March 31, 2025 and December 31, 2024, 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).

As of June 30, 2025 and December 31, 2024, 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, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

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 June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

Amortized Cost Fair Value Amortized Cost Fair Value

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Funds receivable and customer accounts $ 1,180 $ 1,177 $ 566 $ 564

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, 2025 and 2024:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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

The following tables summarize our assets held as of March 31, 2025 and December 31, 2024 for which a non-recurring fair value measurement was recorded during the three months ended March 31, 2025 and the year ended December 31, 2024, respectively:

March 31, 2025 Significant Other

The following tables summarize our assets held as of June 30, 2025 and December 31, 2024 for which a non-recurring fair value measurement was recorded during the six months ended June 30, 2025 and the year ended December 31, 2024, respectively:

June 30, 2025 Significant Other

Observable Inputs

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Total $ 1,038 $ 1,038 $ —

(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, 2025.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(1) Excludes non-marketable equity securities of $ 1.1 billion accounted for under the Measurement Alternative for which no observable price changes occurred during the six months ended June 30, 2025.

December 31, 2024 Significant Other

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(1) Excludes non-marketable equity securities of $ 860 million accounted for under the Measurement Alternative for which no observable price changes occurred during the year ended December 31, 2024.

We measure loans and interest receivable, held for sale using observable inputs, such as the most recent executed prices for comparable loans sold to the global investment firm.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

We measure loans and interest receivable, held for sale using observable inputs, such as the most recent executed prices for comparable loans sold to a global investment firm as a part of a multi-year agreement to sell certain loans receivable.

Accordingly, loans and interest receivable, held for sale are classified within Level 2 in the fair value hierarchy.

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FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AND RECORDED AT FAIR VALUE

Our financial instruments, including cash, restricted cash, time deposits, reverse repurchase agreements, loans and interest receivable, net, certain customer accounts, notes receivable, and long-term 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 $ 12.0 billion and fair value of approximately $ 11.3 billion as of March 31, 2025.

Our financial instruments, including cash and certain cash equivalents, restricted cash, time deposits, reverse repurchase agreements, loans and interest receivable, net, certain customer accounts, notes receivable, and long-term 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 $ 10.2 billion as of June 30, 2025.

Our term debt (including current portion) had a carrying value of approximately $ 10.5 billion and fair value of approximately $ 9.8 billion as of December 31, 2024.

If these financial instruments were measured at fair value in the financial statements, cash would be classified as Level 1;

If these financial instruments were measured at fair value in the financial statements, cash and certain cash equivalents would be classified as Level 1;

restricted cash, time deposits, reverse repurchase agreements, certain customer accounts, and term debt (including current portion) would be classified as Level 2;

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We do not use any derivative instruments for trading or speculative purposes.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Cash flow hedges

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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.

As of March 31, 2025, we estimated that $ 29 million of net derivative losses 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, 2025 and 2024, 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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of June 30, 2025, we estimated that $ 277 million of net derivative losses related to our cash flow hedges included in AOCI are expected to be reclassified into earnings within the next 12 months.

During the three and six months ended June 30, 2025 and 2024, 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 continue to report the derivative’s gain or loss in AOCI until the forecasted transaction affects earnings, at which point we 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 item to which the derivative relates.

Net investment hedges

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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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

FAIR VALUE OF DERIVATIVE CONTRACTS

The fair value of our outstanding derivative instruments as of March 31, 2025 and December 31, 2024 was as follows:

Balance Sheet Location March 31,

The fair value of our outstanding derivative instruments as of June 30, 2025 and December 31, 2024 was as follows:

Balance Sheet Location June 30,

2025 December 31,

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Total derivative liabilities $ 404 $ 37

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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,

Three Months Ended June 30,

(In millions)

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Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI

( 70 ) — 22 —

Gains (losses) on derivatives in net investment hedging relationship:

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$ ( 70 ) $ ( 152 ) $ 22 $ 5

Six Months Ended June 30,

(In millions)

Net revenues Other income (expense), net Net revenues Other income (expense), net

Total amounts presented in the condensed consolidated statements of income (loss) in which the effects of cash flow hedges and net investment hedges are recorded $ 16,079 $ 98 $ 15,584 $ 115

Gains (losses) on derivatives in cash flow hedging relationship:

Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI

( 35 ) — 22 —

Gains (losses) on derivatives in net investment hedging relationship:

Amount of net gains (losses) on foreign exchange contracts excluded from the assessment of effectiveness

Gains (losses) on derivatives not designated as hedging instruments:

Amount of net gains (losses) on foreign exchange contracts

— ( 235 ) — 5

Total net gains (losses)

$ ( 35 ) $ ( 235 ) $ 22 $ 46

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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$ ( 318 ) $ 125 $ ( 459 ) $ 320

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTIONAL AMOUNTS OF DERIVATIVE CONTRACTS

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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, derivative liabilities, repurchase agreements, and reverse repurchase agreements not offset on the condensed consolidated balance sheet but available for offset in the event of default.

The following tables present the derivative assets, derivative liabilities, and reverse repurchase agreements 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 sheet;

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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts Not Offset on the Condensed Consolidated Balance Sheet

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(In millions)

As of March 31, 2025

As of June 30, 2025

Derivative assets (3)

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$ 330 $ 23 $ 256 $ 51

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts Not Offset on the Condensed Consolidated Balance Sheet

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(In millions)

As of March 31, 2025

As of June 30, 2025

Derivative liabilities (3)

$ 404 $ 28 $ 300 $ 76

Repurchase agreements

Total liabilities

$ 87 $ 24 $ 55 $ 8

As of December 31, 2024

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$ 37 $ 23 $ 7 $ 7

Repurchase agreements

Total liabilities

$ 37 $ 23 $ 7 $ 7

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

For repurchase or reverse repurchase positions, this includes any payable or receivable, respectively, that could be offset in the event of counterparty default.

For reverse repurchase positions, this includes any receivable that could be offset in the event of counterparty default.

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

For reverse repurchase agreements, these securities are not included in the consolidated balance sheet unless the counterparty defaults.

(3) We received cash collateral from derivative counterparties totaling $ 27 million and $ 162 million as of March 31, 2025 and December 31, 2024, respectively, and securities from derivative counterparties with a fair value of $ 10 million and $ 30 million as of March 31, 2025 and December 31, 2024, respectively.

We posted $ 60 million and $ 7 million of cash collateral as of March 31, 2025 and December 31, 2024, respectively.

For reverse repurchase agreements, these securities are not included in the condensed consolidated balance sheet unless the counterparty defaults.

(3) We received cash collateral from derivative counterparties totaling $ 17 million and $ 162 million as of June 30, 2025 and December 31, 2024, respectively, and securities from derivative counterparties with a fair value of nil and $ 30 million as of June 30, 2025 and December 31, 2024, respectively.

We posted $ 323 million and $ 7 million of cash collateral as of June 30, 2025 and December 31, 2024, respectively.

(4) PayPal is permitted by contract to sell or repledge collateral relating to its reverse repurchase agreements.

The fair value of this collateral was $ 203 million and $ 96 million as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, we have no t sold or repledged collateral relating to reverse repurchase agreements.

The fair value of this collateral was nil and $ 96 million as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, we have not sold or repledged collateral relating to reverse repurchase agreements.

NOTE 11— LOANS AND INTEREST RECEIVABLE

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Loans and interest receivable, held for sale are recorded at the lower of cost or fair value, determined on an aggregate basis, with valuation changes and any associated charge-offs recorded in restructuring and other on our condensed consolidated statements of income (loss).

As of March 31, 2025 and December 31, 2024, loans and interest receivable, held for sale was $ 714 million and $ 541 million, respectively.

During the three months ended March 31, 2025 and 2024, we sold $ 5.3 billion and $ 4.8 billion of loans and interest receivable, respectively, in connection with the above mentioned agreement.

As of June 30, 2025 and December 31, 2024, loans and interest receivable, held for sale was $ 817 million and $ 541 million, respectively.

During the six months ended June 30, 2025, we derecognized loans with an unpaid balance of $ 11.6 billion and had net proceeds of $ 11.6 billion from loans and interest receivable sold in connection with the above-mentioned agreement.

During the six months ended June 30, 2024, we derecognized loans with an unpaid balance of $ 9.7 billion and had net proceeds of $ 9.6 billion, from loans and interest receivable sold in connection with the above-mentioned agreement.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

LOANS AND INTEREST RECEIVABLE, NET

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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, 2025 and 2024, we purchased approximately $ 277 million and $ 25 million in consumer receivables, respectively.

The outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $ 5.4 billion for both March 31, 2025 and December 31, 2024, net of the participation interest sold to the partner institution of $ 24 million and $ 23 million, respectively.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the six months ended June 30, 2025 and 2024, we purchased approximately $ 602 million and $ 217 million in consumer receivables, respectively.

As of June 30, 2025 and December 31, 2024, the outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $ 5.8 billion and $ 5.4 billion, respectively, net of the participation interest sold to the partner institution of $ 26 million and $ 23 million, respectively.

We closely monitor the credit quality of our consumer receivables to evaluate and manage our related exposure to credit risk.

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The “current” category represents balances that are within 29 days of the billing date or contractual repayment date, as applicable.

March 31, 2025

June 30, 2025

(In millions, except percentages)

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Total $ 2,713 $ 2,153 $ 674 $ 243 $ 18 $ — $ 5,801 100 %

Gross charge-offs for the three months ended March 31, 2025

Gross charge-offs for the six months ended June 30, 2025

$ 67 $ 1 $ 71 $ 12 $ 1 $ — $ 152

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2024

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$ 138 $ 39 $ 133 $ 14 $ — $ — $ 324

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the activity in the allowance for consumer loans and interest receivable for the three months ended March 31, 2025 and 2024:

March 31, 2025 March 31, 2024

The following table summarizes the activity in the allowance for consumer loans and interest receivable for the six months ended June 30, 2025 and 2024:

June 30, 2025 June 30, 2024

Consumer Loans Receivable Interest Receivable Total Allowance

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(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at March 31, 2025 for our consumer receivable portfolio remained consistent with the allowance for credit losses at December 31, 2024.

The allowance for credit losses at June 30, 2025 for our consumer receivable portfolio was $ 377 million, an increase from $ 348 million at December 31, 2024.

The increase in allowance for credit losses was primarily attributable to growth in revolving loans in the U.K.

and installment loans in Japan.

In the second quarter of 2025, we updated our expected credit loss model for our revolving loans in the U.K.

to reflect the utilization of average weekly earnings as a macroeconomic factor and no longer consider household disposable income and retail e-commerce sales.

Additionally, we updated our expected credit loss model for certain portfolios to utilize multiple economic scenarios rather than the single scenario previously utilized.

These changes did not have a material impact on our allowance for credit losses in the period.

Merchant receivables

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merchants by a partner institution and are responsible for the servicing functions related to that portfolio.

During the three months ended March 31, 2025 and 2024, we purchased approximately $ 494 million and $ 419 million in merchant receivables, respectively.

As of March 31, 2025 and December 31, 2024, the total outstanding balance in our pool of merchant loans, advances, and interest and fees receivable was $ 1.6 billion and $ 1.5 billion, net of the participation interest sold to the partner institution of $ 56 million and $ 53 million, respectively.

During the six months ended June 30, 2025 and 2024, we purchased approximately $ 1.0 billion and $ 774 million in merchant receivables, respectively.

As of June 30, 2025 and December 31, 2024, the total outstanding balance in our pool of merchant loans, advances, and interest and fees receivable was $ 1.7 billion and $ 1.5 billion, net of the participation interest sold to the partner institution of $ 59 million and $ 53 million, respectively.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Through our PPWC product, merchants can borrow a certain percentage of their annual payment volume processed by PayPal and are charged a fixed fee for the loan or advance based on the overall credit assessment of the merchant.

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For PPBL, we receive fixed periodic payments over the contractual term of the loan, which generally ranges from 3 to 12 months.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

We actively monitor receivables with repayment periods greater than the original expected or contractual repayment period, as well as the credit quality of our merchant loans and advances that we extend or purchase, so that we can evaluate, quantify, and manage our credit risk exposure.

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The “current” category represents balances that are within 29 days of the expected repayment date or contractual repayment date, as applicable.

March 31, 2025

June 30, 2025

(In millions, except percentages)

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Total $ 1,209 $ 409 $ 24 $ 12 $ 1 $ 6 $ 1,661 100 %

Gross charge-offs for the three months ended March 31, 2025

Gross charge-offs for the six months ended June 30, 2025

$ — $ 42 $ 14 $ 2 $ — $ 1 $ 59

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2024

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$ 10 $ 96 $ 42 $ — $ 8 $ — $ 156

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the activity in the allowance for merchant loans, advances, and interest and fees receivable for the three months ended March 31, 2025 and 2024:

March 31, 2025 March 31, 2024

The following table summarizes the activity in the allowance for merchant loans, advances, and interest and fees receivable for the six months ended June 30, 2025 and 2024:

June 30, 2025 June 30, 2024

Merchant Loans and Advances Interest and Fees Receivable Total Allowance Merchant Loans and Advances Interest and Fees Receivable Total Allowance

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Ending balance $ 137 $ 10 $ 147 $ 104 $ 6 $ 110

The allowance for credit losses at March 31, 2025 for our merchant receivable portfolio was $ 135 million, an increase from $ 113 million at December 31, 2024.

The increase in allowance for credit losses was related to portfolio growth.

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at June 30, 2025 for our merchant receivable portfolio was $ 147 million, an increase from $ 113 million at December 31, 2024.

The increase in allowance for credit losses was related to a decline in credit quality of merchant loans outstanding primarily from modifications in acceptable risk parameters in 2024, which included broadened eligibility.

In the second quarter of 2025, we updated our expected credit loss model for all portfolios to utilize multiple economic scenarios rather than the single scenario previously utilized.

These changes did not have a material impact on our allowance for credit losses in the period.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 12— DEBT

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Interest on the 2035 Notes is payable on April 1 and October 1 of each year, beginning on October 1, 2025.

In May 2024, June 2023, May 2022, May 2020, and September 2019, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 1.3 billion, ¥ 90 billion (approximately $ 601 million as of March 31, 2025), $ 3.0 billion, $ 4.0 billion and $ 5.0 billion, respectively.

In May 2024, June 2023, May 2022, May 2020, and September 2019, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 1.3 billion, ¥ 90 billion (approximately $ 622 million as of June 30, 2025), $ 3.0 billion, $ 4.0 billion and $ 5.0 billion, respectively.

The notes issued from the March 2025, May 2024, June 2023, May 2022, May 2020, and September 2019 debt issuances are senior unsecured obligations and are collectively referred to as the “Notes.” Except for the June 2023 debt issuance and 2028 Floating Rate Notes, we may redeem the Notes in whole at any time or in part from time to time, prior to maturity, at their redemption prices.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of March 31, 2025 and December 31, 2024, we had an outstanding aggregate principal amount of $ 12.1 billion and $ 10.6 billion, respectively, related to the Notes.

As of June 30, 2025 and December 31, 2024, we had an outstanding aggregate principal amount of $ 10.9 billion and $ 10.6 billion, respectively, related to the Notes.

The following table summarizes the Notes outstanding:

Maturities Effective Interest Rate March 31,

Maturities Effective Interest Rate June 30,

2025 December 31,

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(1) Principal amounts represent the U.S.

dollar equivalent as of March 31, 2025 and December 31, 2024, respectively.

dollar equivalent as of June 30, 2025 and December 31, 2024, respectively.

(2) The current portion of term debt is included within “accrued expenses and other current liabilities” on our condensed consolidated balance sheets.

The effective interest rates for the Notes include interest on the Notes, amortization of debt issuance costs, and amortization of the debt discount.

The interest expense recorded for the Notes, including amortization of the debt discount and debt issuance costs, was $ 98 million and $ 84 million for the three months ended March 31, 2025 and 2024, respectively.

The interest expense recorded for the Notes, including amortization of the debt discount and debt issuance costs, was $ 110 million and $ 208 million for the three and six months ended June 30, 2025, respectively.

The interest expense recorded for the Notes, including amortization of the debt discount and debt issuance costs, was $ 90 million and $ 174 million for the three and six months ended June 30, 2024, respectively.

PayPal Holdings, Inc.

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Paidy credit agreement

In February 2022, we entered into a credit agreement (the “Paidy Credit Agreement”) with Paidy as co-borrower, which provided for an unsecured revolving credit facility of ¥ 60.0 billion, which was modified in September 2022 to increase the borrowing capacity by ¥ 30.0 billion for a total borrowing capacity of ¥ 90.0 billion (approximately $ 601 million as of March 31, 2025).

As of March 31, 2025 and December 31, 2024, ¥ 90.0 billion (approximately $ 601 million) and ¥ 90.0 billion (approximately $ 574 million) was drawn down under the Paidy Credit Agreement, respectively, which was recorded in long-term debt on our condensed consolidated balance sheets.

At March 31, 2025, no borrowing capacity was available for the purposes permitted by the Paidy Credit Agreement.

During the three months ended March 31, 2025 and 2024, the total interest expense and fees we recorded related to the Paidy Credit Agreement were de minimis.

As of June 30, 2025 and December 31, 2024, ¥ 90.0 billion (approximately $ 622 million) and ¥ 90.0 billion (approximately $ 574 million) was drawn down under the Paidy Credit Agreement, respectively, which was recorded in long-term debt on our condensed consolidated balance sheets.

At June 30, 2025, no borrowing capacity was available for the purposes permitted by the Paidy Credit Agreement.

During the three and six months ended June 30, 2025 and 2024, the total interest expense and fees we recorded related to the Paidy Credit Agreement were de minimis.

FUTURE PRINCIPAL PAYMENTS

As of March 31, 2025, the future principal payments associated with our term debt were as follows (in millions):

As of June 30, 2025, the future principal payments associated with our term debt were as follows (in millions):

Remaining 2025

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable and reasonably estimable were not material as of March 31, 2025.

Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable and reasonably estimable were not material as of June 30, 2025.

Except as otherwise noted for the proceedings described in this Note 13, we have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material.

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As a resolution of this investigation, on March 17, 2023, AUSTRAC’s Chief Executive Officer accepted an enforceable undertaking from PPAU in relation to the self-reported issues.

The enforceable undertaking does not include a monetary penalty.

The entry into and compliance with the enforceable undertaking will not require a change to our business practices in a manner that could result in a material loss, require significant management time, result in the diversion of significant operational resources, or otherwise adversely affect our business.

PPAU is required to deliver an Assurance Action Plan (“AAP”) under the enforceable undertaking to demonstrate that the governance and oversight arrangements following the remedial work completed by PPAU are sustainable and appropriate.

The enforceable undertaking requires PPAU to appoint an external auditor.

The enforceable undertaking did not include a monetary penalty.

PPAU was required to deliver an Assurance Action Plan (“AAP”) under the enforceable undertaking to demonstrate that the governance and oversight arrangements following the remedial work completed by PPAU are sustainable and appropriate.

The enforceable undertaking required PPAU to appoint an external auditor.

The external auditor was appointed on June 22, 2023 to assess and report on the appropriateness, sustainability and efficacy of the actions to be taken under the AAP.

PPAU provided the external auditor’s final report to AUSTRAC on April 16, 2024.

The successful completion of the enforceable undertaking is subject to AUSTRAC’s ultimate review and decision based on the external auditor’s final report.

We cannot predict the outcome of AUSTRAC’s decision.

Any failure to comply with the enforceable undertaking could result in penalties or require us to change our business practices.

The successful completion of the enforceable undertaking was subject to AUSTRAC’s ultimate review and decision based on the external auditor’s final report.

On July 22, 2025, AUSTRAC gave PPAU written notice of its decision with immediate effect to cancel the enforceable undertaking.

This matter is now concluded.

In February 2022, we received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (“FTC”) related to PayPal’s practices relating to commercial customers that submit charges on behalf of other merchants or sellers, and related activities.

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We are cooperating with the CFPB in connection with these CIDs.

In November 2023, we received a subpoena from the U.S.

SEC Division of Enforcement relating to PayPal USD stablecoin.

The subpoena requested the production of documents.

In February 2025, the SEC communicated it was closing this inquiry without enforcement action.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In August 2024, we received a CID from the CFPB related to PayPal Credit.

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We are cooperating with the CFPB in connection with this CID.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Legal proceedings

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The PPH Securities Action seeks unspecified compensatory damages on behalf of the putative class members.

Defendants have filed a motion to dismiss the PPH Securities Action.

Defendants filed a motion to dismiss the PPH Securities Action.

On January 29, 2025, the Court dismissed all of the claims without prejudice.

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Trial is scheduled to begin in October 2025.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

General matters

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Intellectual property claims, whether meritorious or not, are time-consuming and costly to defend and resolve, could require expensive changes in our methods of doing business, or could require us to enter into costly royalty or licensing agreements on unfavorable terms or make substantial payments to settle claims or to satisfy damages awarded by courts.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

From time to time, we are involved in other disputes or regulatory inquiries that arise in the ordinary course of business, including suits by our consumers (individually or as class actions), merchants or regulators alleging, among other things, improper disclosure of our prices, rules, or policies, that our practices, prices, rules, policies, or user, product, business or merchant agreements violate applicable law, or that we have acted unfairly or not acted in conformity with such prices, rules, policies, or agreements.

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We have agreed, under certain circumstances, to indemnify the chartered financial institution and its assignee of a portion of these loans in connection with the services provided for loans made under this program.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As part of the agreement to sell a portion of our consumer installment receivables portfolio, in certain circumstances such as breaches in loan warranties, we may be required to indemnify the global investment firm that purchased the loans or repurchase the loans.

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however, the maximum potential amount of the indemnification is not, in our view, representative of the expected future exposure.

As of March 31, 2025 and December 31, 2024, the current outstanding balances of the loans sold was $ 2.8 billion and $ 2.9 billion, respectively.

As of June 30, 2025 and December 31, 2024, the current outstanding balances of the loans sold was $ 3.2 billion and $ 2.9 billion, respectively.

The terms of the indemnification align to the maturities of the loans sold.

To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2025 and December 31, 2024, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.

As of June 30, 2025 and December 31, 2024, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on our consolidated financial condition, results of operations, liquidity, capital expenditures, or capital resources.

PROTECTION PROGRAMS

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These programs are designed to promote confidence on the part of both consumers, who will be reimbursed in certain circumstances, such as not receiving their purchased item in the condition significantly as described, as well as merchants, who will receive payment in certain circumstances, such as establishing proof of shipment or delivery of an item to the customer.

These protection programs are considered assurance-type warranties under applicable accounting standards for which we estimate and record associated costs in transaction and credit losses during the period the payment transaction is completed.

At March 31, 2025 and December 31, 2024, the allowance for transaction losses was $ 60 million and $ 86 million, respectively.

The allowance for negative customer balances was $ 245 million and $ 256 million at March 31, 2025 and December 31, 2024, respectively.

The following table shows changes in the allowance for transaction losses and negative customer balances related to our protection programs for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

These protection programs are considered assurance-type warranties under applicable accounting standards for which we estimate associated costs within the allowance for transaction losses.

Our protection programs may result in negative customer balances when there are insufficient funds in a customer’s PayPal account to cover charges applied for merchant-related chargebacks within the scope of our protection programs.

Negative customer balances can also occur from bank returns and reversals due to insufficient funding sources.

The allowance for negative customer balances represents our estimate of current expected credit losses on negative customer balances.

At June 30, 2025 and December 31, 2024, the allowance for transaction losses was $ 89 million and $ 86 million, respectively.

The allowance for negative customer balances was $ 263 million and $ 256 million at June 30, 2025 and December 31, 2024, respectively.

The following table shows changes in the allowance for transaction losses and negative customer balances related to our protection programs for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in millions)

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Provision (1)

Realized losses ( 348 ) ( 309 )

383 259 661 519

Realized losses and charge-offs ( 371 ) ( 286 ) ( 719 ) ( 595 )

Recoveries (2)

Ending balance $ 352 $ 270 $ 352 $ 270

(1) Changes in estimates for the prior period provision related to the allowance for transaction losses are not material and are aggregated with current period provision.

(2) Recoveries are only relevant for the allowance for negative customer balances.

NOTE 14— STOCK REPURCHASE PROGRAMS

During the three months ended March 31, 2025, we repurchased approximately 19 million shares of our common stock for approximately $ 1.5 billion at an average cost of $ 77.56 , excluding excise tax.

During the six months ended June 30, 2025, we repurchased approximately 41 million shares of our common stock for approximately $ 3.0 billion at an average cost of $ 72.45 , excluding excise tax.

These shares were purchased in the open market under our stock repurchase program authorized in June 2022.

As of March 31, 2025, a total of approximately $ 3.4 billion and $ 15.0 billion remained available for future repurchases of our common stock under our June 2022 and February 2025 stock repurchase programs, respectively.

During the three months ended March 31, 2025 and 2024, we recorded $ 12 million and $ 10 million in excise tax within treasury stock on our condensed consolidated balance sheets, respectively.

The payable associated with the excise tax is a non-cash financing activity which is not reflected on the condensed consolidated statement of cash flows until settled.

As of June 30, 2025, a total of approximately $ 1.9 billion and $ 15.0 billion remained available for future repurchases of our common stock under our June 2022 and February 2025 stock repurchase programs, respectively.

For both the six months ended June 30, 2025 and 2024, we recorded $ 25 million in excise tax within treasury stock on our condensed consolidated balance sheets.

The payable associated with the excise tax is a non-cash financing activity which is not reflected on the condensed consolidated statement of cash flows until settlement.

NOTE 15— STOCK-BASED PLANS

In June 2025, our stockholders approved the authorization of an additional 15 million shares to the Amended and Restated PayPal Holdings, Inc.

2015 Equity Incentive Award Plan.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 15— STOCK-BASED PLANS

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense is measured based on the estimated fair value of shares at the time of grant and recognized over the award’s vesting period.

The impact on our results of operations of recording stock-based compensation expense for the three months ended March 31, 2025 and 2024 was as follows:

Three Months Ended March 31,

The following table summarizes the impact of stock-based compensation expense on our results of operations for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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NOTE 16— INCOME TAXES

Our effective tax rate for the three months ended March 31, 2025 and 2024 was 20 % and 27 %, respectively.

Our effective tax rate for the three and six months ended June 30, 2025 was 18 % and 19 %, respectively.

Our effective tax rate for the three and six months ended June 30, 2024 was 19 % and 23 %, respectively.

The difference between our effective tax rate and the U.S.

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The Organization for Economic Co-operation and Development (“OECD”) has published model rules, which include the implementation of a global minimum tax rate of 15%, commonly referred to as Pillar Two.

Certain countries in which we do business enacted legislation that became effective as of January 1, 2025.

Our effective tax rate for the three months ended March 31, 2025 includes the impact of Pillar Two minimum taxes in these jurisdictions.

Gross unrecognized tax benefits were approximately $ 2.4 billion and $ 2.3 billion as of March 31, 2025 and December 31, 2024, respectively.

Certain countries in which we do business have enacted legislation that became effective as of January 1, 2025.

Our effective tax rate for the three and six months ended June 30, 2025 includes the impact of Pillar Two minimum taxes in these jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law in the U.S., with certain provisions of the Act effective in 2025 and other provisions becoming effective in 2026 and beyond.

We are in the process of evaluating the impacts of the Act to our consolidated financial statements.

Gross unrecognized tax benefits were approximately $ 2.4 billion and $ 2.3 billion as of June 30, 2025 and December 31, 2024, respectively.

Due to various factors, including uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of these unrecognized tax benefits is highly uncertain.

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Given the number of years remaining subject to examination and the number of matters being examined, we were unable to estimate the full range of possible adjustments to the balance of gross unrecognized tax benefits.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 17— RESTRUCTURING AND OTHER

RESTRUCTURING

The restructuring charges associated with the following plans were recorded in “restructuring and other” on our condensed consolidated statements of income.

Accrued restructuring liabilities were included in “accrued expenses and other current liabilities” on our condensed consolidated balance sheets.

During the second quarter of 2025, management undertook a large-scale initiative (the “Q2 2025 Plan”) to reengineer our existing technology infrastructure to improve scalability, reduce network latency, decrease operational costs, and optimize our workforce.

The Q2 2025 Plan is a transformative unified program designed to streamline operations and includes exiting certain data centers to migrate to more efficient cloud based solutions.

The plan is expected to be executed over a period of 18 to 42 months with the workforce component to be substantially completed in 2027 and the technology infrastructure component to be substantially completed in 2028.

The associated restructuring charges for both the three and six months ended June 30, 2025 were $ 95 million and included employee severance and benefits costs.

In connection with this restructuring, we expect to incur employee severance and benefits costs of approximately $ 90 million to $ 100 million, asset impairment and accelerated depreciation charges of approximately $ 40 million to $ 60 million, and other restructuring costs of approximately $ 110 million to $ 140 million over the term of the Q2 2025 Plan.

Other restructuring costs relate to process re-engineering and one-time migration to cloud solutions and consist of contractor costs, consulting fees, and prepaid software and maintenance costs without future economic benefit.

The timing of activities and cost estimates continue to be developed and are subject to change.

The following table summarizes the restructuring reserve activity during the six months ended June 30, 2025:

Employee Severance and Benefits Costs

(In millions)

Accrued liability as of January 1, 2025

Accrued liability as of June 30, 2025

During the first quarter of 2025, management initiated a workforce reduction to ensure compliance with a new regulation impacting operations in an international market.

The associated restructuring charges during the three months ended March 31, 2025 were $ 39 million, and included employee severance and benefits costs, substantially all of which were accrued for as of March 31, 2025.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the restructuring reserve activity during the three months ended March 31, 2025:

The associated restructuring charges during the six months ended June 30, 2025 were $ 36 million and included employee severance and benefits costs, which were substantially completed as of June 30, 2025.

The following table summarizes the restructuring reserve activity during the six months ended June 30, 2025:

Employee Severance and Benefits Costs

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Accrued liability as of January 1, 2025

Accrued liability as of March 31, 2025 (1)

(1) Accrued restructuring liability is included in “accrued expenses and other current liabilities” on our condensed consolidated balance sheets.

Payments ( 35 )

Accrued liability as of June 30, 2025

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

During the first quarter of 2024, management initiated a global workforce reduction intended to streamline operations, focus resources on core strategic priorities, and improve our cost structure.

The associated restructuring charges during the three months ended March 31, 2024 were $ 175 million, and included employee severance and benefits costs and stock-based compensation expense, all of which were substantially completed by the fourth quarter of 2024.

During the three months ended March 31, 2025 and 2024, approximately $ 25 million and $ 37 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.

The associated restructuring charges during the three and six months ended June 30, 2024 were $ 83 million and $ 258 million, and included employee severance and benefits costs and stock-based compensation expense, which were substantially completed in the fourth quarter of 2024.

During the three and six months ended June 30, 2025, approximately $ 27 million and $ 52 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.

During the three and six months ended June 30, 2024, approximately $ 27 million and $ 64 million, respectively, of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.

NOTE 18— SEGMENT INFORMATION

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The following table sets forth our segment information for revenue, segment profit (loss), and significant expenses:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In millions)

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Customer support and operations (1)

413 436 811 890

Sales and marketing (1)

583 446 1,071 867

Technology and development (1)

767 718 1,498 1,460

General and administrative (1)

461 570 964 1,034

Restructuring and other 116 113 182 325

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(1) Includes depreciation and amortization expense.

For the three months ended March 31, 2025 and 2024, total depreciation and amortization expense was $ 245 million and $ 265 million, respectively.

For the three and six months ended June 30, 2025, total depreciation and amortization expense was $ 239 million and $ 484 million, respectively.

For the three and six months ended June 30, 2024, total depreciation and amortization expense was $ 263 million and $ 528 million, respectively.

There are no reconciling items or adjustments between segment net revenues, net income, total assets and consolidated net revenues, net income, and total assets.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements