What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-05 compared with 2025-10-28 · 313 added, 505 removed, 1052 unchanged (44% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2026 December 31,

5 unchanged sentences

Loans and interest receivable, held for sale 1,825 1,726

Loans and interest receivable, net of allowances of $ 515 and $ 461 as of September 30, 2025 and December 31, 2024, respectively

Loans and interest receivable, net of allowances of $ 560 and $ 539 as of March 31, 2026 and December 31, 2025, respectively

Funds receivable and customer accounts 39,501 38,198

19 unchanged sentences

4,000 shares authorized;

941 and 993 shares outstanding as of September 30, 2025 and December 31, 2024, respectively

892 and 920 shares outstanding as of March 31, 2026 and December 31, 2025, respectively

Preferred stock, $ 0.0001 par value;

100 shares authorized, unissued

Treasury stock at cost, 400 and 337 shares as of September 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 457 and 423 shares as of March 31, 2026 and December 31, 2025, respectively

( 34,651 ) ( 33,138 )

5 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions, except per share amounts)

21 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

2 unchanged sentences

Foreign currency translation adjustments (“CTA”), net

( 49 ) 275 185 7

Tax (expense) benefit on foreign CTA, net

Net investment hedges CTA (losses) gains, net

— ( 149 ) — 50

Tax benefit (expense) on net investment hedges CTA (losses) gains, net

— 35 — ( 12 )

Tax benefit (expense) on foreign CTA, net

Unrealized gains (losses) on cash flow hedges, net

78 ( 148 ) ( 346 ) ( 49 )

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

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

18 60 ( 2 ) 158

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

( 5 ) ( 14 ) — ( 37 )

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

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

Other comprehensive income (loss), net of tax 145 ( 72 )

1 unchanged sentence

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

4 unchanged sentences

Balances at December 31, 2025 920 $ ( 33,138 ) $ 21,582 $ ( 658 ) $ 32,470 $ 20,256

Adoption of crypto asset accounting standard

— — — — 20 20

Net income — — — — 1,113 1,113

1 unchanged sentence

— — — ( 34 ) — ( 34 )

Tax expense on foreign CTA, net

— — — ( 7 ) — ( 7 )

Unrealized losses on cash flow hedges, net

— — — ( 176 ) — ( 176 )

Tax benefit on unrealized losses on cash flow hedges, net

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

— — — ( 9 ) — ( 9 )

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 5 — ( 171 ) — — ( 171 )

Common stock repurchased ( 19 ) ( 1,512 ) — — — ( 1,512 )

Stock-based compensation — — 285 — — 285

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

Net income — — — — 1,261 1,261

Foreign CTA, net

— — — 125 — 125

Tax expense on foreign CTA, net

Unrealized losses on cash flow hedges, net

Tax benefit on foreign CTA, net

Unrealized gains on cash flow hedges, net

— — — 192 — 192

Tax benefit on unrealized losses on cash flow hedges, net

Tax expense on unrealized gains on cash flow hedges, net

— — — ( 13 ) — ( 13 )

3 unchanged sentences

Common stock and stock-based awards issued, net of shares withheld for employee taxes 6 — ( 139 ) — — ( 139 )

3 — ( 2 ) — — ( 2 )

Common stock repurchased ( 34 ) ( 1,513 ) — — — ( 1,513 )

Stock-based compensation — — 319 — — 319

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

Net income — — — — 1,248 1,248

Foreign CTA, net

— — — ( 49 ) — ( 49 )

Unrealized gains on cash flow hedges, net

— — — 78 — 78

Tax expense on unrealized gains on cash flow hedges, net

— — — ( 3 ) — ( 3 )

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

— — — 18 — 18

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

Cash dividends declared ($ 0.14 per share)

— — — — ( 130 ) ( 130 )

Common stock and stock-based awards issued, net of shares withheld for employee taxes 2 — ( 66 ) — — ( 66 )

Common stock repurchased ( 21 ) ( 1,513 ) — — — ( 1,513 )

Stock-based compensation — — 292 — — 292

Balances at September 30, 2025 941 $ ( 31,624 ) $ 21,359 $ ( 700 ) $ 31,163 $ 20,198

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY—(continued)

Balances at March 31, 2026 892 $ ( 34,651 ) $ 21,735 $ ( 513 ) $ 33,453 $ 20,024

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

2 unchanged sentences

Balances at December 31, 2024 993 $ ( 27,085 ) $ 20,705 $ ( 550 ) $ 27,347 $ 20,417

Net income — — — — 888 888

Foreign CTA, net

— — — ( 143 ) — ( 143 )

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 )

Treasury stock reissuance — 4 — — — 4

Stock-based compensation — — 376 — — 376

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

— — — ( 125 ) — ( 125 )

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

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

Adoption of crypto asset accounting standard — — — — 20 20

Net income — — — — 1,287 1,287

1 unchanged sentence

— — — 109 — 109

Net investment hedges CTA losses, net

— — — ( 149 ) — ( 149 )

Tax benefit on net investment hedges CTA losses, net

Tax expense on foreign CTA, net

— — — ( 7 ) — ( 7 )

2 unchanged sentences

Tax benefit on unrealized losses on cash flow hedges, net

Unrealized gains on available-for-sale debt securities, net — — — 60 — 60

Tax expense on unrealized gains on available-for-sale debt securities, net — — — ( 14 ) — ( 14 )

Unrealized losses on available-for-sale debt securities, net — — — ( 9 ) — ( 9 )

Tax benefit on unrealized losses on available-for-sale debt securities, net — — — 2 — 2

Common stock and stock-based awards issued, net of shares withheld for employee taxes 5 — ( 171 ) — — ( 171 )

Common stock repurchased ( 19 ) ( 1,512 ) — — — ( 1,512 )

Treasury stock reissuance — 4 — — — 4

Stock-based compensation — — 285 — — 285

Balances at September 30, 2024 1,006 $ ( 25,851 ) $ 20,426 $ ( 627 ) $ 26,226 $ 20,174

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

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

14 unchanged sentences

Accounts receivable ( 2 ) ( 98 )

Transaction loss allowance for cash losses, net ( 313 ) ( 311 )

Other current assets and non-current assets 249 64

Accounts payable ( 52 ) ( 52 )

Other assets and liabilities ( 1,564 ) ( 647 )

Other current liabilities and non-current liabilities ( 437 ) ( 279 )

Net cash provided by operating activities 1,134 1,160

8 unchanged sentences

Maturities and sales of investments 4,521 5,465

Acquisitions, net of cash acquired ( 122 ) —

Funds receivable ( 352 ) ( 2,741 )

Collateral posted related to derivative instruments, net 110 ( 53 )

Other ( 15 ) —

Net cash provided by (used in) investing activities

Net cash used in investing activities

( 2,100 ) ( 3,637 )

Cash flows from financing activities:

Borrowings from repurchase agreements 2,949 656

Repayments of repurchase agreements ( 2,949 ) ( 656 )

Proceeds from issuance of common stock 74 55

Purchases of treasury stock ( 1,500 ) ( 1,500 )

4 unchanged sentences

Collateral received related to derivative instruments and reverse repurchase agreements, net 108 ( 135 )

Payments of dividends to stockholders ( 130 ) —

Other ( 2 ) ( 2 )

Net cash used in financing activities

( 4,009 ) ( 4,691 )

Net cash (used in) provided by financing activities

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS—(continued)

Nine Months Ended September 30,

Three Months Ended March 31,

(In millions)

8 unchanged sentences

Cash and cash equivalents $ 6,977 $ 7,569

Short-term investments — 1

Funds receivable and customer accounts 15,466 13,532

1 unchanged sentence

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

5 unchanged sentences

At PayPal, our mission is to revolutionize commerce globally.

Our products are designed to enable digital payments and simplify commerce experiences for consumers and merchants to make selling, shopping, and sending and receiving money simple, personalized, secure, online or offline, including mobile.

Our two-sided platform serves millions of consumers and merchants worldwide.

5 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 September 30, 2025 and December 31, 2024, no VIEs qualified for consolidation as the structures of these entities do not provide us with both the ability to direct activities that would significantly impact their economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

As of September 30, 2025 and December 31, 2024, the carrying value of our investments in nonconsolidated VIEs that are primarily investments in funds that are limited partnerships or similar structures which are focused on increasing access to capital for underserved communities was $ 199 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.

Our maximum exposure to loss related to these nonconsolidated VIEs, which represents funded commitments and any future funding commitments, was $ 246 million as of both September 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.

As of March 31, 2026 and December 31, 2025, no VIEs qualified for consolidation as the structures of these entities do not provide us with both the ability to direct activities that would significantly impact their economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

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

Our maximum exposure to loss related to these nonconsolidated VIEs, which represents funded commitments and any future funding commitments, was $ 246 million as of both March 31, 2026 and December 31, 2025.

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

In the opinion of management, these condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the condensed consolidated financial statements for all interim periods presented.

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

Certain amounts for prior periods have been reclassified to conform to the financial statement presentation as of and for the three months ended March 31, 2026.

Use of estimates

4 unchanged sentences

Actual results could materially differ from these estimates.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

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

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amended guidance enhances income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information.

This guidance requires disclosure of specific categories in the effective tax rate reconciliation and additional information on reconciling items meeting a quantitative threshold.

In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes.

It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).

The amended guidance is effective for annual periods beginning after December 15, 2024.

The guidance can be applied either prospectively or retrospectively.

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):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

11 unchanged sentences

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

Recently adopted accounting guidance

In December 2023, the FASB issued ASU 2023-08, Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60):

Accounting for and Disclosure of Crypto Assets .

This amended guidance requires fair value measurement of certain crypto assets each reporting period, with the changes in fair value reflected in net income.

The amendments also require disclosures of the name, fair value, units held, and cost basis for each significant crypto asset held and annual reconciliations of crypto asset holdings.

The new guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2024.

We adopted this guidance effective as of January 1, 2025.

We have applied the amendments of this guidance as a cumulative-effect adjustment to retained earnings.

The adoption of this guidance did not have a significant impact on our condensed consolidated financial statements.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In January 2025, the SEC released Staff Accounting Bulletin (“SAB”) No.

122 rescinding SAB No.

121, which required an entity to record a liability to reflect its obligation to safeguard the crypto assets held for its platform users with a corresponding asset and required disclosures related to the entity’s safeguarding obligations.

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 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 our condensed consolidated balance sheet:

December 31, 2024

(In millions)

As Previously Reported (1)

Adjustments As Adjusted

Total assets (2)

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

Total liabilities (2)

$ 61,194 $ ( 2,886 ) $ 58,308

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

(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 $ 203 million and $ 207 million as of September 30, 2025 and December 31, 2024, respectively.

These contract assets are included in other assets in our condensed consolidated balance sheets and were $ 231 million and $ 238 million as of March 31, 2026 and December 31, 2025, respectively.

DISAGGREGATION OF REVENUE

1 unchanged sentence

Revenues recorded within these categories are earned from similar products and services for which the nature of associated fees and the related revenue recognition models are substantially similar.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

1 unchanged sentence

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

2 unchanged sentences

Other countries (1)

3,664 3,329 10,571 9,896

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 $ 542 million and $ 515 million for the three months ended September 30, 2025 and 2024, respectively, and $ 1.6 billion and $ 1.5 billion for the nine months ended September 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 .

(2) Total net revenues include $ 473 million and $ 573 million for the three months ended March 31, 2026 and 2025, respectively, which do not represent revenues recognized in the scope of Accounting Standards Codification Topic 606, Revenue from contracts with customers .

Such revenues relate to interest and fees earned on loans and interest receivable, including loans and interest receivable held for sale, hedging gains or losses, and interest earned and gains or losses on certain assets underlying customer balances.

7 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions, except per share amounts)

7 unchanged sentences

Common stock equivalents excluded from net income (loss) per diluted share because their effect would have been anti-dilutive or potentially dilutive 21 2

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 4— BUSINESS COMBINATIONS AND DIVESTITURES

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 nine months ended September 30, 2024.

There were no divestitures completed in the nine months ended September 30, 2025 and 2024.

NOTE 4— BUSINESS COMBINATIONS

In the three months ended March 31, 2026, we completed an acquisition with a total purchase price of $ 134 million, consisting primarily of cash consideration, which was accounted for as a business combination.

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

NOTE 5— GOODWILL AND INTANGIBLE ASSETS

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

2024 Goodwill Acquired Adjustments September 30,

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

2025 Goodwill Acquired Foreign CTA

(In millions)

Total goodwill $ 10,864 $ 104 $ ( 22 ) $ 10,946

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

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

INTANGIBLE ASSETS

The components of identifiable intangible assets were as follows:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Gross Carrying Amount Accumulated Amortization

6 unchanged sentences

Marketing related 59 ( 52 ) 7 60 ( 50 ) 10

Developed technologies

9 ( 1 ) 8 — — —

Developed technology 23 ( 3 ) 20 9 ( 2 ) 7

All other 210 ( 175 ) 35 208 ( 165 ) 43

1 unchanged sentence

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

Amortization expense for intangible assets was $ 47 million and $ 51 million for the three months ended September 30, 2025 and 2024, respectively.

Amortization expense for intangible assets was $ 142 million and $ 159 million for the nine months ended September 30, 2025 and 2024, respectively.

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

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

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

Fiscal years:

(In millions)

Remaining 2026 $ 77

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

5 unchanged sentences

While a majority of our lease agreements do not contain an explicit interest rate, certain of our lease agreements are subject to changes based on the Consumer Price Index or another referenced index.

In the event of changes to the relevant index, lease liabilities are not remeasured and instead are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.

In the event of changes to the relevant index, lease liabilities are not remeasured and are instead treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred.

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

2 unchanged sentences

The components of lease expense were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

3 unchanged sentences

Total lease expense, net

$ 43 $ 41 $ 128 $ 112

Supplemental cash flow information related to leases during the three and nine months ended September 30, 2025 and 2024 was as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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

Three Months Ended March 31,

(In millions)

2 unchanged sentences

Financing cash flows from finance leases $ 2 $ 2

ROU lease assets obtained in exchange for new operating lease liabilities

$ 52 $ 59 $ 57 $ 336

ROU lease assets obtained in exchange for new finance lease liabilities $ — $ 27 $ — $ 82

ROU lease assets obtained in exchange for operating lease liabilities

Supplemental balance sheet information related to leases was as follows:

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

(In millions, except weighted-average figures)

9 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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

Operating leases Finance leases

9 unchanged sentences

The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases.

As of March 31, 2026, we have an additional operating lease for an office, which will commence in the second quarter of 2026 or later with minimum lease payments aggregating to $ 284 million and a lease term of twelve years .

As of March 31, 2026, we did 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 September 30, 2025:

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

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

10 unchanged sentences

Ending balance $ 82 $ 8 $ ( 866 ) $ 313 $ ( 50 ) $ ( 513 )

1Q 2026 FORM 10-Q

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 three months ended September 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 $ 43 $ ( 36 ) $ ( 999 ) $ 390 $ ( 91 ) $ ( 693 )

Other comprehensive income (loss) before reclassifications ( 160 ) 60 275 ( 149 ) 28 54

Amount of net gains (losses) reclassified from AOCI

( 12 ) — — — — ( 12 )

Net current period other comprehensive income (loss) ( 148 ) 60 275 ( 149 ) 28 66

Ending balance $ ( 105 ) $ 24 $ ( 724 ) $ 241 $ ( 63 ) $ ( 627 )

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the nine months ended September 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 $ ( 949 ) $ 313 $ ( 75 ) $ ( 550 )

Other comprehensive income (loss) before reclassifications ( 430 ) ( 1 ) 185 — 13 ( 233 )

Amount of net gains (losses) reclassified from AOCI

( 84 ) 1 — — — ( 83 )

Net current period other comprehensive income (loss) ( 346 ) ( 2 ) 185 — 13 ( 150 )

Ending balance $ ( 199 ) $ 12 $ ( 764 ) $ 313 $ ( 62 ) $ ( 700 )

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

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

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

8 unchanged sentences

Ending balance $ ( 29 ) $ 5 $ ( 840 ) $ 313 $ ( 71 ) $ ( 622 )

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

1 unchanged sentence

Affected Line Item in the Statements of Income (Loss)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

1 unchanged sentence

$ ( 86 ) $ 35 Net revenues

Net gains (losses) on cash flow hedges—foreign exchange contracts ( 1 ) ( 1 ) Customer support and operations

Net gains (losses) on cash flow hedges—foreign exchange contracts ( 1 ) ( 1 ) Technology and development

Net gains (losses) on investments

— 1 Net revenues

Net gains (losses) on investments

— — 1 — Other income (expense), net

( 88 ) 34 Income before income taxes

3 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

4 unchanged sentences

Other income (expense), net $ ( 95 ) $ 73

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

1 unchanged sentence

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 September 30, 2025 and December 31, 2024:

September 30,

2026 December 31,

12 unchanged sentences

Available-for-sale debt securities 2,286 2,285

Restricted cash — 1

Total short-term investments $ 2,365 $ 2,373

4 unchanged sentences

Total long-term investments $ 4,125 $ 4,330

(1) Includes $ 525 million and nil of available-for-sale debt securities with original maturities of three months or less as of September 30, 2025 and December 31, 2024, respectively.

(2) Includes $ 220 million and $ 149 million of available-for-sale debt securities with original maturities of three months or less as of September 30, 2025 and December 31, 2024, respectively.

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

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 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:

September 30, 2025 (1)

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

March 31, 2026 (1)

Losses Estimated

14 unchanged sentences

Mortgage-backed and asset-backed securities 404 — ( 1 ) 403

Commercial paper 570 — — 570

Long-term investments:

government and agency securities 480 — — 480

Foreign government and agency securities 50 — — 50

Corporate debt securities 542 1 — 543

5 unchanged sentences

Refer to “Note 9 — Fair Value Measurement of Assets and Liabilities.”

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

28 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 $ 121 million and $ 140 million at September 30, 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 $ 97 million and $ 101 million at March 31, 2026 and December 31, 2025, respectively, and were included in other current assets on our condensed consolidated balance sheets.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 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:

September 30, 2025 (1)

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

March 31, 2026 (1)

Less than 12 months 12 months or longer Total

12 unchanged sentences

Short-term investments:

government and agency securities 295 — — — 295 —

Foreign government and agency securities 25 — 20 — 45 —

1 unchanged sentence

Mortgage-backed and asset-backed securities 247 ( 1 ) 53 — 300 ( 1 )

Commercial paper 470 — — — 470 —

Long-term investments:

government and agency securities 210 — — — 210 —

Foreign government and agency securities 25 — — — 25 —

Corporate debt securities 235 — — — 235 —

2 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

12 unchanged sentences

1,000 ( 1 ) 206 — 1,206 ( 1 )

Municipal securities 29 — 36 — 65 —

Commercial paper 1,375 — — — 1,375 —

1 unchanged sentence

government and agency securities 443 — — — 443 —

Foreign government and agency securities — — 20 — 20 —

Corporate debt securities 94 ( 1 ) 109 ( 1 ) 203 ( 2 )

3 unchanged sentences

Long-term investments:

government and agency securities 50 — — — 50 —

Foreign government and agency securities 25 — — — 25 —

8 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

1 unchanged sentence

$ 5,279 $ 5,472

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

During the nine months ended September 30, 2024, we incurred gross realized losses of $ 43 million and gains which were de minimis.

During the three months ended March 31, 2026 and 2025, we incurred gross realized gains and losses which were de minimis.

Gross realized gains and losses were determined using the specific identification method.

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

September 30, 2025

March 31, 2026

Amortized Cost Fair Value

5 unchanged sentences

Total $ 20,257 $ 20,265

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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

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 nine months ended September 30, 2025 and 2024 include the purchase of investments of $ 127 million and $ 75 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 $ 15 million and $ 23 million as of September 30, 2025 and December 31, 2024, respectively.

Marketable equity securities totaled $ 106 million and $ 180 million as of March 31, 2026 and December 31, 2025, respectively.

As of March 31, 2026, we held marketable equity securities with a fair value of $ 94 million with a time-based contractual sale restriction, which is set to expire in May 2026.

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

The carrying value of our non-marketable equity securities totaled $ 1.6 billion and $ 1.5 billion as of September 30, 2025 and December 31, 2024, respectively.

As of September 30, 2025 and December 31, 2024, we had non-marketable equity securities of $ 213 million and $ 200 million, respectively, for which we have the ability to exercise significant influence, but not control, over the investee.

The carrying value of our non-marketable equity securities totaled $ 1.7 billion as of both March 31, 2026 and December 31, 2025.

As of both March 31, 2026 and December 31, 2025, we had non-marketable equity securities of $ 215 million for which we have the ability to exercise significant influence, but not control, over the investee.

We account for these equity securities using the equity method of accounting.

2 unchanged sentences

Measurement Alternative adjustments

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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

Three Months Ended March 31,

(In millions)

2 unchanged sentences

Net additions (reductions) (1)

6 20 ( 48 ) 85

Gross unrealized gains 45 55

2 unchanged sentences

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

The following table summarizes the cumulative gross unrealized gains and cumulative gross unrealized losses and impairment related to non-marketable equity securities accounted for under the Measurement Alternative held at September 30, 2025 and December 31, 2024, respectively:

September 30,

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

2026 December 31,

2 unchanged sentences

Cumulative gross unrealized losses and impairments $ ( 421 ) $ ( 353 )

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

1 unchanged sentence

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 September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

Net unrealized gains (losses) $ ( 97 ) $ 48

Supplemental cash flow information related to investments

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

2 unchanged sentences

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 September 30, 2025 and December 31, 2024:

September 30, 2025 Quoted Prices in

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

March 31, 2026 Quoted Prices in

Active Markets for

12 unchanged sentences

Mortgage-backed and asset-backed securities 403 — 403

Commercial paper 570 — 570

Total short-term investments 2,286 — 2,286

10 unchanged sentences

government and agency securities 480 — 480

Foreign government and agency securities 50 — 50

Corporate debt securities 543 — 543

5 unchanged sentences

$ 60 $ — $ 60

Total financial liabilities $ 229 $ — $ 229

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

3 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

36 unchanged sentences

$ 158 $ — $ 158

Total financial liabilities $ 37 $ — $ 37

(1) Excludes cash and cash equivalents of $ 8.0 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.

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

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

4 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 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).

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

We elect to account for available-for-sale debt securities denominated in currencies other than the functional currency of our subsidiaries under the fair value option.

Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the condensed consolidated statements of income (loss) to significantly reduce the accounting asymmetry that would otherwise arise when recognizing the corresponding foreign exchange gains and losses relating to customer liabilities.

The following table summarizes the estimated fair value and amortized cost of our available-for-sale debt securities under the fair value option as of September 30, 2025 and December 31, 2024:

September 30, 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 March 31, 2026 and December 31, 2025:

March 31, 2026 December 31, 2025

Amortized Cost Fair Value Amortized Cost Fair Value

(In millions) (In millions)

(In millions)

Funds receivable and customer accounts $ 600 $ 598 $ 621 $ 620

The following table summarizes the gains (losses) from fair value changes recognized in other income (expense), net related to the available-for-sale debt securities under the fair value option for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

1 unchanged sentence

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

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

September 30, 2025 Significant Other

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

March 31, 2026 Significant Other

Observable Inputs

4 unchanged sentences

Total $ 1,495 $ 1,350 $ 145

(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 nine months ended September 30, 2025.

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

December 31, 2025 Significant Other

7 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

9 unchanged sentences

FINANCIAL ASSETS AND LIABILITIES NOT MEASURED AND RECORDED AT FAIR VALUE

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 $ 10.4 billion as of September 30, 2025.

Our financial instruments, including cash, PayPal USD stablecoin (“PYUSD”), time deposits, certain loans and interest receivable, held for sale, loans and interest receivable, net, notes receivable, commercial paper, and debt related to borrowings on our credit facilities are carried at amortized cost, which approximates their fair value.

Our term debt (including current portion) had a carrying value of approximately $ 10.8 billion and fair value of approximately $ 10.1 billion as of March 31, 2026.

Our term debt (including current portion) had a carrying value of approximately $ 10.8 billion and fair value of approximately $ 10.3 billion as of December 31, 2025.

If these financial instruments were measured at fair value in the financial statements, cash and 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;

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

time deposits, certain loans and interest receivable, held for sale, commercial paper, and term debt (including current portion) would be classified as Level 2;

and the remaining financial instruments would be classified as Level 3 in the fair value hierarchy.

18 unchanged sentences

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.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 30, 2025, we estimated that $ 199 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 nine months ended September 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.

As of March 31, 2026, we estimated that $ 82 million of net derivative gains related to our cash flow hedges included in AOCI are expected to be reclassified into earnings within the next 12 months.

During the three months ended March 31, 2026 and 2025, we did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction.

If we elect to discontinue our cash flow hedges and it is probable that the original forecasted transaction will occur, we will continue to report the derivative’s gain or loss in AOCI until the forecasted transaction affects earnings, at which point we will also reclassify it into earnings.

Gains and losses on derivatives held after we discontinue our cash flow hedges and on derivative instruments that are not designated as cash flow hedges are recorded in the same financial statement line to which the derivative relates.

12 unchanged sentences

FAIR VALUE OF DERIVATIVE CONTRACTS

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

Balance Sheet Location September 30,

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

Balance Sheet Location March 31,

2026 December 31,

12 unchanged sentences

Total derivative liabilities $ 60 $ 158

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

2 unchanged sentences

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 September 30,

Three Months Ended March 31,

(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 $ 8,417 $ 13 $ 7,847 $ ( 80 )

Net revenues Customer support and operations Technology and development Other income (expense), net

Total amounts presented in the condensed consolidated statements of income (loss) in which the effects of cash flow hedges are recorded

$ 8,353 $ 446 $ 793 $ ( 95 )

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

1 unchanged sentence

( 86 ) ( 1 ) ( 1 ) —

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

— 62 — ( 177 )

Total net gains (losses)

$ ( 86 ) $ ( 1 ) $ ( 1 ) $ 53

Nine Months Ended September 30,

Three Months Ended March 31,

(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 $ 24,496 $ 111 $ 23,431 $ 35

Net revenues Customer support and operations Technology and development Other income (expense), net

Total amounts presented in the condensed consolidated statements of income (loss) in which the effects of cash flow hedges are recorded

$ 7,791 $ 398 $ 731 $ 73

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

1 unchanged sentence

35 ( 1 ) ( 1 ) —

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

— ( 173 ) — ( 172 )

Total net gains (losses)

$ 35 $ ( 1 ) $ ( 1 ) $ ( 83 )

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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

1 unchanged sentence

$ 104 $ ( 143 )

Unrealized net gains (losses) on foreign exchange contracts designated as net investment hedges

— ( 149 ) — 50

Total unrealized net gains (losses) recognized from derivative contracts designated as hedging instruments in the condensed consolidated statements of comprehensive income (loss)

$ 29 $ ( 309 ) $ ( 430 ) $ 11

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTIONAL AMOUNTS OF DERIVATIVE CONTRACTS

1 unchanged sentence

however, this amount is not recorded on the balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the derivative instruments.

The notional amount is generally not exchanged, but is used only as the underlying basis on which the value of foreign currency exchange payments under these contracts is determined.

The notional amount is generally not exchanged, and used only as the underlying basis on which the value of foreign currency exchange payments under these contracts is determined.

The following table provides the notional amounts of our outstanding derivative instruments:

September 30,

2026 December 31,

8 unchanged sentences

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

The following tables present the derivative assets and derivative liabilities not offset on the condensed consolidated balance sheets but available for offset in the event of default.

The tables also present the cash and non-cash collateral received or pledged relating to these positions.

1 unchanged sentence

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

Amounts Presented on the Condensed Consolidated Balance Sheet

Financial Instruments (1)

Amounts Not Offset on the Condensed Consolidated Balance Sheets

Amounts Presented on the Condensed Consolidated Balance Sheets Financial Instruments (1)

Collateral Received (2)

(In millions)

As of September 30, 2025

As of March 31, 2026

Derivative assets (3)

$ 188 $ 25 $ 107 $ 56

Reverse repurchase agreements (4)

$ 48 $ 26 $ 6 $ 16

As of December 31, 2025

1 unchanged sentence

$ 20 $ 13 $ 2 $ 5

Reverse repurchase agreements (4)

$ 330 $ 23 $ 256 $ 51

Amounts Not Offset on the Condensed Consolidated Balance Sheet

Amounts Presented on the Condensed Consolidated Balance Sheet

Financial Instruments (1)

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Amounts Not Offset on the Condensed Consolidated Balance Sheets

Amounts Presented on the Condensed Consolidated Balance Sheets Financial Instruments (1)

Collateral Pledged (2)

(In millions)

As of September 30, 2025

As of March 31, 2026

Derivative liabilities (3)

4 unchanged sentences

(1) For derivative positions, this includes any derivative fair value 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 condensed consolidated balance sheet unless the counterparty defaults.

(3) We received cash collateral from derivative counterparties totaling $ 7 million and $ 162 million as of September 30, 2025 and December 31, 2024, respectively, and securities from derivative counterparties with a fair value of $ 35 million and $ 30 million as of September 30, 2025 and December 31, 2024, respectively.

We posted $ 214 million and $ 7 million of cash collateral as of September 30, 2025 and December 31, 2024, respectively, and securities to derivative counterparties with a fair value of $ 50 million and nil as of September 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 nil and $ 96 million as of September 30, 2025 and December 31, 2024, respectively.

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

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

We posted $ 46 million and $ 156 million of cash collateral as of March 31, 2026 and December 31, 2025, respectively, and securities to derivative counterparties with a fair value of $ 77 million and $ 91 million as of March 31, 2026 and December 31, 2025, respectively.

NOTE 11— LOANS AND INTEREST RECEIVABLE

We classify our loans and interest receivable based on management intent.

When PayPal has the intent to sell the loans to third-party investors they are classified as loans and interest receivable, held for sale on our condensed consolidated balance sheets and 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).

In connection with the sale of certain portfolios to third-party investors and the reclassification and measurement of those portfolios as held for sale, we reverse the previously recorded allowances for credit losses associated with those loans and interest receivable balances.

We receive a market-based service fee for servicing the loans sold.

When PayPal has the intent and ability to hold the loans for the foreseeable future they are classified as loans and interest receivable, net on our condensed consolidated balance sheets and are reported at their outstanding balances, net of any participation interests sold, unamortized deferred origination fees and costs, and allowance for credit losses.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

LOANS AND INTEREST RECEIVABLE, HELD FOR SALE

As of September 30, 2025 and December 31, 2024, loans and interest receivable, held for sale was $ 1.4 billion and $ 541 million, respectively, and include both loans reclassified to held for sale and loans originated as held for sale.

During the nine months ended September 30, 2025 we reclassified approximately $ 574 million of loans and interest receivable, net to loans and interest receivable, held for sale.

During the nine months ended September 30, 2025, we derecognized loans with an unpaid balance of $ 18.3 billion and had net proceeds of $ 18.2 billion from loans and interest receivable sold.

During the nine months ended September 30, 2024, we derecognized loans with an unpaid balance of $ 14.8 billion and had net proceeds of $ 14.7 billion, from loans and interest receivable sold.

As of March 31, 2026 and December 31, 2025, loans and interest receivable, held for sale was $ 1.8 billion and $ 1.7 billion, respectively, and include both loans reclassified to held for sale and loans originated as held for sale.

During the three months ended March 31, 2026, we derecognized loans with an unpaid balance of $ 7.5 billion and had net proceeds of $ 7.4 billion from loans and interest receivable sold.

During the three months ended March 31, 2025, we derecognized loans with both an unpaid balance and net proceeds of $ 5.3 billion from loans and interest receivable sold.

LOANS AND INTEREST RECEIVABLE, NET

4 unchanged sentences

We offer non interest-bearing installment credit products in these markets as well as interest-bearing installment credit products in the U.S.

and Germany, among other markets.

We purchase receivables related to interest-bearing installment loans extended to U.S.

consumers by an independent chartered financial institution (“partner institution”) and are responsible for the servicing functions related to that portfolio.

During the nine months ended September 30, 2025 and 2024, we purchased approximately $ 934 million and $ 390 million in consumer receivables, respectively.

As of September 30, 2025 and December 31, 2024, the outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $ 5.2 billion and $ 5.4 billion, respectively, net of the participation interest sold to the partner institution of $ 28 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.

Credit risk management begins with initial underwriting and continues through the full repayment of a loan.

To assess a consumer who requests a loan, we use, among other indicators, internally developed risk models using detailed information from external sources, such as credit bureaus where available, and internal data, including the consumer’s prior repayment history with our credit products where available.

We use delinquency status and trends to assist in making (or, for interest-bearing installment loans in the U.S., to assist the partner institution in making) new and ongoing credit decisions, to adjust our models, to plan our collection practices and strategies, and in determining our allowance for consumer loans and interest receivable.

During the three months ended March 31, 2026 and 2025, we purchased approximately $ 369 million and $ 277 million in consumer receivables, respectively.

As of March 31, 2026 and December 31, 2025, the outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $ 5.4 billion and $ 5.5 billion, respectively, net of the participation interest sold to the partner institution of $ 33 million for both March 31, 2026 and December 31, 2025.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

1 unchanged sentence

Consumer receivables delinquency and allowance

The following tables present the delinquency status and gross charge-offs of consumer loans and interest receivable by year of origination.

The following tables present the delinquency status and gross charge-offs of revolving and installment loans and interest receivable by year of origination, as applicable.

The amounts are based on the number of days past the billing date for revolving loans or contractual repayment date for installment loans.

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

September 30, 2025

March 31, 2026

(In millions, except percentages)

8 unchanged sentences

Total $ 2,781 $ 1,093 $ 1,171 $ 291 $ 78 $ — $ 5,414 100 %

Gross charge-offs for the nine months ended September 30, 2025

Gross charge-offs for the three months ended March 31, 2026

$ 35 $ — $ 33 $ 3 $ — $ — $ 71

12 unchanged sentences

$ 136 $ 36 $ 107 $ 20 $ 1 $ — $ 300

1Q 2026 FORM 10-Q

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 nine months ended September 30, 2025 and 2024:

September 30, 2025 September 30, 2024

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

March 31, 2026 March 31, 2025

Consumer Loans Receivable Interest Receivable Total Allowance

2 unchanged sentences

Beginning balance $ 366 $ 3 $ 369 $ 341 $ 7 $ 348

Changes in allowance due to reclassification of loans and interest receivable to or from held for sale ( 23 ) — ( 23 ) — — —

Provisions 55 3 58 55 3 58

3 unchanged sentences

Ending balance $ 373 $ 3 $ 376 $ 347 $ 5 $ 352

(1) Beginning balances, provisions and charge-offs include amounts related to loans and interest receivable prior to their reclassification to loan and interest receivable, held for sale during the period.

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at September 30, 2025 for our consumer receivable portfolio remained consistent with the allowance for credit losses at December 31, 2024.

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.

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

In the first quarter of 2026, we updated our expected credit loss model for interest bearing installment loans in the U.S.

to reflect current risk characteristics.

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

Merchant receivables

We offer access to merchant finance products for certain small and medium-sized businesses through our PayPal Working Capital (“PPWC”) and PayPal Business Loan (“PPBL”) products, which we collectively refer to as our merchant finance offerings.

We offer access to merchant finance products for certain small and medium-sized businesses through our PayPal Working Capital (“PPWC”) product in the U.S., Germany, and U.K., among other markets, and our PayPal Business Loan (“PPBL”) product in the U.S., which we collectively refer to as our merchant finance offerings.

We purchase receivables related to credit extended to U.S.

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

During the nine months ended September 30, 2025 and 2024, we purchased approximately $ 1.6 billion and $ 1.2 billion in merchant receivables, respectively.

As of September 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 $ 62 million and $ 53 million, respectively.

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.

Loans and advances are repaid through a fixed percentage of the merchant’s future payment volume that PayPal processes.

Through our PPBL product, we provide merchants access to short-term business financing for a fixed fee based on an evaluation of the applying business as well as the business owner.

PPBL repayments are collected through periodic payments until the balance has been satisfied.

The interest or fee is fixed at the time the loan or advance is extended and is recognized as deferred revenue in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

The fixed interest or fee is amortized into revenues from other value added services based on the amount repaid over the repayment period.

We estimate the repayment period for PPWC based on the merchant’s payment processing history with PayPal.

For PPWC, there is a general requirement that at least 10 % of the original amount of the loan or advance plus the fixed fee must be repaid every 90 days.

We calculate the repayment rate of the merchant’s future payment volume so that repayment of the loan or advance and fixed fee is expected to generally occur within 9 to 12 months from the date of the loan or advance.

On a monthly basis, we recalculate the repayment period based on the repayment activity on the receivable.

As such, actual repayment periods are dependent on actual merchant payment processing volumes.

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.

To assess a merchant seeking a loan or advance, we use, among other indicators, risk models developed internally which utilize information obtained from multiple internal and external data sources to predict the likelihood of timely and satisfactory repayment by the merchant of the loan or advance amount and the related interest or fee.

Primary drivers of the models include the merchant’s annual payment volume, payment processing history with PayPal, prior repayment history with PayPal’s credit products where available, information sourced from consumer and business credit bureau reports, and other information obtained during the application process.

We use delinquency status and trends to assist in making (or, in the U.S., to assist the partner institution in making) ongoing credit decisions, to adjust our internal models, to plan our collection strategies, and in determining our allowance for these loans, advances, and interest and fees receivable.

During the three months ended March 31, 2026 and 2025, we purchased approximately $ 570 million and $ 494 million in merchant receivables, respectively.

As of March 31, 2026 and December 31, 2025, the total outstanding balance in our pool of merchant loans, advances, and fees receivable was $ 1.9 billion and $ 1.8 billion, respectively, net of the participation interest sold to the partner institution of $ 66 million and $ 65 million, respectively.

Merchant receivables delinquency and allowance

The following tables present the delinquency status and gross charge-offs of merchant loans, advances, and interest and fees receivable by year of origination.

The following tables present the delinquency status and gross charge-offs of merchant loans, advances, and fees receivable by year of origination.

The amounts are based on the number of days past the expected or contractual repayment date for amounts outstanding.

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

September 30, 2025

March 31, 2026

(In millions, except percentages)

2024 2023 2022 2021 Prior Total Percent

Merchant loans, advances, and interest and fees receivable:

2025 2024 2023 2022 Total Percent

Merchant loans, advances, and fees receivable:

Current $ 818 $ 803 $ 26 $ 3 $ 4 $ 1,654 89.4 %

4 unchanged sentences

Total $ 830 $ 946 $ 63 $ 8 $ 4 $ 1,851 100.0 %

Gross charge-offs for the nine months ended September 30, 2025

Gross charge-offs for the three months ended March 31, 2026

$ — $ 25 $ 13 $ 2 $ — $ 40

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

December 31, 2025

1 unchanged sentence

2024 2023 2022 2021 Prior Total Percent

Merchant loans, advances, and interest and fees receivable:

Merchant loans, advances, and fees receivable:

Current $ 1,558 $ 53 $ 5 $ 3 $ — $ 2 $ 1,621 89.8 %

6 unchanged sentences

$ 25 $ 87 $ 19 $ 4 $ — $ 2 $ 137

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 nine months ended September 30, 2025 and 2024:

September 30, 2025 September 30, 2024

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

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

March 31, 2026 March 31, 2025

Merchant Loans and Advances Fees Receivable

Total Allowance Merchant Loans and Advances Fees Receivable

Total Allowance

(In millions)

3 unchanged sentences

Recoveries 4 — 4 6 — 6

( 1 ) — ( 1 ) — — —

Ending balance $ 169 $ 15 $ 184 $ 128 $ 7 $ 135

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at September 30, 2025 for our merchant receivable portfolio was $ 163 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.

NOTE 12— DEBT

In March 2025, we issued fixed and floating rate notes with varying maturity dates for an aggregate principal amount of $ 1.5 billion, consisting of $ 450 million aggregate principal amount of floating rate notes due 2028 (the “2028 Floating Rate Notes”), $ 450 million aggregate principal amount of 4.450 % notes due 2028 (the “2028 Notes”) and $ 600 million aggregate principal amount of 5.100 % notes due 2035 (the “2035 Notes”).

Interest on the 2028 Floating Rate Notes is payable on March 6, June 6, September 6 and December 6 of each year, beginning on June 6, 2025.

The 2028 Floating Rate Notes bear interest at a floating rate equal to the compounded secured overnight financing rate, reset quarterly, plus 0.670 % per annum.

Interest on the 2028 Notes is payable on March 6 and September 6 of each year, beginning on September 6, 2025.

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 $ 606 million as of September 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.

Upon the occurrence of both a change of control of the Company and a downgrade of the Notes below an investment grade rating, we will be required to offer to repurchase each series of Notes at a price equal to 101 % of the then outstanding principal amounts, plus accrued and unpaid interest.

The Notes are subject to covenants, including limitations on our ability to create liens on our assets, enter into sale and leaseback transactions, and merge or consolidate with another entity, in each case subject to certain exceptions, limitations, and qualifications.

Proceeds from the issuance of these Notes may be used for general corporate purposes, which may include funding the repayment or redemption of outstanding debt, share repurchases, ongoing operations, capital expenditures, and possible acquisitions of businesses, assets, or strategic investments.

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

As of September 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 September 30,

NOTE 12— DEBT

The following table summarizes total long-term debt:

Maturities Effective Interest Rate March 31,

2026 December 31,

10 unchanged sentences

6/1/2050 3.33 % 1,000 1,000

Fixed-rate 3.250 % notes

6/1/2050 3.33 % 1,000 1,000

May 2022 debt issuance:

12 unchanged sentences

6/9/2028 1.31 % 232 237

¥ 37 billion fixed-rate 1.240 % notes

6/9/2028 1.31 % 249 236

May 2024 debt issuance:

5 unchanged sentences

Floating-rate notes 3/6/2028 4.73 % 450 450

3/6/2028 5.22 % 450 —

Fixed-rate 4.450 % notes

3 unchanged sentences

Total term debt

10,876 10,884

Unamortized premium (discount) and issuance costs, net ( 73 ) ( 76 )

2 unchanged sentences

Total carrying amount of term debt

$ 9,409 $ 9,412

(1) Principal amounts represent the U.S.

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

dollar equivalent as of March 31, 2026 and December 31, 2025, 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 $ 107 million and $ 315 million for the three and nine months ended September 30, 2025, respectively.

The interest expense recorded for the Notes, including amortization of the debt discount and debt issuance costs, was $ 100 million and $ 274 million for the three and nine months ended September 30, 2024, respectively.

As of March 31, 2026, the future principal payments associated with our long-term debt was as follows (in millions):

Remaining 2026

Thereafter 5,350

Total $ 10,876

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

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 $ 106 million and $ 98 million for the three months ended March 31, 2026 and 2025, respectively.

CREDIT FACILITIES

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 $ 606 million as of September 30, 2025).

As of September 30, 2025 and December 31, 2024, ¥ 90.0 billion (approximately $ 606 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 September 30, 2025, no borrowing capacity was available for the purposes permitted by the Paidy Credit Agreement.

During the three and nine months ended September 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 September 30, 2025, the future principal payments associated with our term debt were as follows (in millions):

Thereafter 6,350

Total $ 10,904

The Paidy Credit Agreement will terminate and all amounts owed thereunder will be due and payable in February 2027, unless the commitments are terminated earlier.

As of March 31, 2026 and December 31, 2025, ¥ 90.0 billion (approximately $ 563 million) and ¥ 90.0 billion (approximately $ 575 million) was drawn down under the Paidy Credit Agreement, respectively, which was recorded in accrued expenses and other current liabilities and long-term debt, respectively, on our condensed consolidated balance sheets.

The weighted average interest rate on the borrowing was 1.42 % as of March 31, 2026.

At March 31, 2026, no borrowing capacity was available for the purposes permitted by the Paidy Credit Agreement.

During the three months ended March 31, 2026 and 2025, the total interest expense and fees we recorded related to the Paidy Credit Agreement were de minimis.

COMMERCIAL PAPER

There was $ 200 million outstanding in Commercial Paper Notes as of both March 31, 2026 and December 31, 2025, which was recorded in accrued expenses and other current liabilities on our condensed consolidated balance sheets.

The weighted average interest rate on the commercial paper borrowings was 3.99 % and 4.07 % as of March 31, 2026 and December 31, 2025, respectively.

The maturities of the Commercial Paper Notes may vary, but may not exceed 397 days from the date of issuance.

Other than as provided above, there were no significant changes to the information disclosed in our 2025 Form 10-K.

6 unchanged sentences

if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range.

For those proceedings in which an unfavorable outcome is reasonably possible but not probable, we have disclosed an estimate of the reasonably possible loss or range of losses or we have concluded that an estimate of the reasonably possible loss or range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) are not material.

For those proceedings in which an unfavorable outcome is reasonably possible but not probable, (i) we have disclosed an estimate of the reasonably possible loss or range of losses or (ii) we have concluded that our estimate of the reasonably possible loss or range of losses arising directly from the proceeding (i.e., monetary damages or amounts paid in judgment or settlement) is not material.

If we cannot estimate the probable or reasonably possible loss or range of losses arising from a legal proceeding, we have disclosed that fact.

1 unchanged sentence

With respect to the matters disclosed in this Note 13, we are unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

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 September 30, 2025.

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, 2026.

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.

17 unchanged sentences

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

In March 2026, we received notices of investigations and related requests for information from the U.K.

Financial Conduct Authority (“FCA”) under the Competition Act 1998 regarding certain provisions in PayPal’s contractual agreements with Visa and Mastercard relating to funding and use of the PayPal digital wallet.

We are cooperating with the FCA in connection with these investigations.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

Legal proceedings

13 unchanged sentences

On March 17, 2025, the lead plaintiff filed an amended complaint.

Defendants have filed a motion to dismiss the amended complaint.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On March 31, 2026, the Court dismissed all of the claims with prejudice.

On April 30, 2026, the plaintiffs filed an appeal in the U.S.

Court of Appeals for the Third Circuit.

On November 2, 2022, a putative shareholder derivative action captioned Shah v.

13 unchanged sentences

The Derivative Actions have been stayed pending further developments in the PPH Securities Action.

On December 20, 2022, a civil lawsuit captioned State of Hawai‘i, by its Office of Consumer Protection, v.

PayPal, Inc., and PayPal Holdings, Inc.

1CCV-22-0001610, was filed in the Circuit Court of the First Circuit of the State of Hawai‘i (the “Hawai‘i Action”).

The Hawai‘i Action asserts claims for unfair and deceptive acts and practices under Hawai‘i Revised Statutes Sections 480-2(a) and 481A-3(a).

Plaintiff seeks injunctive relief as well as unspecified penalties and other monetary relief.

On July 14, 2023, the court denied Defendants’ motion to dismiss the complaint.

We expect to reach a final settlement in this matter in the fourth quarter of 2025.

On February 17, 2026, a putative securities class action captioned Goodman v.

PayPal Holdings, Inc.

5:26-cv-01381-NW, was filed in the U.S.

District Court for the Northern District of California (the “Goodman Securities Action”).

On March 5, 2026, before the Company entered an appearance, the plaintiff filed a notice of voluntary dismissal.

On March 31, 2026, the court closed the matter.

On February 24, 2026, a putative securities class action captioned Darcy v.

PayPal Holdings, Inc.

3:26-cv-01589-JSC, was filed in the U.S.

District Court for the Northern District of California (the “Darcy Securities Action”).

The Darcy Securities Action purports to be brought on behalf of purchasers of the Company’s stock between February 25, 2025 and February 2, 2026 (the “Darcy Class Period”), and asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against the Company and certain of its current and former officers.

The complaint alleges that certain public statements made by the Company during the Darcy Class Period were rendered materially false and misleading (which, allegedly, caused the Company’s stock to trade at artificially inflated prices) by the defendants’ failure to disclose impediments to its branded checkout growth strategy that impaired the Company’s ability to meet its 2027 financial targets.

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

On March 11, 2026, a putative shareholder derivative action captioned Goncalves v.

Chriss et al.

5:26-cv-02145-SVK, was filed in the U.S.

District Court for the Northern District of California (the “Goncalves Action”), purportedly on behalf of the Company.

The Goncalves Action is based on the same alleged facts and circumstances as the Darcy Securities Action.

The Goncalves Action names certain of our current and former officers, as well as members of our Board of Directors, as defendants.

The Goncalves Action alleges claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, contribution, and violations of the Securities Exchange Act of 1934, and seeks, on behalf of the Company, an award of damages and an order directing the Company to reform its corporate governance and internal procedures.

On April 2, 2026, a putative securities class action captioned Norfolk County Retirement System v.

PayPal Holdings, Inc.

5:26-cv-02849-VKD, was filed in the U.S.

District Court for the Northern District of California (the “Norfolk Securities Action”).

The Norfolk Securities Action generally asserts the same claims and allegations made in the Darcy Securities Action, but expands the Darcy Class Period to February 8, 2024 to February 2, 2026 and includes additional alleged misstatements from the earlier time period.

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

General matters

5 unchanged sentences

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.

In addition to these types of disputes and regulatory inquiries, our operations are also subject to regulatory and legal review and challenges that may reflect the increasing global regulatory focus to which the payments industry is subject and, when taken together with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on our business and customers and may lead to increased costs and decreased transaction volume and revenue.

Further, the number and significance of these disputes and inquiries are increasing as our business has grown and expanded in scale and scope, including the number of active accounts and payments transactions on our platform, the range and increasing complexity of the products and services that we offer, and our geographical operations.

In addition to these types of disputes and regulatory inquiries, our operations are also subject to regulatory and legal review and challenges that may reflect the increasing global regulatory focus and scrutiny to which the payments industry is subject and, when taken together with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on our business and customers and may lead to increased costs and decreased transaction volume and revenue.

Further, the number and significance of these disputes and inquiries are increasing as our business has grown and expanded in scale and scope, including the number of active accounts and payment transactions on our platform, the range and increasing complexity of the products and services that we offer, and our geographical operations.

Any claims or regulatory actions against us, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require us to change our products, services, or business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources, or otherwise harm our business.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

INDEMNIFICATION PROVISIONS

2 unchanged sentences

In addition, the indemnity rights we have against eBay under the agreements may not be sufficient to protect us, and our indemnity obligations to eBay may be significant.

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

In the ordinary course of business, we include indemnification provisions in certain of our agreements with parties with whom we have commercial relationships.

1 unchanged sentence

These indemnification provisions generally include indemnity for other types of third-party claims, which may be related to intellectual property rights, confidentiality, willful misconduct, data privacy obligations, and certain breach of contract claims, among others.

These indemnification provisions generally also include indemnity to our payments processors in the event of card association fines against the processor arising out of conduct by us or our customers.

These indemnification provisions generally also include indemnity to our payments processors arising out of conduct by us or our customers, including in the event of card association fines or other damages incurred by the processor.

It is not possible to determine the maximum potential loss under these indemnification provisions due to our limited history of prior indemnification claims and the unique facts and circumstances involved in each particular situation.

5 unchanged sentences

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.

As part of agreements to sell certain loans receivable portfolios, in certain circumstances such as breaches in loan warranties, we may be required to indemnify the third-party investors that purchased the loans or repurchase the loans.

As part of the agreements to sell certain loans receivable portfolios, in certain circumstances such as breaches in loan warranties, we may be required to indemnify the third-party investors that purchased the loans or repurchase the loans.

The estimate of the maximum potential amount of future payments we may be required to make is equal to the current outstanding balances of the loans sold;

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

As of September 30, 2025 and December 31, 2024, the current outstanding balances of the loans sold was $ 3.4 billion and $ 2.9 billion, respectively.

As of March 31, 2026 and December 31, 2025, the current outstanding balances of the loans sold was $ 3.4 billion and $ 3.8 billion, respectively.

The term of the indemnification obligations align to the maturities of the loans sold.

1 unchanged sentence

OFF-BALANCE SHEET ARRANGEMENTS

As of September 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.

As of March 31, 2026 and December 31, 2025, 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

1 unchanged sentence

Our protection programs help protect both consumers and merchants from financial loss resulting from, among other things, counterparty non-performance.

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 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 eligible 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 eligible item to the customer.

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

2 unchanged sentences

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

At September 30, 2025 and December 31, 2024, the allowance for transaction losses was $ 85 million and $ 86 million, respectively.

The allowance for negative customer balances was $ 334 million and $ 256 million at September 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 nine months ended September 30, 2025 and 2024:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

At March 31, 2026 and December 31, 2025, the allowance for transaction losses was $ 26 million and $ 73 million, respectively.

The allowance for negative customer balances was $ 284 million and $ 271 million at March 31, 2026 and December 31, 2025, 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, 2026 and 2025:

Three Months Ended March 31,

(in millions)

1 unchanged sentence

Provision (1)

397 264 1,058 783

Realized losses and charge-offs ( 359 ) ( 348 )

Recoveries (2)

41 53 109 117

Ending balance $ 310 $ 305

1 unchanged sentence

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

NOTE 14— STOCK REPURCHASE PROGRAMS

During the nine months ended September 30, 2025, we repurchased approximately 63 million shares of our common stock for approximately $ 4.5 billion at an average cost of $ 71.78 , excluding excise tax.

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

As of September 30, 2025, a total of approximately $ 355 million 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 the nine months ended September 30, 2025 and 2024, we recorded $ 38 million and $ 40 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 14 — STOCKHOLDERS’ EQUITY

STOCK REPURCHASE PROGRAM

During the three months ended March 31, 2026, we repurchased approximately 34 million shares of our common stock for approximately $ 1.5 billion at an average cost of $ 44.60 , excluding excise tax.

These shares were purchased in the open market under our stock repurchase program authorized in February 2025.

As of March 31, 2026, a total of approximately $ 12.4 billion remained available for future repurchases of our common stock under our February 2025 stock repurchase program.

DIVIDEND PROGRAM

In February 2026, the Company’s Board of Directors declared a cash dividend of $ 0.14 per share on our common stock, totaling approximately $ 130 million.

The dividend was paid on March 25, 2026, to stockholders of record of our common stock as of the close of business on March 4, 2026.

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.

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

The following table summarizes the impact of stock-based compensation expense on our results of operations for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(In millions)

3 unchanged sentences

General and administrative 74 72

Restructuring and other — 28 — 88

Total stock-based compensation expense $ 284 $ 267

Capitalized as part of internal use software and website development costs $ 31 $ 35

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

1 unchanged sentence

NOTE 16— INCOME TAXES

Our effective tax rate for both the three and nine months ended September 30, 2025 was 19 %.

Our effective tax rate for both the three and nine months ended September 30, 2024 was 23 %.

Our effective tax rate for both the three months ended March 31, 2026 and 2025 was 20 %.

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

federal statutory rate of 21% in the periods presented was primarily the result of foreign income taxed at different rates, tax expense related to stock-based compensation, and other discrete tax adjustments.

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 have enacted legislation that became effective as of January 1, 2025.

Our effective tax rate for the three and nine months ended September 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.

The provisions of the Act effective in 2025 were not material and have been reflected in our results, as applicable.

Gross unrecognized tax benefits were approximately $ 2.5 billion and $ 2.3 billion as of September 30, 2025 and December 31, 2024, respectively.

federal statutory rate of 21% in the periods presented was primarily the result of foreign and U.S.

income taxed at different rates as well as discrete tax adjustments including tax effects of stock-based compensation.

Gross unrecognized tax benefits were approximately $ 2.5 billion as of both March 31, 2026 and December 31, 2025.

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.

1 unchanged sentence

These adjustments or settlements could result in changes to our unrecognized tax benefits related to positions on prior year tax filings.

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

NOTE 17— RESTRUCTURING AND OTHER

4 unchanged sentences

The 2Q 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 the three and nine months ended September 30, 2025 were de minimis and $ 96 million, respectively, 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.

The 2Q 2025 Plan is expected to be executed over a period of 18 to 42 months with the workforce component expected to be substantially completed in 2026 and the technology infrastructure component expected to be substantially completed in 2028.

The following table summarizes the associated restructuring charges:

Three Months Ended

March 31, 2026 Total Plan Costs Incurred to Date

(In millions)

Employee severance and benefits costs $ 2 $ 98

Other restructuring costs (1)

(1) 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.

In connection with this restructuring, we expect to incur employee severance and benefits costs of approximately $ 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 2Q 2025 Plan.

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

1Q 2026 FORM 10-Q

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The following table summarizes the restructuring reserve activity during the nine months ended September 30, 2025:

Employee Severance and Benefits Costs

The following table summarizes the restructuring reserve activity during the three months ended March 31, 2026:

Employee Severance and Benefits Costs Other Restructuring Costs

(In millions)

Accrued liability as of January 1, 2026

$ 52 $ 6 $ 58

Payments ( 9 ) ( 3 ) ( 12 )

Accrued liability as of September 30, 2025

Accrued liability as of March 31, 2026

$ 45 $ 12 $ 57

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 nine months ended September 30, 2025 were $ 36 million and included employee severance and benefits costs, which was completed in the third quarter of 2025.

The following table summarizes the restructuring reserve activity during the nine months ended September 30, 2025:

Employee Severance and Benefits Costs

(In millions)

Accrued liability as of January 1, 2025

Payments ( 36 )

Accrued liability as of September 30, 2025

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 and nine months ended September 30, 2024 were $ 36 million and $ 294 million, respectively, 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 nine months ended September 30, 2025, approximately $ 70 million and $ 122 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 nine months ended September 30, 2024, approximately $ 28 million and $ 92 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.

PayPal Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

The associated restructuring charges during the three months ended March 31, 2025 were $ 39 million and included employee severance and benefits costs, which was completed in the third quarter of 2025.

During the three months ended March 31, 2026 and 2025, approximately $ 61 million and $ 25 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

3 unchanged sentences

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

(In millions)

4 unchanged sentences

Customer support and operations (1)

447 427 1,258 1,317

Sales and marketing (1)

521 508 1,592 1,375

Technology and development (1)

801 746 2,299 2,206

General and administrative (1)

513 519 1,477 1,553

Restructuring and other 74 66

3 unchanged sentences

(1) Includes depreciation and amortization expense.

For the three and nine months ended September 30, 2025, total depreciation and amortization expense was $ 245 million and $ 729 million, respectively.

For the three and nine months ended September 30, 2024, total depreciation and amortization expense was $ 255 million and $ 783 million, respectively.

For the three months ended March 31, 2026 and 2025, total depreciation and amortization expense was $ 238 million and $ 245 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.

For disclosure of geographical information, please refer to “Note 2—Revenue”.

NOTE 19— SUBSEQUENT EVENTS

On October 27, 2025, the Company’s Board of Directors declared a cash dividend of $ 0.14 per share on our common stock, totaling approximately $ 130 million.

The dividend will be payable on December 10, 2025, to stockholders of record of our common stock as of the close of business on November 19, 2025.

1Q 2026 FORM 10-Q

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