PayPal Holdings is on track to deliver at least $1.5 billion in gross run-rate savings over the next two to three years, with about $400 million of new run-rate savings targeted by the end of 2026. The plan comes as profitability faces pressure, with second quarter 2026 revenues up 5% year over year to $8.68 billion but non-GAAP operating income down 8% to $1.51 billion and non-GAAP operating margin falling to 17.4% from 19.8%. The savings plan has three main drivers: a simpler structure, operational and portfolio changes, and wider use of artificial intelligence, with AI expected to be the largest contributor at roughly 40% of total savings. PayPal is not planning to bank all those savings, as much of the money is expected to be reinvested in areas such as financial services, Buy Now Pay Later and Venmo. Shares of PayPal have gained 34.6% in the past three months, and the Zacks Consensus Estimate for full-year 2026 EPS has been revised upward to $5.37 in the past month.
PayPal Holdings IncPayPal targets $1.5B in cost savings, with AI as largest contributor, despite margin pressure.
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