LAST 3 MONTHS

1. SALES

SHARES: 837M · EPS: $1.28

2. CASH FLOW

• *1: WC = average of the last 10 fiscal years: -5.5%. As it is quarterly, the annual amount is divided by 4 = -93.1M. Deviation of reported working capital (-710M) versus theoretical WC (-93.1M): -616.9M. Cash Flow after the working capital adjustment is: 1592M - (-616.9M) = 2208.9M.

3. CAPITAL ALLOCATION

Does not reconcile: +860M remain unexplained between free capital and the identified uses. The gap corresponds to unmapped line items or to non-cash movements and balance sheet reclassifications (restricted cash, foreign exchange effect on cash, debt assumed in acquisitions or reclassifications between cash and investments) that should be reviewed in the cash flow and balance sheet notes of the report.

• *1: Balance debt: 13400M -> 13472M (+72M). Net debt: 2144M -> 3192M (+1048M). Balance cash: 8306M -> 7160M (-1146M); cash decreased: source of liquidity (+); Cash row = 1146M.
• *2: Short-term investments: change in the balance of marketable securities (2950M -> 3120M), net of -170M due to purchases exceeding sales (use of capital).

FULL YEAR TO DATE (9 MONTHS)

1. SALES

SHARES: 837M · EPS: $3.93

2. CASH FLOW

• *1: WC = average of the last 10 fiscal years: -5.5%. As it is quarterly, the annual amount is divided by 4 per quarter: -279.5M over 9 months. Deviation of reported working capital (-768M) versus theoretical WC (-279.5M): -488.5M. Cash Flow after the working capital adjustment is: 4709M - (-488.5M) = 5197.5M.
• *2: Taxes: The company should have paid 937.7M in taxes (23% on adjusted EBT of 4077M) and has only paid 420M in cash according to the cash flow statement. Adjustment of -517.7M to Normalized Cash Flow for the tax discrepancy.
• *3: Stock Options / Share-based compensation (SBC): The company reports 767M in share-based compensation added back to operating cash flow. Assuming effective shareholder dilution and given that it is usually granted at a discount, under a conservative approach the full amount of this line item is deducted (-767M) from Normalized Cash Flow. The final figure combines the three adjustments to Cash Flow: 4709M +488.5M (working capital) -517.7M (taxes) -767M (stock options) = 3912.8M.

3. CAPITAL ALLOCATION

More or less reconciles. Even so, there may be some detail I have missed.

• *1: Balance debt: 11583M -> 13472M (+1889M). Net debt: 1161M -> 3192M (+2031M). Balance cash: 8049M -> 7160M (-889M); cash decreased: source of liquidity (+); Cash row = 889M.
• *2: Short-term investments: net flow of marketable securities for the period (purchases of 18555M versus sales of 14218M), net of -4337M (use of capital).
• *3: Acquisitions: 122M was allocated to the purchase of a company (total price of 134M), completed in the first quarter of 2026 and paid mainly in cash (use of funds).
• *4: Restricted cash goes from 15969M to 12929M; the release of 3040M financed the acquisition in the period (122M).

QUARTERLY NOTES AND RELEVANT INFORMATION

Guidance · Guidance raised

PayPal raises its non-GAAP EPS guidance for fiscal year 2026 to ~$5.60 (from ~$5.38 previously) and raises TM$ to ~15,700M. It reaffirms GAAP EPS (~$5.07), adjusted FCF of 6,500M+, share buybacks of 6,000M and CAPEX of ~1,000M. For 4Q 2026 it expects GAAP EPS of ~$1.37 and non-GAAP EPS of ~$1.43.

• Restructuring and cost savings: The company recorded $152M in restructuring charges in the quarter associated with the 3Q 2026 plan (global workforce reduction) and an additional $17M from the strategic reorganization plan announced in April 2026. The 2Q 2025 plan has accumulated $124M in costs incurred to date and is expected to generate gross run-rate savings of at least $1,500M over 2-3 years, with more than $700M by year-end.
• Share buybacks: PayPal repurchases approximately 28 million shares in 3Q 2026 for $1,515M, representing approximately 3.3% of shares outstanding. Over the nine months of 2026, share buybacks amount to $4,553M.
• Dividend: The company paid $370M in dividends during the nine months of 2026 ($0.14 per share quarterly).