PayPal CEO exits as stock plunges 20% on weak 2026 forecast and missed holiday quarter
Feb 3, 2026
Key Points
- PayPal's board ousts CEO Alex Kris after missing Q4 revenue by $130 million and issuing weak 2026 profit guidance, with stock falling 20% on the announcement.
- HP's Enrique Lores becomes CEO effective March 1, inheriting a $33 billion revenue company whose stock has dropped 85% over five years despite 500 million active users.
- PayPal expects full-year profit to decline or stay flat, well below Wall Street's 8% growth expectations, and withdrew multi-year guidance citing weakening retail spending and labor market softness.
Summary
PayPal's board ousted CEO Alex Kris and named HP's Enrique Lores as his replacement, effective March 1, after the payments company missed Q4 2025 revenue estimates ($8.68B actual versus $8.8B expected) and issued a weak 2026 profit outlook. The stock fell 20% on the announcement. CFO Jamie Miller serves as interim CEO until Lores takes over.
Kris was brought in to navigate slowing growth and intensifying competition from large tech companies and fintech rivals. The board said execution under his tenure did not meet expectations. Lores spent over six years as president and CEO of HP before the move. Wall Street analysts raised questions about PayPal's turnaround strategy, particularly given how suddenly the transition was announced compared to other recent CEO successions like Disney's.
PayPal generates $33 billion in annual net revenue as a $40 billion public company, yet its stock is down 85% over the past five years. The company owns Venmo, a strong asset, but faces sustained competitive pressure from Cash App, Apple Pay, and other payment alternatives. The Braintree acquisition that housed Venmo was largely a lucky outcome rather than a deliberate strategic win.
The earnings miss arrived while PayPal announced a partnership to embed its digital wallet directly into ChatGPT for 2026. During a strong holiday quarter when competitors onboarded customers and accelerated growth, PayPal declined. This signals a structural problem.
PayPal expects full-year adjusted profit to range from a low single-digit percentage decline to a slight increase, well below Wall Street's roughly 8% growth expectations. The company withdrew its previous multi-year 2027 outlook and will now provide forecasts one year at a time, signaling increased uncertainty. Miller cited weakening retail spending, elevated interest rates, and softening labor market conditions as headwinds.
Lores inherits an established payments infrastructure and half a billion active users but faces pressure to answer whether PayPal can compete with tech giants and newer fintech entrants, or whether the company has structurally lost relevance.