10-K – 2026-02-03 – pypl-20251231.htm

The Luxembourg Commission de Surveillance du Secteur Financier (the “CSSF”) has agreed that PayPal’s management may designate up to 50 % of European customer balances held in our Luxembourg banking subsidiary to fund European and U.K. credit activities. As of December 31, 2025 and 2024, the cumulative amount approved by PayPal to be designated to fund credit activities was $ 2.0 billion as of those respective dates and represented approximately 26 % of European customer balances made available for our corporate use as of those respective dates, as determined by applying financial regulations maintained by the CSSF. At the time PayPal’s management designates the European customer balances held in our Luxembourg banking subsidiary to be used to extend credit, the balances are classified as cash and cash equivalents and no longer classified as customer accounts on our consolidated balance sheets. The remaining assets underlying the customer balances remain separately classified as customer accounts on our consolidated balance sheets. We identify these customer accounts separately from corporate funds and maintain them in interest and non-interest bearing bank deposits, time deposits, and available-for-sale debt securities. Customer balances deposited with our partners on a short-term basis in advance of customer transactions and used to fulfill our direct obligation under amounts due to customers are classified as cash and cash equivalents within our customer accounts classification on our consolidated balance sheets. See “Note 8—Cash and Cash Equivalents, Funds Receivable and Customer Accounts, and Investments” for additional information related to customer accounts.

Customer-owned cryptocurrency assets are not recorded on our consolidated balance sheets because we do not have a present right to obtain the related economic benefits or restrict others' access to those benefits. Accordingly, the assets remain the property of our customers.

FY 2025 FORM 10-K
68

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Funds receivable and funds payable

Funds receivable and funds payable arise due to the time required to initiate collection from and clear transactions through external payment networks. When customers fund their PayPal account using their bank account, credit card, or debit card, or withdraw funds from their PayPal account to their bank account or through a debit card transaction, there is a clearing period before the cash is received or settled, usually one to three business days for U.S. transactions and generally up to five business days for international transactions. In addition, a portion of our customers’ funds are settled directly to their bank account. These funds are also classified as funds receivable and funds payable and arise due to the time required to initiate collection from and clear transactions through external payment networks.

We present changes in funds receivable and funds payable and amounts due to customers as cash flows from investing activities and financing activities, respectively, on our consolidated statements of cash flows based on the nature of the activity underlying our customer accounts.

Property and equipment

Property and equipment consists primarily of computer equipment, software and website development costs, land and buildings, leasehold improvements, and furniture and fixtures. Property and equipment are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets; generally, one to five years for computer equipment and software, including capitalized software and website development costs, three years for furniture and fixtures, up to 30 years for buildings and building improvements, and the shorter of five years or the non-cancelable term of the lease for leasehold improvements.

Direct costs incurred to develop software for internal use and website development costs, including those costs incurred in expanding and enhancing our payments platform, are capitalized and amortized generally over an estimated useful life of three years and are recorded as amortization within the financial statement captions aligned with the internal organizations that are the primary beneficiaries of such assets. We capitalized $ 642  million and $ 509  million of internally developed software and website development costs for the years ended December 31, 2025 and 2024, respectively. Amortization expense for these capitalized costs was $ 515  million, $ 498  million, and $ 482  million for the years ended December 31, 2025, 2024, and 2023, respectively. Costs related to the maintenance of internal use software and website development costs are expensed as incurred.

Leases

We determine whether an arrangement is a lease for accounting purposes at contract inception. Operating leases are recorded as right-of-use (“ROU”) assets which are included in other assets , and lease liabilities which are included in accrued expenses and other current liabilities and other long-term liabilities on our consolidated balance sheets. ROU assets for finance leases are included in property and equipment, and lease liabilities for finance leases are included in accrued expenses and other current liabilities and other long-term liabilities on our consolidated balance sheets. For sale-leaseback transactions, we evaluate the sale and the lease arrangement based on our conclusion as to whether control of the underlying asset has been transferred, and recognize the sale-leaseback as either a sale transaction or under the financing method. The financing method requires the asset to remain on our consolidated balance sheets throughout the term of the lease and the proceeds to be recognized as a financing obligation.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. A majority of our leases do not provide an implicit rate and therefore we use an incremental borrowing rate for specific terms on a collateralized basis using information available on the commencement date in determining the present value of lease payments. The ROU asset calculation includes lease payments to be made and excludes lease incentives. The ROU asset and lease liability may include amounts attributed to options to extend or terminate the lease when it is reasonably certain we will exercise that option. When we reach a decision to exercise a lease renewal or termination option, we recognize the associated impact to the ROU asset and lease liability. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Lease expense for finance leases is amortized on a straight-line basis over the lease term, and interest expense for finance lease liabilities is recognized based on the implicit rate or the incremental borrowing rate.

FY 2025 FORM 10-K
69

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We have lease agreements with lease and non-lease components. We have elected to apply the practical expedient and account for the lease and non-lease components as a single lease component for all leases, where applicable. In addition, we have elected to apply the practical expedients related to lease classification, hindsight, and land easement. We apply a single portfolio approach to account for the ROU assets and lease liabilities.

We evaluate ROU assets related to leases for indicators of impairment whenever events or changes in circumstances indicate that the carrying amount of an ROU asset may not be recoverable. When a decision has been made to exit a lease prior to the contractual term or to sublease that space, we evaluate the asset for impairment and recognize the associated impact to the ROU asset and related expense, if applicable. The evaluation is performed at the asset group level initially and where appropriate, at the lowest level of identifiable cash flows, which is at the individual lease level. Undiscounted cash flows expected to be generated by the related ROU assets are estimated over the ROU assets’ useful lives. If the evaluation indicates that the carrying amount of the ROU assets may not be recoverable, any potential impairment is measured based upon the fair value of the related ROU asset or asset group as determined by appropriate valuation techniques.

Goodwill and intangible assets

Goodwill is tested for impairment, at a minimum, on an annual basis at the reporting unit level by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. If the reporting unit does not pass the qualitative assessment, then the reporting unit’s carrying value is compared to its fair value. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value. The fair value of the reporting unit may be estimated using income and market approaches. The discounted cash flow method, a form of the income approach, uses expected future operating results and a market participant discount rate. The market approach uses comparable company prices and other relevant information generated by market transactions (either publicly traded entities or mergers and acquisitions) to develop pricing metrics to be applied to historical and expected future operating results of the reporting unit. Failure to achieve these expected results, changes in the discount rate, or market pricing metrics may cause a future impairment of goodwill at the reporting unit level. We conducted our annual impairment test of goodwill as of August 31, 2025 and 2024. We determined that no adjustment to the carrying value of goodwill of our reporting unit was required. As of December 31, 2025, we determined that no events occurred, or circumstances changed from August 31, 2025 through December 31, 2025 that would more likely than not reduce the fair value of the reporting unit below its carrying amount.

Intangible assets consist of acquired customer list and user base intangible assets, marketing related intangibles, developed technology, and other intangible assets. Intangible assets are amortized over the period of estimated benefit using the straight-line method and estimated useful lives ranging from three to seven years . No significant residual value is estimated for intangible assets.

We evaluate long-lived assets (including intangible assets) for impairment whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future undiscounted cash flow the asset is expected to generate.

Allowance for transaction losses

We are exposed to transaction losses due to credit card and other payment misuse as well as non-performance from sellers who accept payments through PayPal. We establish an allowance for estimated losses arising from completing customer transactions, such as chargebacks for unauthorized credit card use and merchant-related chargebacks due to non-delivery or unsatisfactory delivery of eligible purchased items, purchase protection program claims, and account takeovers. This allowance represents an accumulation of the estimated amounts of probable transaction losses as of the reporting date. The allowance is monitored regularly and is updated based on actual loss data. The allowance is based on known facts and circumstances, internal factors including experience with similar cases, historical trends involving loss payment patterns, and the mix of transaction and loss types, as appropriate. Additions to the allowance are reflected as a component of transaction and credit losses on our consolidated statements of income (loss). The allowance for transaction losses is included in accrued expenses and other current liabilities on our consolidated balance sheets.

FY 2025 FORM 10-K
70

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Allowance for negative customer balances

Negative customer balances occur primarily when there are insufficient funds in a customer’s PayPal account to cover charges applied for bank returns and reversals, debit card transactions, and merchant-related chargebacks due to non-delivery or unsatisfactory delivery of eligible purchased items, which are generally within the scope of our protection programs. Negative customer balances can be cured by the customer by adding funds to their account, receiving payments, or through back-up funding sources. We also utilize third-party collection agencies. For negative customer balances that are not expected to be cured or otherwise collected, we provide an allowance for expected losses. The allowance represents expected losses based on historical trends involving collection and write-off patterns, internal factors including our experience with similar cases, other known facts and circumstances, and current conditions at the balance sheet date, which are assumed to remain unchanged over the life of these short-term assets. Loss rates are derived using historical loss data for each delinquency bucket using a roll rate model that captures the losses and the likelihood that a negative customer balance will be written off as the delinquency age of such balance increases. The loss rates are then applied to the outstanding negative customer balances. Once the quantitative calculation is performed, we review the adequacy of the allowance and determine if qualitative adjustments need to be considered. We write-off negative customer balances in the month in which the balance becomes outstanding for 120 days. Write-offs that are recovered are recorded as a reduction to our allowance for negative customer balances. Negative customer balances are included in other current assets, net of the allowance on our consolidated balance sheets. Adjustments to the allowance for negative customer balances are recorded as a component of transaction and credit losses on our consolidated statements of income (loss).

Derivative instruments

See “Note 10—Derivative Instruments” for information related to the derivative instruments.

Repurchase and reverse repurchase agreements

We enter into repurchase agreements as a form of secured borrowing and reverse repurchase agreements as a form of secured lending, primarily to provide additional liquidity and to deploy excess cash. These agreements are accounted for as collateralized financing transactions. Repurchase agreements and reverse repurchase agreements are reported in other current liabilities and other current assets, respectively, on our consolidated balance sheet and recorded at amortized cost.

Fair value measurements

We measure certain financial assets and liabilities at fair value on a recurring basis and certain financial and non-financial assets and liabilities at fair value on a non-recurring basis when a change in fair value or impairment is evidenced. Fair value is defined as the price received to sell an asset or paid to transfer a liability in the principal market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is estimated by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The categorization within the following three-level fair value hierarchy for our recurring and non-recurring fair value measurements is based upon the lowest level of input that is available and significant to the fair value measurement:
• Level 1 - Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.
• Level 2 - Observable inputs other than Level 1 quoted prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be market-corroborated.
• Level 3 - Unobservable inputs that cannot be directly corroborated by observable market data and that typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

See “Note 9—Fair Value Measurement of Assets and Liabilities” for additional information related to our fair value measurements.

FY 2025 FORM 10-K
71

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Concentrations of risk

Our cash, cash equivalents, short-term investments, accounts receivable, loans and interest receivable, net, funds receivable and customer accounts, long-term investments, and other assets are potentially subject to concentration of credit risk. Cash, cash equivalents, and customer accounts are placed with financial institutions that management believes are of high credit quality. In addition, funds receivable are generated primarily with financial institutions which management believes are of high credit quality. We invest our cash, cash equivalents, and customer accounts primarily in highly liquid, highly rated instruments which are uninsured. We have corporate deposit balances with financial services institutions which exceed the FDIC insurance limit of $250,000. As part of our cash management process, we perform periodic evaluations of the relative credit standing of these financial institutions. Our accounts receivable are derived from revenue earned from customers located in the U.S. and internationally. Our loans and interest receivable are derived from consumer and merchant financing activities for customers located in the U.S. and internationally. Our long-term notes receivable and contract asset within other assets are associated with the sale of our U.S. consumer credit receivables to a partner institution. Transaction expense is derived from fees paid to payment processors and other financial institutions, located in the U.S. and internationally, when we draw funds from a customer’s credit or debit card, bank account, or other funding source they have stored in their digital wallet.

As of December 31, 2025, one customer and one partner institution accounted for 12 % and 23 % of net accounts receivable, respectively. As of December 31, 2024, one partner institution accounted for 14 % of net accounts receivable. The same partner institution accounted for our long-term notes receivable and contract asset balance, which represented 18 % and 17 % of other assets at December 31, 2025 and 2024, respectively. No customer accounted for more than 10% of net loans receivable as of December 31, 2025 and 2024. During the years ended December 31, 2025, 2024, and 2023, no customer accounted for more than 10% of net revenues. During the years ended December 31, 2025 and 2024, two payment processors accounted for 56 % and 48 % of transaction expense, respectively. During the year ended December 31, 2023, one payment processor accounted for 60 % of transaction expense.

Revenue recognition

See “Note 2—Revenue” for information related to our revenue recognition.

Advertising expense

We expense the cost of producing advertisements at the time production occurs and expense the cost of communicating advertisements in the period during which the advertising space or airtime is used as sales and marketing expense. Online advertising expenses are recognized based on the terms of the individual agreements, which are generally based on the number of impressions delivered over the total number of contracted impressions, on a pay-per-click basis, or on a straight-line basis over the term of the contract. Advertising expense totaled $ 867 million, $ 574 million, and $ 364 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Defined contribution savings plans

We have a defined contribution savings plan in the U.S. which qualifies under Section 401(k) of the Internal Revenue Code (“Code”). Our non-U.S. employees are covered by other savings plans. Expenses related to our defined contribution savings plans are recorded when services are rendered by our employees.

Stock-based compensation

We determine compensation expense associated with restricted stock units, performance based restricted stock units, and restricted stock awards based on the estimated fair value of our common stock on the date of grant. We generally recognize compensation expense using a straight-line amortization method over the respective vesting period for awards that are ultimately expected to vest. Accordingly, stock-based compensation expense for the years ended December 31, 2025, 2024, and 2023 has been reduced for estimated forfeitures. When estimating forfeitures, we consider voluntary termination behavior of our employees as well as trends of actual forfeitures.

FY 2025 FORM 10-K
72

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Foreign currency

Many of our foreign subsidiaries have designated the local currency of their respective countries as their functional currency. Assets and liabilities of our non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars at exchange rates prevailing at the balance sheet dates. Revenues and expenses of our non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using daily exchange rates. Gains and losses resulting from these translations are recorded as a component of accumulated other comprehensive income (loss) (“AOCI”). Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as other income (expense), net on our consolidated statements of income (loss).

Income taxes

We account for income taxes using an asset and liability approach, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of enacted tax laws; the effects of future changes in tax laws or rates are not anticipated. If necessary, the measurement of deferred tax assets is reduced by the amount of any tax benefits that are not expected to be realized based on available evidence. We report a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. We account for Global Intangible Low-Taxed Income, renamed as the Net Controlled Foreign Corporation Tested Income under the One Big Beautiful Bill Act, as a current-period expense when incurred.

Other income (expense), net

Other income (expense), net includes:
• interest income, which consists of interest earned on corporate cash and cash equivalents and short-term and long-term investments,
• interest expense, which consists of interest expense, fees, and amortization of debt discount on our long-term debt (including current portion), credit facilities, and commercial paper,
• realized and unrealized gains (losses) on strategic investments, and
• other, which primarily includes foreign exchange gains and losses due to remeasurement of certain foreign currency denominated monetary assets and liabilities, forward points on derivative contracts designated as net investment hedges, fair value changes on the derivative contracts not designated as hedging instruments and realized and unrealized gains (losses) on crypto assets held for investment.

Recently issued accounting guidance

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 . The amended guidance requires disaggregation of certain expense captions into specified natural expense categories in the disclosures within the notes to the financial statements. In addition, the guidance requires disclosure of selling expenses and its definition. The new guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. 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 September 2025, the FASB issued ASU 2025-06, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amended guidance modernizes the accounting for costs related to internal-use software to more closely align with current software development methods. The guidance removes references to project stages and clarifies when we are required to start capitalizing eligible costs. The new guidance is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or a retrospective basis. We are evaluating the impact this amended guidance may have on our consolidated financial statements.

FY 2025 FORM 10-K
73

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 consolidated financial statements.

In December 2023, the FASB issued 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) are 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. We adopted this guidance prospectively for the annual period ending December 31, 2025. For additional information, see “Note 16 — Income Taxes.”

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. SAB No. 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 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 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 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. We do not believe any of these new accounting pronouncements have had, or will have, a material impact on our consolidated financial statements or disclosures.

NOTE 2— REVENUE

We enable our customers to send and receive payments. We earn revenue primarily by completing payment transactions for our customers on our payments platform and from other value added services. Our revenues are classified into two categories: transaction revenues and revenues from other value added services.

FY 2025 FORM 10-K
74

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

TRANSACTION REVENUES

We earn transaction revenues primarily from fees paid by our customers to receive payments on our platform. These fees may have a fixed and variable component. The variable component is generally a percentage of the value of the payment amount and is known at the time the transaction is processed. For a portion of our transactions, the variable component of the fee is eligible for reimbursement when the underlying transaction is approved for a refund. We estimate the amount of fee refunds that will be processed each quarter and record a provision against our transaction revenues. The volume of activity processed on our payments platform, which results in transaction revenue, is referred to as Total Payment Volume (“TPV”). We generate additional revenues from merchants and consumers: on transactions where we perform currency conversion, when we enable cross-border transactions (i.e., transactions where the merchant and consumer are in different countries), when we facilitate the instant transfer of funds for our customers from their PayPal or Venmo account to their bank account or debit card, when we facilitate the purchase and sale of cryptocurrencies, as contractual compensation from sellers that violate our contractual terms (for example, through fraud or counterfeiting), and other miscellaneous fees. Our transaction revenues are also reduced by certain incentives provided to our customers.

Our contracts with our customers are usually open-ended and can be terminated by either party without a termination penalty after the notice period has lapsed. Therefore, our contracts are defined at the transaction level and do not extend beyond the service already provided. Our contracts generally renew automatically without any significant material rights. Some of our contracts include tiered pricing, which are based primarily on volume. The fee charged per transaction is adjusted up or down if the volume processed for a specified period is different from prior period defined volumes. We have concluded that this volume-based pricing approach does not constitute a future material right since the discount is within a range typically offered to a class of customers with similar volume. We do not have any capitalized contract costs.

Our primary service comprises a single performance obligation to complete payments on our payments platform for our customers. Using our risk assessment tools, we perform a transaction risk assessment on individual transactions to determine whether a transaction should be authorized for completion on our payments platform. When we authorize a transaction, we become obligated to our customer to complete the payment transaction.

We recognize fees charged to our customers primarily on a gross basis as transaction revenue when we are the principal in respect of completing a payment transaction. As a principal to the transaction, we control the service of completing payments on our payments platform. We bear primary responsibility for the fulfillment of the payment service, contract directly with our customers, control the product specifications, and define the value proposal from our services. Further, we have full discretion in determining the fee charged to our customers, which is independent of the costs we incur in instances where we may utilize payment processors or other financial institutions to perform services on our behalf. We therefore bear full margin risk when completing a payment transaction. These fees paid to payment processors and other financial institutions are recognized as transaction expense. We are also responsible for providing customer support.

To promote engagement and acquire new users on our platform, we may provide incentives to merchants and consumers in various forms including discounts on fees, rebates, rewards, and coupons. Evaluating whether an incentive is a payment to a customer requires judgment. Incentives that are determined to be consideration payable to a customer or paid on behalf of a customer are recognized as a reduction of revenue. Incentives based on performance targets are recorded as a reduction to revenue when earned based on management’s estimate of each customer’s future performance, and incentives not based on performance targets are amortized as a reduction of revenue ratably over the contractual term. Certain incentives paid to users that are not our customers are classified as sales and marketing expense.

We provide merchants and consumers with protection programs for certain purchase transactions completed on our payments platform. These protection programs help protect both merchants and consumers from financial loss, resulting from, among other things, counterparty non-performance. These protection programs do not provide a separate service to our customers and we estimate and record associated costs in transaction and credit losses during the period the payment transaction is completed.

FY 2025 FORM 10-K
75

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

REVENUES FROM OTHER VALUE ADDED SERVICES

We earn revenues from other value added services, which are comprised of revenue earned through partnerships, referral fees, subscription fees, gateway fees, and other services that we provide to our consumers and merchants. These contracts typically have one performance obligation which is provided and recognized over the term of the contract. The transaction price is generally fixed and known at the end of each reporting period; however, for some agreements, it may be necessary to estimate the transaction price using the expected value method. Revenue earned from other value added services is recorded on a net basis when we are considered the agent with respect to processing transactions.

We also earn revenues from interest and fees earned on our portfolio of loans receivable, and interest earned on certain assets underlying customer balances. Interest and fees earned on the portfolio of loans receivable are computed and recognized based on the effective interest method and are presented net of any required reserves and amortization of deferred origination costs.

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 consolidated balance sheets and were $ 238  million and $ 207  million as of December 31, 2025 and 2024, respectively.

DISAGGREGATION OF REVENUE

We believe that the nature, amount, timing, and uncertainty of our revenue and cash flows and how they are affected by economic factors are most appropriately depicted through our primary geographical markets and types of revenue categories (transaction revenues and revenues from other value added services). 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.

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

  Year Ended December 31,
  2025    2024 2023
(In millions)
Primary geographical markets
U.S.
$ 18,868   $ 18,267   $ 17,253  

Other countries (1)
14,304   13,530   12,518  
Total net revenues (2)
$ 33,172   $ 31,797   $ 29,771  

Revenue category
Transaction revenues
$ 29,798   $ 28,842   $ 26,857  
Revenues from other value added services
3,374   2,955   2,914  
Total net revenues (2)
$ 33,172   $ 31,797   $ 29,771  

(1) No single country included in the other countries category generated more than 10% of total net revenues.
(2) Total net revenues include $ 2.1 billion for both the years ended December 31, 2025 and 2024 and $ 1.8 billion for the year ended December 31, 2023, which do not represent revenues recognized in the scope of Accounting Standards Codification Topic 606, Revenue from contracts with customers. Such revenues relate to interest and fees earned on loans and interest receivable, including loans and interest receivable held for sale, hedging gains or losses, and interest earned and gains or losses on certain assets underlying customer balances.

Net revenues are attributed to the country in which the party paying our fee is located.

NOTE 3— NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding for the period. The dilutive effect of outstanding equity incentive awards is reflected in diluted net income (loss) per share by application of the treasury stock method. The calculation of diluted net income (loss) per share excludes all anti-dilutive common shares. During periods when we report net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items would decrease the net loss per share.

FY 2025 FORM 10-K
76

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

  Year Ended December 31,
2025 2024    2023
(In millions, except per share amounts)
Numerator:
Net income (loss) $ 5,233   $ 4,147   $ 4,246  
Denominator:
Weighted average shares of common stock - basic
959   1,029   1,103  
Dilutive effect of equity incentive awards 9   10   4  
Weighted average shares of common stock - diluted
968   1,039   1,107  
Net income (loss) per share:
Basic $ 5.46   $ 4.03   $ 3.85  
Diluted $ 5.41   $ 3.99   $ 3.84  
Common stock equivalents excluded from net income (loss) per diluted share because their effect would have been anti-dilutive or potentially dilutive 11   9   21  

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 completed in 2024 or 2023.

On November 1, 2023, we completed the sale of Happy Returns to United Parcel Services, Inc. for approximately $ 466  million in cash, net of cash divested, and derecognized the assets held for sale, consisting primarily of $ 81  million of goodwill and $ 13  million of net intangible assets. The sale of Happy Returns enabled us to focus on our core business and priorities. A pre-tax gain of $ 339 million, net of transaction costs, was included in restructuring and other in the consolidated statements of income (loss) for the year ended December 31, 2023.

There were no divestitures completed in 2025 or 2024.

NOTE 5— GOODWILL AND INTANGIBLE ASSETS

GOODWILL

The following table presents goodwill balances and adjustments to those balances during the years ended December 31, 2025 and 2024:

December 31, 2023 Goodwill
Acquired Adjustments December 31, 2024 Goodwill
Acquired Adjustments December 31, 2025
  (In millions)
Total goodwill $ 11,026   $ —   $ ( 189 ) $ 10,837   $ 7   $ 20   $ 10,864  

The adjustments to goodwill during 2025 and 2024 pertained to foreign currency translation adjustments.

FY 2025 FORM 10-K
77

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

INTANGIBLE ASSETS

The components of identifiable intangible assets were as follows:

  December 31, 2025 December 31, 2024
  Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount Gross
Carrying
Amount Accumulated
Amortization Net
Carrying
Amount
  (In millions)

Intangible assets (1) :

Customer lists and user base $ 372   $ ( 224 ) $ 148   $ 854   $ ( 601 ) $ 253  
Marketing related 60   ( 50 ) 10   60   ( 38 ) 22  
Developed technology 9   ( 2 ) 7   —   —   —  
All other 208   ( 165 ) 43   182   ( 131 ) 51  
Intangible assets, net $ 649   $ ( 441 ) $ 208   $ 1,096   $ ( 770 ) $ 326  

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

Amortization expense for intangible assets was $ 175 million, $ 207 million, and $ 226 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Expected future intangible asset amortization as of December 31, 2025 was as follows:

Fiscal years: (In millions)
2026 $ 98  
2027 62  
2028 48  

Total $ 208  

NOTE 6— LEASES

PayPal enters into various leases, which are primarily real estate operating leases. We use these properties for executive and administrative offices, customer services and operations centers, product development offices, and data centers. PayPal also enters into computer equipment finance leases.

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.

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

PayPal’s lease portfolio includes a small number of subleases. A sublease situation can arise when currently leased real estate space is available and is surplus to operational requirements.

The components of lease expense were as follows:

Year Ended December 31,
2025 2024 2023
(In millions)
Operating lease expense $ 162   $ 159   $ 156  

Finance lease expense - amortization of ROU lease assets
16   8   —  

Sublease income ( 8 ) ( 12 ) ( 9 )
Total lease expense, net
$ 170   $ 155   $ 147  

FY 2025 FORM 10-K
78

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Supplemental cash flow information related to leases was as follows:

Year Ended December 31,
2025 2024 2023
(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 178   $ 169   $ 174  
Financing cash flows from finance leases
$ 6   $ 60   $ —  
ROU lease assets obtained in exchange for new operating lease liabilities
$ 68   $ 343   $ ( 1 )
ROU lease assets obtained in exchange for new finance lease liabilities
$ —   $ 82   $ —  
Other non-cash ROU lease asset activity (1)
$ ( 5 ) $ —   $ ( 40 )

(1) ROU lease asset impairment

Supplemental balance sheet information related to leases was as follows:

As of December 31,
2025 2024
(In millions, except weighted-average figures)
Operating leases
Finance leases
Operating leases
Finance leases

ROU lease assets $ 539   $ 56   $ 599   $ 73  
Current lease liabilities 148   7   135   5  
Long-term lease liabilities 548   10   629   18  
Total lease liabilities $ 696   $ 17   $ 764   $ 23  
Weighted-average remaining lease term 5.4 years 3.4 years 5.9 years 4.4 years
Weighted-average discount rate 4   % 5   % 4   % 5   %

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

Operating Leases Finance Leases

Fiscal years: (In millions)
2026 $ 174   $ 8  
2027 170   6  
2028 116   4  
2029 98   —  
2030 83   —  
Thereafter 151 —  
Total $ 792   $ 18  
Less: present value discount ( 96 ) ( 1 )
Lease liability $ 696   $ 17  

Operating lease amounts include minimum lease payments under our non-cancelable operating leases primarily for office and data center facilities. Finance lease amounts include minimum lease payments under our non-cancelable finance leases primarily for computer equipment. The amounts presented are consistent with contractual terms and are not expected to differ significantly from actual results under our existing leases. We recognize rent expense under such agreements on a straight-line basis.

As of December 31, 2025, we have an additional operating lease for an office, which will commence in the first quarter of 2026 or later with minimum lease payments aggregating to $ 284 million and a lease term of twelve years . As of December 31, 2025, we did no t have any additional finance leases which have not yet commenced.

FY 2025 FORM 10-K
79

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 7— OTHER FINANCIAL STATEMENT DETAILS

PROPERTY AND EQUIPMENT, NET

  As of December 31,
2025 2024
(In millions)
Property and equipment, net:
Computer equipment and software $ 3,581   $ 3,360  
Internal use software and website development costs 5,364   4,714  
Land and buildings 340   337  
Leasehold improvements 357   343  
Furniture and fixtures 138   133  
Development in progress and other 34   104  
Total property and equipment, gross 9,814   8,991  
Accumulated depreciation and amortization ( 8,114 ) ( 7,483 )
Total property and equipment, net $ 1,700   $ 1,508  

Depreciation and amortization expense was $ 788 million, $ 825 million and $ 846 million in 2025, 2024 and 2023, respectively.
Supplemental cash flow information related to property and equipment
Non-cash investing transactions that are not reflected in the consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 include property and equipment acquired through increases in accounts payable of $ 9  million, $ 14 million and $ 7  million, respectively.

Geographical information

The following table summarizes long-lived assets based on geography, which consist of property and equipment, net and operating lease ROU assets:

  As of December 31,
  2025 2024
  (In millions)
Long-lived assets:
U.S. $ 2,009   $ 1,885  
Other countries 230   222  
Total long-lived assets $ 2,239   $ 2,107  

Long-lived assets attributed to the U.S. and other countries are based upon the country in which the asset is located or owned.

FY 2025 FORM 10-K
80

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the year ended December 31, 2025:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities Foreign CTA
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 ( 429 ) —   117   —   33   ( 279 )
Less: Amount of net gains (losses) reclassified from AOCI
( 172 ) 1   —   —   —   ( 171 )
Net current period other comprehensive income (loss) ( 257 ) ( 1 ) 117   —   33   ( 108 )
Ending balance $ ( 110 ) $ 13   $ ( 832 ) $ 313   $ ( 42 ) $ ( 658 )

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

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities
Foreign
CTA
Net Investment
Hedges CTA Gains (Losses) Estimated Tax
(Expense) Benefit Total
(In millions)
Beginning balance $ ( 56 ) $ ( 134 ) $ ( 731 ) $ 191   $ ( 16 ) $ ( 746 )
Other comprehensive income (loss) before reclassifications 251   108   ( 218 ) 122   ( 59 ) 204  
Less: Amount of net gains (losses) reclassified from AOCI
48   ( 40 ) —   —   —   8  
Net current period other comprehensive income (loss) 203   148   ( 218 ) 122   ( 59 ) 196  
Ending balance $ 147   $ 14   $ ( 949 ) $ 313   $ ( 75 ) $ ( 550 )

The following table summarizes the changes in accumulated balances of other comprehensive income (loss) for the year ended December 31, 2023:

Unrealized Gains (Losses) on Cash Flow Hedges Unrealized Gains (Losses) on Available-for-sale Debt Securities
Foreign
CTA
Net Investment
Hedges CTA Gains (Losses) Estimated Tax (Expense)
Benefit Total
(In millions)
Beginning balance $ 111   $ ( 591 ) $ ( 575 ) $ ( 1 ) $ 128   $ ( 928 )
Other comprehensive income (loss) before reclassifications ( 56 ) 434   ( 156 ) 192   ( 144 ) 270  
Less: Amount of net gains (losses) reclassified from AOCI
111   ( 23 ) —   —   —   88  
Net current period other comprehensive income (loss) ( 167 ) 457   ( 156 ) 192   ( 144 ) 182  
Ending balance $ ( 56 ) $ ( 134 ) $ ( 731 ) $ 191   $ ( 16 ) $ ( 746 )

FY 2025 FORM 10-K
81

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Details about AOCI Components   Amount of Gains (Losses) Reclassified from AOCI
Affected Line Item in the Statements of Income (Loss)
Year Ended December 31,
2025 2024 2023
(In millions)
Net gains (losses) on cash flow hedges — foreign exchange contracts
$ ( 166 ) $ 48   $ 111   Net revenues
Net gains (losses) on cash flow hedges — foreign exchange contracts
( 2 ) —   —   Customer support and operations
Net gains (losses) on cash flow hedges — foreign exchange contracts
( 3 ) —   —   Technology and development
Net gains (losses) on cash flow hedges — foreign exchange contracts
( 1 ) —   —   General and administrative
Net gains (losses) on investments
—   ( 40 ) ( 21 ) Net revenues
Net gains (losses) on investments
1   —   ( 2 ) Other income (expense), net
( 171 ) 8   88   Income before income taxes
—   —   —   Income tax expense

Total reclassifications for the period $ ( 171 ) $ 8   $ 88   Net income (loss)

OTHER INCOME (EXPENSE), NET

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

  Year Ended December 31,
  2025 2024 2023
(In millions)
Interest income $ 517   $ 662   $ 480  
Interest expense ( 441 ) ( 382 ) ( 347 )
Net gains (losses) on strategic investments 162   ( 285 ) 201  
Other ( 11 ) 9   49  
Other income (expense), net $ 227   $ 4   $ 383  

Refer to “Note 1 — Overview and Summary of Significant Accounting Policies” for details on the composition of these balances.

FY 2025 FORM 10-K
82

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 December 31, 2025 and 2024:

  December 31,
2025 December 31,
2024
(In millions)
Cash and cash equivalents
$ 8,049   $ 6,662  
Funds receivable and customer accounts:
Cash and cash equivalents (1)
$ 15,969   $ 15,827  
Time deposits 94   15  
Available-for-sale debt securities 14,457   14,551  
Funds receivable 7,678   7,278  
Total funds receivable and customer accounts $ 38,198   $ 37,671  
Short-term investments:
Time deposits $ 88   $ 107  
Available-for-sale debt securities 2,285   4,154  
Restricted cash —   1  

Total short-term investments $ 2,373   $ 4,262  
Long-term investments:
Time deposits $ 5   $ 22  
Available-for-sale debt securities 2,421   3,002  

Strategic investments 1,904   1,559  
Total long-term investments $ 4,330   $ 4,583  

(1) Includes $ 374  million and $ 149  million of available-for-sale debt securities with original maturities of three months or less as of December 31, 2025 and 2024, respectively.

FY 2025 FORM 10-K
83

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025 and 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:

  December 31, 2025 (1)

  Gross
Amortized
Cost    Gross
Unrealized
Gains    Gross
Unrealized
Losses  
Estimated
Fair Value
(In millions)

Funds receivable and customer accounts:
U.S. government and agency securities $ 3,529   $ 1   $ —   $ 3,530  
Foreign government and agency securities 81   —   —   81  
Corporate debt securities 2,438   4   ( 1 ) 2,441  
Mortgage-backed and asset-backed securities
3,825   7   ( 1 ) 3,831  
Municipal securities 98   —   —   98  
Commercial paper 4,229   1   —   4,230  
Short-term investments:
U.S. government and agency securities 443   —   —   443  
Foreign government and agency securities 60   —   —   60  
Corporate debt securities 985   1   ( 2 ) 984  
Mortgage-backed and asset-backed securities
448   —   —   448  
Commercial paper 350   —   —   350  
Long-term investments:
U.S. government and agency securities 400   —   —   400  
Foreign government and agency securities 50   —   —   50  
Corporate debt securities 648   2   —   650  
Mortgage-backed and asset-backed securities
1,320   2   ( 1 ) 1,321  
Total available-for-sale debt securities (2)
$ 18,904   $ 18   $ ( 5 ) $ 18,917  

(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position.
(2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. Refer to “Note 9 — Fair Value Measurement of Assets and Liabilities.”

FY 2025 FORM 10-K
84

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

  December 31, 2024 (1)

  Gross
Amortized
Cost    Gross
Unrealized
Gains    Gross
Unrealized
Losses  
Estimated
Fair Value
(In millions)

Funds receivable and customer accounts:
U.S. government and agency securities $ 5,709   $ 4   $ ( 2 ) $ 5,711  
Foreign government and agency securities 77   —   —   77  
Corporate debt securities 405   —   —   405  
Mortgage-backed and asset-backed securities
4,039   13   ( 5 ) 4,047  
Municipal securities 503   1   —   504  
Commercial paper 3,391   1   —   3,392  
Short-term investments:
U.S. government and agency securities 188   —   ( 2 ) 186  
Foreign government and agency securities 84   —   —   84  
Corporate debt securities 1,751   —   ( 2 ) 1,749  
Mortgage-backed and asset-backed securities
848   5   —   853  
Commercial paper 1,281   1   —   1,282  
Long-term investments:
U.S. government and agency securities 235   —   —   235  
Foreign government and agency securities 124   —   ( 1 ) 123  
Corporate debt securities 1,601   3   ( 2 ) 1,602  
Mortgage-backed and asset-backed securities
1,042   1   ( 1 ) 1,042  
Total available-for-sale debt securities (2)
$ 21,278   $ 29   $ ( 15 ) $ 21,292  

(1) “—” Denotes gross unrealized gain or unrealized loss of less than $1 million in a given position.
(2) Excludes foreign currency denominated available-for-sale debt securities accounted for under the fair value option. 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 $ 101 million and $ 140 million at December 31, 2025 and 2024, respectively, and were included in other current assets on our consolidated balance sheets.

FY 2025 FORM 10-K
85

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025 and 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:

  December 31, 2025 (1)

Less than 12 months 12 months or longer Total
  Fair Value    Gross
Unrealized
Losses    Fair Value    Gross
Unrealized
Losses Fair Value    Gross
Unrealized
Losses
(In millions)

Funds receivable and customer accounts:
U.S. government and agency securities $ 1,261   $ —   $ 50   $ —   $ 1,311   $ —  
Foreign government and agency securities 56   —   —   —   56   —  
Corporate debt securities 309   ( 1 ) —   —   309   ( 1 )
Mortgage-backed and asset-backed securities
1,000   ( 1 ) 206   —   1,206   ( 1 )

Commercial paper 1,375   —   —   —   1,375   —  
Short-term investments:
U.S. government and agency securities 443   —   —   —   443   —  
Foreign government and agency securities —   —   20   —   20   —  
Corporate debt securities 94   ( 1 ) 109   ( 1 ) 203   ( 2 )
Mortgage-backed and asset-backed securities
354   —   6   —   360   —  
Commercial paper 200   —   —   —   200   —  
Long-term investments:

Foreign government and agency securities 25   —   —   —   25   —  
Corporate debt securities 20   —   —   —   20   —  
Mortgage-backed and asset-backed securities
368   ( 1 ) 35   —   403   ( 1 )
Total available-for-sale debt securities $ 5,505   $ ( 4 ) $ 426   $ ( 1 ) $ 5,931   $ ( 5 )

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

FY 2025 FORM 10-K
86

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

  December 31, 2024 (1)

Less than 12 months 12 months or longer Total
  Fair Value    Gross
Unrealized
Losses    Fair Value    Gross
Unrealized
Losses Fair Value    Gross
Unrealized
Losses
(In millions)

Funds receivable and customer accounts:
U.S. government and agency securities $ 1,314   $ ( 1 ) $ 517   $ ( 1 ) $ 1,831   $ ( 2 )
Foreign government and agency securities 57   —   —   —   57   —  
Corporate debt securities 105   —   50   —   155   —  
Mortgage-backed and asset-backed securities
1,673   ( 5 ) 2   —   1,675   ( 5 )
Municipal securities 29   —   36   —   65   —  
Commercial paper 275   —   —   —   275   —  
Short-term investments:
U.S. government and agency securities —   —   186   ( 2 ) 186   ( 2 )

Corporate debt securities 618   ( 2 ) 90   —   708   ( 2 )
Mortgage-backed and asset-backed securities
250   —   18   —   268   —  
Commercial paper 218   —   —   —   218   —  
Long-term investments:
U.S. government and agency securities 50   —   —   —   50   —  
Foreign government and agency securities 90   —   34   ( 1 ) 124   ( 1 )
Corporate debt securities 347   ( 1 ) 9   ( 1 ) 356   ( 2 )
Mortgage-backed and asset-backed securities
610   ( 1 ) —   —   610   ( 1 )
Total available-for-sale debt securities $ 5,636   $ ( 10 ) $ 942   $ ( 5 ) $ 6,578   $ ( 15 )

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

Unrealized losses have not been recognized into income as we neither intend to sell, nor anticipate that it is more likely than not that we will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value was due primarily to changes in market interest rates rather than credit losses. We will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred.

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

  Year Ended December 31,
2025 2024 2023
(In millions)
Proceeds from sales and maturities of available-for-sale debt securities
$ 27,173   $ 33,455   $ 30,320  

During the year ended December 31, 2025, we incurred gross realized gains and losses which were de minimis. During the years ended December 31, 2024 and 2023, we incurred gross realized losses of $ 44 million and $ 26 million, respectively, and de minimis gross realized gains. Gross realized gains and losses were determined using the specific identification method.

FY 2025 FORM 10-K
87

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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:

  December 31, 2025
Amortized Cost Fair Value
(In millions)
One year or less $ 9,885   $ 9,886  
After one year through five years 3,783   3,791  
After five years through ten years 1,954   1,952  
After ten years 3,282   3,288  
Total $ 18,904   $ 18,917  

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

STRATEGIC INVESTMENTS

Our strategic investments include marketable equity securities, which are publicly traded, and non-marketable equity securities, which are primarily investments in privately held companies. Our marketable equity securities have readily determinable fair values and are recorded as long-term investments on our consolidated balance sheets at fair value with changes in fair value recorded in other income (expense), net on our consolidated statements of income (loss). Marketable equity securities totaled $ 180  million and $ 23  million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, we held marketable equity securities with a fair value of $ 164  million with a time-based contractual sale restriction, which is set to expire in May 2026.

Our non-marketable equity securities are recorded in long-term investments on our consolidated balance sheets. The carrying value of our non-marketable equity securities totaled $ 1.7 billion and $ 1.5 billion as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, we had non-marketable equity securities of $ 215 million and $ 200 million, respectively, for which we have the ability to exercise significant influence, but not control, over the investee. We account for these equity securities using the equity method of accounting. The remaining non-marketable equity securities do not have a readily determinable fair value and we measure these equity investments at cost minus impairment, if any, and adjust for changes resulting from observable price changes in orderly transactions for an identical or similar investment in the same issuer. All gains and losses on these investments, realized and unrealized, and our share of earnings or losses from investments accounted for using the equity method are recognized in other income (expense), net on our consolidated statements of income (loss).

Measurement Alternative adjustments

The adjustments to the carrying value of our non-marketable equity securities accounted for under the Measurement Alternative in the years ended December 31, 2025 and 2024 were as follows:

Year Ended December 31,
  2025 2024
(In millions)
Carrying amount, beginning of period $ 1,336   $ 1,631  
Adjustments related to non-marketable equity securities:
Net additions (reductions) (1)
15   ( 2 )
Gross unrealized gains 212   20  
Gross unrealized losses and impairments ( 54 ) ( 313 )
Carrying amount, end of period $ 1,509   $ 1,336  

(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 December 31, 2025 and 2024, respectively:

FY 2025 FORM 10-K
88

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31,
2025 December 31,
2024
(In millions)
Cumulative gross unrealized gains $ 872   $ 1,187  
Cumulative gross unrealized losses and impairments $ ( 353 ) $ ( 562 )

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 December 31, 2025 and 2024, respectively:

  Year Ended December 31,
  2025 2024
(In millions)
Net unrealized gains (losses) $ 168   $ ( 270 )

Supplemental cash flow information related to investments

Non-cash investing transactions that are not reflected in the consolidated statement of cash flows for the year ended December 31, 2025, 2024, and 2023 include the purchase of investments of $ 189  million, $ 150  million and $ 22  million, respectively, that have not yet settled.

FY 2025 FORM 10-K
89

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 9— FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES

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 December 31, 2025 and 2024:     

December 31, 2025 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
(In millions)
Assets:      
Cash and cash equivalents (1) :

Money market fund
$ 4   $ 4   $ —  

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

U.S. government and agency securities 443   —   443  
Foreign government and agency securities 60   —   60  
Corporate debt securities 984   —   984  
Mortgage-backed and asset-backed securities
448   —   448  
Commercial paper 350   —   350  
Total short-term investments 2,285   —   2,285  
Funds receivable and customer accounts (3) :

U.S. government and agency securities 3,530   —   3,530  
Foreign government and agency securities 371   —   371  
        Corporate debt securities 2,736   —   2,736  
Mortgage-backed and asset-backed securities
3,831   —   3,831  
Municipal securities 98   —   98  
Commercial paper 4,265   —   4,265  
Total funds receivable and customer accounts 14,831   —   14,831  
Derivatives (4)
20   —   20  
Long-term investments (2),(5) :

U.S. government and agency securities 400   —   400  
Foreign government and agency securities 50   —   50  
Corporate debt securities 650   —   650  
Mortgage-backed and asset-backed securities
1,321   —   1,321  
Marketable equity securities 180   180   —  
Total long-term investments 2,601   180   2,421  
Total financial assets $ 19,741   $ 184   $ 19,557  
Liabilities:
Derivatives (4)
$ 158   $ —   $ 158  
Total financial liabilities $ 158   $ —   $ 158  

(1) Excludes cash and cash equivalents of $ 8.0 billion 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) Derivative assets and liabilities are included within “prepaid expenses and other current assets” and “other assets” and “accrued expenses and other current liabilities” and “other long-term liabilities,” respectively, on our consolidated balance sheets.
(5) Excludes non-marketable equity securities of $ 1.7 billion measured using the Measurement Alternative or equity method accounting.

FY 2025 FORM 10-K
90

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2024 Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other Observable Inputs (Level 2)
(In millions)
Assets:      
Cash and cash equivalents (1) :

Money market fund
$ 14   $ 14   $ —  

Short-term investments (2) :

U.S. government and agency securities 186   —   186  
Foreign government and agency securities 84   —   84  
Corporate debt securities 1,749   —   1,749  
Mortgage-backed and asset-backed securities
853   —   853  
Commercial paper 1,282   —   1,282  
Total short-term investments 4,154   —   4,154  
Funds receivable and customer accounts (3) :

U.S. government and agency securities 5,711   —   5,711  
Foreign government and agency securities 379   —   379  
Corporate debt securities 667   —   667  
Mortgage-backed and asset-backed securities
4,047   —   4,047  
Municipal securities 504   —   504  
Commercial paper 3,392   —   3,392  
Total funds receivable and customer accounts 14,700   —   14,700  
Derivatives (4)
243   —   243  
Long-term investments (2), (5) :

U.S. government and agency securities 235   —   235  
Foreign government and agency securities 123   —   123  
Corporate debt securities 1,602   —   1,602  
Mortgage-backed and asset-backed securities
1,042   —   1,042  
Marketable equity securities 23   23   —  
Total long-term investments 3,025   23   3,002  
Total financial assets $ 22,136   $ 37   $ 22,099  
Liabilities:
Derivatives (4)
$ 37   $ —   $ 37  
Total financial liabilities $ 37   $ —   $ 37  

(1) Excludes cash and cash equivalents of $ 6.6 billion not measured and recorded at fair value.
(2) Excludes restricted cash of $ 1 million and time deposits of $ 129 million not measured and recorded at fair value.
(3) Excludes cash, time deposits, and funds receivable of $ 23.0 billion underlying funds receivable and customer accounts not measured and recorded at fair value.
(4) Derivative assets and liabilities are included within “prepaid expenses and other current assets” and “other assets” and “accrued expenses and other current liabilities” and “other long-term liabilities,” respectively, on our consolidated balance sheets.
(5) Excludes non-marketable equity securities of $ 1.5 billion measured using the Measurement Alternative or equity method accounting.

Our financial assets classified within Level 1 are valued using quoted prices for identical assets in active markets. All other financial assets and liabilities are valued using quoted prices for identical instruments in less active markets, readily available pricing sources for comparable instruments, or models using market observable inputs (Level 2).

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).

FY 2025 FORM 10-K
91

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025 and 2024, we did not have any assets or liabilities requiring measurement at fair value on a recurring basis with significant unobservable inputs that would require a high level of judgment to determine fair value (Level 3).

We elect to account for available-for-sale debt securities denominated in currencies other than the functional currency of our subsidiaries under the fair value option. Election of the fair value option allows us to recognize any gains and losses from fair value changes on such investments in other income (expense), net on the 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 December 31, 2025 and 2024:

December 31, 2025 December 31, 2024
Amortized Cost Fair Value Amortized Cost Fair Value
(In millions)
Funds receivable and customer accounts $ 621   $ 620   $ 566   $ 564  

The following table summarizes the gains (losses) from fair value changes recognized in other income (expense), net related to the available-for-sale debt securities under the fair value option for the years ended December 31, 2025 and 2024 :

Year Ended December 31,
  2025 2024
(In millions)
Funds receivable and customer accounts $ 86   $ ( 29 )

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

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

December 31, 2025 Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3)
(In millions)
Loans and interest receivable, held for sale
$ 1,223   $ 1,182   $ 41  
Non-marketable equity securities measured using the Measurement Alternative (1)
690   679   11  

Total $ 1,913   $ 1,861   $ 52  

(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.

December 31, 2024 Significant Other Observable Inputs (Level 2) Significant Other Unobservable Inputs (Level 3)
(In millions)
Loans and interest receivable, held for sale
$ 541   $ 541   $ —  
Non-marketable equity securities measured using the Measurement Alternative (1)
476   131   345  

Total $ 1,017   $ 672   $ 345  

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

FY 2025 FORM 10-K
92

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We measure loans and interest receivable, held for sale that are comparable to loans receivable sold to third-party investors using observable inputs, such as the most recent executed prices. These loans and interest receivable, held for sale are classified within Level 2 in the fair value hierarchy. Certain loans and interest receivable, held for sale are valued using significant unobservable inputs, such as adjustments to recently executed prices. These loans and interest receivable, held for sale are classified within Level 3 in the fair value hierarchy. Refer to “Note 11—Loans and Interest Receivable” for additional information on loans and interest receivable, held for sale.

We measure the non-marketable equity securities accounted for under the Measurement Alternative at cost minus impairment, if any, adjusted for observable price changes in orderly transactions for an identical or similar investment in the same issuer. Non-marketable equity securities that have been remeasured during the period based on observable price changes are classified within Level 2 in the fair value hierarchy because we estimate the fair value based on valuation methods which only include significant inputs that are observable, such as the observable transaction price at the transaction date. The fair value of non-marketable equity securities are classified within Level 3 when we estimate fair value using significant unobservable inputs such as when we remeasure due to impairment and use discount rates, forecasted cash flows, and market data of comparable companies, among others.
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, certain loans and interest receivable, held for sale, loans and interest receivable, net, certain customer accounts, notes receivable, commercial paper, 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 $ 10.3  billion as of December 31, 2025. Our term debt (including current portion) had a carrying value of approximately $ 10.5  billion and fair value of approximately $ 9.8 billion as of December 31, 2024. If these financial instruments were measured at fair value in the financial statements, cash and certain cash equivalents would be classified as Level 1; restricted cash, time deposits, reverse repurchase agreements, certain loans and interest receivable, held for sale, certain customer accounts, 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.

NOTE 10— DERIVATIVE INSTRUMENTS

SUMMARY OF DERIVATIVE INSTRUMENTS

Our primary objective in holding derivatives is to reduce the volatility of earnings and cash flows associated with changes in foreign exchange rates. Our derivatives expose us to credit risk to the extent that our counterparties may be unable to meet the terms of the arrangement. We seek to mitigate such risk by limiting our counterparties to, and by spreading the risk across, major financial institutions and by entering into collateral security arrangements. In addition, the potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing basis. We do not use any derivative instruments for trading or speculative purposes.

Cash flow hedges

We have significant international revenues and expenses denominated in foreign currencies, which subjects us to foreign exchange risk. We have a foreign currency exposure management program in which we designate certain foreign exchange contracts, generally with maturities of 12 months or less, to reduce the volatility of cash flows primarily related to forecasted revenues and expenses denominated in certain foreign currencies. The objective of these foreign exchange contracts is to help mitigate the risk that the U.S. dollar-equivalent cash flows are adversely affected by changes in the applicable U.S. dollar/foreign currency exchange rate. These derivative instruments are designated as cash flow hedges and accordingly, the derivative’s gain or loss is initially reported as a component of AOCI and subsequently reclassified into revenue or the applicable expense line item in the consolidated statements of income (loss) in the same period the forecasted transaction affects earnings. We evaluate the effectiveness of our foreign exchange contracts on a quarterly basis by comparing the critical terms of the derivative instruments with the critical terms of the forecasted cash flows of the hedged item; if the critical terms are the same, we conclude the hedge will be perfectly effective. We do not exclude any component of the changes in fair value of the derivative instruments from the assessment of hedge effectiveness. We report cash flows arising from derivative instruments consistent with the classification of cash flows from the underlying items that these derivatives are hedging. Accordingly, the cash flows associated with derivatives designated as cash flow hedges are classified in cash flows from operating activities on our consolidated statements of cash flows.

FY 2025 FORM 10-K
93

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025, we estimated that $ 111 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 years ended December 31, 2025, 2024, and 2023, we did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction. If we elect to discontinue our cash flow hedges and it is probable that the original forecasted transaction will occur, we continue to report the derivative’s gain or loss in AOCI until the forecasted transaction affects earnings, at which point we also reclassify it into earnings. Gains and losses on derivatives held after we discontinue our cash flow hedges and on derivative instruments that are not designated as cash flow hedges are recorded in the same financial statement line to which the derivative relates.

Net investment hedges

Prior to 2025, we used foreign exchange contracts to reduce the foreign exchange risk related to our investment in certain foreign subsidiaries. These derivatives were designated as net investment hedges and accordingly, the gains and losses on the portion of the derivatives included in the assessment of hedge effectiveness were recorded in AOCI as part of foreign currency translation. We excluded forward points from the assessment of hedge effectiveness and recognized them in other income (expense), net on a straight-line basis over the life of the hedge. The accumulated gains and losses associated with these instruments will remain in AOCI until the foreign subsidiaries are sold or substantially liquidated, at which point they will be reclassified into earnings. The cash flows associated with derivatives designated as a net investment hedge are classified in cash flows from investing activities on our consolidated statements of cash flows.

We have no t reclassified any gains or losses related to net investment hedges from AOCI into earnings for any of the periods presented.

Foreign exchange contracts not designated as hedging instruments

We have a foreign currency exposure management program in which we use foreign exchange contracts to offset the foreign exchange risk of our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. These contracts are not designated as hedging instruments and reduce, but do not entirely eliminate, the impact of foreign exchange rate movements on our assets and liabilities. The gains and losses due to remeasurement of certain foreign currency denominated monetary assets and liabilities are recorded in other income (expense), net, which are offset by the gains and losses on these foreign exchange contracts. The cash flows associated with our non-designated derivatives used to hedge foreign currency denominated monetary assets and liabilities are classified in cash flows from operating activities on our consolidated statements of cash flows.

FAIR VALUE OF DERIVATIVE CONTRACTS

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

  Balance Sheet Location As of December 31,
2025 2024
Derivative Assets: (In millions)
Foreign exchange contracts designated as hedging instruments
Other current assets $ 7   $ 157  

Foreign exchange contracts not designated as hedging instruments
Other current assets 13   86  

Total derivative assets $ 20   $ 243  

Derivative Liabilities:
Foreign exchange contracts designated as hedging instruments
Other current liabilities $ 118   $ 10  

Foreign exchange contracts not designated as hedging instruments
Other current liabilities 40   27  

Total derivative liabilities $ 158   $ 37  

FY 2025 FORM 10-K
94

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

EFFECT OF DERIVATIVE CONTRACTS ON CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the location in the consolidated statements of income (loss) and amount of recognized gains or losses related to our derivative instruments:

Year Ended December 31,
  2025
(In millions)
Net revenues Customer support and operations Technology and development General and administrative Other income (expense), net
Total amounts presented in the consolidated statements of income (loss) in which the effects of cash flow hedges and net investment hedges are recorded
$ 33,172   $ 1,704   $ 3,103   $ 1,979   $ 227  

Gains (losses) on derivatives in cash flow hedging relationship:
Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI ( 166 ) ( 2 ) ( 3 ) ( 1 ) —  

Gains (losses) on derivatives not designated as hedging instruments:
Amount of net gains (losses) on foreign exchange contracts —   —   —   —   ( 216 )

Total gains (losses) $ ( 166 ) $ ( 2 ) $ ( 3 ) $ ( 1 ) $ ( 216 )

Year Ended December 31,
  2024 2023
(In millions)
Net revenues Other income (expense), net Net revenues Other income (expense), net
Total amounts presented in the consolidated statements of income (loss) in which the effects of cash flow hedges and net investment hedges are recorded
$ 31,797   $ 4   $ 29,771   $ 383  

Gains (losses) on derivatives in cash flow hedging relationship:
Amount of net gains (losses) on foreign exchange contracts reclassified from AOCI
48   —   111   —  
Gains (losses) on derivatives in net investment hedging relationship:

Amount of net gains (losses) on foreign exchange contracts excluded from the assessment of effectiveness
—   67   —   100  
Gains (losses) on derivatives not designated as hedging instruments:
Amount of net gains (losses) on foreign exchange contracts
—   111   —   ( 263 )
Amount of gains (losses) on equity derivative contracts (1)
—   —   —   44  
Total net gains (losses)
$ 48   $ 178   $ 111   $ ( 119 )

(1) During the year ended December 31, 2023, equity derivative contracts were entered into and matured in association with the sale of marketable equity securities related to strategic investments. The cash flows associated with the equity derivative contracts were classified in cash flows from investing activities on our consolidated statements of cash flows.

FY 2025 FORM 10-K
95

Table of Contents
PayPal Holdings, Inc.
NOTES TO 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):

Year Ended December 31,
  2025 2024 2023
(In millions)
Unrealized net gains (losses) on foreign exchange contracts designated as cash flow hedges
$ ( 429 ) $ 251   $ ( 56 )
Unrealized net gains (losses) on foreign exchange contracts designated as net investment hedges
—   122   192  
Total unrealized net gains (losses) recognized from derivative contracts designated as hedging instruments in the consolidated statements of comprehensive income (loss)
$ ( 429 ) $ 373   $ 136  

NOTIONAL AMOUNTS OF DERIVATIVE CONTRACTS

Derivative transactions are measured in terms of the notional amount; 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 following table provides the notional amounts of our outstanding derivative instruments:

Year Ended December 31,
2025 2024
(In millions)
Foreign exchange contracts designated as hedging instruments $ 5,878   $ 3,942  
Foreign exchange contracts not designated as hedging instruments 11,932   13,317  

Total $ 17,810   $ 17,259  

MASTER NETTING AGREEMENTS - RIGHTS OF SET-OFF

Under master netting agreements with certain counterparties to our derivative contracts, repurchase agreements, and reverse repurchase agreements, subject to applicable requirements, we are allowed to net settle transactions of the same type with a single net amount payable by one party to the other. PayPal has not elected to offset for balance sheet presentation and we present the derivative assets, derivative liabilities, repurchase agreements and reverse repurchase agreements on a gross basis on our consolidated balance sheets.

We have entered into collateral security arrangements with certain counterparties that provide for collateral to be received or posted when the net fair value of certain financial instruments fluctuates from contractually established thresholds. 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 consolidated balance sheets.

FY 2025 FORM 10-K
96

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables present the derivative assets, derivative liabilities, and reverse repurchase agreements not offset on the consolidated balance sheets but available for offset in the event of default. The tables also present the cash and non-cash collateral received or pledged relating to these positions. The amount of collateral presented is limited to the amount presented on our consolidated balance sheets; therefore, instances of over-collateralization are excluded from the table below.

Amounts Not Offset on the Consolidated Balance Sheets

Amounts Presented on the Consolidated Balance Sheet
Financial Instruments (1)
Collateral Received (2)
Net Amounts

(In millions)
As of December 31, 2025
Derivative assets (3)
$ 20   $ 13   $ 2   $ 5  
Reverse repurchase agreements (4)
—   —   —   —  
Total assets
$ 20   $ 13   $ 2   $ 5  
As of December 31, 2024
Derivative assets (3)
$ 243   $ 23   $ 169   $ 51  
Reverse repurchase agreements (4)
87   —   87   —  
Total assets
$ 330   $ 23   $ 256   $ 51  

Amounts Not Offset on the Consolidated Balance Sheets

Amounts Presented on the Consolidated Balance Sheet
Financial Instruments (1)
Collateral Pledged (2)
Net Amounts

(In millions)
As of December 31, 2025
Derivative liabilities (3)
$ 158   $ 13   $ 122   $ 23  

As of December 31, 2024
Derivative liabilities (3)
$ 37   $ 23   $ 7   $ 7  

(1) For derivative positions, this includes any derivative fair value that could be offset in the event of counterparty default. For reverse repurchase positions this includes any receivable that could be offset in the event of counterparty default.
(2) Includes cash and the fair value of securities exchanged with the counterparty. For reverse repurchase agreements, these securities are not included in the consolidated balance sheet unless the counterparty defaults.
(3) We received cash collateral from derivative counterparties totaling $ 2 million and $ 162 million as of December 31, 2025 and 2024, respectively, and securities from derivative counterparties with a fair value of $ 90 million and $ 30 million as of December 31, 2025 and 2024, respectively. We posted $ 156  million and $ 7 million of cash collateral as of December 31, 2025 and 2024, respectively, and securities to derivative counterparties with a fair value of $ 91 million and nil as of December 31, 2025 and 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 December 31, 2025 and 2024, respectively. As of both December 31, 2025 and 2024, we have not sold or repledged collateral relating to reverse repurchase agreements.

NOTE 11— LOANS AND INTEREST RECEIVABLE

LOANS AND INTEREST RECEIVABLE, HELD FOR SALE

As of December 31, 2025 and 2024, loans and interest receivable, held for sale was $ 1.7 billion and $ 541  million, respectively, and included both loans reclassified to held for sale and loans originated as held for sale. During the years ended December 31, 2025 and 2024, we reclassified $ 574 million and nil , respectively, of loans and interest receivable, net to loans and interest receivable, held for sale. During the year ended December 31, 2025, we derecognized loans with an unpaid balance of $ 26.9  billion and had net proceeds of $ 26.7  billion from loans and interest receivable sold. During the year ended December 31, 2024, we derecognized loans with an unpaid balance of $ 20.9  billion and had net proceeds of $ 20.8  billion from loans and interest receivable sold.

FY 2025 FORM 10-K
97

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

LOANS AND INTEREST RECEIVABLE, NET

Consumer receivables

We offer revolving and installment credit products as a funding option for consumers in certain checkout transactions on our payments platform. Our revolving credit product consists of PayPal Credit in the U.K., which is made available to consumers as a funding source in their PayPal wallet once they are approved for credit. Additionally, we offer installment credit products at the time of checkout in various markets, including the U.S., several markets across Europe, Australia, and Japan. 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 years ended December 31, 2025 and 2024, we purchased approximately $ 1.3  billion and $ 690 million in consumer receivables, respectively. As of December 31, 2025 and 2024, the outstanding balance of consumer receivables, which consisted of revolving and installment loans and interest receivable, was $ 5.5 billion and $ 5.4 billion, respectively, net of the participation interest sold to the partner institution of $ 33 million and $ 23 million, respectively.

Consumer receivables delinquency and allowance

We closely monitor the credit quality of our revolving and installment loans 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.

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.

December 31, 2025
(In millions, except percentages)

Revolving Loans
Amortized Cost Basis Installment Loans Amortized Cost Basis
2025 2024 2023 2022 2021 Total Percent
Consumer loans and interest receivable:

Current $ 2,767   $ 2,043   $ 360   $ 114   $ —   $ —   $ 5,284   96.4 %
30 - 59 Days 29   34   5   2   —   —   70   1.3 %
60 - 89 Days 19   22   4   2   —   —   47   0.9 %
90 - 179 Days 39   31   6   2   —   —   78   1.4 %
Total
$ 2,854   $ 2,130   $ 375   $ 120   $ —   $ —   $ 5,479   100 %
Gross charge-offs for the year ended December 31, 2025
$ 136   $ 36   $ 107   $ 20   $ 1   $ —   $ 300  

FY 2025 FORM 10-K
98

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2024
(In millions, except percentages)

Revolving Loans
Amortized Cost Basis Installment Loans Amortized Cost Basis
2024 2023 2022 2021 2020 Total Percent
Consumer loans and interest receivable:

Current $ 2,404   $ 2,427   $ 353   $ 43   $ —   $ —   $ 5,227   96.6 %
30 - 59 Days 25   28   4   —   —   —   57   1.1 %
60 - 89 Days 16   19   4   1   —   —   40   0.7 %
90 - 179 Days 38   40   9   2   —   —   89   1.6 %
Total
$ 2,483   $ 2,514   $ 370   $ 46   $ —   $ —   $ 5,413   100 %
Gross charge-offs for the year ended December 31, 2024
$ 138   $ 39   $ 133   $ 14   $ —   $ —   $ 324  

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

December 31, 2025 December 31, 2024
Consumer Loans Receivable Interest Receivable Total Allowance (1)
   Consumer Loans Receivable Interest Receivable Total Allowance

(In millions)
Beginning balance $ 341   $ 7   $ 348   $ 357   $ 23   $ 380  
Changes in allowance due to reclassification of loans and interest receivable to or from held for sale
( 23 ) —   ( 23 ) —   —   —  
Provisions 255   13   268   249   7   256  
Charge-offs ( 283 ) ( 17 ) ( 300 ) ( 301 ) ( 23 ) ( 324 )
Recoveries 62   —   62   48   —   48  
Other (2)
14   —   14   ( 12 ) —   ( 12 )
Ending balance $ 366   $ 3   $ 369   $ 341   $ 7   $ 348  

(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.
(2) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at December 31, 2025 for our consumer receivable portfolio was $ 369 million, an increase from $ 348 million at December 31, 2024. The increase in allowance for credit losses was related to the growth of revolving loans in the U.K. and interest-bearing installment loans in the U.S. partially offset by the release of reserves as a result of the reclassification of certain non interest-bearing installment loans in the U.S. to held for sale.

Merchant receivables

We offer access to merchant finance products for certain small and medium-sized businesses through our PPWC and PPBL products, 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 years ended December 31, 2025 and 2024, we purchased approximately $ 2.2 billion and $ 1.8 billion in merchant receivables, respectively. As of December 31, 2025 and 2024, the total outstanding balance in our pool of merchant loans, advances, and fees receivable was $ 1.8 billion and $ 1.5 billion, respectively, net of the participation interest sold to the partner institution of $ 65 million and $ 53 million, respectively.

FY 2025 FORM 10-K
99

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

Merchant receivables delinquency and allowance

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 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 fees receivable.

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.

December 31, 2025
(In millions, except percentages)
2025 2024 2023 2022 2021 Prior
Total Percent
Merchant loans, advances, and fees receivable:

Current $ 1,558   $ 53   $ 5   $ 3   $ —   $ 2   $ 1,621   89.8 %
30 - 59 Days 63   17   1   1   —   —   82   4.5 %
60 - 89 Days 27   10   1   1   —   —   39   2.2 %
90 - 179 Days 34   18   2   1   —   —   55   3.0 %
180+ Days 2   5   2   —   —   —   9   0.5 %
Total
$ 1,684   $ 103   $ 11   $ 6   $ —   $ 2   $ 1,806   100 %
Gross charge-offs for the year ended December 31, 2025
$ 25   $ 87   $ 19   $ 4   $ —   $ 2   $ 137  

FY 2025 FORM 10-K
100

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2024
(In millions, except percentages)
2024 2023 2022 2021 2020 Prior
Total Percent
Merchant loans, advances, and fees receivable:

Current $ 1,274   $ 28   $ 13   $ 1   $ 8   $ 4   $ 1,328   90.4 %
30 - 59 Days 55   10   3   —   —   1   69   4.7 %
60 - 89 Days 23   6   2   —   —   —   31   2.1 %
90 - 179 Days 21   11   4   —   —   —   36   2.4 %
180+ Days 1   4   1   —   —   —   6   0.4 %
Total
$ 1,374   $ 59   $ 23   $ 1   $ 8   $ 5   $ 1,470   100 %
Gross charge-offs for the year ended December 31, 2024
$ 10   $ 96   $ 42   $ —   $ 8   $ —   $ 156  

The following table summarizes the activity in the allowance for merchant loans, advances, and fees receivable, for the years ended December 31, 2025 and 2024:

December 31, 2025 December 31, 2024
Merchant Loans and Advances Fees Receivable
Total Allowance    Merchant Loans and Advances Fees Receivable
Total Allowance
(In millions)
Beginning balance $ 107   $ 6   $ 113   $ 148   $ 12   $ 160  
Provisions 151   18   169   79   2   81  
Charge-offs ( 127 ) ( 10 ) ( 137 ) ( 148 ) ( 8 ) ( 156 )
Recoveries 21   —   21   28   —   28  
Other (1)
4   —   4   —   —   —  
Ending balance $ 156   $ 14   $ 170   $ 107   $ 6   $ 113  

(1) Includes amounts related to foreign currency remeasurement.

The allowance for credit losses at December 31, 2025 for our merchant receivable portfolio was $ 170 million, an increase from $ 113 million at December 31, 2024. The increase in allowance for credit losses was related to the growth of the merchant receivables portfolio as well as a decline in credit quality of merchant loans outstanding primarily from modifications in acceptable risk parameters in 2024, which included broadened eligibility.

FY 2025 FORM 10-K
101

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 12— DEBT

NOTES

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, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 1.3 billion. Interest on these notes is payable on June 1 and December 1 of each year, beginning on December 1, 2024.

In June 2023, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of ¥ 90 billion (approximately $ 575 million as of December 31, 2025). Interest on these notes is payable on June 9 and December 9 of each year, beginning on December 9, 2023.

In May 2022, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 3.0 billion. Interest on these notes is payable on June 1 and December 1 of each year, beginning on December 1, 2022.

In May 2020, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 4.0 billion. Interest on these notes is payable on June 1 and December 1 of each year, beginning on December 1, 2020.

In September 2019, we issued fixed rate notes with varying maturity dates for an aggregate principal amount of $ 5.0 billion. Interest on these notes is payable on April 1 and October 1.

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.” Interest on the Notes is payable in arrears. 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.

FY 2025 FORM 10-K
102

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025 and 2024, we had an outstanding aggregate principal amount of $ 10.9 billion and $ 10.6 billion related to the Notes. The following table summarizes the Notes outstanding:

As of December 31,
Maturities Effective Interest Rate 2025 2024
(in millions)
September 2019 debt issuance:

Fixed-rate 2.650 % notes
10/1/2026 2.78 % $ 1,250   $ 1,250  
Fixed-rate 2.850 % notes
10/1/2029 2.96 % 1,500   1,500  

May 2020 debt issuance:

Fixed-rate 1.650 % notes
6/1/2025 1.78 % —   1,000  
Fixed-rate 2.300 % notes
6/1/2030 2.39 % 1,000   1,000  
Fixed-rate 3.250 % notes
6/1/2050 3.33 % 1,000   1,000  

May 2022 debt issuance:

Fixed-rate 3.900 % notes
6/1/2027 4.06 % 500   500  
Fixed-rate 4.400 % notes
6/1/2032 4.53 % 1,000   1,000  
Fixed-rate 5.050 % notes
6/1/2052 5.14 % 1,000   1,000  
Fixed-rate 5.250 % notes
6/1/2062 5.34 % 500   500  

June 2023 debt issuance (1) :

¥ 30 billion fixed-rate 0.813 % notes
6/9/2025 0.89 % —   191  
¥ 23 billion fixed-rate 0.972 % notes
6/9/2026 1.06 % 147   147  
¥ 37 billion fixed-rate 1.240 % notes
6/9/2028 1.31 % 237   236  

May 2024 debt issuance:

Fixed-rate 5.150 % notes
6/1/2034 5.35 % 850   850  
Fixed-rate 5.500 % notes
6/1/2054 5.66 % 400   400  

March 2025 debt issuance:
Floating-rate notes 3/6/2028 5.06 % 450   —  
Fixed-rate 4.450 % notes
3/6/2028 4.66 % 450   —  
Fixed-rate 5.100 % notes
4/1/2035 5.20 % 600   —  
Total term debt
$ 10,884   $ 10,574  

Unamortized premium (discount) and issuance costs, net ( 76 ) ( 78 )
Less: current portion of term debt (2)
( 1,396 ) ( 1,191 )
Total carrying amount of term debt $ 9,412   $ 9,305  

(1) Principal amounts represent the U.S. dollar equivalent as of December 31, 2025 and 2024, respectively.
(2) The current portion of term debt is included within “accrued expenses and other current liabilities” on our 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 $ 421 million, $ 366 million, and $ 334 million for the years ended December 31, 2025, 2024, and 2023, respectively.

FY 2025 FORM 10-K
103

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

CREDIT FACILITIES

Revolving credit facility

In June 2023, we entered into a credit agreement (the “Credit Agreement”) that provides for an unsecured $ 5.0 billion, five-year revolving credit facility. The Credit Agreement includes a $ 150 million letter of credit sub-facility and a $ 600 million swingline sub-facility, with available borrowings under the revolving credit facility reduced by the amount of any letters of credit and swingline borrowings outstanding from time to time. Loans borrowed under the Credit Agreement are available in U.S. dollar, Euro, British pound, and Australian dollar, and in each case subject to the sub-limits and other limitations provided in the Credit Agreement. We may also, subject to the agreement of the applicable lenders and satisfaction of specified conditions, increase the commitments under the revolving credit facility by up to $ 2.0 billion. Subject to specific conditions, we may designate one or more of our subsidiaries as additional borrowers under the Credit Agreement, provided that PayPal Holdings, Inc. guarantees the portion of borrowings made available and other obligations of any such subsidiaries under the Credit Agreement. As of December 31, 2025, certain subsidiaries were designated as additional borrowers. Funds borrowed under the Credit Agreement may be used for working capital, capital expenditures, acquisitions, and other purposes not in contravention of the Credit Agreement.

We are obligated to pay interest on loans under the Credit Agreement and other customary fees for a credit facility of this size and type, including an upfront fee and an unused commitment fee based on our debt rating. Loans under the Credit Agreement will bear interest at either (i) the applicable term benchmark rate plus a margin (based on the Company’s public debt ratings) ranging from 0.750 % to 1.250 %, (ii) the applicable Risk-Free Rate (Sterling Overnight Index Average for loans denominated in pounds sterling and Euro Short-Term Rate for loans denominated in euros) plus a margin (based on the Company’s public debt ratings) ranging from 0.750 % to 1.250 %, (iii) the applicable overnight rate plus a margin (based on the Company’s public debt ratings) ranging from 0.750 % to 1.250 %, or (iv) a formula based on the prime rate, the federal funds effective rate or the adjusted term Secured Overnight Financing Rate plus a margin (based on the Company’s public debt ratings) ranging from zero to 0.250 %. Subject to certain conditions stated in the Credit Agreement, the Company and any subsidiaries designated as additional borrowers may borrow, prepay and reborrow amounts under the revolving credit facility at any time during the term of the Credit Agreement. The Credit Agreement will terminate and all amounts owing thereunder will be due and payable on June 7, 2028, unless (a) the commitments are terminated earlier, either at the request of the Company or, if an event of default occurs, by the lenders (or automatically in the case of certain bankruptcy-related events), or (b) the maturity date is extended upon the request of the Company, subject to the agreement of the lenders. The Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including a financial covenant, events of default, and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens and the incurrence of subsidiary indebtedness, in each case subject to certain exceptions. The financial covenant requires the Company to meet a quarterly financial test with respect to a maximum consolidated leverage ratio.

As of December 31, 2025 and 2024, no borrowings or letters of credit were outstanding under the Credit Agreement. Accordingly, at December 31, 2025, $ 5.0 billion of borrowing capacity was available for the purposes permitted by the Credit Agreement, subject to customary conditions to borrowing.

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 $ 575 million as of December 31, 2025). Borrowings under the Paidy Credit Agreement are for use by Paidy for working capital, capital expenditures, and other permitted purposes. Loans under the Paidy Credit Agreement bear interest at the Tokyo Interbank Offered Rate plus a margin (based on our public debt rating) ranging from 0.40 % to 0.60 %. 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. The Paidy Credit Agreement contains customary representations, warranties, affirmative and negative covenants, including a financial covenant, events of default, and indemnification provisions in favor of the lenders. The negative covenants include restrictions regarding the incurrence of liens and subsidiary indebtedness, in each case subject to certain exceptions. The financial covenant requires us to meet a quarterly financial test with respect to a maximum consolidated leverage ratio.

FY 2025 FORM 10-K
104

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

As of December 31, 2025 and 2024, ¥ 90.0  billion (approximately $ 575  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 consolidated balance sheets. At December 31, 2025, no borrowing capacity was available for the purposes permitted by the Paidy Credit Agreement. During the years ended December 31, 2025, 2024, and 2023, the total interest expense and fees we recorded related to the Paidy Credit Agreement were de minimis.

Other available facilities

We also maintain uncommitted credit facilities in various regions throughout the world, which had a borrowing capacity of approximately $ 80 million in the aggregate, as of December 31, 2025 and 2024. This available credit includes facilities where we can withdraw and utilize the funds at our discretion for general corporate purposes. Interest rate terms for these facilities vary by region and reflect prevailing market rates for companies with strong credit ratings. As of December 31, 2025, substantially all of the borrowing capacity under these credit facilities was available, subject to customary conditions to borrowing.

COMMERCIAL PAPER

In November 2025, we established a commercial paper program that allows us to issue up to $ 5.0 billion of unsecured commercial paper notes (“Commercial Paper Notes”) through private placement using third-party broker-dealers (the “Commercial Paper Program”). Borrowings under the Commercial Paper Program are supported by the Credit Agreement. The Company intends to maintain availability under the Credit Agreement in an amount at least equal to the aggregate outstanding borrowings under the Commercial Paper Program. Net proceeds from the issuance of the Commercial Paper Notes may be used for general corporate purposes. The maturities of the Commercial Paper Notes may vary but may not exceed 397 days from the date of issuance. There were $ 200 million outstanding in Commercial Paper Notes as of December 31, 2025, which was recorded in accrued expenses and other current liabilities on our consolidated balance sheet.

FUTURE PRINCIPAL PAYMENTS

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

2026 $ 1,397  
2027 1,075  
2028 1,137  
2029 1,500  
2030 1,000  
Thereafter 5,350  
Total $ 11,459  

FY 2025 FORM 10-K
105

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 13— COMMITMENTS AND CONTINGENCIES
LITIGATION AND REGULATORY MATTERS

Overview

We are involved in legal and regulatory proceedings on an ongoing basis. Certain of these proceedings are in early stages and may seek an indeterminate amount of damages or penalties or may require us to change or adopt certain business practices. If we believe that a loss arising from such matters is probable and can be reasonably estimated, we accrue the estimated liability in our financial statements at that time. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; 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, (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. In assessing the materiality of a legal proceeding, we evaluate, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require us to change our business practices in a manner that could have a material adverse impact on our business. 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.

Amounts accrued for legal and regulatory proceedings for which we believe a loss is probable and reasonably estimable were not material as of December 31, 2025. Except as otherwise noted for the proceedings described in this Note 13, we have concluded, based on currently available information, that reasonably possible losses arising directly from the proceedings (i.e., monetary damages or amounts paid in judgment or settlement) in excess of our recorded accruals are also not material. Determining legal reserves or possible losses from such matters involves judgment and may not reflect the full range of uncertainties and unpredictable outcomes. We may be exposed to losses in excess of the amount recorded, and such amounts could be material. If any of our estimates and assumptions change or prove to have been incorrect, it could have a material adverse effect on our business, financial position, results of operations, or cash flows.

Regulatory proceedings

In February 2022, we received a Civil Investigative Demand (“CID”) from the Federal Trade Commission (“FTC”) related to PayPal’s practices relating to commercial customers that submit charges on behalf of other merchants or sellers, and related activities. In August 2025, we received an additional CID investigating whether deceptive schemes and other unlawful activities by merchants using PayPal’s platform were facilitated or furthered by the Company’s onboarding, due diligence, and other practices. The CIDs request the production of documents and answers to written questions, as well as other information. We are cooperating with the FTC in connection with these CIDs.

In January 2023, we received notice of an administrative proceeding and a related request for information from the German Federal Cartel Office (“FCO”) related to terms in PayPal (Europe) S.à.r.l. et Cie, S.C.A.’s contractual terms with merchants in Germany prohibiting surcharging and requiring parity presentation of PayPal relative to other payment methods. We are cooperating with the FCO in connection with this proceeding.

We have received CIDs from the Consumer Financial Protection Bureau (“CFPB”) related to investigation and error-resolution obligations under Regulation E, the presentment of transactions to linked bank accounts, and related matters. The CIDs request the production of documents and answers to written questions. We are cooperating with the CFPB in connection with these CIDs.

In August 2024, we received a CID from the CFPB related to PayPal Credit. The CID also relates to backup payment options in a digital wallet to pay for goods or services. The CID requests the production of documents and answers to written questions. We are cooperating with the CFPB in connection with this CID.

FY 2025 FORM 10-K
106

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Legal proceedings

On October 4, 2022, a putative securities class action captioned Defined Benefit Plan of the Mid-Jersey Trucking Industry and Teamsters Local 701 Pension and Annuity Fund v. PayPal Holdings, Inc., et al. , Case No. 22-cv-5864, was filed in the U.S. District Court for the District of New Jersey. On January 11, 2023, the Court appointed Caisse de dépôt et placement du Québec as lead plaintiff and renamed the action In re PayPal Holdings, Inc. Securities Litigation (“PPH Securities Action”). On March 13, 2023, the lead plaintiff filed an amended and consolidated complaint. The PPH Securities Action asserts claims relating to our public statements with respect to net new active accounts (“NNA”) results and guidance, and the detection of illegitimately created accounts. The PPH Securities Action purports to be brought on behalf of purchasers of the Company’s stock between February 3, 2021 and February 1, 2022 (the “Class Period”), and asserts claims for alleged violations of Section 10(b) of the Exchange Act against the Company, as well as its former Chief Executive Officer, former Chief Strategy, Growth and Data Officer, and former Chief Financial Officer (collectively, the “Individual Defendants,” and together with the Company, “Defendants”), and for alleged violations of Sections 20(a) and 20A of the Exchange Act against the Individual Defendants. The complaint alleges that certain public statements made by Defendants during the 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 that, among other things, the Company’s incentive campaigns were susceptible to fraud and led to the creation of illegitimate accounts, which allegedly affected the Company’s NNA results and guidance. The PPH Securities Action seeks unspecified compensatory damages on behalf of the putative class members. Defendants filed a motion to dismiss the PPH Securities Action. On January 29, 2025, the Court dismissed all of the claims without prejudice. On March 17, 2025, the lead plaintiff filed an amended complaint. Defendants have filed a motion to dismiss the amended complaint.

On November 2, 2022, a putative shareholder derivative action captioned Shah v. Daniel Schulman, et al. , Case No. 22-cv-1445, was filed in the U.S. District Court for the District of Delaware (the “Shah Action”), purportedly on behalf of the Company. On April 4, 2023, a putative shareholder derivative action captioned Nelson v. Daniel Schulman, et. al. , Case No. 23-cv-01913, was filed in the U.S. District Court for the District of New Jersey (the “Nelson Action”) purportedly on behalf of the Company. On January 31, 2025, a putative shareholder derivative action captioned Spathias v. Daniel Schulman, et al. , Case No. 25-cv-1007, was filed in the U.S. District Court for the Northern District of California (the “Spathias Action,” and collectively, the “Derivative Actions”). The Derivative Actions are based on the same alleged facts and circumstances as the PPH Securities Action, and name certain of our officers, including our former Chief Executive Officer and former Chief Financial Officer, and members of our Board of Directors, as defendants. The Derivative Actions allege claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, gross mismanagement and violations of the Exchange Act, and seek to recover damages on behalf of the Company. 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. , Case No. 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 executed a final settlement in this matter on December 17, 2025.

General matters

Other third parties have from time to time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We are subject to patent disputes and expect that we will increasingly be subject to additional patent infringement claims involving various aspects of our business as our products and services continue to expand in scope and complexity. Such claims may be brought directly or indirectly against our companies and/or against our customers (who may be entitled to contractual indemnification under their contracts with us), and we are subject to increased exposure to such claims as a result of our acquisitions, particularly in cases where we are introducing new products or services in connection with such acquisitions. We have in the past been forced to litigate such claims, and we believe that additional lawsuits alleging such claims will be filed against us. Intellectual property claims, whether meritorious or not, are time-consuming and costly to defend and resolve, could require expensive changes in our methods of doing business, or could require us to enter into costly royalty or licensing agreements on unfavorable terms or make substantial payments to settle claims or to satisfy damages awarded by courts.

FY 2025 FORM 10-K
107

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

INDEMNIFICATION PROVISIONS

Our agreements with eBay governing our separation from eBay provide for specific indemnity and liability obligations for both eBay and us. Disputes between eBay and us have arisen and others may arise in the future, and an adverse outcome in such matters could materially and adversely impact our business, results of operations, and financial condition. 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.

In the ordinary course of business, we include indemnification provisions in certain of our agreements with parties with whom we have commercial relationships. Under these contracts, we generally indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by any third party with respect to our domain names, trademarks, logos, and other branding elements to the extent that such marks are related to the subject agreement. 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 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.

PayPal has participated in the U.S. Government’s Paycheck Protection Program administered by the U.S. Small Business Administration. Loans made under this program were funded by an independent chartered financial institution that we partnered with. We received a fee for providing services in connection with these loans and retained operational and audit risk related to those activities. 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 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 December 31, 2025 and 2024, the current outstanding balances of the loans sold was $ 3.8  billion and $ 2.9 billion, respectively. The term of the indemnification obligations align to the maturities of the loans sold.
 
To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions.

FY 2025 FORM 10-K
108

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

OFF-BALANCE SHEET ARRANGEMENTS

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

PROTECTION PROGRAMS

In addition to the protections afforded by applicable law, we provide consumers and merchants with protection programs for certain purchase transactions completed on our payments platform. 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 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. Our protection programs may result in negative customer balances when there are insufficient funds in a customer’s PayPal account to cover charges applied for merchant-related chargebacks within the scope of our protection programs. Negative customer balances can also occur from bank returns and reversals due to insufficient funding sources. The allowance for negative customer balances represents our estimate of current expected credit losses on negative customer balances.

At December 31, 2025 and 2024, the allowance for transaction losses was $ 73 million and $ 86 million, respectively. The allowance for negative customer balances was $ 271 million and $ 256 million at December 31, 2025 and 2024, respectively. The following table shows changes in the allowance for transaction losses and negative customer balances related to our protection programs for the years ended December 31, 2025 and 2024:

As of December 31,
2025 2024
(In millions)

Beginning balance $ 342   $ 282  
Provision (1)
1,337   1,114  
Realized losses and charge-offs
( 1,487 ) ( 1,218 )
Recoveries (2)
152   164  
Ending balance $ 344   $ 342  

(1) Changes in estimates for the prior period provision related to the allowance for transaction losses are not material and are aggregated with current period provision.
(2) Recoveries are only relevant for the allowance for negative customer balances.

FY 2025 FORM 10-K
109

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 14— STOCKHOLDERS’ EQUITY

STOCK REPURCHASE PROGRAMS

In July 2018, our Board of Directors authorized a stock repurchase program that provided for the repurchase of up to $ 10.0  billion of our common stock, with no expiration from the date of authorization. In June 2022, our Board of Directors authorized an additional stock repurchase program that provides for the repurchase of up to $ 15.0 billion of our common stock, with no expiration from the date of authorization. This program became effective in the first quarter of 2023 upon completion of the July 2018 stock repurchase program. In February 2025, our Board of Directors authorized an additional stock repurchase program that provides for the repurchase of up to $ 15.0  billion of our common stock, with no expiration from the date of authorization. This program became effective in the fourth quarter of 2025 upon completion of the June 2022 stock repurchase program. Our stock repurchase programs are intended to offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, may also be used to make opportunistic repurchases of our common stock to reduce outstanding share count. Any share repurchases under our stock repurchase programs may be made through open market transactions, block trades, privately negotiated transactions, including accelerated share repurchase agreements, or other means at times and in such amounts as management deems appropriate and will be funded from our working capital or other financing alternatives. Moreover, any stock repurchases are subject to market conditions and other uncertainties, and we cannot predict if or when any stock repurchases will be made. We may terminate our stock repurchase programs at any time without prior notice.

During the year ended December 31, 2025, we repurchased approximately 86 million shares of our common stock for approximately $ 6.0  billion at an average cost of $ 69.94 , excluding excise tax. These shares were purchased in the open market under our stock repurchase programs authorized in June 2022 and February 2025. As of December 31, 2025, a total of approximately $ 13.9 billion remained available for future repurchases of our common stock under our February 2025 stock repurchase program.

During the year ended December 31, 2024, we repurchased approximately 92 million shares of our common stock for approximately $ 6.0 billion at an average cost of $ 65.55 , excluding excise tax. These shares were purchased in the open market under our stock repurchase program authorized in June 2022. As of December 31, 2024, a total of approximately $ 4.9 billion remained available for future repurchases of our common stock under our June 2022 stock repurchase program.
During the year ended December 31, 2023, we repurchased approximately 74 million shares of our common stock for approximately $ 5.0 billion at an average cost of $ 67.72 , excluding excise tax. These shares were purchased in the open market under our stock repurchase programs authorized in July 2018 and June 2022. As of December 31, 2023, a total of approximately $ 10.9 billion remained available for future repurchases of our common stock under our June 2022 stock repurchase program.
During the years ended December 31, 2025 and 2024, we recorded $ 51  million and $ 50  million in excise tax within treasury stock on our consolidated balance sheets, respectively. The payable associated with the excise tax is a non-cash financing activity which is not reflected on the consolidated statement of cash flows until settlement.
Shares of common stock repurchased for the periods presented were recorded as treasury stock for the purposes of calculating net income (loss) per share and were accounted for under the cost method. No repurchased shares of common stock have been retired.

DIVIDEND PROGRAM

In October 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 was payable on December 10, 2025, to stockholders of record of our common stock as of the close of business on November 19, 2025.

FY 2025 FORM 10-K
110

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 15— STOCK-BASED AND EMPLOYEE SAVINGS PLANS

EQUITY INCENTIVE PLAN

Under the terms of the Amended and Restated PayPal Holdings, Inc. 2015 Equity Incentive Award Plan (the “Plan”), equity awards, including restricted stock units (“RSUs”), restricted stock awards, performance-based restricted stock units (“PBRSUs”), stock options, deferred stock units, and stock payments, may be granted to our directors, officers, and employees. In June 2025, our stockholders approved the authorization of an additional 15  million shares to the Plan. At December 31, 2025, approximately 75 million shares were authorized under the Plan and approximately  45 million shares were available for future grant. Shares issued as a result of stock option exercises and the release of stock awards were funded primarily with the issuance of new shares of common stock.

RSUs are granted to eligible employees under the Plan. RSUs issued on or after January 1, 2022 generally vest over three years at a rate of 33 % after one year , then in equal quarterly installments thereafter. RSUs are subject to an employee’s continuing service to us, and do not have an expiration date. The cost of RSUs granted is determined using the fair market value of PayPal’s common stock on the date of grant.

Certain of our executives and non-executives are eligible to receive PBRSUs, which are equity awards that may be earned based upon the Company’s performance relative to pre-established market or performance targets over performance periods of one to three years . We estimate the fair value of market-based PBRSU awards at the date of grant using a Monte Carlo valuation methodology that incorporates into the valuation the possibility that the market condition might not be satisfied. The total estimated fair value is amortized over each award’s performance period regardless of whether the condition is satisfied. The number of shares that vest at the end of each performance period will vary based on the performance against specified market conditions. PBRSUs that are subject to a performance condition may vest and settle depending on the Company’s performance against pre-established performance metrics over a predefined performance period. PBRSUs with only a performance condition generally are cliff vested following the completion of the performance period, subject to the Compensation Committee’s approval of the level of achievement against the pre-established performance targets. Over the performance period, the number of PBRSUs with only a performance condition that may be issued, and related stock-based compensation expense that is recognized, is adjusted upward or downward based upon the probability of achieving the approved performance targets. Depending on the probability of achieving the pre-established performance targets, the number of PBRSUs with only a performance condition issued could range from 0 % to 200 % of the target amount.

EMPLOYEE STOCK PURCHASE PLAN

Under the terms of the Employee Stock Purchase Plan (“ESPP”), shares of our common stock may be purchased over an offering period with a maximum duration of two years at 85 % of the lower of the fair market value on the first day of the applicable offering period or on the last business day of each six-month purchase period within the offering period. Employees may contribute between 2 % and 10 % of their gross compensation during an offering period to purchase shares, but not more than the statutory limitation of $25,000 per year. All company stock purchased through the ESPP is considered outstanding and is included in the weighted-average outstanding shares for purposes of computing basic and diluted net income (loss) per share. For the years ended December 31, 2025, 2024, and 2023, our employees purchased 2.6 million, 2.1 million, and 2.3 million shares under the ESPP at an average per share price of $ 45.85 , $ 44.16 , and $ 55.34 , respectively. As of December 31, 2025, approximately  39 million shares were reserved for future issuance under the ESPP.

FY 2025 FORM 10-K
111

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

RSU, PBRSU, AND RESTRICTED STOCK ACTIVITY

The following table summarizes RSU, PBRSU, and restricted stock activity under the Plan as of December 31, 2025 and changes during the year ended December 31, 2025:

Units Weighted Average Grant-Date
Fair Value
(per share)
  (In thousands, except per share amounts)
Outstanding at January 1, 2025 31,288   $ 67.35  
Awarded
22,329   $ 70.92  
Vested
( 15,923 ) $ 67.55  
Forfeited
( 5,937 ) $ 72.39  

Outstanding at December 31, 2025 31,757   $ 68.84  
Expected to vest 27,499  

The aggregate intrinsic value of RSUs and PBRSUs vested under the Plan was $ 1.1 billion for both December 31, 2025 and 2024 and $ 752  million for December 31, 2023.

In the year ended December 31, 2025, the Company granted 1.6  million PBRSUs with a three-year performance period. In the year ended December 31, 2024, the Company granted 1.9  million PBRSUs with a three-year performance period. In the year ended December 31, 2023, the Company granted 2.3 million PBRSUs with a one-year performance period (fiscal 2023), which became fully vested following the completion of the performance period in February 2024 ( one year from the annual incentive award cycle grant date), and 1.8  million PBRSUs with a three-year performance period.

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

T he following table summarizes the impact of stock-based compensation expense under the Plan on our results of operations for the years ended December 31, 2025, 2024, and 2023:

  Year Ended December 31,
  2025 2024 2023
  (In millions)
Customer support and operations $ 204   $ 233   $ 305  
Sales and marketing 125   143   179  
Technology and development 489   478   612  
General and administrative 266   339   434  
Restructuring and other
—   100   —  
Total stock-based compensation expense $ 1,084   $ 1,293   $ 1,530  

Capitalized as part of internal use software and website development costs $ 134   $ 109   $ 52  
Income tax benefit on total stock-based compensation expense $ 227   $ 238   $ 260  
Income tax benefit realized related to awards vested or exercised $ 237   $ 205   $ 136  

As of December 31, 2025, there was approximately $ 1.4 billion of unearned stock-based compensation that is expected to be recognized over a weighted average period of 1.87 years. If there are any modifications or cancellations of the underlying unvested awards, we may be required to accelerate, increase, or cancel all or a portion of the remaining unearned stock-based compensation expense. Future unearned stock-based compensation will increase to the extent we grant additional equity awards, change the mix of equity awards we grant, or assume unvested equity awards in connection with acquisitions.

FY 2025 FORM 10-K
112

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

EMPLOYEE SAVINGS PLANS

Under the terms of the PayPal Holdings, Inc. Deferred Compensation Plan, which also qualifies under Section 401(k) of the Code, participating U.S. employees may contribute up to 50 % of their eligible compensation, but not more than statutory limits. Under the PayPal plan, eligible employees received one dollar for each dollar contributed, up to 4 % of each employee’s eligible salary, subject to a maximum employer contribution per employee of $ 14,000 in 2025, $ 13,800 in 2024, and $ 13,200 in 2023. Our non-U.S. employees are covered by other savings plans. For the years ended December 31, 2025, 2024, and 2023, the matching contribution expense for our U.S. and international savings plans was approximately $ 83 million, $ 74 million, and $ 80 million, respectively.

NOTE 16— INCOME TAXES

The components of income before income taxes were as follows:

  Year Ended December 31,
  2025 2024 2023
(In millions)
United States $ 1,453   $ 946   $ 993  
International 4,839   4,383   4,418  
Income before income taxes $ 6,292   $ 5,329   $ 5,411  

The income tax expense was composed of the following:

  Year Ended December 31,
  2025 2024 2023
(In millions)
Current:
Federal $ ( 116 ) $ 342   $ 1,031  
State and local 65   107   145  
Foreign 893   502   657  
Total current portion of income tax expense
$ 842   $ 951   $ 1,833  
Deferred:
Federal $ 295   $ 278   $ ( 490 )
State and local ( 15 ) ( 29 ) ( 79 )
Foreign ( 63 ) ( 18 ) ( 99 )
Total deferred portion of income tax expense (benefit) 217   231   ( 668 )
Income tax expense
$ 1,059   $ 1,182   $ 1,165  

FY 2025 FORM 10-K
113

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate:

Year Ended December 31, 2025
$ Amount
(in millions) %

Tax provision at the U.S. federal statutory rate
$ 1,321   21.0   %
State and local income tax, net of federal income tax effect (1)
( 22 ) ( 0.3 ) %
Foreign tax effects:

Singapore

Statutory tax rate difference between Singapore and the U.S.
( 155 ) ( 2.5 ) %
Incentive agreement
( 466 ) ( 7.4 ) %
Qualified domestic minimum top-up tax
370   5.9   %
Other
2   —   %
Other foreign jurisdictions
14   0.2   %

Effect of cross-border tax laws
21   0.3   %
Tax credits:

Research and development
( 99 ) ( 1.6 ) %

Changes in valuation allowances (2)
312   5.0   %
Nontaxable or nondeductible items
47   0.7   %
Changes in unrecognized tax benefits (3)
225   3.6   %
Other:

Internal legal entity restructuring (2)
( 518 ) ( 8.2 ) %
Other rate drivers 7   0.1   %
Income tax expense and effective income tax rate
$ 1,059   16.8   %

(1) The state that contributed to the majority (greater than 50%) of the tax effect in this category was California.
(2) “Internal legal entity restructuring” includes $ 299  million of U.S. tax attributes generated, which are not more-likely-than-not to be realized, and is offset in “Changes in valuation allowances.”
(3) PayPal made a policy election to aggregate changes in unrecognized tax benefits for all jurisdictions in this line item.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the following is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate:

  Year Ended December 31,
  2024 2023
Federal statutory rate 21.0   % 21.0   %
Domestic income taxed at different rates 0.1   % ( 1.5 ) %
State taxes, net of federal benefit 1.1   % 1.1   %
Foreign income taxed at different rates ( 4.3 ) % ( 5.1 ) %
Stock-based compensation expense 2.6   % 3.5   %
Tax credits 0.6   % ( 0.7 ) %
Change in valuation allowances 0.6   % —   %
Other 0.5   % 3.2   %
Effective income tax rate 22.2   % 21.5   %

FY 2025 FORM 10-K
114

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents supplemental cash flow information related to income taxes paid (net of refunds received):

Year Ended December 31, 2025
(In millions)
US federal
$ 535  
US state and local:

Other
19  
Foreign:

Singapore
254  
Luxembourg 96  
Other
195  
Total cash taxes paid, net of refunds received
$ 1,099  

Deferred tax assets and liabilities are recognized for the future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax basis using enacted tax rates in effect for the year in which the differences are expected to reverse. Significant deferred tax assets and liabilities consist of the following:

  As of December 31,
  2025 2024
(In millions)
Deferred tax assets:
Tax attribute carryforwards $ 911   $ 265  
Accruals and allowances
603   546  
Lease liabilities 168   194  
Stock-based compensation 83   93  

Capitalized research and development
715   1,077  
Other items
54   63  
Total deferred tax assets 2,534   2,238  
Valuation allowance (1)
( 736 ) ( 240 )
Total deferred tax assets, net of valuation allowance
$ 1,798   $ 1,998  
Deferred tax liabilities:
ROU lease assets $ ( 131 ) $ ( 153 )
Capitalized software development costs
( 184 ) ( 176 )
Net unrealized gains ( 119 ) ( 97 )
Other items
( 111 ) ( 74 )
Total deferred tax liabilities ( 545 ) ( 500 )
Net deferred tax assets $ 1,253   $ 1,498  

(1) For the year ended December 31, 2025, we had an increase in our valuation allowance of $ 496  million, primarily driven by an increase in our U.S. federal tax attributes generated as part of an internal legal entity restructuring, as well as an increase in our U.S. state tax attributes due to a change in our state apportionment rates, which are not more-likely-than-not to be realized.

As of December 31, 2025, our net foreign net operating loss carryforwards for income tax purposes were approximately $ 184  million, and certain of these amounts are subject to an annual limitation. If not utilized, a portion of these losses will begin to expire in 2026. As of December 31, 2025, our net U.S. Federal capital loss carryforward was approximately $ 299  million, which will expire in 2030. As of December 31, 2025, our net California research and development tax credit carryforwards for income tax purposes were approximately $ 141  million, which may be carried forward indefinitely. As of December 31, 2025, our Federal corporate alternative minimum tax credit carryforward was approximately $ 144  million, which may be carried forward indefinitely. It is more likely than not that most of these net operating loss, capital loss, and research and development tax credit carryforward deferred tax assets will not be realized and a valuation allowance has been recorded against these assets.

Repatriation of our foreign earnings for use in the U.S. is generally not expected to result in a significant amount of income taxes; as a result, the corresponding deferred tax liability we have accrued is not material.

FY 2025 FORM 10-K
115

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We benefit from agreements concluded in certain jurisdictions, most significantly Singapore. The Singapore agreement is effective through 2030, results in significantly lower rates of taxation on certain classes of income and requires various thresholds of investment and employment in that jurisdiction. We review our compliance on an annual basis to ensure we continue to meet our obligations under this agreement. This agreement, after factoring in any qualified domestic minimum top-up tax in 2025 onward, resulted in tax savings of approximately $ 96 million, $ 473  million, and $ 441 million in 2025, 2024, and 2023, respectively. Excluding the effect of U.S. and foreign tax legislation, the benefit of this agreement on our diluted net income (loss) per share was approximately $ 0.10 , $ 0.46 , and $ 0.40 in 2025, 2024, and 2023, respectively. These results may further vary based on our overall tax profile.

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.

The following table reflects changes in unrecognized tax benefits for the periods presented below:

  Year Ended December 31,
  2025 2024 2023
  (In millions)
Gross amounts of unrecognized tax benefits as of the beginning of the period $ 2,320   $ 2,236   $ 1,877  
Increases related to prior period tax positions 240   44   178  
Decreases related to prior period tax positions ( 155 ) ( 201 ) ( 30 )
Increases related to current period tax positions 276   280   235  
Settlements ( 90 ) —   —  
Statute of limitation expirations ( 46 ) ( 39 ) ( 24 )
Gross amounts of unrecognized tax benefits as of the end of the period $ 2,545   $ 2,320   $ 2,236  

If the remaining balance of unrecognized tax benefits were realized in a future period, it would result in a tax benefit of $ 1.7  billion.
 
For the years ended December 31, 2025, 2024, and 2023, we recognized net interest and penalties of $ 73 million, $ 50  million, and $ 151 million, respectively, related to uncertain tax positions in income tax expense. This expense is reflected in the “Changes in unrecognized tax benefits” line of our effective income tax rate schedule for 2025 and “Other” line of our effective income tax rate schedule for 2024 and 2023. The amount of interest and penalties accrued as of December 31, 2025 and 2024 was approximately $ 637 million and $ 556 million, respectively.

We are subject to taxation in the U.S. and various state and foreign jurisdictions. We are currently under examination by certain tax authorities for the 2013 to 2024 tax years. The material jurisdictions in which we are subject to examination by tax authorities for tax years after 2012 primarily include the U.S. (Federal and California), India, Singapore, and Israel. We believe that adequate amounts have been reserved for any adjustments that may ultimately result from our open examinations.

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. It is reasonably possible that within the next twelve months, we may receive additional tax adjustments by various tax authorities or possibly reach resolution of audits in one or more jurisdictions. These adjustments or settlements could result in changes to our unrecognized tax benefits related to positions on prior year tax filings.

In connection with our separation from eBay in 2015, we entered into various agreements that govern the relationship between the parties going forward, including a tax matters agreement. Under the tax matters agreement, eBay is generally responsible for all additional taxes (and will be entitled to all related refunds of taxes) imposed on eBay and its subsidiaries (including subsidiaries that were transferred to PayPal pursuant to the separation) arising after the separation date with respect to the taxable periods (or portions thereof) ended on or prior to July 17, 2015, except for those taxes for which PayPal reflected an unrecognized tax benefit on the separation date.

FY 2025 FORM 10-K
116

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 17— RESTRUCTURING AND OTHER

RESTRUCTURING

The restructuring charges associated with the following plans were recorded in “restructuring and other” on our consolidated statements of income. Accrued restructuring liabilities were included in “accrued expenses and other current liabilities” on our consolidated balance sheets.

2Q 2025 Plan

During the second quarter of 2025, management undertook a large-scale initiative (the “2Q 2025 Plan”) to reengineer our existing technology infrastructure to improve scalability, reduce network latency, decrease operational costs, and optimize our workforce. 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 2Q 2025 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 during the year ended December 31, 2025 were $ 102  million, consisting of $ 96  million in employee severance and benefits costs and $ 6  million in other restructuring 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 2Q 2025 Plan. Other restructuring costs relate to process re-engineering and one-time migration to cloud solutions and consist of contractor costs, consulting fees, and prepaid software and maintenance costs without future economic benefit. The timing of activities and cost estimates continue to be developed and are subject to change.

The following table summarizes the restructuring reserve activity during the year ended December 31, 2025:

Employee Severance and Benefits Costs Other Restructuring Costs
Total

(In millions)
Accrued liability as of January 1, 2025
$ —   $ —   $ —  
Charges
96   6   102  
Payments ( 44 ) —   ( 44 )
Accrued liability as of December 31, 2025
$ 52   $ 6   $ 58  

1Q 2025 Plan

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 year ended December 31, 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 year ended December 31, 2025:

Employee Severance and Benefits Costs

(In millions)
Accrued liability as of January 1, 2025
$ —  
Charges
36  
Payments ( 36 )
Accrued liability as of December 31, 2025
$ —  

FY 2025 FORM 10-K
117

Table of Contents
PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

1Q 2024 Plan

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 year ended December 31, 2024 were $ 307 million, and included employee severance and benefits costs and stock-based compensation expense, which were substantially completed in the fourth quarter of 2024.

1Q 2023 Plan

During the first quarter of 2023, management initiated a global workforce reduction intended to focus resources on core strategic priorities and improve our cost structure and operating efficiency. The associated restructuring charges in 2023 were $ 122 million. We primarily incurred employee severance and benefits costs, which were substantially completed by the fourth quarter of 2023.

We continue to review our real estate and facility capacity requirements due to our new and evolving work models. We incurred asset impairment charges of nil in 2025 and 2024, and $ 61 million in 2023 due to exiting certain leased properties, which resulted in a reduction of ROU lease assets and related leasehold improvements. Additionally, we recognized a gain of $ 17  million due to the sale of an owned property and incurred a loss of $ 14  million related to another owned property held for sale in the year ended December 31, 2023.

OTHER

During the years ended December 31, 2025, 2024 and 2023, approximately $ 193 million, $ 129 million and $ 74 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 (inclusive of transaction costs) and fair value adjustments to measure loans and interest receivable, held for sale, at the lower of cost or fair value.

In the fourth quarter of 2023, we completed the sale of Happy Returns and recorded a pre-tax gain of $ 339 million, net of transaction costs, in restructuring and other . For additional information on the divestiture, see “Note 4—Business Combinations and Divestitures”.

FY 2025 FORM 10-K
118

PayPal Holdings, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 18— SEGMENT INFORMATION

Our chief operating decision maker (“CODM”), our Chief Executive Officer, manages the business and evaluates operating performance based on consolidated net income. Our CODM uses consolidated net income to monitor budget versus actual results. We operate as one segment and have one reportable segment that constitutes consolidated results.

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

Year Ended December 31,
2025 2024 2023
(In millions)

Net revenues $ 33,172   $ 31,797   $ 29,771  
Less (add):

Transaction expense 15,987   15,697   14,385  
Transaction losses
1,337   1,114   1,192  
Credit losses
383   328   490  
Customer support and operations (1)
1,704   1,768   1,919  
Sales and marketing (1)
2,283   2,001   1,809  
Technology and development (1)
3,103   2,979   2,973  
General and administrative (1)
1,979   2,147   2,059  
Restructuring and other 331   438   ( 84 )
Other income (expense), net ( 227 ) ( 4 ) ( 383 )
Income tax expense 1,059   1,182   1,165  
Segment net income (loss)
$ 5,233   $ 4,147   $ 4,246  

(1) Includes depreciation and amortization expense. Total depreciation and amortization expense was $ 1.0 billion for both years ended December 31, 2025 and 2024 and $ 1.1 billion for the year ended December 31, 2023.

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” and “Note 7—Other Financial Statement Details”.

FY 2025 FORM 10-K
119

Table of Contents

FINANCIAL STATEMENT SCHEDULE

The Financial Statement Schedule II—VALUATION AND QUALIFYING ACCOUNTS is filed as part of this Annual Report on Form 10-K.

Balance at
Beginning of
Period Charged/
(Credited) to
Net Income Charges
Utilized/
(Write-offs) Balance at
End of Period
  (In millions)
Allowance for Transaction Losses and Negative Customer Balances
Year Ended December 31, 2023 $ 278   $ 1,192   $ ( 1,188 ) $ 282  
Year Ended December 31, 2024 $ 282   $ 1,114   $ ( 1,054 ) $ 342  
Year Ended December 31, 2025 $ 342   $ 1,337   $ ( 1,335 ) $ 344  
Allowance for Loans and Interest Receivable
Year Ended December 31, 2023 $ 598   $ 539   $ ( 597 ) $ 540  
Year Ended December 31, 2024 $ 540   $ 337   $ ( 416 ) $ 461  
Year Ended December 31, 2025 $ 461   $ 414   $ ( 336 ) $ 539  

FY 2025 FORM 10-K
120

Table of Contents

ITEM 16. FORM 10-K SUMMARY
None.

INDEX OF EXHIBITS

Incorporated by Reference
Exhibit
Number    Exhibit Description Filed with this Form 10-K Form Date Filed
2.01
   Separation and Distribution Agreement by and between eBay Inc. and PayPal Holdings, Inc. 10-12B/A 6/26/2015
3.01
   PayPal Holdings, Inc. Restated Certificate of Incorporation 10-Q 7/27/2017
3.02
   PayPal Holdings, Inc. Amended and Restated Bylaws effective September 27, 2023
8-K 10/2/2023
4.01
Description of Securities 10-K 2/6/2020
4.02
Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee 8-K 9/26/2019
4.03
Officer’s Certificate, dated as of September 26, 2019, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee, containing Forms of 2026 Note and 2029 Note
8-K 9/26/2019
4.04
Officer’s Certificate, dated as of May 18, 2020, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee, containing Forms of 2030 Note and 2050 Note
8-K 5/18/2020
4.05
Officer’s Certificate, dated as of May 23, 2022, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee, containing Forms of 2027 Note, 2032 Note, 2052 Note, and 2062 Note
8-K 5/23/2022
4.06
Officer’s Certificate, dated as of June 9, 2023, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee, containing Forms of Note for 0.972% Notes due 2026 and 1.240% Notes due 2028
8-K
6/9/2023
4.07
Officer’s Certificate, dated as of May 28, 2024, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee, containing Forms of Note for 5.150% Notes due 2034 and 5.500% Notes due 2054
8-K
5/28/2024
4.08
Officer’s Certificate, dated as of March 6, 2025, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Computershare Trust Company, N.A. as successor to Wells Fargo Bank, National Association, as Trustee, containing Forms of Note for Floating Rate Notes due 2028, 4.450% Notes due 2028 and 5.100% Notes due 2035
8-K
3/6/2025
10.01
Tax Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated July 17, 2015 8-K 7/20/2015
10.02+
PayPal Employee Incentive Plan, as amended and restated DEF 14A 4/14/2016
10.03+
PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as Amended and Restated
8-K 6/9/2025
10.04+
PayPal Holdings, Inc. Amended and Restated Deferred Compensation Plan effective November 6, 2018 10-K 2/7/2019

FY 2025 FORM 10-K
121

Table of Contents

Incorporated by Reference
Exhibit
Number    Exhibit Description Filed with this Form 10-K Form Date Filed
10.05+
PayPal Holdings, Inc. Executive Change in Control and Severance Plan, as amended and restated, effective as of November 24, 2025
X

10.06+
Form of Indemnity Agreement between PayPal Holdings, Inc. and individual directors and officers 10-12B/A 5/14/2015
10.07+
Form of Global Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan 10-12B/A 5/14/2015
10.08+
Form of Global Performance Based Restricted Stock Unit Award Grant Notice and Performance Based Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as amended and restated 10-Q 4/30/2024
10.09+
Form of Global Notice of Grant of Stock Option and Stock Option Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan 10-12B/A 5/14/2015
1 0. 10+
Form of Global Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as amended and restated (2026)
X

1 0. 11+
Form of Global Performance Based Restricted Stock Unit Award Grant Notice and Performance Based Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as amended and restated (2026)
X

10.1 2 +
Form of Director Annual Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan 10-12B/A 5/14/2015
10.1 3 +
Form of Electing Director Quarterly Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan 10-12B/A 5/14/2015
10.1 4 +
PayPal Holdings, Inc. Amended and Restated Employee Stock Purchase Plan 8-K 5/25/2018
10. 1 5 +
Amendment to PayPal Holdings, Inc. Amended and Restated Employee Stock Purchase Plan
10-Q 11/9/2021
10.1 6 +
PayPal Holdings, Inc. 2022 Inducement Plan S-8
7/15/2022
10.1 7 +
Letter Agreement by and between PayPal Holdings, Inc. and Alex Chriss, dated August 10, 2023
8-K
8/14/2023
10.1 8 +
Offer Letter, dated October 29, 2023, by and between PayPal Holdings, Inc. and Jamie Miller
8-K
11/1/2023
10.19
Credit Agreement, dated as of June 7, 2023, among PayPal Holdings, Inc. the Designated Borrowers party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Australia Limited, as the Administrative Agents 8-K
6/13/2023
10.20^†
Deed of Amendment and Restatement dated November 11, 2025 in relation to the Receivables Purchase Agreement and the Receivables Management Agreement dated as of December 12, 2023, by and between PayPal (Europe) S.à r.l. et Cie, SCA (as Receivables Manager and Seller), PayPal UK Ltd (as Receivables Manager), Alps Partners S.à r.l. (as Purchaser), BNY Mellon Corporate Trustee Services Limited (as Security Agent), Avega S.à r.l. (as Back-Up Receivables Manager Facilitator) and Alps Partners (Holding) S.à r.l. (as Class C Lender)
X

FY 2025 FORM 10-K
122

Table of Contents

Incorporated by Reference
Exhibit
Number    Exhibit Description Filed with this Form 10-K Form Date Filed
10.21^†
Receivables Purchase Agreement, dated as of November 11, 2025 by and between PayPal (Europe) S.à r.l. et Cie, SCA (as Seller and a Receivables Manager), PayPal UK Ltd (as a Receivables Manager and collectively with PayPal (Europe) S.à r.l. et Cie, SCA, the Receivables Managers), Alps 2.0 Partners S.à r.l. (as Purchaser), BNY Mellon Corporate Trustee Services limited (as Security Agent), Avega S.à r.l. (as Back-Up Receivables Manager Facilitator) and Alps 2.0 Partners (Holding) as Class C Lender)
8-K
11/17/2025
10.22^†
Receivables Management Agreement, dated as of November 11, 2025 by and between PayPal (Europe) S.à r.l. et Cie, SCA (as Seller and EU Receivables Manager), PayPal UK Ltd (as UK Receivables Manager), Alps 2.0 Partners S.à r.l. (as Purchaser), Avega S.à r.l. (as Back-Up Receivables Manager Facilitator) and Alps 2.0 Partners ( Holding) S.à r.l. as Class C Lender)
8-K
11/17/2025
10.2 3 +
Offer Letter, dated October 23, 2023, by and between PayPal Holdings, Inc. and Michelle Gill
10-K
2/8/2024
10.2 4 +
Offer Letter, dated October 23, 2023, by and between PayPal Holdings, Inc. and Diego Scotti
10-K 2/8/2024
10.2 5 +
Offer Letter, dated December 4, 2023, by and between PayPal Holdings, Inc. and Suzan Kereere
10-K 2/8/2024
10. 26 +
Offer Letter, dated May 28, 2024, by and between PayPal Holdings, Inc. and Christopher Natali 8-K
6/3/2024
10. 27 +
Letter agreement by and between PayPal Holdings, Inc. and Aaron Webster, dated February 5, 2024 10-Q
4/30/2024
10. 28 +
Independent Director Compensation Policy X

10.29
Form of Commercial Paper Dealer Agreement between the Company, as issuer, and the applicable Dealer party thereto
8-K
11/14/2025
19.01 ^
PayPal Holdings, Inc. Insider Trading Policy
X

21.01
List of Subsidiaries X
23.01
PricewaterhouseCoopers LLP consent X
24.01
Power of Attorney (see signature page) X
31.01
Certification of PayPal Holdings, Inc.’s Chief Executive Officer and Chief Financial Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002
X
32.01
Certification of PayPal Holdings, Inc.’s Chief Executive Officer and Chief Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002
X
97.01+
PayPal Holdings, Inc. Mandatory Recovery Policy for Executive Officers
X

101 The following financial information related to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income (Loss), (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Stockholders’ Equity, (v) the Consolidated Statements of Cash Flows; and (vi) the related Notes to Consolidated Financial Statements
X
104 Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101 X

+ Indicates a management contract or compensatory plan or arrangement.
† Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S‑K.
^ Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

FY 2025 FORM 10-K
123

Table of Contents

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 3, 2026.
 

PayPal Holdings, Inc.

By:     /s/ Jamie Miller

Name:
Title:    Jamie Miller
Interim President and Chief Executive Officer and Executive Vice President, Chief Financial and Operating Officer

Table of Contents