By Paige Smith, Bloomberg
PayPal Holdings Inc. said the CEO of HP Inc. Enrique Lores will take the top job from Alex Chriss, whose recovery plan failed to meet the goals and facilitate the growing payment business.
Shares fell as much as 19%, the biggest daily decline in more than four years, after the CEO’s announcement and a separate statement showing fourth-quarter profit and revenue that analysts missed.
Chriss, who was appointed in 2023 to replace CEO Dan Schulman, at the time vowed to prioritize profits while refocusing the company on a PayPal-branded exit. But the stock lagged behind rivals as Chriss doubled its revenue guidance and failed to meet new targets. Management said on Tuesday that they could no longer commit to past forecasts for next year.
“Although progress has been made in many areas over the past two years, the pace of change and implementation has not been consistent with the Board’s expectations,” said newly appointed independent board chairman David Dorman.
Jamie Miller, the payments company’s chief financial and operations officer, will serve as interim CEO until Lores takes over on March 1. Miller said on a conference call Tuesday that PayPal “didn’t move fast enough or with the level of focus that was needed.”
The San Jose, California-based company said Tuesday that growth in PayPal-branded online purchases slowed to 1% in the fourth quarter, down from 6% a year earlier. The company also highlighted weakness in US retail spending and international sales.
Fourth-quarter earnings per share of $1.23 and total revenue of $8.68 billion topped analysts’ estimates for the three-month period.
The turnaround time for PayPal management was “probably faster than many expected,” Evercore ISI analyst Adam Frisch wrote in a note to clients. “The big question is whether you’re going to bring in a formidable payments team to try another multi-year turnaround or look to start reviewing strategic asset options,” Frisch said, referring to Lores.
Lores spent decades at HP working his way up from engineering positions to roles that included managing the office that handled the 2015 spinoff of Hewlett Packard Enterprise and helping HP’s printing business.
He took over there in 2019 with the aim of “reviving” the company. In addition to navigating HP through the challenging PC and printer markets, Lores survived a disastrous takeover bid for Xerox Holdings Corp. which ultimately failed during this pandemic.
Lores has recently been guiding HP through broad industry headwinds, from uncertainty about US tariffs to weakening consumer and business demand for computers. Under Lores, HP has been transforming its global supply chain, moving production to Vietnam, Thailand, India, Mexico and the US and away from China. A long-delayed recovery in the personal computer market began to show last year, but prices are threatening to derail progress.
Bruce Broussard, an HP board member, has been named interim CEO while the search committee looks for a replacement, according to an HP statement.
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Lores now takes the helm of a company that has struggled to make money in recent quarters, and analysts are skeptical of a turnaround. PayPal reported lower-than-expected full-year earnings of $5.31 per share. It said in October the figure will be $5.35 to $5.39. The company raised its full-year earnings outlook twice — once in July and again in October — before finally dropping.
Full-year 2026 revenue dollars, which represent how much the company earns from processing after expenses, are expected to show a “slight decline” from last year, according to the presentation.
During the fourth quarter, PayPal filed to become a US bank with the Federal Deposit Insurance Corp. and the Utah Department of Financial Institutions, the company said will help its ability to lend to small businesses. PayPal already has a banking license in Europe.
-Courtesy of Lynn Doan and Georgie McKay.
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