Aureus
AExcellent

PayPal Holdings, Inc.(PYPL)

A

Financial data as of Dec 31, 2025Improving · Financials

FCF Margin13.8%Free Cash Flow / Revenue
Cash Conversion122.6%Operating CF / Net Income
Free Cash Flow$5.6B
Revenue$33.2B
Net Cash-$1.9BNet debt position
Debt / FCF2.2xManageable debt load
Current Ratio1.29Adequate short-term liquidity
YoY FCF Growth+200.0%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseB
→
+0.5Healthy FCF margin with manageable debt (13.8%, 2.2x; 0.1x sector-adjusted)
→
+1Strong YoY FCF growth (200.0% YoY)
→
+1Very low debt-to-FCF ratio (2.2x; 0.1x sector-adjusted)
→
FinalA

Analysis Summary

Strengths

  • Healthy FCF margin (13.8%)
  • Excellent cash conversion (123%)
  • Strong YoY FCF growth (+200.0%)

Concerns

  • Net debt position ($1.9B) — 2.2x FCF, manageable
SBC-adjusted FCF used — $1.0B stock-based compensation (18% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin13.8%
Net Margin15.8%
Operating CF Margin19.3%
CapEx Ratio2.6%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$1.9BNet debt position
Debt / FCF2.2xManageable debt load
Current Ratio1.29Adequate liquidity
Debt / Equity0.49Low leverage

Quarterly FCF Trend

+200.0% YoYImproving (+200.0%)

Free cash flow per quarter

Sector Comparison — Financials

FCF Margin ranked against sector peers

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Detailed Metrics

Company NamePayPal Holdings, Inc.
SectorFinancials
Free Cash Flow$5.6B
Revenue$33.2B
Net Income$5.2B
Operating Cash Flow$6.4B
Capital Expenditure$852.0M
FCF Margin13.8%
Cash Conversion Rate122.6%
Net Margin15.8%
Total Debt$10.0B
Total Cash$8.0B
Net Cash-$1.9B
Current Ratio1.29
Debt / Equity0.49
Debt / FCF2.2x
YoY FCF Growth+200.0%
Positive Quarters5 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeA
Data SourceYahoo Finance

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