PayPal CEO Shift: HP's Lores Steps In After Earnings Shock
PayPal has named Enrique Lores—former HP chief and current board chair—as its new CEO and president, replacing Alex Chriss after just 17 months at the helm. The surprise leadership change arrives alongside disappointing fourth-quarter results that missed Wall Street expectations and triggered a nearly 18% premarket stock plunge. Investors reacted sharply as PayPal also slashed its full-year profit forecast, signaling deeper operational challenges beyond a single earnings miss. The board explicitly cited execution speed that "was not in line with expectations" given accelerating shifts across payments and commerce.
Credit: PayPal
Why the Sudden Leadership Pivot?
The board's language reveals mounting frustration with PayPal's transformation pace under Chriss, who joined from Intuit in September 2023 with promises to reposition the company as a commerce platform rather than just a payments processor. Despite launching initiatives like Branded Checkout and expanding buy-now-pay-later offerings, merchant adoption has lagged while transaction margins face persistent pressure. With competitors aggressively embedding financial services into shopping experiences, PayPal's window to reclaim momentum is narrowing. Bringing in Lores—a proven operator with deep hardware-to-software transition experience at HP—signals the board wants disciplined execution over theoretical strategy.
The Earnings Backdrop That Forced Action
Tuesday's announcement landed like a one-two punch for shareholders. PayPal reported fourth-quarter revenue of $8.68 billion, falling short of the $8.80 billion analysts expected as consumer spending softened amid ongoing cost-of-living pressures. More concerning was the company's 2026 guidance: PayPal projected a decline in full-year profit when Wall Street had anticipated growth. This reversal shattered confidence in management's ability to navigate near-term headwinds while investing for long-term relevance. CFO and COO Jamie Miller will serve as interim CEO until Lores formally assumes the role, providing continuity during the transition period.
Who Is Enrique Lores? The Intern-Turned-CEO Story
Lores isn't an outsider parachuting into crisis mode—he's been PayPal's board chair since July 2024, giving him months of immersion in the company's challenges and opportunities. Before that, he spent over 35 years at HP, rising from an engineering intern in 1989 to CEO in 2019. His tenure at the helm saw HP navigate brutal industry disruption as printing revenues declined and computing markets fragmented. Lores stabilized operations, sharpened product roadmaps, and maintained profitability through disciplined capital allocation—exactly the profile PayPal's board seeks today. With an electrical engineering degree and MBA, he bridges technical depth with commercial acumen—a rare combination in fintech leadership.
What Lores Inherits: Margin Pressure and Merchant Skepticism
PayPal's core challenge isn't transaction volume—it's value capture. As unbranded checkout options proliferate and card networks push direct merchant integrations, PayPal's take rate faces structural erosion. The company's strategic bet on Branded Checkout aims to reverse this by keeping the PayPal logo visible during transactions, boosting consumer trust and merchant conversion rates. But adoption remains uneven. Lores now must accelerate merchant onboarding while managing investor expectations for near-term margin stability. His HP experience navigating similar "hardware-to-services" transitions could prove invaluable in reframing PayPal's value proposition beyond the checkout button.
AI Isn't Coming—It's Already Reshaping Commerce
Lores acknowledged in his statement that artificial intelligence is "reshaping commerce daily," and he's right. The payments landscape is evolving beyond faster transactions toward predictive, contextual experiences. AI now powers real-time fraud prevention, dynamic currency conversion, and personalized checkout flows that reduce cart abandonment. Winners in 2026 won't just process payments—they'll anticipate shopper intent and remove friction before it occurs. PayPal possesses rich transaction data across 430 million consumers, but competitors are moving faster to monetize these insights. Lores' mandate includes transforming PayPal from a utility into an intelligence layer for digital commerce.
Quarterly Accountability Meets Long-Term Vision
Notably, Lores emphasized that PayPal will "hold itself accountable for delivering quarterly accounts" alongside product innovation—a subtle but significant message to investors burned by missed forecasts. This dual focus acknowledges a painful truth: without consistent execution on near-term metrics, long-term bets lose credibility. Yet quarterly pressure can't come at the expense of strategic investments in AI infrastructure, merchant tools, and cross-border capabilities. Striking this balance defined Lores' HP tenure, where he maintained dividend payouts while funding R&D for future growth vectors like 3D printing and hybrid work solutions. PayPal needs that same steadiness now.
What Success Looks Like in 2026
Investors will watch three indicators closely under Lores' leadership. First, Branded Checkout penetration among top merchants must accelerate meaningfully by mid-year. Second, transaction margin dollars need stabilization after projected declines in early 2026. Third, PayPal must demonstrate tangible AI integration—beyond marketing buzzwords—into core products like fraud detection and checkout optimization. Lores won't have the luxury of a multi-year grace period; markets expect visible progress within two quarters. His insider status as board chair provides a head start, but execution speed remains the ultimate test.
The Road Ahead for PayPal's Turnaround
This leadership change represents more than a personnel swap—it's a strategic reset timed to 2026's inflection point in digital commerce. Consumer habits solidified during pandemic-era digital adoption are now being reshaped by AI-native shopping experiences. PayPal sits atop a valuable network, but networks decay without constant reinforcement. Lores brings operational discipline honed through decades of industry turbulence. His challenge is monumental: reignite growth while managing margin realities, all amid intensifying competition from both fintech startups and tech giants embedding payments into ecosystems. The next 90 days of transition will set the tone—but the real verdict arrives with Q2 earnings when markets assess whether PayPal's pace of change has finally aligned with opportunity.
