LEASES

3 Months Ended

Mar. 31, 2025

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:


	Three Months Ended March 31,
	2025		2024
	(In millions)
Operating lease expense	$	41	$	37
Finance lease expense - amortization of right-of-use (“ROU”) lease assets	4		—





Sublease income	(2)		(3)
Total lease expense, net	$	43	$	34

Supplemental cash flow information related to leases during the three months ended March 31, 2025 and 2024 were as follows:


	Three Months Ended March 31,
	2025		2024
	(In millions)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	42	$	43

Financing cash flows from finance leases	$	2	$	—
ROU lease assets obtained in exchange for new operating lease liabilities	$	5	$	143
ROU lease assets obtained in exchange for new finance lease liabilities	$	—	$	16

Supplemental balance sheet information related to leases was as follows:


	March 31, 2025						December 31, 2024
	(In millions, except weighted-average figures)
	Operating leases			Finance leases			Operating leases			Finance leases
ROU lease assets	$	576		$	69		$	599		$	73
Current lease liabilities	139			6			135			5
Long-term lease liabilities	599			15			629			18
Total lease liabilities	$	738		$	21		$	764		$	23
Weighted-average remaining lease term	5.6 years			4.1 years			5.9 years			4.4 years
Weighted-average discount rate	4		%	5		%	4		%	5		%

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


	Operating leases		Finance leases
Fiscal years:	(In millions)
Remaining 2025	$	124	$	5
2026	175		6
2027	155		6
2028	103		6
2029	89		—

Thereafter	198		—
Total	$	844	$	23
Less: present value discount	(106)		(2)
Lease liability	$	738	$	21

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.

As of March 31, 2025, we have additional operating leases, primarily for offices and data centers, which will commence in the second quarter of 2025 or later with minimum lease payments aggregating to $42 million and lease terms ranging from three to ten years. As of March 31, 2025, we did not have any additional finance leases which have not yet commenced.

LEASES