PayPal has published information about its earnings for the first quarter of the current year, which exceeded preliminary expectations, but at the same time, this company missed on revenue and reaffirmed its guidance for 2025 due to macro uncertainty.
The value of shares of the mentioned brand dropped by more than 3% in pre-market trading.
The company’s revenue for January-March of the current year was recorded at the $7.79 billion mark. This indicator has shown growth, which was 1% compared to the reading for the same period in 2024. At the same time, the consensus forecast of analysts surveyed by LSEG predicted that PayPal’s revenue for the first quarter of 2025 would reach $7.85 billion.
The company stated that its results for January-March of the current year reflect a strategy that prioritizes profitability over volume. The firm also noted that it rolled off lower-margin revenue streams.
Adjusted earnings per share was $1.33. At the same time, the consensus forecast of analysts surveyed by LSEG predicted that this figure would reach $1.16.
Transaction margin dollars, PayPal’s main measure of profitability, for the first quarter of 2025 was recorded at the $3.7 billion mark. This indicator showed an increase of 7% compared to the reading for the same period last year. It is also worth noting separately that for the fifth quarter in a row, PayPal has seen profitable growth under the chief executive officer Alex Chriss.
The total payment volume for the first quarter of 2025 was recorded at the $417.2 billion mark. This indicator showed an increase of 3% year-on-year. It is also worth clarifying that the specified reading reflects how digital payments are faring in the broader economy. The consensus forecast of analysts surveyed by LSEG predicted that the mentioned figure would reach almost $418 billion. The number of active accounts increased by 2% year-on-year, reaching 436 million.
Owned by PayPal Venmo, an app that allows users to send and receive money, generated revenue in the first quarter of 2025, which was 20% higher than the reading for the same period in 2024. At the same time, the exact dollar figure was not published in this case.
The total volume of payments for Venmo for the first quarter of 2025 was recorded at the $75.9 billion mark. This indicator showed an increase of 10% year-on-year. Pay with Venmo transaction volume rose by 50% in the first quarter of the current year. Venmo debit card monthly active users increased by about 40%.
PayPal is currently focused on better monetization of main acquisitions. In this case, it means such acquisitions as Braintree and Venmo. It is also worth noting that DoorDash, Starbucks, and Ticketmaster are currently on the list of businesses that accept Venmo as one of the payment methods for their customers.
Ahead of the publication of PayPal’s earnings report, some analysts made cautious forecasts, despite the company’s focus on margin expansion. Morgan Stanley experts warned in their note that investor sentiment remains bearish due to the potential impact of tariffs, competitive pressure from Apple and Shopify, and the risk of a long-term slowdown in branded checkout growth.
Jefferies analysts drew attention to PayPal’s China cross-border exposure as an emerging risk associated with potential new levies and changes to the de minimis exemption.
The company has published positive guidance for the second quarter of the current year. PayPal expects adjusted earnings per share for the mentioned period to range from $1.29 to $1.31. At the same time, the average estimate of analysts surveyed by LSEG predicted that the corresponding figure would be $1.21.
Transaction margin dollars for the second quarter of 2025, according to the company’s forecast, will range from $3.75 billion to $3.8 billion. In this case, it implies an increase of 4-5% year-on-year.
PayPal has reaffirmed its guidance for the entire year 2025. In this context, the company noted the global macroeconomic uncertainty. The firm expects earnings per share for 2025 to range from $4.95 to $5.1. PayPal also predicts that its free cash flow for the current year will range from $6 billion to $7 billion. In the first quarter of 2025, the firm’s cash flow from operations reached $1.2 billion. The free cash flow for the first three months of the current year amounted to $1 billion.
Since the beginning of 2025, the value of the company’s shares has shown a decrease of 24%. At the same time, the Nasdaq dropped 10%.
As we have reported earlier, PayPal Plans to Boost Stablecoin Use.
