A sign is posted outside PayPal’s headquarters in San Jose, California.
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Paypal The payments giant on Tuesday raised its full-year adjusted profit forecast as it benefits from strong consumer spending and cost-cutting measures boosted first-quarter operating margins.
After the financial report was released, the company’s stock price fluctuated greatly in pre-market trading, eventually rising 4%.
While economic concerns have clouded the outlook for the payments industry for months, consumer spending has shown remarkable resilience. Even as low-income groups limit discretionary purchases, most Americans are still looking to shop online, eat out and travel.
PayPal’s newly appointed management also aims to reignite investor confidence through efforts to make the company leaner and reduce costs, easing pressure on its stock, which was one of the worst-performing stocks on the Nasdaq last year. .
Earlier this year, PayPal announced plans to lay off about 2,500 people, accounting for 9% of its global workforce.
Chief executive Alex Chriss said: “2024 remains a transition year as we focus on execution – driving our key strategic initiatives, realizing cost savings and reinvesting where appropriate.”
The company expects adjusted profit to grow by a “mid- to high-single-digit percentage” in 2024, leaving its previous forecast unchanged.
PayPal also expects second-quarter revenue to grow 7% on a currency-neutral basis, basically in line with Wall Street expectations.
Total payments volume grew 14% to $403.9 billion in the first quarter, while net revenue grew 10% to $7.7 billion on a currency-neutral basis.
After adjustments, PayPal’s first-quarter operating profit margin increased 84 basis points to 18.2%. Its profit margins have been at the center of investor anxiety over the last year as growth slowed after the pandemic.
The company’s low-margin business products are growing strongly, while growth of its branded products has slowed as pressure from competitors increases. apple.
Its adjusted earnings per share rose to $1.08 in the three months ended March 31, compared with 85 cents a year earlier.
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