PayPal Q1 total payment volume tops expectations, shares spike

Investing.com -- PayPal (NASDAQ:PYPL) has posted a better-than-anticipated 14% uptick in first-quarter total payment volume to $403.9 billion, as Chief Executive Alex Chriss reiterated that the group remains focused on "execution" during an ongoing turnaround effort.

Chriss has been overseeing a sweeping overhaul of the payments processor's operations, including steep staff reductions, as it looks to stem recently weak performance in its share price. Last year, PayPal's stock was one of the worst performers on the Nasdaq 100 Index due in part to investor concerns over rising competition to its branded Venmo offering from Big Tech players like Google (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL).

"2024 remains a transition year," Chriss said in a statement on Tuesday.

When not allowing for commonly-followed accounting rules, PayPal said it expects annual earnings per share to increase by a mid to high single-digit percentage compared to last year's mark of $3.83. The 12-month estimate reflects adjustments of about $490 million, including restructuring charges in the first and second quarters.

On a GAAP-basis, full-year per-share income is seen sliding to approximately $3.65, compared with $3.84 in the prior year and up from a prior estimate of $3.60.

The outlook comes after payment transactions in the January to March period jumped by 11% to 6.5 billion thanks in part to an acceleration in demand for PayPal's branded checkout services.

Net revenues also surged by 9% to $7.7 billion, versus Bloomberg consensus estimates of $7.51 billion. Non-GAAP earnings per share, which are based on a new accounting methodology, increased by 27% to $1.08. When using the prior method excluding the impact of stock-based compensation and related employer payroll taxes, the figure rose by 20% to $1.40, above consensus forecasts of $1.22.

Analysts at Jefferies called the top-line result "strong," adding that there were "impressive beats" on growth in both transaction margin dollars and transaction gross profit.

Shares in PayPal touched their highest level since August in early U.S. trading.