PayPal Posts 8% Jump in Q1 Revenue, Exceeds Expectations

PayPal (Nasdaq: PYPL), a major global payments platform, reported net revenue of $6.48 billion for the first quarter of 2022, between January and March. It was a year-over-year increase of 8 percent and above market expectations.

However, its operating income declined by 32 percent to come down to $711 million. It registered a net income of $509 million with $0.43 as earnings per share, which slides by 53 percent. On an adjusted basis, the earnings declined by 28 percent to $0.88 per share.

Additionally, there was a solid year-over-year increase in payment volume on the platform. It processed $323 billion worth of payments in the first three months of the year, which was a yearly rise of 15 percent.

But, Paypal signaled that the transaction volumes on its platform might take a hit due to the rising inflation and the ongoing conflict in Ukraine. Indeed, the growth rate of transactions slowed down significantly last quarter.

It generated $5.99 billion in revenue only from payment transactions, which increased at a rate of 7 percent.

In addition, the payments platform added 2.4 million net new active accounts between January and March. It closed the quarter with 429 million active accounts, which was an increase of 9 percent from the previous quarter.

Forecast

For the full financial year, the company is now expecting a revenue growth of between 11 and 13 percent. But, it could hit between 15 and 17 percent if business from eBay is excluded.

Furthermore, Paypal remained conservative with its expectations of activities. It is expecting total payments volume to grow at a rate between 13 and 15 percent, which could surpass $1.4 trillion. The expected earnings have been kept between the range of $2.19 and $2.34, with the adjusted figures between $3.81 and $3.93.