PayPal reports first-quarter earnings beat, maintains forecast

Core Insights - PayPal reported better-than-expected earnings for Q1 but missed revenue estimates, reaffirming guidance for 2025 due to macroeconomic uncertainty [1][6] - The stock fell approximately 2% in pre-market trading following the earnings report [1] Financial Performance - Sales increased by 1% year-over-year to $7.79 billion, below the expected $7.85 billion [6] - Transaction margin dollars grew by 7% to $3.7 billion, marking the fifth consecutive quarter of profitable growth [2] - Earnings per share were $1.33, adjusted, compared to the expected $1.16 [6] Key Metrics - Total payment volume was $417.2 billion, slightly missing the nearly $418 billion estimate [2] - The number of active accounts rose by 2% year-over-year to 436 million [2] - Venmo revenue increased by 20% year-over-year, with total payment volume for Venmo rising by 10% to $75.9 billion [3] Guidance and Outlook - For Q2, PayPal issued better-than-expected guidance, forecasting adjusted earnings per share of $1.29 to $1.31, above the average analyst estimate of $1.21 [5] - The company reaffirmed its full-year guidance, expecting earnings per share of $4.95 to $5.10 and free cash flow between $6 billion and $7 billion [6] Market Sentiment - Analysts expressed cautious sentiment ahead of the earnings report, citing potential impacts from tariffs and competitive pressures from companies like Apple and Shopify [4] - Jefferies analysts highlighted risks related to PayPal's exposure to China and potential new tariffs [5]