Fintech e-payments company PayPal reported higher revenues and profits. It raised expectations for the year after cost savings and solid online sales supported higher profit margins.
Revenues in the first quarter rose ten percent, excluding currency differences, to $7.04 billion and were slightly above expectations of $7 billion.
The company said payments volume rose 12 percent on a currency-neutral basis to $354.5 billion at the end of the first quarter ended March 31, while the number of transactions jumped 13 percent to 5.8 billion.
Adjusted operating margin in the first quarter was 22.7 percent versus 20.7 percent last year. Still, despite that, management announced a weaker recovery for the rest of the year. Year-over-year operating margin growth should now be at least 100 basis points, compared to earlier forecasts of around 125.
Adjusted earnings per share (EPS) from January to March was $1.17.
On a year-over-year basis, PayPal expects adjusted earnings to grow about 20 percent to $4.95 per share, above the consensus estimate of $4.88.
The company previously noted that the focus is on cost reduction, given that inflation has negatively affected the consumption of non-essential consumer goods. In January, PayPal announced that it would lay off seven percent of its workforce, or about two thousand employees, in a business environment of high-interest rates fueling fears of a possible recession.
PayPal crash after the pandemic
PayPal company was one of the biggest winners during the pandemic when citizens were mainly oriented toward using its platform for electronic shopping. However, growth slowed last year after the official lifting of pandemic measures and worsening macroeconomic conditions.
The company’s share prices, which during the pandemic went above the level of $300, are now hovering around $75 per piece.