PayPal Holdings on Tuesday reported March quarter earnings that topped Wall Street estimates while revenue fell short. The company maintained its full-year earnings guidance for PayPal stock amid growing investor worries over a possible U.S. recession and a U.S.-China trade war.
The digital payments firm reported first-quarter earnings before the market open. Shares rose in afternoon trading.
PayPal earnings for the first quarter rose 23% to $1.33 per share on an adjusted basis. Revenue climbed 1% to $7.79 billion. Analysts expected PayPal earnings of $1.16 a share on revenue of $7.85 billion.
In a bright spot, active monthly users of digital payment services rose 2% to 436 million.
Repricing initiatives last year at subsidiary Braintree have pressured revenue growth as well as payment volumes but improved transaction margins.
PayPal Stock: Key Financial Metrics
In Q1, total payment volume (TPV) processed from merchant customers in the quarter climbed 3% to $417.2 billion, slightly below estimates. Analysts had projected total payment volume of $418 billion.
Branded TPV is tied to the online PayPal checkout button that many consumers use when shopping online. The company's new definition of branded volume now includes Pay with Venmo.
Also, PayPal said Venmo revenue increased 20% year-over-year in Q1 but the company did not provide a dollar figure. New Chief Executive Alex Chriss has several product initiatives underway to increase revenue growth, including a new Venmo debit card.
"We've leaned into Venmo and the investment is starting to pay off," Chriss said on the Q1 earnings call with analysts.
Another key financial metric, transaction margin dollars, rose 7% to $3.7 billion. That topped estimates of $3.62 billion.
For PayPal, transaction margin dollars represent the profit it makes from each individual payment transaction it processes, after accounting for the direct costs associated with that transaction, such as fee payments to credit card networks.
"Results were a mixed bag and generally in-line with our estimates – with branded volume growth the major headliner at 6% growth, which is flattish year-over-year and not showing signs of acceleration yet," said Evercore ISI analyst Adam Frisch in a report. "Unbranded volume growth was better than expected, and fiscal 2025 guidance was reaffirmed."
Full-Year Guidance Maintained
For full-year 2025, PayPal predicted adjusted earnings per share in a range of $4.95-$5.10 and transaction margin dollars in a range of $15.2 billion to $15.4 billion. The company did not provide a revenue outlook in January.
On the stock market today, PayPal stock rose 1.8% to 66.12 in afternoon trading.
Heading into the PayPal earnings report, shares were down 25% in 2025.
President Donald Trump's tariff-based trade polices have pressured fintech stocks amid worries over consumer spending.
Also, lost checkout market share to Apple and others continue to be a concern for PayPal stock.
PayPal Stock Technical Ratings
San Jose, Calif.-based PayPal has evolved from an online checkout option to a mobile shopping and person-to-person payments app.
Further, PYPL stock holds an IBD Composite Rating of 59 out of a best-possible 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Also, PYPL stock has an Accumulation/Distribution Rating of D-minus. That rating analyzes price and volume changes in a stock over the past 13 weeks of trading. Its current rating indicates more funds are buying than selling.
The rating, on an A+ to E scale, measures institutional buying and selling in a stock. A+ signifies heavy institutional buying, E means heavy selling. Think of the C grade as neutral.
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