PayPal shares fell 8 as investors were disappointed by the
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PayPal shares fell 8% as investors were disappointed by the forecast for the future

PayPal Holdings, which owns the electronic payment system PayPal, let me down results of work in the fourth quarter and 2023 as a whole. Although the company’s results beat analysts’ expectations, its shares fell 8% due to weak guidance for the current quarter.

  Image source: Marques Thomas/unsplash.com

Image source: Marques Thomas/unsplash.com

The company’s revenue for the quarter was $8.03 billion, up 9% year-on-year and beating LSEG analysts’ forecast of $7.87 billion. The company’s GAAP operating profit rose 39% year-on-year to $1.7 billion, adjusted operating profit (non-GAAP) increased by 11% to $1.9 billion.

PayPal’s (GAAP) net income increased 52% to $1.4 billion, or $1.29 per share, from $921 million, or $0.81 per share, a year earlier. Adjusted earnings per share (non-GAAP) rose 19% to $1.48. Adjusted operating margin (non-GAAP) was 23.3%, up 39 basis points year over year.

The number of active accounts fell 2% to 426 million, below analysts surveyed by StreetAccount’s expectations of 427.17 million. The company reported total payments volume for the quarter was $409.8 billion, up 15% year over year, exceeding the forecast of analysts surveyed by StreetAccount is $405.51 billion.

For 2023 as a whole, PayPal’s revenue grew 8% to $29.8 billion. Earnings per share (GAAP) rose 84% to $3.84, and adjusted earnings per share (non-GAAP) increased 24% to $5.10 . Total payments volume grew 13% to $1.53 trillion.

PayPal’s forecast for all of 2024 and the first quarter fell short of analysts’ expectations. The company forecast full-year earnings of $5.10 per share, below analysts surveyed by LSEG’s expectations of $5.48 per share.

PayPal estimates year-over-year earnings per share growth will fall into the single digits (4% to 6%) in the first quarter, compared with analysts’ consensus estimate of 8.7%. Revenue growth should be 6.5–7%.

Chief Financial Officer Jamie Miller said the company will stop providing annual guidance and will limit its guidance to the current quarter. “Given the significant changes taking place at the company, we believe it is prudent to forecast revenue quarterly ahead and provide updates as the year progresses,” – he said.

Late last month, PayPal announced its decision to cut 9% of its global workforce, or about 2,500 jobs, as part of an infrastructure optimization effort.

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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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