PayPal (PYPL.US) reported solid results for Q1 2025. A strong start to the year in terms of performance has pushed the company’s stock up more than 2% in today’s session. Nevertheless, the management decided not to update its full-year 2025 guidance due to uncertainty surrounding tariffs and the impact of current government policies on consumer strength. This suggests that if the tariff issue is resolved in a way favorable to the company, PayPal's full-year results could exceed current expectations.
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PayPal breaks above $65 today, marking a breakout from the consolidation range seen before “Liberation Day,” thus fully recovering the losses triggered by the retaliatory tariff news. Source: xStation
The company reported revenue of $7.79 billion, representing a +1.2% year-over-year increase. On the sales side, this was a slight disappointment compared to expectations of $7.85 billion.
Despite that, PayPal delivered a higher adjusted operating income, rising to $1.62 billion (+16% y/y), beating market expectations of $1.5 billion. The company also reported its highest net income since Q4 2023, at $1.29 billion, which translated into adjusted earnings per share of $1.33 (versus consensus expectations of $1.16).
The number of active users also increased to 436 million, marking a 2.1% year-over-year rise.
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Strong Q1 2025 results did not lead the company to revise its full-year 2025 guidance. PayPal continues to expect adjusted EPS in the range of $4.95–$5.10, free cash flow of $6–7 billion, and capital expenditures of approximately $1 billion. All of these figures remain in line with consensus forecasts.
FINANCIAL RESULTS 1Q25
- Adjusted EPS $1.33 vs. $1.08 y/y, estimate $1.16
- Total payment volume $417.21 billion, +3.3% y/y, estimate $419.23 billion
- Venmo total payment volume $75.94 billion, +9.6% y/y, estimate $75.54 billion
- Transaction margin dollars $3.72 billion, +7.4% y/y, estimate $3.62 billion
- Active customer accounts 436 million, +2.1% y/y, estimate 434.02 million
- Net revenue $7.79 billion, +1.2% y/y, estimate $7.85 billion
- Transaction revenue $7.02 billion, -0.3% y/y, estimate $7.15 billion
- US net revenue $4.46 billion vs. $4.47 billion y/y, estimate $4.5 billion
- International net revenue $3.33 billion, +3% y/y, estimate $3.37 billion
- Adjusted operating income $1.62 billion, +16% y/y, estimate $1.5 billion
- Adjusted operating margin 20.7% vs. 18.2% y/y, estimate 19.8%
- Adjusted free cash flow $1.38 billion, -26% y/y
