PayPal shares gain 7.5% after quarterly report 📈

PayPal (PYPL.US) shares are gaining nearly 7.5% ahead of the opening of today's trading session on Wall Street, following the release of better-than-expected financial results for Q1.  One of the Fintech leaders reported total payment volume for the first quarter that exceeded average analyst estimates. What's more, the company raised full-year forecasts and gave notice of its willingness to conduct a share buyback worth at least $5 billion. 

Selected results presented by the company:

• Total Payment Volume (TPV) $403.9 billion, +14% y/y, $392.9 billion estimate 
• Net revenues $7.7 billion, +9.4% y/y, estimate $7.51 billion
• Transaction revenue $7.03 billion, estimate $6.79 billion
• Revenue from other services $665 million, estimate $723.3 million
• U.S. net revenue $4.47 billion, estimate $4.37 billion
• International net revenue $3.23 billion, estimate $3.12 billion
• Dollar transaction margin $3.5 billion
• Total operating expenses $6.53 billion, estimate $6.45 billion
• Adjusted operating income $1.40 billion, estimate $1.55 billion
• Adjusted EPS $1.08
• Adjusted free cash flow $1.86 billion, estimate $1.19 billion
• Payment transactions $6.51 billion, estimate $6.45 billion
• The company expects Q2 earnings per share to increase by a low double-digit percentage, compared to $0.87 last year.

Two key metrics:

For PayPal, the important metrics investors are looking at are active users and the previously mentioned total payment volume. The customer transaction profile remains resilient, and margins are improving (PayPal is seeking to reduce expenses and right-size its business after a number of acquisitions. At the end of last year, the company overhauled its senior management, and a few months later announced plans to cut about 9% of its workforce as part of CEO Alex Chriss' efforts to boost the company's profits), indicating continued momentum in the company's business. This is also confirmed by the picture presented by American Express and Visa's quarterly results.

Source: own compilation

The company expects adjusted profit in 2024 to increase by "a mid- to high-single-digit percentage," compared to its earlier forecast of holding steady.

The company's chart before the Wall Street opening (D1 interval):

The company's stock price before the Wall Street opening shows a nearly 7.5 percent upward move at the start of the session. Source: xStation