PYPL's Q1 Earnings Top Estimates, Revenues Up Y/Y, Shares Rise

PayPal Holdings PYPL reported first-quarter 2025 non-GAAP earnings of $1.33 per share, which surpassed the Zacks Consensus Estimate by 15.65% and jumped 23.1% year over year.Net revenues of $7.79 billion increased 1.2% year over year on a reported basis and 2% on a forex-neutral basis. The figure lagged the consensus mark by 0.43%.Following the results, PayPal shares were up roughly 1% at the time of posting this article. Year to date, PYPL shares have declined 23%.PYPL’s Revenue DetailsThe total payment volume was $417.2 billion for the reported quarter, up 3% year over year on a reported basis and 4% on a forex-neutral basis. Transaction margin in dollar terms were $3.7 billion grew more than 7% on a reported basis. Excluding interest on customer balances transaction margin increased 7% to $3.4 billion. PayPal Holdings, Inc. Price PayPal Holdings, Inc. price | PayPal Holdings, Inc. Quote Transaction revenues were $7 billion (90.1% of net revenues), down 0.3% year over year. Value Added Services revenues were $775 million (9.9% of net revenues), up 16.5% year over year.Revenues from the United States totaled $4.46 billion (57% of net revenues), up 8% on a year-over-year basis. International revenues were $3.33 billion (43% of net revenues), up 12% year over year on a reported basis and 14% on a forex-neutral basis.PayPal witnessed year-over-year growth of 2% in total active accounts to 436 million in the reported quarter. The total number of payment transactions was 6.045 billion, down 7% on a year-over-year basis. PYPL’s payment transactions per active account were 59.4 million, down 1% year over year.PYPL’s Operating DetailsPayPal’s operating expenses were $6.26 billion in the first quarter, down 4.1% year over year. As a percentage of net revenues, the figure decreased 450 basis points (bps) on a year-over-year basis to 80.4%.The transaction expense rate was 0.89% in the reported quarter compared with 0.97% reported in the year-ago quarter. Transaction margin improved 270 bps to 47.7%.PYPL’s Balance Sheet Remains StrongAs of March 31, 2025, cash, cash equivalents and investments (including long-term) were $15.8 billion. The long-term debt balance was $12.6 billion.PYPL generated $1.2 billion in cash from operations, while adjusted free cash flow was $1.4 billion in the first quarter of 2025.The company returned $1.5 billion to shareholders through share repurchases.PayPal Reiterated 2025 GuidanceFor 2025, PayPal still anticipates non-GAAP earnings between $4.95 per share and $5.10 per share.Transaction margin is expected between $15.2 billion and $15.4 billion, suggesting growth in the 4-5% range.Non-GAAP non-transaction operating expenses are expected to grow in the low single-digit range. Free cash flow is expected between $6 billion and $7 billion. Share repurchase is expected to be roughly $6 billion.For the second quarter of 2025, PayPal expects non-GAAP earnings between $1.29 per share and $1.31 per share.Transaction margin is expected between $3.75 billion and $3.80 billion, suggesting growth in the 4-5% range for the current quarter.Zacks Rank & Stocks to ConsiderCurrently, PayPal carries a Zacks Rank #3 (Hold). Barrett Business Services BBSI, Bowman Consulting Group BWMN and Climb Global Solutions CLMB are some better-ranked stocks in the broader Zacks Business Services sector. While Bowman Consulting Group and Climb Global Solutions sport a Zacks Rank #1 (Strong Buy), while Barrett Business Services carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Barrett Business Services is scheduled to report its first-quarter 2025 results on May 7. Bowman Consulting Group is set to report first-quarter 2025 results on May 6, while Climb Global Solutions is scheduled to report its first-quarter 2025 results on April 30.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barrett Business Services, Inc. (BBSI): Free Stock Analysis Report PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report Bowman Consulting Group Ltd. (BWMN): Free Stock Analysis Report Climb Global Solutions, Inc. (CLMB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks