PayPal Revenue, Outlook Affected by Firm's Price-To-Value Plan

Key Takeaways

• PayPal Holdings missed third-quarter revenue estimates and gave soft guidance as it focuses on its "price-to-value" plan.
• Earnings per share came in just ahead of expectations.
• Payment volume, payment transactions, and active accounts increased.

PayPal Holdings (PYPL) shares slumped Tuesday after the payment services provider missed third-quarter sales estimates and gave weak guidance as the company moves ahead with its "price-to-value" strategy.

PayPal reported revenue rose 6% year-over-year to $7.85 billion. Analysts surveyed by Visible Alpha were looking for $7.88 billion. Earnings per share (EPS) of $0.99 exceeded forecasts by a penny.

Total payment volume increased 9% to $422.6 billion. Payment transactions were up 6% to 6.6 billion, with payment transactions per active account (on a trailing 12-month basis) advancing 9% to 61.4. The total number of active accounts rose just under 1% to 432 million.

Chief Executive Officer (CEO) Alex Chriss said PayPal was making "solid progress in our transformation as we bring new innovations to market, forge important partnerships with leading commerce players, and drive awareness and engagement through new marketing campaigns."

PayPal Sees Adjusted EPS Declining in Q4

The company sees current-quarter revenue growth of low-single-digit percent—reflecting the impact of its "price-to-value strategy and prioritization of profitable growth"—and adjusted EPS declining by a low- to mid-single-digit percent.

Shares of PayPal Holdings reached their highest level of 2024 yesterday, and even with today's 3.5% drop they're still up more than 30% year-to-date.

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