PayPal maintains annual revenue, profit estimates amid US trade uncertainty

PayPal beat Wall Street estimates for first-quarter earnings and stuck to its annual profit forecast on Tuesday, even at a time when U.S. President Donald Trump's tariffs have fueled economic uncertainty. 

The company's results show that consumers are continuing to spend despite worries that Trump's trade war could lead to a recession. 

Since CEO Alex Chriss took the helm in late 2023, PayPal has narrowed its focus and concentrated on high-margin businesses instead of aggressive growth. 

"PayPal had a great start to the year and our strategy is working. This is our fifth consecutive quarter of profitable growth," Chriss said.

  Excluding one-time costs, PayPal earned $1.33 per share in the first quarter, topping analysts' expectations of $1.16, according to estimates compiled by LSEG.

  Revenue stood at $7.79 billion, missing estimates of $7.85 billion. Total payment volume (TPV) climbed 4%, while operating expenses fell 4%.

  The company is focusing on expense management, as PayPal seeks to fund investments through savings from deploying automation and artificial intelligence.

  PayPal sees annual adjusted profit between $4.95 and $5.10 per share. The company said it was sticking to its previous guidance despite a strong start to the year because of "uncertainty in the global macro environment".

  Shares of the company fell 1% before the open. They have fallen 24% this year.

  BRANDED CHECKOUT IN FOCUS

  Investor worries around growth in the firm's branded checkout offerings, which include PayPal and Venmo, have heavily pressured the stock.

  Additionally, concerns about market share loss due to increasing competition from Big Tech rivals Apple and Alphabet's Google have created a potential overhang. 

In February, PayPal unveiled plans to accelerate branded checkout growth to between 8% and 10% by 2027. 

PayPal is rolling out a new checkout experience and focusing on monetizing its Venmo app to accelerate branded growth.

  In the first quarter, PayPal's branded checkout TPV grew 6% excluding leap day, compared with a 5% rise a year ago.

  PayPal has also forged lucrative partnerships and introduced new products, including its Fastlane guest checkout feature, to shield its dominant position.   

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