PayPal Holdings, Inc. (NASDAQ:PYPL) saw its shares fall more than 10% at Tuesday’s open, even after delivering first-quarter results that topped Wall Street expectations on both revenue and earnings.
The company reported adjusted earnings per share of $1.34, beating the $1.27 consensus estimate by $0.07. Revenue rose 7% year over year to $8.4 billion, exceeding forecasts of $8.05 billion, while growing 5% on a currency-neutral basis.
Total payment volume increased 11% to $464.0 billion, or 8% on a currency-neutral basis, and payment transactions climbed 7% to 6.5 billion.
“I’m energized by the opportunity to improve execution and accelerate PayPal’s growth,” said Enrique Lores, President and CEO. “We are taking deliberate steps to sharpen our strategy, simplify our organization, and improve both our growth trajectory and cost structure by focusing our investments where we believe they will have the greatest impact.”
Despite the strong quarter, the stock reaction followed weaker forward guidance. For the second quarter, PayPal expects adjusted EPS to decline by a high-single digit percentage, or roughly -9%. The company also reiterated its full-year outlook, projecting adjusted EPS to range from a low-single digit decline to modest growth.
Transaction margin dollars excluding interest on customer balances rose 3% to $3.5 billion. However, profitability metrics showed pressure, with GAAP operating margin contracting 182 basis points to 17.8% and adjusted operating margin falling 229 basis points to 18.4%.
PayPal also announced a quarterly dividend of $0.14 per share, payable on June 25, 2026.