PayPal Stock Surges After Surprising Earnings Report and Strong Transaction-Margin Growth

Q2/24 Results

PayPal Holdings Inc. thrilled investors with its latest earnings report, revealing an unexpected 8% growth in transaction-margin dollars for the June quarter, marking the company's best performance on this key metric since 2021.

This growth, driven by strong contributions from branded checkout, Braintree, and Venmo, exceeded analysts' expectations and boosted investor confidence.

In light of this robust performance, PayPal has raised its full-year outlook, now anticipating low- to mid-single-digit growth in transaction-margin dollars and adjusted earnings per share growth in the low to mid-teens. CEO Alex Chriss emphasized that PayPal is "operating from a position of strength" and focusing on long-term profitable growth.

• In the second quarter, PayPal’s revenue climbed 8% to $7.9 billion, beating analyst estimates. Net income rose to $1.13 billion, or $1.08 per share, and on an adjusted basis, earnings per share were $1.19, surpassing the predicted 99 cents.

• For the third quarter, PayPal expects high-single-digit growth in adjusted earnings per share, a significant improvement over analysts' previous expectations of a nearly 25% decline. Additionally, PayPal projects mid-single-digit growth in third-quarter revenue, with a FactSet consensus of $7.98 billion implying a 7.5% growth forecast.

• Payment transactions also increased by 8% to 6.6 billion, with total payment volume growing 11% to $416.8 billion. The company’s Fastlane product is set for U.S. general availability in August, promising to further enhance the checkout experience for users.

PayPal’s impressive performance and optimistic outlook suggest a promising future for the payments giant.

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