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

Shares of PayPal Holdings (PYPL) fell on Tuesday after the payment services provider missed third-quarter sales estimates and provided weak guidance as the company advances a “price-to-value” strategy.

PayPal reported its 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 beat expectations by a penny.

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

Chief Executive Officer (CEO) Alex Cress said PayPal is making “strong progress in our transformation as we bring new innovations to market, forge important partnerships with major commerce players, and drive awareness and engagement through new marketing campaigns.”

PayPal sees adjusted EPS decline in Q4

The company expects current quarter revenue growth of the low-single digits — reflecting the impact of its “price-to-value strategy and prioritization of profitable growth” — and adjusted EPS decline of the low-to-mid-single digits.

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