By Mackenzie Tatananni

PayPal Holdings is striving to improve its profitability and break out from being a traditional payment-processing company. First-quarter earnings were encouraging.

Net revenues grew 1% to $7.8 billion, or 2% adjusted for currency impacts, in line with the FactSet consensus estimate. Adjusted earnings of $1.33 a share topped the $1.16 a share that analysts were expecting.

Transaction margin dollars, a key performance metric, increased 7% year over year to $3.7 billion. The figure represents total revenue less transaction expense and transaction and credit losses.

Monthly active accounts grew 2% to 224 million in the quarter, while transactions per active account grew 4%, excluding the company's payment-processing business.

The company notched its fifth consecutive quarter of profitable growth, marking a turnaround under the new leadership team headed by CEO Alex Chriss, who joined the company in 2023.

" PayPal had a great start to the year and our strategy is working," Chriss said in a statement. He cited progress across areas of focus including branded checkout, Venmo, and "omnichannel," the integration of various payment methods into a single experience for shoppers.

However, management refused to let expectations get too high. PayPal maintained the full-year guidance it provided in February, citing "global macro uncertainty."

The company said it expects adjusted earnings in the range of $4.95 to $5.10 a share, representing 6% to 10% growth from the previous year. PayPal also guided for transaction margin dollars of $15.2 billion to $15.4 billion, or 4% to 5% growth.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 29, 2025 07:05 ET (11:05 GMT)

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