April 29 (Reuters) - PayPal missed Wall Street estimates for first-quarter revenue on Tuesday, overshadowing the payments giant's profit beat and sending its shares down 3.2% before the bell.

The company's results highlight the challenge of navigating growth expectations as PayPal undergoes an ambitious turnaround under CEO Alex Chriss' leadership.

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

Still, PayPal stuck to its annual profit forecast, even at a time when U.S. President Donald Trump's tariffs have fueled economic uncertainty.

Its revenue stood at $7.79 billion in the first quarter, missing expectations of $7.85 billion, according to estimates compiled by LSEG, while it earned $1.33 per share, excluding one-time costs, topping analysts' expectations of $1.16.

Evercore analyst Adam Frisch said the results were a mixed bag given the revenue miss.

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

PayPal has been focusing on expense management, as it seeks to fund investments through savings from deploying automation and artificial intelligence.

Its total payment volume (TPV) climbed 4% in the reported quarter, while operating expenses fell 4%.

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.

Frisch said branded checkout growth was yet to show signs of year-over-year acceleration.

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

Line chart depicting PayPal's stock performance in past 12 months