(Reuters) – PayPal beat Wall Street estimates for fourth-quarter profit on Wednesday as more Americans used its payments platform for shopping during the holiday season.
This was also the company’s first full quarterly results under the stewardship of CEO Alex Chriss, who is expected to announce plans on strategic initiatives later in the day.
“We’re driving significant transformation across our company and are committed to making the necessary changes to our business to drive profitable growth in the years ahead,” Chriss said in a statement.
PayPal posted a fourth-quarter adjusted profit of $1.48 a share for the three months ended Dec 31. Analysts on average had expected $1.36 per share, according to LSEG data.
Revenue rose 9% to $8 billion in the quarter, on a currency-neutral basis, also beating expectations of $7.87 billion.
PayPal’s stock struggled last year as the company’s growth lagged peers amid increased pressure on its mainstay business from the entry of Apple and Alphabet’s Google.
The company’s shares fell 13.8% in 2023 and were among the worst performers on the Nasdaq 100 Index, a key benchmark for technology stocks. In contrast, rival Block surged 23.1%.
Last week, PayPal announced plans to cut about 2,500 jobs this year, or 9% of its global workforce. Chriss had earlier vowed to lower costs and focus growth on higher-margin businesses.
Meanwhile, analysts have focused on PayPal’s margins, which have underwhelmed investors in recent quarters. The company’s low-margin business products have shown strong growth, while growth in its branded products has slowed due to competition.
Adjusted operating margin came in at 23.3% in the fourth quarter, expanding 39 basis points, from a year earlier.
Total payments volume increased 13% on an FX-neutral basis to $409.8 billion in the fourth quarter, beating Street expectations of $404.45 billion.
(Reporting by Manya Saini in Bengaluru; Editing by Anil D’Silva)
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