Proactive Investors - Shares in PayPal Holdings Inc (NASDAQ:PYPL) are heading for a fall on Tuesday after the payments powerhouse issued a warning over its profit margins, despite higher revenues expected to boost earnings.
Consumers spent more than expected via its platforms in the first quarter, up 12% to US$354.5bn, as transactions per active account rose 13%, leading to net revenues rising 9% to US$7.04bn.
Underlying earnings per share rose 33% to US$1.17, beating the Wall Street consensus forecast of US$1.10, per Bloomberg.
On the back of the stronger net revenues, the company said it now expects net revenues to grow around 6.5-7% in the second quarter and EPS US$1.15-1.17.
For the full year, EPS is expected to grow around 20% to circa US$4.95 on a non-GAAP basis.
Share buybacks of about US$4bn are anticipated.
Adjusted operating margins are seen widening by at least one percentage point this year, PayPal said alongside its first quarter earnings statement after the closing bell on Monday, having previously guided to roughly one and a quarter points.
“PayPal had a very good start to 2023 and delivered stronger than expected performance in the first quarter," said chief executive Dan Schulman in the statement.
He added: "we are confident in our momentum and raising our full-year EPS guidance as a result".