Revenue Growth: Revenue increased by 9% at spot and 10% on a currency-neutral basis to $7.7 billion.
Earnings per Share (EPS): Non-GAAP EPS grew 27% year-over-year to $1.08. Under previous non-GAAP methodology (excluding stock-based compensation), EPS would have increased approximately 20% to $1.40.
Transaction Margin Dollar Growth: Transaction margin dollars grew 4% year-over-year.
Total Payment Volume (TPV): TPV grew 14% on both a spot and currency-neutral basis to $403.9 billion.
Operating Income and Margin: Non-GAAP operating income grew 15% to $1.4 billion. Non-GAAP operating margin expanded 84 basis points to 18.2%.
Free Cash Flow: Generated $1.8 billion in free cash flow in Q1; $1.9 billion excluding certain accounting impacts.
Future Guidance
Q2 Revenue Growth: Expected to increase approximately 6.5% at spot and 7% on a currency-neutral basis.
Q2 EPS Growth: Non-GAAP EPS expected to increase by a low double-digit percentage.
Full Year EPS Growth: Non-GAAP EPS now expected to grow mid- to high single-digit percentage for 2024.
Transactional Margin Dollars: Expected to be slightly positive for the full year.
Non-Transaction Operating Expenses: Expected to increase slightly for the full year.
Free Cash Flow: Expected to be approximately $5 billion for the full year.
Trends, Market Conditions, Sentiment
Transformation and Investment: PayPal is in a transition year, focused on execution and strategic investment for long-term success. This includes targeting operational improvements and efficiency across large enterprise, SMBs, and consumer businesses, including Venmo.
Innovation and Product Developments: Introduction of products like Fastlane and a redesigned mobile checkout experience are seen as critical to improving branded checkout conversions and providing better services to merchants and consumers.
Strategic Repositioning: PayPal is placing significant emphasis on retooling and making surgical changes to improve its strategic positioning, profitability, and product portfolio across all customer segments.
Market Resilience: The solid start to the year demonstrates resilience despite acknowledging the substantial work and time required for a comprehensive transformation.
Focus on Efficiency and Engagement: Continuing efforts in driving operational efficiency and engaging more deeply with the customer base to stimulate activity and transactions.
Notable Quotes
”This is a transition year where we are focused on execution and making critical choices that will set the business up for long-term success.” - Alex Chriss, CEO.
”We are instilling a rigorous cost/benefit discipline throughout the company and leaving no stone unturned when it comes to reducing unproductive costs.” - Alex Chriss, CEO.
”Our non-GAAP results now include the impact of stock-based compensation expense and related payroll taxes…intended to enhance transparency, operating discipline.” - Jamie Miller, CFO.
”We continue to plan for a relatively consistent macroeconomic and consumer spending environment… we now expect 2024 non-GAAP EPS to grow by a mid- to high single-digit percentage.” - Jamie Miller, CFO.
”While we are still in the early innings of driving a meaningful and comprehensive transformation… our first quarter results are an encouraging indication of what… persistent execution can achieve.” - Alex Chriss, CEO.
