Paypal with sharp profit slump and reduction of the annual forecast

Paypal’s profit fell by 54 percent compared to the previous year, but the share was spared a price catastrophe.

The first quarterly figures for 2022 show a sharp drop in profits at the payment service provider PayPal. Net income fell by a whopping 54 percent year-on-year to $509 million, as the company recently announced and also reported to “Der Aktionär”.

Adjusted earnings per share shrank to just 88 cents. Revenue rose by around eight percent to 6.5 billion US dollars, a fairly meager growth for Paypal conditions.

Annual forecast lowered, share down by more than 50 percent since the beginning of the year

During the pandemic, PayPal was one of the big beneficiaries due to the associated online shopping boom. But now the company is experiencing its lowest growth rate in five years. Analysts had already expected a drop in earnings in advance and even expected a little less in terms of sales. The stock initially rose significantly in the after-hours trading. However, the shareholders are probably anything but happy, the price has already fallen by over 56 percent since the beginning of the year.

Paypal CEO Dan Schulman was self-critical:

“Our shareholders expect more from us than what we have achieved in the past few quarters,”

says the company boss with a view to a lot of room for improvement.

The company is also lowering its forecast for the full year for the time being. A volume of around 15 to 17 percent is now expected for the transactions processed – the target was once 21 to 23 percent. In addition, the company is currently trying to realign itself: Away from acquiring new customers at any price towards greater monetization of the existing user base.

Also interesting:

Paypal changes terms and conditions: users should know that now

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button