PayPal holdings stocks falls

Shares in PayPal Holdings have fallen after the payments company said that its adjusted operating margin will not grow as quickly as previously expected, despite increased spending on its platforms in Q1. PayPal expects its adjusted operating margin, which measures profits made per dollar of sales without using generally accepted accounting principles, to grow by at least 100 basis points this year, compared with its earlier forecast of growth of about 125 basis points.

The company’s shares fell 4.1% at 5:02 pm in late New York trading after the announcement. The lowered guidance came even after payments volume rose 12% to $354.5bn, exceeding the $349.5bn that analysts in a survey had anticipated. The higher payment volume helped boost the firm’s revenue to more than the company had forecast just three months ago, which led to the company raising its full-year forecast for adjusted earnings per share.

Dan Schulman, CEO of PayPal, stated that the company had “obviously had a good strong start to the year” and that it was “stronger than our expectations coming into the year.” PayPal, along with other e-commerce rivals, had been dealing with a slowdown in volume on its many platforms as consumers returned to in-store shopping, and spending slowed due to once-in-a-generation levels of inflation.

PayPal’s first-quarter results also showed the company cutting 2,000 staffers, citing the macroeconomic slowdown that has weighed on the firm’s business in recent quarters. In February, Schulman announced that he intended to step down at the end of the year and that the board had retained a search firm to help find his successor. In the meantime, he’s been refocusing PayPal on enticing existing customers to use its apps more.