PayPal declare $15 billion Share Buyback Program
PayPal released guidance that exceeded analysts’ expectations and revealed better-than-expected fourth-quarter results.
Although adjusted net income dropped 1 percent to $1.21 billion, PayPal anticipates adjusted earnings per share for the first quarter of $1.15 to $1.17, which is higher than the average analyst estimate of $1.13. Additionally, PayPal announced a new $15 billion share buyback program, with an estimated $6 billion in repurchases anticipated in 2025.
The revenue grew by roughly 4% during the quarter compared to $8.03 billion in the same period last year.
The fourth quarter’s total payment volume, which measures how well digital payments are performing in the overall economy, came in at $437.8 billion, slightly less than the $438.2 billion analysts had predicted.
PayPal’s unbranded payment volume, or the transactions it processes for third-party companies instead of using its platform, dropped to 2 percent from 29 percent in the fourth quarter as the company continues to follow a price-to-value strategy.
Chief Financial Officer Jamie Miller stated that the company anticipates “similar dynamics the next few quarters” and that renegotiations with current customers will be a “five-point revenue growth headwind” over 2025.
Alex Chriss, the CEO of PayPal, joined the company in September 2023 and is working to boost growth.
The company had been in a deep slump because of a decline in take rate, the percentage of revenue PayPal keeps from each transaction, and increased competition.
Prioritizing profitable expansion and increasing the revenue from significant acquisitions like Braintree and the payments app Venmo have been Chriss’ main priorities.
The CEO of PayPal stated that the company had made strategic investments in automation and artificial intelligence, which he called “critical” for the future, and that it had cut headcount by 10% in 2024.
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