PayPal has reduced guidance for its full-year performance, as it comes out of its slowest first quarter in five years.
Spending through PayPal increased 15 per cent in the March quarter, to A$453 billion.
After forecasting total payments for the year would climb by 21-23 per cent, they have now revised this to 15-17 per cent, with revenue forecast to rise by 13 per cent, compared with an earlier target of 17 per cent.
“We have much to be proud of but we know we can continue to do even better,” CEO Dan Schulman said, while also pointing out “we continue to grow faster than the rate of e-commerce.”
PayPal has gone through a tough time of late.
It no longer acts as a vital cog in former parent company eBay’s shopping platform, which has driven the slowdown.
After delivering softer-than-expected results during the December 2021 quarter, the company’s stock plunged 18 per cent.
In February, shares plummeted another 25 per cent, after PayPal was forced to wipe 4.5 million accounts, and cancel its incentives and rewards programs. Intended to lure new users as part of an ambitious plan to achieve 750 million active accounts by 2025, it instead resulted in millions of inactive accounts held by “bad actors” taking advantage of the programs.
Weeks ago, Chief Financial Officer John Rainey (below) was poached by Walmart.
On top of all that, they cut off Russian transactions in early March, effectively wiping a third of expected first-quarter earnings from that market.
Adjusted earnings for the year are likely to be US$3.81-$3.93 a share, well below an earlier range of $4.60-$4.75, according to PayPal.
