San Jose, California – PayPal Holdings reported its third-quarter earnings, surpassing expectations on adjusted earnings but falling slightly below revenue estimates. The company attributed the performance to increased earnings by 22% to $1.20 per share and a 6% revenue growth to $7.85 billion for the quarter ending on Sept. 30.

Analysts had anticipated earnings of $1.07 per share on revenue of $7.88 billion, though the total payment volume from merchant transactions met estimates at $422.6 billion. For the fourth quarter, PayPal projected revenue growth in the low single digits and adjusted earnings per share between $1.07 and $1.11 due to new product and marketing initiatives, as analysts had estimated an adjusted EPS of $1.10 on revenue growth of 5% to $8.44 billion.

Despite falling 3.2% to around 81 in midday trading following the earnings report, PayPal stock had advanced by 35% in 2024, reaching a 20-month high the day before. Analysts like James Friedman from Susquehanna expressed optimism in PayPal’s performance, citing transaction margin dollar growth and the contribution of subsidiary Braintree to the company’s success.

With the debate over the impact of recent price hikes at Braintree, PayPal is focused on improving transaction margins and profitability, even at the expense of lower payment volumes and revenue in the near term. CEO Alex Chriss emphasized the company’s commitment to delivering value to merchants through strategic growth opportunities and innovative services like Fastlane and ads platform.

Active accounts for PayPal grew by 1% year-over-year to 432 million in the third quarter, marking the first increase since 2023. Additionally, the company added one million new debit card users after introducing a loyalty rewards program in September. PayPal also announced a stock buyback of $1.8 billion in the third quarter, indicating confidence in its future performance and growth potential.

Overall, PayPal’s performance in the third quarter exceeded expectations, leading to improved full-year adjusted EPS and margin transaction outlook. With plans for continued growth and innovation, PayPal remains a key player in the digital payments industry amid stiff competition from companies like Apple, Block, and others.