PayPal raised its profit forecast for 2024 for the second time this year, according to Reuters. Driven by strong performance in new feature, branded checkout, PayPal in return, also saw a 9% jump in its shares during morning trading on July 30. All of these came despite growing competition from tech giants like Apple and Google, who have expanded into digital payments.
Looking ahead, the company now anticipates a "low to mid-teens percentage" increase in adjusted profit for 2024, up from its earlier forecast of a "mid-to-high single-digit" growth. This positive revision reflects a massive boost in adjusted earnings per share, which rose to $1.19 in the second quarter, compared to 87 cents a year ago.
Overall, PayPal's total payment volume surged 11% to $416.81 billion, and revenue climbed 9% to $7.89 billion on an FX-neutral basis.
PayPal's branded checkout and its other payment platforms, including Braintree and Venmo, contributed to the highest transaction margin dollars growth rate since 2021. The company reported an 8% increase in transaction margin dollars to $3.61 billion, surpassing analysts' expectations.
This growth is a result of both higher transaction volumes and effective cost management, considering their 9% global workforce layoff earlier this year, per VCPost.
PayPal's "Branded Checkout" refers to a payment processing service that allows businesses to integrate PayPal's payment system directly into their websites and apps, providing a seamless and recognizable checkout experience for customers.
Branded Checkout is designed to leverage PayPal's well-known and trusted brand to improve conversion rates for merchants by offering a familiar and secure payment option. It enables businesses to customize the checkout experience while benefiting from PayPal's robust fraud protection and transaction security features.
PayPal's CEO Alex Chriss and CFO Jamie Miller expressed confidence in the company's strategy. They noted that while volume and revenue growth might slow in the second half of the year, the focus on profitable growth and cost efficiency is expected to continue driving positive results.
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