PayPal Holdings, Inc. Q3 Earnings Report

PayPal Holdings, Inc. reported third-quarter earnings that beat analyst estimates but fell short on revenue, leading to a drop in shares during premarket trading on Tuesday.

The digital payments giant posted adjusted earnings per share of $1.20, surpassing the analyst consensus of $1.07. However, revenue came in at $7.85 billion, missing the $7.88 billion that analysts had projected. Compared to the same quarter last year, revenue grew 6% YoY.

Total payment volume increased 9% to $422.6 billion, while payment transactions rose 6% to 6.6 billion. The company's active accounts grew 0.9% YoY to 432 million.

CEO Alex Chriss stated, "PayPal (NASDAQ:PYPL) delivered strong financial and operating results during a highly productive third quarter. We are making solid progress in our transformation as we bring new innovations to market, forge important partnerships with leading commerce players, and drive awareness and engagement through new marketing campaigns."

For the fourth quarter, PayPal expects revenue to grow in the low single digits, reflecting the impact of its price-to-value strategy and focus on profitable growth. The company raised its full-year non-GAAP EPS guidance, now projecting high teens growth compared to the previous outlook of low to mid-teens growth.

PayPal's operating margin expanded in the quarter, with GAAP operating margin increasing 198 basis points to 17.7% and non-GAAP operating margin rising 194 basis points to 18.8%.

The company returned $1.8 billion to stockholders by repurchasing approximately 28 million shares of common stock during the quarter.