PayPal reports a 1% revenue increase for Q1, focusing on branded checkout, cryptocurrency, and BNPL ventures. Venmo sees a 10% volume growth and 20% revenue increase, while the company aims to expand its branded strategies into Europe, starting with Germany. Total payment volume is up 3%, but overall revenue remains flat at $7.79 billion.
PayPal Holdings Inc. has reported a modest growth rate of just 1% in revenue for the first quarter, which has left some analysts scratching their heads. The company’s overall transaction revenue didn’t show any movement, but it appears its focus on branded checkout has led to some brighter outcomes. This was revealed Tuesday during a conference call where executives discussed their quarterly results.
The company is clearly positioning itself to expand in both cryptocurrency and the buy now, pay later (BNPL) sector, even if it’s a bit early to see substantial impacts. CEO Alex Chriss reassured investors that they’re still prioritising current projects but acknowledged, “there’s an opportunity to lean in to BNPL.” Additionally, PayPal has begun incentivising crypto spending with rewards, although big shifts in user behaviour have yet to materialise.
PayPal’s branded checkout initiatives remain critical to their strategy for driving both volume and profits. The company reported an 8% increase in branded transactions for the quarter—up from 6% the previous year—according to Chriss. Online branded dollar volume rose nearly 6%, and he believes this will continue to grow over the coming months.
Meanwhile, Venmo is experiencing noteworthy growth, with transaction volume climbing 10% this quarter compared to 8% last year. Originally known for peer-to-peer payments, Venmo is making strides with Pay with Venmo, which Chriss mentioned had JetBlue accepting it back in January. He is optimistic about more merchants joining in the upcoming quarter.
As of the end of the quarter, approximately 2 million PayPal and Venmo debit cards were being used—a clear focus for the company moving forward as they strive to distribute more cards to consumers. Venmo’s revenue, too, is doing well, with a dramatic 20% increase this quarter, which Chriss noted as a record-high in several years.
The company is gearing up to introduce its branded strategy in Europe, kicking off with Germany. Chriss mentioned that they’ve fine-tuned their approach and see Pay with Venmo as an integral part of their expansion.
Overall, PayPal reported a total payment volume of $417.2 billion, marking a 3% rise from the same quarter the previous year. This is a notable slowdown compared to the robust 14% growth they recorded a year ago. CFO Jamie Miller pointed out they have decided to avoid chasing unprofitable volumes, particularly in their Braintree unit, which handles unbranded processing. Their total revenue for the quarter stood at $7.79 billion—pretty much unchanged from last year, indicating a significant pause in their growth trajectory.
