PayPal's stock falls after earnings. Here's what's spooking Wall Street.

By Emily Bary

PayPal's June-quarter guidance came up short, overshadowing signs of momentum in the latest period

PayPal posted first-quarter earnings on Tuesday, beating expectations with its latest results but falling short with its guidance.

PayPal Holdings posted its first earnings report under new CEO Enrique Lores on Tuesday, showing modest growth on a closely watched measure of payment volume but a disappointing earnings forecast for the current quarter.

The company left intact its full-year guidance while projecting a roughly 9% decline in adjusted earnings per share for the June quarter. Analysts tracked by FactSet were modeling $1.34, which would have translated to a decline of only about 4%.

That overshadowed better-than-expected results for the latest period. In the first quarter, PayPal (PYPL) reported revenue of $8.35 billion, up 7% from a year before and above the FactSet consensus of $8.05 billion. Adjusted EPS rose 1% to $1.34 and beat the $1.27 consensus view.

Total payment volume was up 11% to $464 billion.

Shares slid 7.7% on Tuesday.

The company grew branded-checkout volume by 2% in the first quarter after growing by 1% in the December quarter. Branded checkout includes transactions made using the core PayPal (PYPL) checkout button, and is monitored by investors to see how the company is keeping pace in a competitive payment-technology market.

Volume from Venmo, the peer-to-peer payment platform, accelerated to reach 14% in the latest quarter.

PayPal logged 3% growth in transaction-margin dollars - a measure of the profitability of payment volume.

PayPal recently announced that it would reorganize its business under three units. One will focus on checkout solutions and the core PayPal brand; another will focus on consumer financial services and Venmo; and the third one will include cryptocurrency and payment services.

The goal is to increase organizational accountability and give the various brands the ability to move more quickly.

PayPal said Tuesday that it's also embarking on a new cost-cutting program, targeting $1.5 billion or more of gross run-rate savings over the next two to three years. The company plans to reinvest those savings back into the business.

-Emily Bary

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05-05-26 1828ET