CEO Enrique Lores said PayPal would "carefully consider" buyout opportunities if they create more shareholder value than its standalone strategy.
- PayPal reported second-quarter revenue and earnings that exceeded Wall Street expectations.
- The company raised its full-year adjusted earnings guidance, citing confidence in the company's turnaround efforts.
- It cited improvements across branded checkout, Venmo, Braintree and financial services.
Shares of PayPal (PYPL) gained in morning trade on Tuesday after the company reported a beat-and-raise second quarter, and CEO Enrique Lores stated the company is “open” to assessing buyout opportunities that come its way.
PYPL stock gained over 2% in morning trade and was among the top trending tickers on Stocktwits at the time of writing. Retail sentiment around the company improved to ‘neutral’ from ‘bearish’ territory over the past day, and chatter increased to ‘normal’ from ‘low’ levels. Platform data showed a 900% jump in message volume over the last 24 hours.
CEO Says PayPal Would Consider Buyout Offers
PayPal, which reportedly received a $50 billion takeover proposal earlier this year, would “carefully consider” any future offers through the lens of shareholder value, Lores said.
"We remain open and objective in evaluating opportunities," Lores said during the company's second quarter (Q2) earnings call on Tuesday. "And if we see levers or a path that we believe would create superior value for our shareholders than executing our current strategy, we would of course carefully consider them."
Q2 Earnings Top Estimates, Full-Year Outlook Raised
PayPal reported second-quarter revenue of $8.7 billion, ahead of analysts' expectations of $8.47 billion, according to Koyfin data. Earnings per share came in at $1.25, topping the consensus estimate of $1.23.
"I'm encouraged by the progress we made this quarter," Lores said. "We moved with urgency to sharpen our transformation plan and advance our growth strategies across our three businesses." He said branded checkout continued to stabilize, while Venmo and Braintree maintained strong momentum. The company is also expanding into financial services to diversify its business model.
PayPal raised its full-year non-GAAP earnings outlook to approximately $5.38 per share, up from its previous guidance that ranged from a low-single-digit decline to slightly positive versus last year's $5.31.
PayPal’s First Quarter With New CEO
Tuesday's results come as PayPal continues a broad restructuring under Lores, who took over as CEO in March after previously leading HP.
In May, the company announced plans to eliminate roughly 4,760 jobs, or about 20% of its workforce, over the next two to three years. The restructuring is expected to generate approximately $1.5 billion in annualized savings and is intended to fund investments in higher-growth areas of the business.
PYPL’s stock has fallen over 1% this year and dropped over 25% in the last 12 months.
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