May 5 (Reuters) - PayPal exceeded Wall Street expectations for first-quarter results on Tuesday as resilient consumer spending lifted volumes at the digital payments firm.
Though consumers have been grappling with inflationary pressures and economic uncertainty exacerbated by the Middle East conflict, wealthier households have largely underpinned spending resilience.
Payment networks Visa, Mastercard and American Express reported strong quarterly results last month, signaling sustained spending trends
despite economic pressures.
PayPal's revenue rose 7% to $8.35 billion, beating analysts' average estimate of $8.05 billion, according to data compiled by LSEG. On a currency-neutral basis, total payment volumes also jumped 8% over a year ago to about $464 billion.
It reported adjusted profit of $1.34 per share for the three months ended March 31, also above an estimate of $1.27 per share.
Total payment volumes at its higher-margin online branded checkout segment - which tracks transactions where consumers actively choose PayPal or Venmo wallets at checkout - grew 2% in the first quarter.
Shares of the company rose more than 2% in premarket trading.
NEW CEO IN FOCUS
PayPal has been navigating intense competition in the payments space after the entry of Big Tech firms such as Apple and Google in the segment.
The firm had a legacy lead from a pandemic-era surge in digital payments, but growth has since cooled. Its shares are down over 80% from record highs in mid-2021.
PayPal is now seeking a firmer footing under new CEO Enrique Lores, who will lead his first earnings call later on Tuesday.
Since he took over in March, the company has said it will reorganize its business into three operating units, including a separate Venmo-focused division.
PayPal outlined plans to save about $1.5 billion over the next two to three years and said it will reinvest that amount to drive new growth.
(Reporting by Utkarsh Shetti in Bengaluru; Editing by Pooja Desai)
