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• PayPal’s Q1 earnings showed net revenues increasing by 2% at constant currency, and while this isn’t stellar growth, underlying PayPal branded volume growth was decent at 6%.
• The company is focusing on profitable, “durable” growth, rather than a higher proportion of low-margin processing volumes.
• To that end, underlying dollar margin growth (an important profit measure) grew at 8%, a slightly faster rate than the previous quarter.
• The company has cut costs in recent years as part of an efficiency drive, helping operating margins move higher, with margins increasing by a further 257 basis points to 20.7% in Q1. These improvements also highlight the scalable nature of payment processing.