PayPal Holdings' (PYPL) fourth quarter results beat analyst estimates on both the top and bottom lines. Adjusted earnings per share $1.48 was better than the expected $1.36 and revenue of $8.03 billion topped estimates of $7.87 billion. Total payment volume was also better than expected. However, investors were disappointed in the guidance, with a 2024 adjusted earnings per share forecast of $5.10, well below the expected $5.49 and free cash flow of about $5 billion compared to estimates of $6.2 billion.

Yahoo Finance's Josh Lipton and Julie Hyman break down the report.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Stephanie Mikulich

Video Transcript

JOSH LIPTON: Meanwhile, PayPal shares, they are falling after just reporting results. Let's give those to you right now. It's kind of mixed here, Julie.

Q4 adjusted EPS 148, that clocks in-- that is a beat, right? Consensus was closer to 136. Q4 revenue, $8.03 billion. That's also a beat.

Looking at Q4 total payment volume, $409.8 billion. That was greater than expected, but a little concern here perhaps about that 2024 adjusted EPS guidance. That comes in at 510. That's light at least relative to expectations. Street was a little bit closer to 549.

JULIE HYMAN: It seems like everything from in terms of the forward looking forecast is below what analysts had been estimating here. So you were talking about the adjusted earnings per share forecast for the full year. Free cash flow for PayPal for the full year, it says, will be $5 billion. Analysts were predicting more than $6 billion here.

The company also says for the full year, it expects to repurchase at least $5 billion worth of its shares, but that does not seem to be necessarily stemming the downdraft at least not for now when you see that 6% decline. So I think we got to look at-- look to the call, see exactly what is going on the forecast side, and why that's short, especially when the company's fourth quarter numbers beat. So what's going to change in terms of momentum as the year goes on is going to be an important question on the call for PayPal.

JOSH LIPTON: Yeah, you'll have questions about the core checkout business, competition there from big rivals like Apple and Google. You also have a relatively still new CEO at the company right now who has been trying to get leaner and meaner. Of course, the layoffs introduce some new initiatives, which didn't exactly wow investors at least initially. But certainly a lot of questions that go through.