02:04 PM EDT, 04/30/2024 (MT Newswires) -- PayPal Holdings ( PYPL ) on Tuesday raised its full-year earnings guidance after reporting higher first-quarter results year over year under a new accounting methodology.

The payments firm now expects 2024 non-GAAP per-share earnings to grow by a mid to high single-digit percentage, compared with $3.83 a year earlier. PayPal ( PYPL ) said its non-GAAP results are based on a new methodology that includes the impact of stock-based compensation expense and related employer payroll taxes. The company has recast its results for 2021, 2022 and 2023 to reflect the change, according to a statement.

PayPal's ( PYPL ) previous guidance was for roughly flat non-GAAP EPS, Chief Financial Officer Jamie Miller said on an earnings conference call, according to a Capital IQ transcript. Analysts polled by Capital IQ expect 2024 normalized EPS of $5.04.

PayPal ( PYPL ) expects its new outlook to benefit from the inclusion of stock-based compensation expense and a "meaningful outperformance" in the first quarter relative to its plans, Miller told analysts. "We expect earnings growth to be more muted in the second half of the year due primarily to less benefit from interest income on customer balances, normalization in transaction and loan loss performance as we progress through the year and the expected timing of investment actions."

The company continues to expect 2024 free cash flow to be about $5 billion, and execute at least $5 billion in share buybacks, Miller said.

For the quarter through March 31, non-GAAP EPS jumped to $1.08 from $0.85 a year earlier under the new methodology, while revenue rose 9% to $7.7 billion. Analysts polled by Capital IQ expected normalized EPS of $1.22 on revenue of $7.52 billion.

"We see clear opportunities for operational improvements across our large enterprise, small business and consumer businesses, including Venmo, and in driving more efficiency across the organization," Chief Executive Alex Chriss said on the call. "But it will take time to prudently drive a meaningful and sustainable transformation."

First-quarter US net revenue rose 8% year over year to $4.47 billion, while international sales jumped 12% to $3.23 billion. The number of payment transactions grew 11% to 6.51 billion. Active accounts reached 427 million, up 0.4% sequentially but down 1% annually. PayPal ( PYPL ) shares were up 1.9% in Tuesday afternoon trade.

For the ongoing quarter, PayPal ( PYPL ) expects non-GAAP EPS to rise by a low double-digit percentage, compared with $0.87 a year earlier, while revenue is seen increasing 6.5%. The consensus is for normalized EPS of $1.18 on revenue of $7.81 billion.

The company is focused on giving its customers more ways to immediately use their Venmo debit card in person with Apple ( AAPL ) Pay and Alphabet's (GOOG, GOOGL) Google Pay, expected "in the coming months," Chriss told analysts, adding that PayPal ( PYPL ) is also investing in automation.

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