Total payment volume increased 13% year over year excluding currency changes. That drove an acceleration in revenue growth of 10% on a constant currency basis, up from 8% in the first quarter.
The pandemic fueled a massive acceleration in payment volume growth, and PayPal has felt the hangover. Decelerating growth coming out of the pandemic coupled with the stock's high valuation sent the shares tumbling in 2022, but that is behind the company now.
PayPal is in a relatively strong competitive position right now. Despite the lower rate of payment volume growth, it is still a massive platform with 429 million active accounts. As competitors retreat, CEO Dan Schulman said PayPal is "doubling down" on checkout and digital wallets, including Venmo, as well as the Braintree platform. Schulman said these investments led to an increase in market share in the second quarter.
PayPal is also making some changes to realign its business. It announced that Blake Jorgensen would step in as chief financial officer. Jorgensen previously served in the same role at Electronic Arts, where he helped steer the video game maker to tremendous growth in free cash flow and higher margins.
The company also reported it is on pace to realize $900 million in cost savings during 2022, with at least $1.3 billion in additional savings next year. This should be welcome news after the collapse in its once-stellar profit margin over the last few quarters.
Overall, the acceleration in top-line growth is a positive given the challenging economic environment. It's worth noting that total payment volume of $340 billion for the quarter is nearly double the level during the same period in 2019.
PayPal should see stronger revenue and profit growth as we move into 2023, when the company will have much easier year-over-year comparisons.