Earnings

With 218M Active Users And 17M Merchants, PayPal Predicts A Strong Finish For 2017

“PayPal delivered one of its strongest quarters since becoming an independent company,” said Dan Schulman, CEO of PayPal, in a statement. “Putting our customers first in everything we do, enhancing our suite of products and services and partnering with some of the world’s most popular brands are delivering tangible results.”

PayPal, largely pushed by a strong mobile performance, managed to again exceed analyst expectations across the board and raised Q4 guidance. Investors sent PayPal’s stock up 4 percent in after-hours trading.

So, where was all the excitement?

 

By the Numbers

PayPal’s adjusted profit was 32 percent during the third quarter to $560 million, or $0.46 per share, beating the average analyst estimate of $0.43.  Revenue clocked in at $3.24 billion — also a beat of the $3.18 billion expected.

PayPal now has 218 million active accounts, compared to 192 million in the same period last year. On the merchant side, PayPal ended the quarter with 17 million active merchant accounts.

“In addition to our solid financial performance, we also reported record customer growth with the addition of 8.2 million net new actives,” Dan Schulman noted.  “As the world rapidly accelerates to digital payments, we have a tremendous opportunity in front of us.”

The company saw 54 percent growth in mobile payments, totaling $40 billion. Venmo accounted for $9 billion in mobile payments volume in Q3, nearly doubling volume from this time last year. Venmo has processed about $30 billion in total payment volume in 2017 so far.

Total payments volume rose 31 percent to $114 billion. All in all, PayPal processed 1.9 billion payments transactions — roughly 33 transactions per active account.

As of the close of the market today, PayPal’s market cap is $80.86 billion. That is slightly below American Express’ at $81.24 billion — and vastly larger than Discover’s market cap of $24.45 billion.

 

What’s Next

Venmo, with its impressive growth rate, has often been described as the “darling” of the PayPal portfolio — and this week, it got a major upgrade. Venmo users can now use the app to pay at any merchant that accepts PayPal.

“This is something we have had in mind for many years,” PayPal COO Bill Ready told Karen Webster in a conversation shortly before the news was publicly announced. “It’s not just an evolution in what Venmo can do, but a way that social commerce can be meaningful for consumers.”

Schulman noted in his remarks to investors that the quarter was one of the company’s strongest since spinning off of eBay into an independent company.

He also hinted that — apart from upgrades to their current offerings — PayPal might just be on the hunt for acquisitions.

“We have a very strong balance sheet, and it’s a potential weapon for us as we think about competing going forward,” he told investors.

PayPal has already acquired Swift Financial, Xoom and TIO Networks in 2017.

And, it seems, the year of adding new units to the PayPal family might not be over yet.

We’ll keep you posted.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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