PayPal beats estimates on online spending boost
PayPal Holdings Inc reported better-than-expected quarterly results on Wednesday, benefiting from a pandemic-driven shift to online shopping and digital transactions and a rise in consumer spending as economies reopen.
NEW YORK: Shares of PayPal Holdings fell 8 per cent on the payment company's downbeat current-quarter profit outlook that outweighed a better-than-expected profit in the second quarter from a pandemic-driven shift to digital spending.
EBay's continued transition to its own managed payments platform instead of using PayPal for its e-commerce platform served a blow to the latter's performance view for the remainder of 2021.
PayPal has been among the big winners of the COVID-19 pandemic as more people used its services to shop online and pay bills to avoid stepping out. Businesses, forced to move their stores online, also flocked to PayPal.
This helped the company process a total of US$311 billion in payments in the second quarter ended Jun 30, up 40 per cent from a year earlier, and added 11.4 million net new active accounts.
Total revenue in the second quarter rose 19 per cent to US$6.24 billion, but missed estimates of US$6.27 billion, according to Refinitiv data, further hurting shares.
PayPal said it expects third-quarter net revenue to be in the range of about US$6.15 billion to US$6.25 billion, representing growth of about 13-14 per cent at current spot rates, but missing analysts' average estimate of US$6.45 billion.
San Jose, California-based PayPal also said it expects adjusted profit of US$1.07 per share, in-line with a year earlier, but lower than estimates of US$1.14.
It expects annual total payment volumes to rise between 33 per cent and 35 per cent on a spot and forex neutral basis.
On an adjusted basis, PayPal earned a profit of US$1.15 per share in the second quarter, compared with analysts' expectations of US$1.12 per share, according to Refinitiv data.
Venmo, PayPal's app that allows individuals in the United States to send and receive money, processed US$58 billion in payments, up 58 per cent from a year earlier.