PayPal tops estimates on pandemic-driven boost to online spending

PayPal tops estimates on pandemic-driven boost to online spending

Payments processor PayPal Holdings Inc reported a 209per cent jump in fourth-quarter profit on Wednesday, driven by a surge in online spending from consumers staying indoors due to the COVID-19 pandemic.

FILE PHOTO: Illustration photo of the PayPal app on a phone
FILE PHOTO: The PayPal app logo is seen on a mobile phone in this illustration photo, Oct. 16, 2017. REUTERS/Thomas White/File Photo

REUTERS: PayPal Holdings Inc beat Wall Street estimates for quarterly profit on Wednesday and forecast an about 28per cent jump in revenue for the current quarter as coronavirus-related restrictions across the world drove a surge in digital payments.

Online payments have got a boost since the start of the pandemic as people stuck indoors rely on mobile apps for shopping and paying bills.

The San Jose, California-based company said 2020 was its strongest ever annual performance as it processed a record US$936 billion in payments.

Processed payments in the last quarter rose 39per cent to US$277.1 billion, with an additional 16 million net new active customers.

The blowout showing comes despite PayPal having earlier projected a more prudent estimate, partly because of pandemic's impact on the global economy, as well as the U.S. presidential election and concerns about social unrest.

Quarterly revenue rose about 23per cent to US$6.12 billion, above analysts' average estimate of US$6.09 billion, according to Refinitiv IBES.

Venmo, PayPal's service which allows individuals in the United States to send each other money through an app, processed US$47 billion in payments in the quarter, up 60per cent from a year earlier.

Net income jumped to US$1.57 billion, or US$1.32 per share, from US$507 million, or 43 cents per share, a year earlier.

PayPal reported adjusted diluted earnings of US$1.08 per share, higher than analysts' average estimate of US$1.00 per share.

Visa Inc, the world's biggest payment processor, also beat Wall Street estimates for quarterly profit at the end of last month, showing signs of a recovery in payment volumes from the coronavirus-induced slump.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Ramakrishnan M. and Anil D'Silva)

Source: Reuters