PayPal delivered its quarterly results at the end of last week and didn’t disappoint. Revenue, operating margin, net income and earnings per share were all up most satisfactorily for most analysts and investors and the PayPal stock enjoyed a lift on Friday.
For the just completed second quarter, revenue of $3.86 billion was up 23% year over year. These results exceeded the high end of PayPal’s forecast of $3.78 billion to $3.83 billion, and topped analysts’ consensus estimates for revenue of $3.81 billion. User metrics and other key indicators were also strong.
One particular question raised last week when it was revealed that eBay would be offering Square Capital lending to merchants on the marketplace was where this left PayPal. eBay wasn’t forthcoming with information but PayPal has confirmed that it will continue to be a feature on eBay up until 2025. So, if you rely on it, it will still be available for quite a while. Although it might well be less prominent.
Some other highlights that you can find in the full release and transcript that are worthy of note:
PayPal made four key acquisitions: iZettle, Jetlore, Hyperwallet and Simility. And they reported increased international scope in the UK, South Korea, and India through partnerships with Santander, Clydesdale, ShinhanCard, and HDFC Bank. And on mobile, One Touch is the fastest adopted product in PayPal’s history, and has 100 million active users, with nearly 102 million consumers opted in and 9.5 million merchants offering One Touch.
And two recent investments also look interesting. In May, they announced participation in a $125 million investment round in Pine Labs, one of India’s leading point-of-sale solution providers. Pine Labs offers POS devices that accept credit and debit cards, mobile wallets, and services that run on India’s Unified Payments Interface, a government-backed system that allows for instant bank-to-bank transfers. And they’re also backing PPRO. This investment, combined with a comprehensive commercial agreement, provides us the ability to extend more than 100 alternate payment methods to merchants.
I’m pleased to share that PayPal had another strong quarter. As I said at our Investor Day in May, I believe PayPal’s greatest potential lies ahead of us, and the moves we made this past quarter position us to win in multiple segments of our total addressable market. At the same time, we also continue to produce consistent and strong quarterly financial results.
– Dan Schulman, CEO, PayPal
