Earnings Results: PayPal sees record earnings, volume amid sustained e-commerce surge


This report has been updated to correct the data on transactions per active account and total transactions.

PayPal Holdings Inc. saw a record amount of volume flow through its platform in the first quarter as the e-commerce wave continued even amid the gradual reopening of the in-person economy.

Shares of PayPal

were up 5% in after-hours trading Wednesday after the company topped expectations with its latest results and raised its full-year outlook.

The company generated first-quarter net income of $1.1 billion, or 92 cents a share, up from $84 million, or 7 cents a share, in the year-earlier quarter. After adjusting for stock-based compensation, gains on strategic investments, and other items, PayPal

earned $1.22 a share, up from 66 cents a share a year prior and ahead of the FactSet consensus, which called for $1.01 a share. The adjusted-earnings figure is a new quarterly record for PayPal.

PayPal’s revenue for the quarter totaled $6.03 billion, up from $4.62 billion a year earlier. Analysts surveyed by FactSet had been projecting $5.91 billion.

“The really interesting thing is that we not only saw the strongest quarter in our history, but as we look forward, we’re continuing to see elevated levels of digital spend,” Chief Executive Dan Schulman said. “And we now believe the shift in consumers’ digital behavior is going to remain essentially unchanged in a post-COVID world.”

The company saw a record $285 billion in total payments volume, or the value of activity occurring on its platform. Analysts surveyed by FactSet were modeling TPV of $264.7 billion. With the first-quarter performance, PayPal’s TPV on a trailing-12-month basis topped $1 trillion for the first time.

The company added 14.5 million net new active accounts overall. PayPal saw 4.4 billion transactions in the quarter and 42.2 transactions per active account on a trailing-12-month basis. The number of daily active accounts for the core PayPal product rose 33%.

Schulman said that newer services are helping to drive increased engagement. About half of customers who’ve tried PayPal’s buy-now-pay-later service used the feature again within three months, with that number rising to 70% over six months.

Usage of PayPal’s cryptocurrency features that let users buy, sell, and hold digital assets like bitcoin

and ethereum

is “growing by leaps and bounds,” Schulman added, and a newer initiative allowing people to make purchases with their crypto holdings is showing “good traction.”

For the second quarter, PayPal expects revenue of $6.25 billion, up 19% from a year earlier, and adjusted EPS of $1.12 a share, up 5%. Analysts tracked by FactSet were expecting $6.17 billion in revenue and $1.10 in adjusted EPS.

PayPal also upped its full-year forecast. The company now expects $25.75 billion in revenue, an approximately 20% increase from a year earlier, whereas its prior outlook called for 19% growth. PayPal forecasts adjusted EPS of $4.70, up about 21% from a year earlier, compared with its prior outlook calling for roughly 17% growth.

The payments giant expects 52 million to 55 million net new active accounts for the full year, up from its prior forecast calling for about 50 million.

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