On Thursday, October 18, PayPal reported its Q3 earnings and revenues–figures that topped Wall Street’s estimates. There was also a notable surge in payment volume on Venmo, PayPal’s peer-to-peer payment app, and the addition of a ‘record’ 9.1 million new accounts.
Financial markets data & infrastructure provider Refinitv estimated a $0.54 increase in share price; PayPal reported $0.58 per share. The company also took in $3.68 billion in revenue, just over Refinitiv’s estimated $3.66 billion. Expected earnings for Q4 have been raised to $0.65-$0.67, and full-year earnings are expected at $2.38-$2.40 per share.
— PayPal (@PayPal) October 18, 2018
After the report was released on Thursday, CNBC reported that Paypal’s share price rose as much as 7.5 percent during after-hours trading, bringing the price per share to roughly $83. This year to date, PayPal’s share price is up 13 percent; year over year, PayPal is up eight percent.
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Venmo Nears its Tipping Point
While the better-than-expected earnings and revenues are a pleasant surprise, PayPal CEO Schulman said that he’s “especially pleased with the strong overall momentum surrounding Venmo,” and that “while it is still early, our monetization efforts appear to be reaching a tipping point.”
Indeed, Venmo’s payment volume rose an eye-popping 78 percent throughout the quarter, equivalent to roughly $17 billion. The increase in usage is happy news for PayPal and its investors – Venmo has struggled to turn a profit since PayPal acquired it in 2016.
Venmo’s increase in payment volume was echoed in PayPal’s total payment volume, which grew by 25 percent over the course of Q3. 45 percent of that growth can be attributed to mobile payments.
However, the company’s $143 billion in processed payments fell short of Refinitiv’s estimated $145 billion.
PayPal Continues to Expand its Operations
Before the earnings report was published on Thursday, PayPal also announced a set of new features associated with its partnership with American Express. Now, Amex customers will be able to send money through PayPal or Venmo directly through their Amex apps.
Earlier this month, PayPal also announced a new partnership with Walmart. Several months prior, PayPal announced the purchase of iZettle, a Swedish payments startup. According to CNBC, “PayPal has also made deals to buy Hyperwallet, Jetlore, and Simility in 2018.”
“We will continue to leverage acquisitions to strengthen our two-sided platform and maintain our position as the leading global open platform for digital payments,” Schulman commented.