PayPal Sees Revenue and Payment Volume Increase in Q2

On a forex neutral basis, revenue increased by 22 percent and total payment volumes were up 27 percent.

PayPal Holdings Inc. announced its financial results for the second quarter of 2018 on Wednesday. The report from the global technology platform and digital payments leader showed that second-quarter earnings beat Wall Street expectations.

For the period ending June 30, 2018 revenue increased by 23 percent to $3.86 million when compared to the second quarter of 2017. On a foreign currency-neutral basis (FXN) this was an increase of 22 percent. Revenue figures came in higher than analysts expectations, as the consensus estimates from Thomson Reuters forecast revenue for the second quarter to be $3.81 billion.

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In the second quarter, earnings per share (EPS) also beat market expectations. Second-quarter Non-GAAP (generally accepted accounting principles) EPS jumped by 28 percent to 58 cents compared to the 57 cents forecast by Thomson Reuters. GAAP EPS was $0.44. This is an increase of 29% from the previous year. From April 2018 to June 2018, the company repurchased 6.1 million shares of common stock. Because of this, approximately $500 million was returned to stockholders.

Although second-quarter revenue beat expectations, the company’s Q3 forecasts left a lot to be desired. According to the report, revenue in the third quarter is expected to come in between $3.62 billion and $3.67 billion. The company also expects adjusted EPS to fall between 53 cents and 55 cents. Whilst analysts had projected EPS to be 54 cents in Q3, Thomson Reuters consensus estimates saw revenue higher at $3.71 billion. Following the results, PayPal shares fell more than four percent in after-hours trade.

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Operating results for PayPal

The operating results for the second quarter also saw significant growth in the platform’s key areas. In the second quarter of 2018, 7.7 million active accounts were added. This is an increase of 18 percent year-on-year for net new active accounts. Payment transactions were also up by 28 percent compared to the same period last year, coming in at 2.3 billion.

Not only were accounts and transactions up, but the volume of funds also increased. In Q2, the total payment volume was $139 billion, up 29 percent year-on-year, or up 27 percent on an FX-neutral basis.

Dan Schulman, President and CEO at PayPal
Dan Schulman
Source: LinkedIn

Commenting on the results Dan Schulman, President and CEO of PayPal said: “our customer choice initiatives, partnership strategy and continued focus on being a customer champion are contributing to our sustained strong performance.

“We are pleased to have announced four acquisitions in the second quarter that advance our merchant value proposition and geographic reach. Our strategic decision to become an open platform committed to partnerships has increased the value that PayPal can offer our customers, both consumers and merchants.”

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