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PayPal (PYPL) Q1 profit jumps 31%, beats estimates

PayPal Holdings (NASDAQ: PYPL) reported a 31% jump in earnings for the first quarter of 2019 helped by strong growth in revenue, net new active accounts, and engagement across its platform. The bottom line exceeded analysts’ expectations while the top line came in line with consensus estimates. Also, the company guided earnings and revenue for the second quarter and fiscal 2019 within the Street’s view.

Net income jumped by 31% to $667 million and earnings climbed by 34% to $0.56 per share. Adjusted earnings soared by 37% to $0.78 per share.

Net revenue rose by 12% to $4.13 billion. The completion of the sale of the U.S. consumer credit receivables portfolio to Synchrony in July 2018 negatively affected revenue growth by about seven percentage points.

PayPal Holdings (NASDAQ: PYPL) reported a 31% jump in earnings for the first quarter of 2019.

Looking ahead into the second quarter of 2019, the company expects revenue in the range of $4.30 billion to $4.34 billion, earnings in the range of $0.50 to $0.52 per share, and adjusted earnings in the range of $0.68 to $0.70 per share. The revenue estimates included an expected decline of about 7 percentage points related to the sale of US consumer credit receivables to Synchrony.

For fiscal 2019, the company still predicts revenue in the range of $17.85 billion to $18.10 billion. Adjusted earnings guidance is lifted to the range of $2.94 to $3.01 per share from the prior range of $2.84 to $2.91 per share. GAAP earnings are now anticipated to be in the range of $1.97 to $2.05 per share. The revenue forecast included an expected decline of about 3.5 percentage points related to the sale of US consumer credit receivables to Synchrony.

The company now has 277 million customer accounts, including 22 million merchant accounts and over 40 million active Venmo accounts. Thanks to the new strategic relationships with some of the world’s largest marketplaces and platforms including Instagram and MercadoLibre.

Also read: eBay first-quarter earnings results

For the first quarter, PayPal had 9.3 million net new active accounts, an increase of 15% from the previous year quarter’s 8.1 million accounts. Payment transactions increased by 28% to 2.8 billion. Total payment volume was $161 billion, up 22% or 25% on the foreign-exchange-neutral basis. On a trailing twelve months basis, transactions per active account rose by 9% to 37.9.

On a foreign-exchange-neutral basis, Merchant Services volume grew by 29% while eBay Marketplaces volume declined by 4%, which represented 9.7% of total payment volume. Person-to-Person (P2P) volume grew 41% to $42 billion, representing 26% of total payment volume. Venmo processed $21 billion of TPV in the first quarter, growing 73% from a year ago.

Shares of PayPal ended Wednesday’s regular session up 0.30% at $107.22 on the Nasdaq. Following the earnings release, the stock inched down over 1% in the after-market session.

 

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