The PayPal logo at its headquarters in San Jose, California, on January 30, 2024.
Justin Sullivan | Getty Images News | Getty Images
PayPal Third-quarter earnings released on Tuesday were better than expected, but revenue was slightly lower than expected.
Here’s how the company performed compared to Wall Street expectations, according to a survey of analysts by London Stock Exchange Group (LSEG):
- Earnings per share: Adjusted $1.20, expected $1.07
- income: US$7.85 billion, expected US$7.89 billion
Revenue for this quarter increased approximately 6% from US$7.42 billion in the same period last year. PayPal reported net income of $1.01 billion, or 99 cents a share, compared with $1.02 billion, or 93 cents a share, a year earlier.
This is Chief Executive Alex Chriss’ first earnings report since his one-year anniversary in September. The stock is up 36% this year and 42% since Chris joined the payments company. .
Chriss is focused on prioritizing profitable growth and better monetizing key acquisitions, such as Meta’s use of Braintree for credit card processing and payments app Venmo.
According to data, total payments in the quarter ended September 30, which reflects the performance of digital payments in the broader economy, increased 9% from the same period last year to $422.6 billion, slightly higher than the average analyst estimate of $422.5 billion. Street Account.
“PayPal delivered strong financial and operating results during a highly productive third quarter,” Chris said in the earnings release.
The company’s operating margin was 18.8%, beating StreetAccount’s forecast of 17.4%. PayPal reported a total of 432 million active accounts, up 1% from the same period last year and exceeding the average estimate of 430.5 million.
While PayPal’s acceptance rate fell to 1.86% from 1.91% a year ago, transaction margins – how the company measures the profitability of its core business – rose to 46.6% from 45.4%.
PayPal called for “low single-digit growth” in the fourth quarter. Analysts expected growth of 5.4% to $8.46 billion. The investor platform said the guidance reflects “price versus value strategy and earnings growth priorities.”
According to LSEG, the company expects adjusted earnings of $1.07 to $1.11 per share, compared with analysts’ average estimate of $1.10.
One of Chris’ strategies to address declining margins is to provide merchants with more value-added services, such as connecting several data points at checkout to reduce cart abandonment rates. The product is called fast lane, Launched in Augustand is a one-click payment option for online sales that works with apple Make payments and store payments through Shopify.
In August, fintech platform Adyen launched Fastlane Available for enterprise use It also expressed plans to expand its product range globally in the future. The company also partners with other leaders in global business, including Feser, Amazon, global payments and Shopify as it looks to grow its online checkout share.
Another big product launch this season is PayPal Everywhere, now live early September. The program offers 5% cash back for using PayPal debit cards in the mobile app. To date, PayPal has registered 1 million new PayPal debit card users.
Venmo’s total payment volume increased 8% year over year this quarter. Businesses like DoorDash, Starbucks, and Ticketmaster Accept Venmo now As a way for consumers to pay.
“We are making solid progress on our transformation as we bring new innovations to market, build key partnerships with leading commercial players and increase awareness through new marketing campaigns,” Chris said in the release. and engagement.
PayPal will hold an earnings call with analysts at 8 a.m. ET.
watch: PayPal leads the crypto space, allowing merchants to buy and sell virtual assets
About The Author
