PayPal beats the Street on earnings, reveals Venmo numbers – shares rise
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PayPal beats the Street on earnings, reveals Venmo numbers – shares rise

Online payment provider PayPal reported earnings this week for the first quarter of 2019 – and investors liked what they saw. The company also took the opportunity to break new ground, revealing how many users its popular social payments app Venmo has. Overall, and despite a slight miss on total payment volume, a strong set of results has led PayPal’s share price to rise.

Shares in PayPal have appreciated by 32% so far this year

26 04 paypal

Source: Yahoo Finance

PayPal reported first-quarter earnings of 78c per share. That’s an easy beat against consensus estimates of 68c per share, and a significant increase against the year-ago quarter’s figure of 42c per share. Revenue was in-line with the Street’s expectations, coming in at $4.13 billion. The company’s only miss in the first quarter regarded total payment volume (TPV) – a key metric for PayPal. Analysts had hoped to see a figure of $163 billion, but PayPal only managed to report a TPV of $161 billion. We say “only” but it’s worth mentioning that this figure still represents a 25% increase, year on year. Investors seem to have taken that into account, since PayPal’s trending up.

Perhaps most surprising, though, was a separate announcement from PayPal. In that announcement, the company detailed the number of users its peer-to-peer payment service Venmo has for the first time ever. Apparently 40 million people used it “for at least one transaction” over the last year, and its TPV during the first quarter of 2019 was $21 billion.

On the company’s earnings call, CEO Dan Schulman said that Venmo was continuing its “significant momentum,” adding: “As user growth continues to accelerate, merchants are increasingly turning to Venmo as a way to attract a valuable and engaged consumer base.”

Disclosure

Dominion holds PayPal in its Global Trends Ecommerce Fund.


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