PayPal share soar on good results and increased guidance
Online payments giant PayPal wowed investors at the end of last week with a strong set of quarterly earnings and increased guidance. The company said that it’s making progress in monetizing Venmo, its mobile payment service which is incredibly popular but yet to turn a profit. It also beat the street on earnings and revenue, and reiterated its new partnership with offline retail empire Walmart. Investors liked what they saw, and the share price surged by as much as 9.5% in extended trading.
PayPal’s strong results made an impact with investors at the end of last week
SOURCE: Yahoo Finance
PayPal reported adjusted earnings per share of 58 cents, beating out analysts' expectations. Revenue rose by 14%, year on year, to $3.68 billion - a slight overshoot of Wall Street estimates at $3.67 billion. As a result, the company increased its guidance to a range between $4.2 billion and $4.28 billion.
PayPal's CEO, Dan Schulman, said that Venmo's days of making a loss were behind it. He told listeners on the company's earnings call that Venmo was “clearly on the right track,” and added “the economics overall are improving, and the growth and momentum around it is substantial.” Transactions on Venmo came in at $16.7 billion throughout the quarter, a 78% increase from the year-ago quarter. Across all its services, PayPal said it handled $143 billion in payment volume. That's a year on year increase of 24%.
Schulman was also eager to point to PayPal's growing list of international partnerships. On the earnings call, he singled out one such partnership in particular:
“Walmart and PayPal share the belief that managing and moving money should be affordable, accessible, efficient and secure for all segments of our population. And while digital and mobile commerce continues to grow at remarkable rates, there are tens of millions of people that still do not have access to the benefits of the digital economy. This partnership which leverages and combines the unique strengths of both our companies is aimed at addressing that issue.”
Dominion holds PayPal in its Global Trends Managed Fund.
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