PayPal Holdings Inc.’s profit tripled in the fourth quarter, when the company ended what Chief Executive Dan Schulman called the strongest quarter in its history, fueled by the accelerated adoption of digital payments during the pandemic.
The shares rose 2.3% in Wednesday’s trading session.
The company posted a net profit of $ 1.57 billion, or $ 1.32 per share, up from $ 507 million, or 43 cents a share, in the prior year period. PayPal PYPL,
GAAP earnings per share for the last quarter included a 60 percent net gain from strategic investments.
On an adjusted basis, PayPal earned $ 1.08 per share, which came before the FactSet consensus, which required $ 1.00 per share.
PayPal generated $ 6.12 billion in revenue in the December quarter, up from $ 4.96 billion, while analysts expected $ 6.09 billion. This marked the first period in which PayPal reported more than $ 6 billion in quarterly revenue.
The company’s total payment volume (TPV), or the value of transactions made on the platform, rose from $ 199.4 billion to $ 277 billion, while analysts asked for $ 267.9 billion. Venmo’s POS grew 60% to $ 47 billion, while FactSet’s consensus was $ 46.6 billion.
During the busiest times at the height of the Christmas shopping season, PayPal was processing more than 1,000 transactions per second, Schulman told MarketWatch, a record statistic for the company.
PayPal added 16 million new active net accounts in the last quarter, bringing its total active accounts to 377 million, including 29 million merchant accounts. Venmo’s active accounts increased 32% to 70 million.
The company made a series of product launches later in the year, including allowing U.S. users to buy, sell and store cryptocurrencies through its platform. Customers who bought cryptocurrencies through PayPal have accessed their accounts twice as often before, the company said.
Another relatively new product, a buy now, pay later offer, which allows customers to split purchases into three or four installments, depending on the region, generated $ 750 million in total payment volume in the last quarter.
The company now has 600,000 merchants who accept QR codes from PayPal and Venmo, including CVS Health Corp. CVS,
Nike Inc. NKE,
and Five Below Inc FIVE,
Throughout 2020, PayPal has progressed in its efforts to increase in-store transactions through features like Venmo physical cards, QR codes and touch payments. Nearly 10 million PayPal customers made in-store payments through the service in some capacity during 2020, according to Schulman, accounting for more than $ 20 billion in total payment volume.
“All of these new products and services are really transforming PayPal from a checkout solution into a complete super-application, or a digital wallet that transcends payments, financial services and commerce and shopping tools,” he said.
For the first quarter, PayPal expects revenue to grow 28% at current spot rates or 26% on a currency-neutral basis. The company also predicts an adjusted EPS growth of around 50%.
Analysts polled by FactSet were modeling $ 5.62 billion in revenue for the March quarter, up from $ 4.62 billion a year earlier, and 99 cents of adjusted earnings per share, up from 66 cents a year earlier.
Looking at 2021 as a whole, PayPal predicts TPV growth in the range of 20%. The company projects revenue growth of 19% at current spot rates and 17% on a currency-neutral basis to around $ 25.5 billion. It also expects 17% growth in adjusted earnings per share and 50 million new net active accounts for the year.
The FactSet consensus required $ 1.15 trillion in total payment volume, $ 25.43 billion in revenue and $ 3.12 per share in adjusted earnings for the full year.
PayPal shares have gained 40% over the past three months as the S&P 500 SPX,
increased by 17%.