The PayPal application can be seen on a mobile phone.
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PayPal shares rose more than 3% in extended trading on Wednesday after reporting first-quarter earnings that were stronger than analysts had expected.
Here’s how the company did:
- Earnings per share: $1.22, adjusted, vs. $1.01 per share expected in a Refinitiv survey of analysts
- Revenue: $6.03 billion vs. $5.90 billion expected by Refinitiv
- Total payment volume: $285 billion vs. $265 billion expected in a FactSet survey
Revenue grew 31% year over year in the quarter that ended Mar. 31, according to a statement. In the year-ago quarter, the pandemic fomented a surge in online shopping, helping to drive record payment volume for the quarter and the full year.
With respect to guidance, for the second quarter PayPal sees adjusted earnings of $1.12 on $6.25 billion in revenue. Analysts surveyed by Refinitiv had expected $1.10 in adjusted earnings per share on $6.16 billion in revenue.
Analysts and shareholders have been paying particular attention to the buy now, pay later (BNPL) segment, which allows customers to finance purchases at checkout, as well as the company’s push into crypto offerings.
In a note to clients on April 19, Deutsche Bank said it expected PayPal to benefit both from new products like crypto and BNPL, plus a rebound in travel and events through the year. “PayPal has a clear advantage in BNPL and should take material share driving higher ticket sizes, better engagement, and greater share of checkout.”
Atlantic Equities believes PayPal can “quickly take share of this [BNPL] market by leveraging its existing scale as a two-sided payment network.” The April 8 note went on to say that PayPal could add ~$2 billion to its revenues from this revenue stream alone.
Excluding the after-hours move, PayPal stock has risen about 5.9% since the start of the year, while the Nasdaq is up about 5.5% over the same period.
The company is hosting a webcast to discuss its financial results starting at 5:00 p.m. Eastern time.
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