PayPal’s CEO says the second quarter was the strongest in history

PayPal (NASDAQ: PYPL) published its quarterly financial results on Wednesday that came in stronger than what the analysts had anticipated. The company attributed its hawkish performance to the Coronavirus pandemic that fuelled digital payments in recent months. PayPal selected Paxos as the crypto supplier for its new service earlier in July.

Shares of the company jumped about 4% in extended trading on Wednesday. The £167 billion company that has a price to earnings ratio of 116.84 is currently a little under 75% up year to date in the stock market.

PayPal sees highest growth on record in total payment volume

The physical stores started to reopen for the public in the final few weeks of the second quarter. Nonetheless, PayPal’s total payment volume printed the highest growth on record on a year over year basis on Wednesday. PayPal sent a scam warning to Gedling borough residents on Thursday.

PayPal valued its payment volume in Q2 at £171 billion that was significantly higher than £132.50 billion in the same quarter last year. According to FactSet, experts had forecast the company to print £162 billion in payment volume.

PayPal’s Venmo service also posted a 52% increase on an annualised basis as it processed roughly £28.50 billion of payments. The digital payments company also boasted to have onboarded 21.3 million net new active accounts in the recent quarter. 1.7 million of these, PayPal added, were merchant accounts.

According to CEO Dan Schulman, PayPal added about three times as many merchant accounts in Q2 as it usually does in a quarter.  

PayPal’s Q2 financial results versus analysts’ estimates

According to FactSet, experts had forecast the company to register £3.85 billion in revenue in the second quarter. Their estimate for earnings per share (EPS) was capped at 67.04 pence. In its report on Wednesday, PayPal topped both estimates posting a higher £4.05 billion in revenue and 82 pence of earnings per share in Q2.

At £1.18 billion, the worldwide online payments system said that its net income in the second quarter was significantly stronger than £634.20 million in the comparable quarter of last year. On a year over year basis, its EPS and revenue also came in better than last year.

For Q3, PayPal now forecasts a 30% increase in total payment volume, and a 25% increase each in its adjusted EPS and revenue. The Palo Alto-based firm also reinstated its guidance for 2020 that it had previously withdrawn due to COVID-19. It expects an over 25% increase in total payment volume in the full financial year, a 22% growth in revenue and a 25% jump in adjusted earnings per share.