PayPal’s net income jumps more than 100% in the fiscal third quarter

Written by: Wajeeh Khan
November 2, 2020
  • PayPal’s net income jumps more than 100% in the fiscal third quarter.
  • The online payment processor reports £4.23 billion of revenue in Q3.
  • PayPal forecasts an up 28% growth in annual adjusted per-share earnings.

PayPal Holdings Inc. (NASDAQ: PYPL) said on Monday that its revenue in the fiscal third quarter was better than expected. The company attributed its hawkish quarterly performance to the Coronavirus pandemic that fuelled e-commerce in recent months.

Shares of the company were reported about 6% down in extending trading on Monday. On a year to date basis, PayPal is now close to 70% up in the stock market after gaining more than 100% since late March, when the impact of COVID-9 was at its peak. Interesting in investing in the stock market online? Here’s a simple guide to get you started.

PayPal’s Q3 financial results versus analysts’ estimates

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At £790 million, PayPal said that its net income in the third quarter was significantly higher than £357.73 million in the same quarter last year. On an adjusted basis, the worldwide online payments system earned 83 pence per share in the recent quarter versus the year-ago figure of 58.85 pence per share. FactSet Consensus for PayPal’s per-share earnings in Q3 stood at 72.78 pence.

PayPal launched its “buy now, pay later” service in the United Kingdom last month.

In terms of revenue, the American company posted £4.23 billion in the third quarter. In comparison, it had generated a lower £3.39 billion of revenue in Q3 of 2019. Analysts had anticipated £4.20 billion of revenue for PayPal in the recent quarter.  

In an announcement in late October, PayPal said that it was interested in acquiring crypto companies and start working with cryptocurrencies.

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PayPal’s guidance for the full fiscal year

Including 1.5 million merchant accounts, the Palo Alto-based company said its total active accounts increased by 15.2 million in the fiscal third quarter. Total payment volume that PayPal processed in Q3 registered at £191.25 billion versus £180.18 billion expected. Its Venmo platform recorded £34.07 billion of total payment volume in the recent quarter.

For the full fiscal year, the online payment processor now forecasts a minimum of 30% growth in total payment volume, and up to 28% growth in adjusted per-share earnings. PayPal estimates an up to 22% growth in its annual revenue on a currency-neutral basis.

PayPal performed fairly upbeat in the stock market last year with an annual gain of about 30%. At the time of writing, the online payment processor is valued at £170.58 billion and has a price to earnings ratio of 86.18.