PayPal says its profit jumped 200% in the fiscal fourth quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Feb 3, 2021
  • PayPal says its profit jumped 200% in the fiscal fourth quarter.
  • The payments giant reports £4.49 billion of revenue in Q4.
  • PayPal forecasts a 26% growth in its first-quarter revenue.

PayPal Holdings Inc. (NASDAQ: PYPL) said on Wednesday that its profit in the fiscal fourth quarter posted a 200% annualised growth as the COVID-19 pandemic fuelled a shift to digital payments.

PayPal shares, that you can learn to buy online here, gained roughly 2.5% in after-hours trading on Wednesday. The stock is now trading at £189.50 per share after recovering from a low of £62.51 per share in March 2020 when the impact of the Coronavirus emergency was at its peak.

PayPal’s Q4 financial results versus analysts’ estimates

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PayPal reported £1.15 billion of net income in the fourth quarter that translates to 97 pence per share. In the same quarter last year, its net income was capped at a much lower £371.70 million or 31.52 pence per share. PayPal’s net income jumped 100% in the prior quarter (Q3).

The American company earned 79 pence per share on an adjusted basis in Q4. PayPal valued its revenue in the recent quarter at £4.49 billion versus the year-ago figure of £3.64 billion. According to FactSet, experts had forecast the company to post £4.46 billion of revenue in the fourth quarter. Their estimate for adjusted per-share earnings stood at a lower 73 pence per share.

At £203.08 billion, PayPal’s total payment volume (TPV) in Q4 came in significantly higher than £146.19 billion last year. Analysts had predicted its TPV to print at £196.41 billion instead. Net new active accounts, as per the online payments system, were 16 million in the fourth quarter. PayPal now has 377 million total active accounts.

PayPal’s guidance for the fiscal first quarter

For the fiscal first quarter, the San Jose-based company now forecasts a 26% year over year growth in revenue on a currency-neutral basis. PayPal expects its adjusted per-share earnings to climb by roughly 50% in the current quarter.

PayPal said that it expects TPV growth in fiscal 2021 as a whole to register a little under 30%. Full-year revenue and adjusted EPS, the company added, is likely to see a 17% growth each. In separate news, eBay also reported its financial results for the fiscal fourth quarter on Wednesday.

PayPal performed massively upbeat in the stock market last year with an annual gain of more than 100%. At the time of writing, the U.S. based payments giant has a market capitalisation of £216.38 billion and a price to earnings ratio of 95.13.

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