- PayPal’s stocks took a hit post report of Q3 earnings
- The net revenue reported was $5.46 billion, a rise of 25%
- Total Payment Value rose by 38%, totaling $247 billion
- Fintech companies see growth due to increased online payments
PayPal has recently revealed its third-quarter earnings. Though the earnings were strong, PayPal’s stocks went down after the report. Analysts are still confused about why it is so. One reason could be higher expectations from the retail investor. Fintech, as a whole, has been on the rise due to COVID-19.
PayPal’s report numbers
PayPal has shown the strongest growth in total payment volume and revenue in its history. The Total Payment Value (TPV) grew by a whopping 38%, a total of $247 billion. In terms of payment, it processed $4 billion of transactions, a rise of 30% as compared to last year. It reported net revenue of $5.46 billion, a growth of 25%. It is a significant lead over the analyst’s $5.43 billion expectation. The earnings per share also grew to $1.07 as compared to $0.94 expected by analysts.
PayPal’s GAAP operating margin expanded by 198 basis points, gaining 17.9%. It reported a non-GAAP operating margin of 27.2%, an expansion of 377 basis points. The Net New Active accounts were up by 22%. The addition of 15.2 million NNAs resulted in a total of 361 million active accounts. Its cash, cash equivalents, and investments totaled $17.6 billion, while its debt totaled $8.9 billion by the end of September. It also reported a rise of 61% in Venmo payment processing volume, as compared to $44 billion last year.
PayPal’s Strategic Initiatives and Business Updates
The company has expanded its ‘Buy Now Pay Later’ product suite. It introduced short-term installment products in the U.S. and U.K. These products aid merchants drive conversion, revenue, and customer loyalty. This would enable customers to make purchases and payments over interest-free installments.
Its Venmo Credit Card is issued by Synchrony and powered by the Visa network. It gives customers automatic cash back on every eligible purchase, a personalized reward experience. And, users will be able to manage the card directly in the Venmo app.
PayPal launched a new service enabling customers to buy, hold, and sell cryptocurrency directly within their PayPal accounts. It plans to increase cryptocurrency’s utility significantly. It will be made available as a funding source for purchases at its 28 million merchants worldwide.
Fintech is now the ‘new normal’ by many as they continue to manage their finances during the pandemic. Leading sectors in fintech are payments, insurance, banking, and lending.
