PayPal Holdings Inc. continued to benefit from booming e-commerce adoption during the pandemic, producing stronger-than-expected revenue and user growth in a Monday earnings report.
PayPal PYPL, +0.87% posted net income of $1.02 billion, or 86 cents a share, up from $462 million, or 39 cents a share, in the year-earlier quarter. Adjusted earnings per share came in at $1.07, up from 76 cents a year prior and ahead of the FactSet consensus, which called for 94 cents.
PayPal’s revenue for the quarter climbed to $5.46 billion from $4.38 billion, while analysts had been modeling $5.42 billion. The payment-processing giant added 15.2 million net new active accounts in the third quarter, including 1.5 million merchants. The overall net-new-active total was PayPal’s second-best quarterly result, behind only last quarter.
Shares dipped about 4% in after-hours trading Monday immediately following the results’ release. PayPal stock has gained 73.6% so far this year, as the S&P 500 index SPX, +1.23% has moved 1.2% higher.
The company processed $247 billion in total payment volume, or the value of payments running through its platform. Analysts had been expecting $232.7 billion. Total payment volume for the Venmo platform came out to $44 billion and marked the service’s best quarter in terms of volume.
PayPal continued to see volume momentum after the quarter finished, according to a spokeswoman, as the company recorded a new single-day volume record one day during October.
“Our growth reinforces the essential role we play in our customers’ daily lives during this pandemic,” Chief Executive Dan Schulman said in a release. “Going forward, we are investing to create the most compelling and expansive digital wallet that embraces all forms of digital currencies and payments, and operates seamlessly in both the physical and online worlds.”
Read: PayPal introduces cryptocurrencies to platform
PayPal upped its volume and earnings forecasts for the fiscal year. The company now expects total payment volume in the 30% growth range, up from a prior range of high-20% growth. On the bottom line, PayPal anticipates adjusted earnings per share growth of 27% to 28% for 2020, up from a prior estimate of about 25% growth.
The company expects 21% to 22% revenue growth on a currency-neutral basis. Three months back, it told investors to expect 20% to 22% growth.
For the fourth quarter, PayPal models low-to-mid 30% growth in total payment volume and 20% to 25% revenue growth. The company also anticipates 17% to 18% growth in adjusted earnings per share.
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