The US-based payment processing company PayPal reported its third-quarter (Q3) earnings results on Monday. It posted revenue growth of 13%, generating a revenue of USD 6.18 Billion. PayPal’s total payment volume (TPV) of USD 310 Billion, a rise of 26% in this quarter. It added 13.3 Million new accounts, increasing the number of users to 416 Million.
The company generated an operating cash flow of USD 1.51 Billion, a significant increase of 15% year-over-year (YoY). It also said that its operating income increased to USD 1.04 Billion, up by 7% YoY. In Q3 2021, the online payment firm debt stood USD 8.9 Billion while also mentioning that it has repurchased 1.27 million shares and returned USD 350 Million to shareholders.
On the future growth, the company said that it expects its revenue to fall between USD 6.85 billion and USD 6.95 billion in Q4 2020. This is a solid 12-14% growth for the next quarter. However, the expected growth didn’t align with analysts’ expectations, which was USD 7.24 Billion in revenue. The diminished quarter did put pressure on its stock price, tanking 5% in extended trading on Monday.
PayPal’s Executives’ statement on Earnings
“Our third quarter results show solid growth on top of a record year. The strength of PayPal’s two-sided platform and ubiquity in our core markets has set us up to grow at scale, expand our work with existing merchants and attract new partners. We’re thrilled that we are teaming up with Amazon to enable customers in the U.S. to pay with Venmo at checkout,” said PayPal’s President and CEO, Dan Schulman, in a statement. This partnership will allow more than 80 Million Venmo users to do payments for the products on Amazon.com.
The collaboration with Amazon will help the company to boost its revenue as PayPal is getting ready for the future where eBay won’t account for a considerable revenue to them. Currently, it generates 4% of its total revenue from the eBay marketplace. Earlier, eBay announced that it will slowly stop using PayPal services for checkout and will transition gradually to an Amsterdam-based payment company, Adyen. PayPal said it processed 4.9 billion transactions despite the decline in eBay marketplace transactions of 53%.
“Our third quarter performance demonstrates the strength of our diversified platform, our global reach, and the scalability of our business. The powerful and accelerating secular tailwinds of increasing ecommerce penetration and cash displacement have helped to advance our leadership position,” said John Rainey, CFO and EVP, PayPal Global Customer Operations.
Apart from its partnership with Amazon and expanding its relationship with Walmart, Booking.com, and GoFundMe, it completed the acquisition of Paidy, a buy now pay later (BNPL) service provider company in Japan. PayPal acquired Paidy for USD 2.7 Billion in cash. This acquisition is estimated to expand its reach in Japan and expose its services to a population of more than 125 million.
Over the year, PayPal has expanded its services in the UK. For instance, it introduced cryptocurrency buying and selling services in the UK. Last year, it launched similar cryptocurrency services in the US. “We are committed to continue working closely with regulators in the UK, and around the world, to offer our support — and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce,” said Vice President and General Manager for Blockchain, Jose Fernandez da Ponte, in a statement.
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