Paypal (NASDAQ: PYPL) reported its Q22020 earnings on 29th July 2020. The pandemic may have caused havoc across the economy. However, Paypal’s demand surged during the last few months as its revenues and earnings topped estimates by some margin. The revenue for the quarter was $5.26 billion, a 25% increase on a Y-o-Y basis. Analyst estimates pegged the revenue to $4.99 billion. Earnings per share, on the other hand, came in at $1.07, a staggering growth of 49% on a Y-o-Y basis. The EPS number beat analyst estimates of $0.87 as well.
A key performance metric known as Total Payment Volume or TPV grew 29% Y-o-Y to $222 billion. The company also added 21.3 million new accounts during the quarter. That number was greater than the total addition for the entire year 2016. The pandemic accelerated the shift of businesses from offline to online. This trend was evident in the fact that Paypal added 1.7 million new merchant users during Q22020.
Commenting on the strong PYPL earnings, John Rainey, CFO, Paypal Holdings, said “Transaction revenue grew 30% on a currency-neutral basis, the strongest growth we’ve ever reported. Growth accelerated 13-points year over year, and 15-points sequentially.” He further added, “We’ve seen the strongest and most encouraging new customer volume and engagement trends in our history.”
The company believes that customers are enthusiastically using multiple solutions on the Paypal platform like Paypal credit card, Paypal app Venmo, direct deposit, etc. There is a trend, especially among millennials, of increasingly utilizing Paypal for many aspects of the day-to-day financial life.
PYPL stock price closed at $184.6 on 29th July 2020, up 5.95% for the past month.