PayPal comes in light on revenue, profit drops from last year
PayPal shares fell as much as 8% in extended trading on Wednesday after reporting second-quarter earnings that were weaker than analysts had expected.
Here's how the company did versus expectations:
Second quarter net profit dropped 23% from a year earlier to $1.18 billion, and the company added 11.4 million net new active accounts, for a total of 403 million active accounts.
Revenue grew 19% year over year in the quarter that ended June 30, according to a statement. The pandemic fomented a surge in online shopping, helping to drive record payment volume in 2020.
Total payment volume grew 40% to $311 billion, while the Venmo app, which began supporting cryptocurrency services in April, saw payment volume grow 58% to $58 billion.
The mobile payments company made a big push into crypto in the last year, allowing users in the U.S. to buy, sell, and check out with cryptocurrencies.
With its network of 26 million retailers, PayPal's crypto ambitions have positioned the company as a rival to Coinbase, the country's most popular crypto exchange.
PayPal says that eBay is transitioning off of its platform, which is causing a "short-term drag" on growth but says the eBay transition will be completed by the end of the third quarter.
With respect to guidance, for the third quarter PayPal sees adjusted earnings of $1.07 per share on revenue of between $6.15 billion to $6.25 billion. Analysts surveyed by Refinitiv had expected $1.14 in adjusted earnings per share on $6.44 billion in revenue.
Excluding the after-hours move, PayPal stock has risen about 29% since the start of the year, while the Nasdaq is up more than 14% over the same period.
Additional reporting by Kate Rooney.
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