Another solid quarter from PayPal. Shares are up about 2% in AH trading as I write.
Payments giant PayPal is growing faster than what analysts were expecting, according to the latest numbers.
For the second quarter of 2017, PayPal brought in $3.14 billion in revenue, when analysts were expecting $3.09 billion. This is up 18.3% from last year.
Adjusting earnings per share (excluding one-time expenses) also beat Wall Street’s predictions, at 46 cents, instead of 43 cents.
…
The company also raised earnings guidance for the year, meaning the company is telling investors that it is on track to exceed its goals. They are expecting between $12.775 and $12.875 billion in revenue for the year.
Read more at https://techcrunch.com/2017/07/26/paypal-growing-faster-than…
From the press release:
“The accelerating and extensive scale of our two-sided global platform creates a strong foundation for PayPal’s growth, enabling consumers and merchants to transact in new contexts and across operating systems, technologies and platforms,” said Dan Schulman, President and CEO of PayPal. “Our strong results reflect PayPal’s transformation from a single product to a platform company, from a vendor to a strategic partner to both merchants and ecosystem players, and from a checkout option to an increasingly more central way for consumers to manage and move their money.”
…
Mobile-first product development focus is driving performance across PayPal’s business. PayPal processed $106 billion in TPV in the quarter. Approximately 34% of payment volume came through a mobile device and mobile payment volume increased 50% over the same period last year to approximately $36 billion. In addition, Venmo, the company’s social payments platform, processed $8.0 billion of TPV, growing 103% over the same period last year.
From https://investor.paypal-corp.com/releasedetail.cfm?ReleaseID…
Also today, PayPal announced new deals with Baidu and Bank of America. Will go into more detail later, but Baidu deal allows “Chinese consumers to pay with Baidu Wallet and PayPal at PayPal’s millions of merchants outside of China.” And here’s a quick excerpt from a separate BofA press release:
Bank of America [NYSE: BAC] and PayPal [NASDAQ: PYPL] today announced a strategic partnership that will soon enable Bank of America customers to transact with PayPal in stores and seamlessly link their Bank of America cards into PayPal.
The agreement will take effect immediately, with new experiences available to Bank of America customers in the first half of 2018 that will make it even easier for them to shop how, where and when they choose by leveraging the power and convenience of PayPal’s platform.
From https://investor.paypal-corp.com/releasedetail.cfm?ReleaseID…
Here are the numbers:
Revenues (millions) Q1 Q2 Q3 Q4
2014 1874 1983 1971 2193
2015 2137 2297 2258 2556
2016 2544 2650 2667 2981
2017 2975 3136
EPS (non-GAAP) Q1 Q2 Q3 Q4
2014 0.27 0.28 0.24 0.28
2015 0.29 0.32 0.31 0.36
2016 0.37 0.36 0.35 0.42
2017 0.44 0.46
Revenue Growth (billions)
2016 Q2 TTM Revenue = 10.01
2017 Q2 TTM Revenue = 11.76
YOY Revenue Growth = 17.5%, previous quarter 16.75%
EPS Growth (non-GAAP)
2016 Q2 TTM EPS = 1.40
2017 Q2 TTM EPS = 1.67
YOY EPS Growth = 19.3%, previous quarter 15.4%
Non-GAAP P/E (Check Current Price) = 58.79/1.67 = 35.2
1YPEG = 35.2/19.3 = 1.82
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 210M, +12% YOY
Payment transactions: 1.78B, +23% YOY
Payment transactions per active account: 32.3, +10% YOY
Total Payment Volume (TPV): 106.44B, +23% YOY
Transaction margin: 56.3%
Operating margin (non-GAAP): 21.0%
Venmo processed $8.0B TPV, +103% YOY
And here’s a look at the historic growth of those numbers:
# of Active Accounts (millions) Q1 Q2 Q3 Q4
2014 148 152 157 162
2015 165 169 173 179
2016 184 188 192 197
2017 203 210
Payment Transactions (millions) Q1 Q2 Q3 Q4
2014 918 930 972 1144
2015 1123 1161 1216 1428
2016 1414 1448 1512 1755
2017 1732 1775
Transactions Per Active Account Q1 Q2 Q3 Q4
2014 23 23 24 24.5
2015 25.2 26.1 26.9 27.5
2016 28.4 29.4 30.2 31.1
2017 31.7 32.3
TPV (billions) Q1 Q2 Q3 Q4
2014 53.676 56.736 58.184 66.039
2015 63.021 67.482 69.738 81.523
2016 81.056 86.208 87.403 99.348
2017 99.327 106.44
Transaction Margin (%) Q1 Q2 Q3 Q4
2014 65.0 65.7 63.1 63.5
2015 64.2 63.8 62.3 61.1
2016 60.4 59.8 58.7 57.7
2017 56.7 56.3
Operating Margin (%)(non-GAAP) Q1 Q2 Q3 Q4
2014 18.4 20.4
2015 22.1 22.6 19.9 20.8
2016 21.1 19.9 18.4 21.1
2017 21.6 21.0
That’s all I got. Will review the conference call sometime before the weekend is out.
Matt
Long PYPL
MasterCard (MA), PayPal (PYPL), Skechers (SKX) and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx