PayPal Reports Solid Q2, Visa Partnership

PayPal reported in-line EPS, a slight beat on revenue, and a Visa partnership this afternoon after the bell. Via TechCrunch:

PayPal reported earnings after the bell on Thursday, showing $2.65 billion in revenue for the quarter, when analysts were expecting $2.6 billion. Adjusted earnings per share was also in line with Wall Street estimates at 36 cents.

Shares ticked up 2% in after-hours trading, in part because of a Visa announcement that was timed with earnings. The new partnership with Visa, emphasized that they will be collaborating more and will make it easier for customers to move money from their PayPal account to their bank accounts using their Visa debit card. The partnership also means that PayPal digital wallet payments will be accepted at retail locations that facilitate Visa contactless payment transactions.

“Our agreement with Visa enhances our capabilities, offers the potential to establish new contexts for our consumers and merchants, and lays the foundation for additional partnerships,” said PayPal CEO Dan Schulman, in a statement.

Read the entire article at https://techcrunch.com/2016/07/21/paypal-ticks-up-5-on-earni…

Here’s how their numbers are looking:

PayPal Inc.


Revenues (millions)			Q1		Q2		Q3		Q4	
2014					1874		1983		1971		2193	
2015					2137		2297		2258		2556
2016					2544		2650

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

Revenue Growth (billions)
2015 Q2 TTM Revenue = 8.598
2016 Q2 TTM Revenue = 10.008
Year Over Year Revenue Growth = 16.4%, previous Q 16.55%

EPS Growth
2015 Q2 TTM EPS = 1.13
2016 Q2 TTM EPS = 1.40
Year Over Year EPS Growth = 23.9%, previous Q 24.8%

P/E (Check Current Price) = 40.13/1.4 = 28.66

1YPEG = 28.66/23.9 = 1.2

PayPal Metrics

Here is a look at some of PayPal’s other important metrics growth:

of active accounts: 188 million, +11% YOY

Payment transactions: 1.448 billion, + 25% YOY
Payment transactions per active account: 29.4, +13% YOY
Total Payment Volume: $86.208 billion, +28% YOY
Transaction margin: 59.8%

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

Payment Transactions (millions)		        Q1		Q2		Q3		Q4
2014						918		930		972		1144
2015						1123		1161		1216		1428
2016						1414		1448

Payment 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

Total Payment Volume	(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

Transaction Margin (percentage)		        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

Sometime over the next few days (by this weekend for sure) I will look over their conference call notes and report back. All in all, looks like another solid quarter from PayPal.

Matt
Long PYPL
MasterCard (MA), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx

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