Payment processor PayPal Holdings Inc, spun off from eBay Inc reported quarterly revenue slightly below analysts’ expectations as a strong dollar hurt its transaction volumes in China and Europe. EPS topped Street views for 29 cents, ex items, but sales just missed, and EPS guidance fell short of views. The company also continued to accelerate its lead in mobile payments, processing 345 million transactions, an increase of 38%. Shares fell sharply after hours.
Advertisement
Now single, PayPal will have to demonstrate it can capture new users for its online and mobile payments service beyond eBay.
(Nasdaq:PYPL) today announced results for the third quarter ended September 30, 2015, demonstrating PayPal’s strong start as an independent, public company.
Investors are paying attention to the company’s take rate as an alternative metric to the total volume of payments.
The company said it gained market share during the third quarter with a 27% increase in total payment volume on a currency neutral basis, bringing it to $70 billion. The downside of that strategy went on display when Square disclosed its money-losing relationship with Starbucks Corp.
Mr. Schulman, formerly an American Express executive, reached a deal in July to acquire Xoom, a remittance company, for almost $900 million and has expanded features like PayPal’s single-click checkout service to new geographic markets. The company’s operating margin was 14.6 per cent in the quarter compared with 13.8 per cent a year earlier. GAAP net income for the quarter was $301 million or $0.25 per diluted share, and non-GAAP net income was $377 million or $0.31 per diluted share, driven primarily by growing relevancy with its customer base.
PayPal has lent more than US$1 billion to small businesses via its Working Capital program since the program’s inception in 2013. Square, by comparison, has issued more than $300 million.
For the full year, PayPal maintained its 2015 earnings forecast of $US1.23 a share to $US1.27 a share, excluding certain items.
Advertisement
“We are much more than a button on a website”, Schulman said.
