U.S. payment service provider PayPal Inc. reportedly reported results for fiscal year 2021 on May 6.
According to the report, the net revenue in the first quarter of 2021 was USD 6.033 billion, up 31% compared with USD 4.618 billion in the same period of last year, and up 29% excluding the impact of exchange rate fluctuations. Net income was $1.097 billion, up 1,206 percent from $84 million a year earlier.
PayPal’s first-quarter revenue and adjusted diluted earnings per share beat Wall Street analysts’ expectations, as well as its second-quarter and full-year 2021 outlooks, sending its shares up nearly 5% in after-hours trading.
According to the report, part of PayPal’s transaction revenue comes from the company’s crypto buying, selling and holding products. The payments giant also added 14.5 million active accounts, down from 16 million in the previous quarter. (The company does not include crypto payments in its total payments.)
PayPal has previously reported that customers who buy cryptocurrencies through the platform log in to PayPal twice as often as they did before buying cryptocurrencies. In addition, PayPal completed the acquisition of Curv, an encryption security company, in April and partnered with Coinbase to allow Coinbase users to purchase cryptocurrencies through PayPal accounts.
Then on PayPal’s first-quarter 2021 investor earnings call, the company’s CEO argued that cryptocurrency assets are building a fairer and more inclusive financial system. In the wake of PayPal’s successful embrace of crypto assets, much of the call focused on the company’s recent and future plans for digital assets.
Financial Performance and Operating Indicators:
For the quarter ended March 31, PayPal’s net income was $1.097 billion, up 1,206 percent from $84 million a year earlier. Diluted earnings per share were $0.92, up 1,200% from $0.07 in the same period last year. Excluding certain one-time items (not GAAP), PayPal reported adjusted net income of $1.455 billion in the first quarter, up 85% from $786 million in the year-earlier period. Adjusted earnings per share were $1.22, up 84 per cent from $0.66 a year earlier and beating analysts’ expectations. On average, 38 analysts had expected PayPal to earn $1.01 a share in the first quarter, according to Yahoo Finance.
Net profit for the first quarter of the PayPal was US6,033 million, up 31 per cent from the previous year’s close of US4,618 million, and the impact of currency movements was 29 per cent for the year, beating analysts’ expectations.
Paypal’s total payments (TPV) in the first quarter was $285.447 billion, up 50% from $190.567 billion in the same period last year, and up 46% from the same period last year, excluding the impact of currency changes.
PayPal’s total operating expenses in the first quarter were $4.991 billion, compared with $4.22bn a year earlier.
PayPal made an operating profit of $104.2 billion in the first quarter, compared with $398 million in the same period last year. Operating margin was 17.3%, up 865 basis points from 8.6% in the same period last year.
PayPal added 14.5 million net active accounts in the first quarter, up 21% from the same period last year, bringing its total number of active accounts to 392 million. In the first quarter, PayPal handled 4.4 billion transactions, up 34 percent from a year earlier.
PayPal expects net revenue to reach $6.25 billion in the second quarter of fiscal 2021, up 19% year-over-year and up 17% year-over-year excluding currency fluctuations, beating expectations. Diluted earnings per share are expected to be $0.76, compared to $1.29 for the same period last year; Non-GAAP adjusted earnings per share are expected to be $1.12, up 5% from a year ago and also beating expectations.
For the full year of 2021, PayPal expects net revenue to reach $25.75 billion, up 20% year-over-year. Excluding the impact of currency fluctuations, the company expects net revenue to grow 18.5% year-over-year, slightly exceeding expectations. Diluted earnings per share are expected to be $3.33; Non-GAAP adjusted earnings per share are expected to come in at $4.70, up 21% from a year ago and also beating expectations.
PayPal expects to have between 52 million and 55 million net new active accounts for the full year of 2021, and expects total payments to grow 30% year-over-year.
For a long time, PayPal’s main revenue comes from transaction revenue. Take the data released in Q1 financial report as an example, its transaction revenue is about 5.6 billion dollars, accounting for 93% of the total revenue of 6 billion dollars. It can be said that transaction is completely the basic transaction of PayPal. In particular, PayPal’s track record is backed by eBay, and it cooperates closely with global e-commerce giants such as Alibaba. Its main business support is very stable.
After the earnings release, the mainstream analysts on Wall Street have significantly improved their ratings on PayPal, with 30 analysts giving strong buy ratings, which indicates that both the position of PayPal’s existing business and its developing service are highly regarded by the market.
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