PayPal Holdings Inc Q3 2017 Earnings Send Shares Higher After Hours

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PayPal Q3 2017 earnings were released after closing bell tonight, and the company reported non-GAAP earnings of 46 cents per share on $3.239 billion. Analysts had been looking for 43 cents per share in adjusted earnings on $3.17 billion in revenue. In the year-ago quarter, PayPal reported 35 cents per share in earnings on $2.667 billion in revenue.

On a GAAP basis, PayPal Q3 2017 earnings came in at 31 cents per share, a 17% year-over-year increase from last year’s 27 cents per share. The company’s GAAP operating margin came in at 13.1%, while its non-GAAP operating margin was 19.9%.

PayPal added 8.2 million active customer accounts as the number of net new active accounts grew 88%. The company had 218 million active customer accounts, including 17 million merchant accounts. It processed 1.9 billion payment transactions, a 26% increase from the year-ago quarter. On average, there were 32.8 transactions per active account on a trailing 12-month basis, a 9% increase.

Total payment volume rose 30% on a reported basis or 29% on a currency-neutral basis year over year to $114 billion. The FactSet consensus total payments volume implied only a 25% increase. PayPal said about 35% of the payments it processed were completed on a mobile device, and mobile payment volume rose 54% year over year, reaching about $40 billion.

Person-to-person volume increased 47% to $24 billion and made up about 21% of total purchase volume. Venmo processed about $30 billion in total payment volume in the last 12 months, a 106% year-over-year increase. During the third quarter, Venmo’s total payment volume grew 93% from the year-ago quarter to about $9 billion.

For the full year, PayPal projects a 20% to 21% increase on a currency-neutral basis) in revenue, which would bring it to between $12.92 billion and $12.98 billion. The company projects GAAP earnings to be between $1.34 and $1.36 per share and non-GAAP earnings to be between $1.86 and $1.88 per share for the full year. For the fourth quarter, the company looks for revenue to be between $3.57 billion and $3.63 billion, an increase of 20% to 22% on a currency-neutral basis. It looks for GAAP earnings of 37 cents to 39 cents per share and non-GAAP earnings of 50 cents to 52 cents per share.

Following the PayPal Q3 2017 earnings release, the company’s stock surged by more than 3%, rising as high as $70.30 per share before retreating slightly.

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