Paypal Holdings Inc Rises After Q1 Earnings Beat Estimates

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PayPal released its latest earnings report after closing bell tonight, posting adjusted earnings of 37 cents per share and $2.54 billion in revenue. Analysts had been expecting earnings of 35 cents per share and $2.5 billion in revenue. This is the company’s third earnings report since separating from eBay. In the previous quarter, PayPal posted earnings of 36 cents per share and $2.6 billion in revenue.

PayPal takes market share

PayPal’s GAAP earnings climbed 43% to 30 cents per share.

The company added 4.5 million active customer accounts during the quarter to exit March with 184 million active accounts. It processed 1.4 billion transactions, representing a 26% increase. PayPal recorded 28 transactions per active account on a trailing 12-month basis, which is a 12% increase. Total payment volume climbed 31% on a currency neutral basis to $81 billion.

PayPal said tonight that it also gained market share and added some large new merchants like Panera Bread, Air France and others to its list of partners. Merchant total purchase volume grew 39% on a currency neutral basis, and merchant transactionsmade up 82% of total purchase volume.

Canaccord Genuity analysts said before tonight’s print that they believed eBay’s solid gross merchandise volume growth would benefit PayPal as the auction website is still the payment services platform’s biggest merchant partner by a long shot, they said. They also mentioned anecdotal comments about continued merchant adoption of the payment platform, although they were concerned about a decline in take rate as a result of a greater mix of bigger merchants. They pointed to what they thought was ambiguous guidance from management that seemed to indicate that the take rate would fall this year.

PayPal management reaffirms full-year guidance

PayPal guided for second quarter earnings of 34 cents to 36 cents per share, which is right in line with consensus at 35 cents. Management expects revenue to be between $2.57 billion and $2.62 billion, which is strong compared to the consensus of $2.57 billion. They also reiterated their full-year guidance for net revenues to grow by 16% to 19% and GAAP earnings to be between $1.09 and $1.14 per share. They expect non-GAAP earnings to fall between $1.45 and $1.50 per share.

Shares of PayPal surged in after-hours trades, climbing by as much as 3.95% to $41.59.

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