Shares of PayPal fell as much as 7% after the company reported disappointing quarterly results. The company missed revenue expectations, as the pandemic-driven online shopping boom started to slow down. Although PayPal showed strong growth, with a 25% increase in active accounts and a 19% rise in total payment volume, investors were concerned about the declining growth rate compared to previous quarters. Additionally, the company’s decision to acquire Japanese buy now, pay later firm Paidy for $2.7 billion raised concerns about the potential impact on profitability. Despite the setback, PayPal remains optimistic about its long-term growth prospects..
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PayPal shares were down 6.7% in after-hours trading. PayPal headquarters in San Jose, Calif.,
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PayPal Holdings
shares were falling in late trading Wednesday after the payments platform’s results failed to impress Wall Street.
The company reported non-GAAP earnings of $1.16, edging out expectations at $1.15 a share, according to FactSet. Revenue of $7.3 billion topped expectations at $7.27 billion. Total payment volume of $376.5 billion was ahead of estimates at $368.87 billion.
PayPal shares (ticker: PYPL) were down 6.7% in after-hours trading.
Jefferies analyst Trevor Williams, who rates the stock at Hold with a $75 price target, believes investors are homing in on a decline in transactional gross profit that was below expectations. He also notes the transactional take rate declined to 1.74%, compared with expectations of 1.79%.
For the third quarter, the company expects revenue to hit $7.4 billion. It forecasts non-GAAP earnings to be between $1.22 a share and $1.24 a share. The FactSet consensus forecasts recently sat at $1.21 a share and $7.33 billion, respectively.
“We have high confidence that our business is on the right path and we’re seeing clear signs that the investments we’ve made are paying off,” CEO Dan Schulman said in the earnings release.
Write to Connor Smith at [email protected]
PayPal’s shares dropped 6.7% in after-hours trading following the release of its second-quarter results. The company reported non-GAAP earnings of $1.16 per share, slightly beating expectations, and revenue of $7.3 billion, exceeding expectations by a small margin. However, investors were concerned about a decline in transactional gross profit, which fell below expectations, and a lower-than-expected transactional take rate. PayPal expects third-quarter revenue to reach $7.4 billion and forecasts non-GAAP earnings between $1.22 and $1.24 per share. The company remains confident in its business and sees positive results from its investments.
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