PayPal has announced that a surge in e-commerce transactions and new accounts has driven quarterly profits 86% higher. The company announced it will continue to support additional investments in mobile-payment tools.
PayPal says it expects the trends to continue and that it now expected earnings per share for the full year to increase about 25% on 22% revenue growth.
Three months ago, the company had withdrawn full-year guidance because of uncertainty about the economic consequences of the COVID-19 pandemic.
“We have more confidence in the elevated e-commerce trends we are seeing,” says John Rainey, Chief Financial Officer.
What in late April felt like a potentially short-lived surge of panic buying supported by government stimulus checks has become a “durable and profound behavioural shift,” Rainey says.
The company processed $222 billion in payments over the period, up 30% from a year earlier, adjusted for foreign exchange. The rate of payment growth compares with a year-earlier increase of 26% that had slowed to 19% in Q1 when the pandemic broke and retail spending collapsed broadly.
The company added 21.3 million accounts during the quarter, up 137% from a year earlier.The company said it would invest $300 million more this year, mostly on its mobile phone app that displays QR codes so that people can go into stores and pay without touching anything.
Net income increased to $1.53 billion, revenue increased 25% to $5.26 billion, topping the average analyst estimate of $5.0 billion.
The news lifted the stock as much as 6% in after-hours trading. The stock, seen as an e-commerce investment play, was already up 44% since PayPal last reported results on May 6.