PayPal Shares Gained 5.5% Thanks to Robust Results

On Wednesday, shares of PayPal added as much as 5.5% in extended trading after reporting first-quarter earnings that were stronger than expected. The company’s revenue was $6.03 billion vs. $5.90 expected by Refinitiv.

Net profit in the first quarter of the year rose to $1.10 billion from $84 million a year earlier. PayPal added 14.5 million net new active accounts and the total number of users reached 392 million.

Revenue grew 31% year over year in the quarter that ended on the last day of March, according to the statement released by the company. In the year-ago quarter, the coronavirus pandemic fomented a surge in online shopping. It helped to reach record payment volume for the quarter as well as for the year. The total payment volume reached $285 billion vs $265 billion expected.

In regards to guidance, for the second quarter the company sees adjusted earnings of $1.12 per share on $6.25 billion in revenue. Analysts expected $1.20 in adjusted earnings per share on $6.16 billion in revenue. When it comes to the full year, PayPal expects revenue to grow 20% to $25.75 billion. The mobile payments company called for adjusted earnings to grow 21% to $4.70.

Excluding the after-hours move, PayPal stock rose about 5.9% since the start of the year as of May 6. The Nasdaq rose about 5.5% during the same period of time.

PayPal and cryptocurrencies

Cryptocurrencies also helped to reach great results. The company’s CEO Dan Schulman pointed to cryptocurrency as a key growth engine for PayPal. He stated that the half of crypto users open their PayPal app on a daily basis, suggesting that it increases engagement for customers.

The mobile payments company made a huge push into crypto in the last half a year. Users in the U.S. have the ability to buy, sell, and check out with cryptocurrencies. The company has a network of 26 million retailers. Its crypto ambitions have positioned the company as a rival to the country’s most popular cryptocurrency exchange Coinbase.

PayPal also announced plans to introduce a next-generation digital wallet in the third quarter. The company’s CEO described the product as an all-in-one, personalized app. The new product will provide increasingly customized and unique shopping, financial services, and payment experiences.