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Last week, PayPal Holdings Inc PYPL issued its third quarter results that showed its turnaround efforts are on track. PayPal also announced it finally filled its CFO vacancywithJamie Miller, aformer CFO at EY.With the payment industry getting crowded with Apple Inc AAPL and Block Inc SQ , among others, PayPal stopped being the industrys darling. Although it still hasnt restored its glory, it showed solid fundamentals and its new CEO,Alex Chriss, told investors what they wanted to hear asshares were up 4.5% to $53.95 in after-hours trading.PayPal Topped Estimates With Third Quarter Results
PayPal reported that adjustedearningsrose20%YoY to$1.30 per share,comfortably exceeding FactSets estimate of$1.23 per shareas revenue expanded 8% YoY to$7.4 billion, which was in line with expectations.
On a currency-adjusted basis, total payment volumeexpanded13% to $387.8 billionbut total active accounts contractedby four million to 428 million.
PayPal also raised its full year guidance.
PayPalrose its prior outlook as it guided for2023GAAPearningsof$3.75 per share, topping theconsensus estimateof$3.57, while on a non-GAAP basis, earningsare expected to rise21% to $4.98 per share,slightly toppingforecasts.Previously, it guided forfull-year GAAP earnings of $3.49 and non-GAAP of $4.95.PayPal Felt The Pain From The Rise Of Apple Pay
The latest reported quarter was crucial forthe once digital payment leader that is facing an increasingly intense competition and macroeconomic challenges. Although it used to bea darling of the payments space, PayPalsfortuneschanged dramatically over thelast two years. With Apple getting deeper into the payments space, PayPal got threatened. The rise of Apple Pay has certainly cast a shadow over PayPals growth. But even though Apple has deep pockets and innovative technology, a study from August fromserviceMerchant Machine,showed that Apple Pay it is still behind Visa Inc V , MasterCard Incorporated MA , PayPal and American Express Company AXP , but the research is based on the number of transactions as opposed to total dollar values.Moreover, whereApple Pay is reportedly the fifth most popular payment method in the world, Amazon.com Inc AMZN isfurtherbehind it in sixth place.Loading… Loading… Loading… Meanwhile, Visa Reported Its Revenue Rose
At the end of October, Visa Inc V topped analyst predictions as consumer spending stayed strong. Visa reported a net income rose 19% YoYto $4.7 billion, or $2.27 per share.Visa posted a net revenueof$8.6billion,topping Visible Alphas estimate of$8.5 billion.Mastercard Expects Weaker Revenue Growth
Due to fears of economic slowdown, Mastercard guided for a weaker-than-expected net revenue growth for the undergoing, fourth, quarter. Despite a disappointing quarter as growth modestly decelerated but still stayed healthy,Mastercard CEOMichael Miebachemphasized on strong points of the third quarter, claiming that with the companys well-diversified business model, Mastercard is set to capitalize on substantial opportunities in payments and services, despite a challenging macroeconomic and geopolitical climate. Mastercard reported its third quarter net revenue grew 14% YoY to$6.5 billionand due to resilient spending, Mastercard earnedanet income of $3.2 billion,posting an adjusted profit of$3.39 per share, topping estimates of$3.21 per share.
The latest results from the digital payments space shows consumer spending remained resilient in light of recent challenges but this does not have to continue being the case as fears of a looming recession are still in the air. But PayPal remains focused on growing ahigh-quality customerbase and profitable revenue, with the latest results suggesting it is getting back on track.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.Loading… Loading… Loading…