Schulman told MarketWatch that PayPal was seeing better-than-expected traction for its redesigned app, which focuses on a broader set of financial-services tools. PayPal had 426 million active accounts as of the end of 2021. The TPV metric captures the dollar value of transactions running through PayPal’s platform. The company saw $340 billion in fourth-quarter total payment volume, slightly below the FactSet consensus, which was for $345 billion. The latest quarterly revenue performance brought PayPal’s annual total to $25.4 billion for 2021, up from $21.5 billion a year earlier. A year prior, PayPal logged quarterly revenue of $6.1 billion. PayPal’s revenue came in at $6.9 billion for the fourth quarter, matching the FactSet consensus. On an adjusted basis, PayPal earned $1.11 a share, up from $1.08 a share a year earlier, while the FactSet consensus was for $1.12 a share. The payment-technology company reported fourth-quarter net income of $801 million, or 68 cents a share, down from $1.56 billion, or $1.32 a share, a year prior. “If you can look beyond the eBay transition, which we have five more months to go through… and you look past the lapping of the very high quarters of growth that we had last year, you can see a very consistent and strong story about the core underlying business,” Schulman told MarketWatch. PayPal’s count of transactions per account also “accelerated dramatically.”Įxecutives at PayPal remained upbeat about the long-term potential of the business. “We see notable positives,” he wrote, including that growth in total payment volume, when excluding eBay and peer-to-peer volume, accelerated in the fourth quarter. Mizuho analyst Dan Dolev said that the report constituted “a return to earth” after PayPal’s strong surge earlier in the pandemic, but he also wondered if the company’s disappointing numbers “ a hidden bottom.” “We believe part of this can be attributed to a greater pull-forward than expected in customer adds over the last two years and a strategic shift towards focus on ARPU over adding NNAs, but think investors may be more concerned with competitive dynamics potentially being more severe and the company’s longer-term growth targets,” he wrote. Wolfe Research analyst Darrin Peller wrote that while he “saw some downside risk to guidance” heading into the report, “the magnitude was materially more pronounced” as the account, revenue, and earnings guidance fell below already-lowered expectations. “We could increase our spend and accelerate our net-new-active trajectory however, we believe there are better ways to achieve our financial results.” “To be very clear, this is a choice on our part,” he continued. For 2022, the company expects it will add 15 million to 20 million active accounts the FactSet consensus implied an increase of more than 50 million. While the company previously gave a forecast for 750 million active accounts in the medium term, that outlook is no longer “appropriate,” Rainey said. “So our view is spending money on lower-value that are not engaged in the base becomes an increasingly expensive proposition over time and does nothing for our revenue growth,” he said. The company previously ran “incentive-based programs” meant to get lapsed users to “reengage” with PayPal’s platform, but these largely failed to drive sustained usage, Chief Executive Dan Schulman said on the earnings call. The company plans to start providing metrics on average revenue per user (ARPU) to show how user trends are impacting the financials. The company also projects first-quarter adjusted earnings per share of about 87 cents, while the FactSet consensus is for $1.16.Īdditionally, PayPal is changing its strategy when it comes to user growth and retention, a move that will reduce its outlook for growth in net-new-active accounts as the company shifts its focus toward “higher-value” accounts that are more engaged with the PayPal platform. The FactSet consensus calls for $6.76 billion in quarterly sales, which would be up about 12% from the $6.03 billion that PayPal reported a year earlier. Looking to the first quarter, PayPal anticipates revenue growth of about 6%, or 14% when excluding impacts from eBay. Which has been migrating volume away from PayPal For the first half of the year, the company also predicts continued headwinds from eBay Inc.
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