PayPal (NASDAQ:PYPL) share price falls on profit decline

Here's how PayPal fared following its latest quarterly results…

sad woman sitting with shopping bags

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Paypal Holdings Inc (NASDAQ: PYPL) share price has seen better days after the company released its second-quarter results.

Shares in the online payments company are moving to the downside following the result. At the time of writing, the PayPal share price is down 5.3% to US$286.00 in after-hours trade.

Not a good surprise for the PayPal share price

There were two sides to PayPal's second-quarter results this morning. Unfortunately, it appears the general market consensus is to focus on the negative one.

On the positive side of the coin, PayPal beat analyst estimates with adjusted earnings per share of US$1.15, versus US$1.12 expected. The company onboarded an additional 11.4 million net new active accounts, taking total active accounts to 403 million.

More accounts helped PayPal achieve a 17% year-over-year (YoY) increase in revenue to US$6.24 billion. Additionally, the company lifted its total payment volume by 40% to $311 billion.

Commenting on this performance, president and CEO Dan Schulman said:

On the heels of a record year, we continued to drive strong results in the second quarter, reflecting some of the best performance in our history. Our platform now supports 403 million active accounts, with an annualised TPV run rate of approximately US$1.25 trillion. Clearly PayPal has evolved as an essential service in the emerging digital economy.

On the flip side, revenue came in softer than analysts were anticipating. Another negative for the PayPal share price was earnings per share (EPS) declining by 23% YoY to US$1.00. This was followed up with disappointing guidance for the next quarter.

PayPal expects diluted EPS for Q3 to come in at US$0.68, compared to US$0.86 in the prior year.

Continued push into BNPL

In regards to strategic initiatives, PayPal expanded its buy now, pay later (BNPL) offerings across international markets, including Australia.

The company's Pay in 4 offering launched on Aussie shores during the quarter, putting a dent in the share prices of local competitors such as Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P). However, the US payments giant revealed this month that it would not be charging late payment fees.

Motley Fool contributor Mitchell Lawler owns shares of AFTERPAY T FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, PayPal Holdings, and ZIPCOLTD FPO. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended PayPal Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »