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What is happening?
Actions of PayPal Holdings Inc. (NASDAQ: PYPL) On Friday, the group recorded a nearly 10% rise at 11:15 am (EDT) after the company released third-quarter results better than those estimated by Wall Street analysts.
The online payment company reported non-GAAP earnings of $ 0.58 per share, better than consensus estimates of $ 0.54 per share in the third quarter. On its platform, from its core PayPal business to its rapidly growing mobile application, Venmo, PayPal Holdings is growing like a wildfire.
So what
PayPal is benefiting from the growth in the number of accounts as well as the growth of the activities of its existing users. Active accounts increased to 254 million euros, up 15% from the previous year. The company said its average active account had participated in 36.5 transactions in the third quarter, up 9.5% from one year to the next. The combination of account growth and account activity resulted in a 27% increase in the number of payment transactions from one year to the next.
Source of the image: PayPal.
PayPal has also revealed positive developments in its desire to monetize its Venmo users. In its prepared teleconference remarks, the company said 24 percent of its users "have now participated in a monetizable action," up 17 percent sequentially and 13 percent higher in May.
Venmo's growth has only been extraordinary. During the quarter, total service payments reached $ 16.7 billion, up 78% from the same period last year. Incredibly, growth has not slowed significantly this year. In the first and second quarters of 2018, the total volume of Venmo payments increased by 80% and 78%, respectively, from one year to the next.
Now what
Investors can look forward to a busy fourth quarter, which has always been the strongest period for PayPal thanks to seasonal buying habits.
It is important to note that PayPal has implemented a number of pricing activities that will come into effect in the fourth quarter, including an increase in "instant transfer" charges on the Venmo platform. Users can pay an amount equal to 1% of the transfer amount for the funds to be transferred from the application to an eligible debit card within 30 minutes, faster than the standard (free) bank transfer, which takes 1 to 3 working days.
Everything indicates that PayPal, which will turn 20 in December, still has years of growth to come.
Jordan Wathen does not own any of the shares mentioned. The Motley Fool owns shares and recommends PayPal Holdings. The Motley Fool offers the following options: short January 2019 calls $ 82 on PayPal Holdings. Motley Fool has a disclosure policy.
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