PayPal/Samantha Lee/Business Insider
- PayPal just completed its “strongest year” ever achieving “record growth” according to CEO Dan Schulman.
- The company posted $1.57 billion in net income on $6.1 billion in revenues in its earnings results.
- PayPal expects to deliver revenue growth of over 20% throughout 2021.
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Shares of PayPal climbed on Thursday after the company announced a standout quarter, tripling profits amid the increasing adoption of digital payments.
PayPal posted a net income of $1.57 billion for the quarter that ended in December, more than tripling the $507 million it earned in 2019. The company’s GAAP earnings per share also jumped to $1.32 beating consensus estimates by $0.66 per share.
The San Jose, California-based company revealed a 23% increase in revenues, hitting $6.1 billion in the quarter, while adding 16 million net new active accounts to bring total accounts to 377 million.
“PayPal just completed the strongest year in our history achieving record growth in net new active customers, volume, revenue, operating income, earnings, and free cash flow,” said Dan Schulman President and CEO of PayPal in the quarterly conference call.
“Consumers and businesses of all sizes have embraced the new digital era, erasing the distinction between online and offline. A digital-first world is no longer our future, it’s our current reality,” Schulman added.
PayPal's quarterly report delivered, but the company's strong outlook may be helping to boost shares as well.
PayPal forecasted fiscal year 2021 revenues to reach $25.5 billion, beating consensus estimates and implying a steady growth rate of over 20%. The company also expects GAAP earnings per diluted share of approximately $0.70, compared to $0.07 in the prior-year period.
The online payments giant will continue to benefit from increased online shopping even after the pandemic, according to Dan Schulman, President and CEO.
"At the beginning of the pandemic consumers had no choice but to do all shopping online. Today, the vast majority of consumers state that post-pandemic they will continue to shop online at their current elevated levels because it is more convenient, easier, and saves time," Schulman said.
Another interesting point from PayPal's quarterly report came when Schulman discussed cryptocurrencies. The CEO said the current financial system is "antiquated" and that "transactions should be complete in seconds, not days."
"We are significantly investing in our new crypto, blockchain, and digital currencies business unit in order to help shape this more inclusive future," Schulman said.
PayPal moved into the cryptocurrency market back in October when the company announced it would begin allowing customers to pay with cryptocurrency in 2021 and partnered with industry startup Paxos.
Based on Wednesday's conference call, the cryptocurrency market is a big target for PayPal going forward. The company even said there will be a Venmo integration with crypto "within the coming months."
PayPal traded up 5.68%, at $251.90 during premarket hours on Thursday.