Some Improvement for PayPal As a Stripe Takeover Offer Looms – Digital Transactions
The June quarter was a busy one for PayPal Holdings Inc., what with a new chief executive settling in and news about a possible takeover of the company by rival payments platform Stripe. But PayPal nonetheless posted some encouraging results, including 2% growth in branded checkout, a business line whose sluggish performance has dogged the company in recent years.
As might be expected, PayPal’s boss offered only spare comment on the $53 billion offer from Stripe and private-equity firm Advent International, news of which emerged earlier this month. Chief executive Enrique Lores indicated only that PayPal remains “open and objective in evaluating opportunities.”
Now, though, efforts by Lores and other executives to reinvigorate a sluggish PayPal appear to be showing some positive results. The company’s adjusted earnings per share for the quarter reached $1.38, beating Wall Street’s consensus estimate, pegged at $1.28, while total payment volume exceeded analysts’ estimates, growing 10% to $486.4 billion. Revenue, totaling $8.68 billion, was up 4.75%, rising slightly above market expectations and reversing a 4% drop in the first quarter.
Lores, a former HP executive, took over as CEO in March, succeeding Alex Chriss, who had struggled trying to add momentum to the company’s key branded-checkout service. This is now a high priority for a busy Lores, who has overseen the introduction of a passkey service for smoother checkouts and robust account growth for the company’s Venmo debit card.
Branded checkout is key for PayPal as it indicates occasions when consumers explicitly choose PayPal to handle their payment. Branded-checkout’s 2% rise in payment volume for the quarter was level with the first quarter. Active accounts were flat, at 439 million, while payment transactions per active account rose 4% to 60.
For the quarter, operating income slipped 5% to $1.43 billion, while net income totaled $1.1 billion, down 12.5% to $1.1 billion.
