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PayPal Fails to Meet Q2 2021 Earnings Expectations, PYPL Stock Down

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by Daria Rud · 3 min read
PayPal Fails to Meet Q2 2021 Earnings Expectations, PYPL Stock Down
Photo: PayPal

According to PayPal’s Q2 2021 earnings report, the company has seen a 19% growth in net revenue year over year in the quarter that ended June 30, reaching $6.24 billion. However, it falls short of the $6.27 billion expected. 

Worldwide online payments provider PayPal Holdings Inc (NASDAQ: PYPL) has joined the ranks of companies that released their Q2 2021 earnings reports. It turned out that PayPal has not managed to meet analysts’ expectations. Some of the results are quite impressive, but some numbers came weaker than last year’s.

PayPal Q2 Earnings: Details

According to PayPal’s Q2 2021 earnings report, the company has seen a 19% growth in net revenue year over year in the quarter that ended June 30, reaching $6.24 billion. However, it falls short of the $6.27 billion expected.

Further, PayPal’s earnings per share came at $1.15, up 7% from a year earlier. Here, the company beat the $1.12 analysts expected.

PayPal’s total payment volume (TPV) also increased 40% to $311 billion, compared to $222 million in Q2 2020. Meanwhile, analysts projected a total payment volume of $295.2 billion.

Operating income for the period totaled $1.13 billion compared to $951 million for the same period a year ago.

Further, PayPal has seen incredible growth in the number of its clients. In particular, it added 11.4 million net new active accounts worldwide, bringing the total number of its active accounts to 403 million. The surge resulted from the company’s entrance into the crypto industry last year. It started allowing users in the US to buy, sell, and check out with cryptocurrencies.

Dan Schulman, PayPal’s President and CEO, commented:

“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 annualized TPV run rate of approximately $1.25 trillion. Clearly, PayPal has evolved into an essential service in the emerging digital economy.”

Other PayPal’s achievements included several strategic initiatives and business developments. It launched PayPal Zettle in the US, enabling small businesses to seamlessly sell across in-person and online channels, expanded ‘Buy Now, Pay Later’ offerings in key international markets, including Australia Germany, as well as provided full access to buying, selling, holding cryptocurrencies to Venmo users.

Q3 2021 Forecast

For the upcoming quarter, PayPal is expecting $1.07 adjusted earnings per share on revenue of between $6.15 billion to $6.25 billion.

For the rest of 2021, PayPal expects earnings to grow at a rate of about 20% and EPS to reach $ 3.49 per diluted share. The company also expects to add 52 to 55 million new clients.

Dan Schulman stated:

“This year we expect to process approximately $1.25 trillion of payments volume. We expect to grow revenue by 20% more than offsetting pressure to revenue growth of approximately 7 points from eBay and lapping our strongest year with 22% revenue growth.”

PayPal Stock Drops After Hours

Following the Q2 2021 earnings report, PayPal stock plunged. It closed at $301.98. but after hours, it lost 5.29% to reach $286.00.

PayPal’s market cap is $352.98 billion. Year-to-date, PYPL stock is 28.94% up.

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Daria Rud
Author Daria Rud

Daria is an economic student interested in the development of modern technologies. She is eager to know as much as possible about cryptos as she believes they can change our view on finance and the world in general.

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