The Covid-19 pandemic has boosted e-commerce and online shopping which consequently has also led to boost in digital payments which has benefitted online and digital payments firm PayPal Holdings Inc as it reported its strongest first quarter profits on record and comfortably beat estimates of analysts.
The first quarter performance of the company was in addition to its equally strong performance for 2020 which also resulted in payment volumes for the company reaching record levels. .
In the first quarter, a total of $285 billion in payments was processed by the company which was 50 per cent higher than in the same period a year ago, said the San Jose, California based PayPal. It also managed to add 14.5 million net new active customers.
“Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” company’s Chief Executive Officer Dan Schulman said in a statement.
The Covid-19 pandemic has significantly benefitted the company – just like many others, as it gained form the growing trend of people using its payment services for making payments for online shopping and for paying bills while they were forced to stay indoors because of movement restrictions imposed to prevent spread of the pandemic.
The top boss of Visa Inc, the largest payment processor of the world, said last month that the company was emerging from the Covid-19 pandemic because of a growth in online shopping.
There was a 63 per cent growth in transaction processing during the first quarter, at $51 billionm, by Venmo, PayPal’s app that allows individuals in the United States to send each other money.
For the entire year of 2021, the company now expects to add between 52 and 55 million net new active accounts, PayPal also said, while there is expected to a 30 per cent growth in total payments volume on a spot and forex neutral basis.
A possible addition of about 50 million active users in 2021 was forecast by the company in February. The company also forecast its expected annual revenue and diluted earnings per share to be more than the expectation of analyst, according to Refinitiv IBES data.
The company reported net income of $1.22 per share for the recently completed latest quarter which comfortably beast analysts’ average estimates of $1.01 per share. The company also reported a 31 per cent rise in its revenue which was also higher than what analysts were expecting.
Rival Square Inc will report quarterly results on Thursday.
(Adapted from USNnews.com)