Global payments provider PayPal (NASDAQ: PYPL) on Wednesday reported Q1 2021 net revenues of $6.03 billion, up 29% year-over-year, and beating the $5.9 billion estimate of analysts surveyed by TipRanks.
PayPal said non-GAAP earnings per share (EPS) was $1.22, 20 cents better than Seeking Alpha’s estimate, and GAAP EPS was 92 cents, 28 cents ahead of estimates. GAAP EPS increased 1,200% over Q1 2020 and non-GAAP EPS was up 84%.
The stock price was up more than 4% in after-market trading following the release of the earnings results.
More than 14.5 million net new active accounts were added in the quarter as total payment volume (TPV) rose 46% to $285 billion. The company said it has 392 million active accounts and expects to add between 52 million and 55 million in 2021. Merchants on the platform now exceed 33 million.
“Customers across the world have clearly embraced the digital economy and PayPal has become the [choice of many],” Dan Schulman, president and CEO, said on the investor earnings call. “We continue to see a strong demand for a comprehensive set of services from both our merchants and consumers.”
Schulman added that PayPal is not expecting consumers to alter their behaviors, even in a post-COVID-19 world.
Operating income grew 162% year-over-year on a GAAP basis to $1.04 billion, and 84% on a non-GAAP basis to $1.67 billion.
In its earnings release, PayPal said the numbers represent the “strongest first-quarter results in PayPal’s history.”
“Our strong first quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy,” Schulman said. “Our addressable market continues to grow as we launch new products and services for our 392 million active accounts.”
John Rainey, CFO and EVP of global customer operations, said the results have caused PayPal to increase its full-year guidance.
The company projected full-year 2021 GAAP EPS to be in the range of $3.33, compared to $3.54 in 2020, and non-GAAP EPS to grow about 21% to $4.70.
In Q1, PayPal conducted 4.4 billion payment transactions, up 34% year-over-year, powered by Merchant Services, which grew 54% on a spot basis and 50% FXN (FXN refers to FX-neutral results, which are calculated by translating the current period local currency results by the prior period exchange rate). Merchant Services represented 94% of total TPV.
Each active account conducted an average of 42.2 payment transactions on a trailing 12-month basis, the company said, a 7% increase over the prior 12-month period.
PayPal’s cash, cash equivalents and investments totaled $19.1 billion as of March 31, and its debt totaled $8.9 billion. Cash flow from operations was $1.76 billion, growing 24%, and free cash flow was $1.54 billion, growing 27%.
In the quarter, PayPal repurchased approximately 5.3 million shares of common stock.