PayPal Holdings Inc. reported a strong earnings performance during the first quarter of 2019, and disclosed for the first time key metrics for its Venmo business, which reached 40 million active accounts during the period.
Venmo processed $21 billion in total payment volume, a 73% increase from a year ago.
The company reported important growth metrics during the quarter, including 9.3 million net new active accounts, compared with 8.1 million net new actives in the year-ago quarter, representing a 15 percent increase from the prior-year period.
The company has a total of 277 million customer accounts, including 22 million merchant accounts, CEO Dan Schulman disclosed.
"We had a great start to the year, with strong growth in revenue, net new active accounts and engagement across our platform," Schulman said in the company's earnings announcement. "We launched new strategic relationships with some of the world's largest marketplaces and platforms including Instagram and MercadoLibre."
He told security analysts on the quarterly conference call that the company is on pace to reach 300 million net new actives, a new record.
"We added 40 million net new actives in the past 12 months, an all time record," he told analysts. "That is over two times our trajectory from just two years ago. And even as we add record net new actives, our customer engagement continues to grow."
Other key indicators included a 28% rise in payment transaction to 2.8 billion, compared with the year-ago quarter and a 22% increase in total payment volume to $161 billion. The company also reported an average of 37.9 transactions per active account on a trailing 12-month basis, an increase of 9% from the year-ago period.
Person-to-person funds transfer volume rose 41% to $42 billion, representing 26% of total payment volume.
One downside, however, was that eBay Marketplaces volume fell 4% on an FX neutral basis, compared with growth of 6% in the year-ago quarter, representing a total payment volume of 9.7% compared with 12.7% a year ago.
Earnings rose 37% in the quarter to 78 cents a share, beating consensus estimates of 68 cents.
Revenue rose 12% to $4.13 billion in the quarter.
PayPal also announced several key strategic initiatives during the quarter, including its $750 million investment in MercadoLibre, a Latin American e-commerce and payments firm.
PayPal entered an agreement with Instagram to use process payments in Instagram's new checkout experience and formed a partnership with JPMorgan as part of the bank's Instant Transfer consumer rollout, giving PayPal customers faster access to their funds.
Thad Peterson, senior analyst at the Aite Group, said Venmo was performing well and PayPal is fast becoming "the payment ingredient in major commerce initiatives," he told Mobile Payments Today. "Being the embedded payment platform is a very sticky place to be, and it's a great way to continue to scale the offering on the merchant side.".
Visa fiscal Q2 profitable
Visa Inc. reported net income rose 14% to $3 billion, or 17% to $1.31 a share, in the fiscal second-quarter as payments volume and processed transactions rose, while cross-border volume slowed in-line with company expectations.
Payment volume was up 8% from the year-ago period, while the company an 11% increase in transaction volume to 32.5 billion from a year ago.
Revenue rose 8% in the quarter to $5.5 billion.
"We remain focused on investing in multiple growth opportunities including strategies that both grow the overall pie for payments and funds transfer as well as enhance our capabilities to ensure we continue to be the preferred partner in payments," Al Kelly, CEO of Visa told security analysts on a conference call yesterday.
The company reaffirmed its revenue outlook for fiscal 2019, in the low double digits, while the company's expenses in the mid-to-high single digits after adjusting for special items from fiscal 2018.