Financial-technology company PayPal (PYPL 0.34%) reported its second-quarter results after the bell on Wednesday. The results put the spotlight on the company's rapid growth and improving profitability, as well as a new share repurchase authorization.
As investors consider the implications of PayPal's latest quarterly results, here's an overview of some of the most insightful metrics from the update.
PayPal's Venmo Checkout. Image source: Venmo.
1. Revenue increased 23%
This year-over-year growth translated to $3.86 billion in total revenue for the quarter -- ahead of a consensus analyst estimate for revenue of $3.81 billion.
Though revenue was above analysts' consensus forecast, PayPal's year-over-year growth rate was below its 24% revenue growth in Q1. But revenue increased 22% on a currency-neutral basis in both Q1 and Q2.
2. EPS jumped 29%
Thanks to strong revenue growth and a GAAP operating margin of 14.8%, PayPal's EPS increased 29% year over year to $0.44. A meaty non-GAAP operating margin of 21.3% helped PayPal's non-GAAP EPS increase 28% year over year to $0.58.
On average, analysts had expected non-GAAP earnings per share of $0.57 for the quarter.
3. PayPal added 7.7 million active accounts
This compares to 8.1 million active account additions in Q1.
4. PayPal's payment transactions rose to 2.3 billion
This is up 28% year over year -- up slightly from 25% growth in this key metric in Q1. Importantly, PayPal's payment transactions per active account on a trailing-12-month basis continued to increase, rising 9% year over year. This was also an acceleration from 8% growth in Q1.
5. Total payment volume was $139 billion
This was up 29% from total payment volume (TPV) in the year-ago quarter.
6. Person-to-person payment volume was $33 billion
This was up an impressive 50% year over year, helped by PayPal's social payments platform, Venmo. P2P volume accounted for 24% of TPV during the quarter.
7. Venmo payment volume was $14 billion
This represented stunning year-over-year growth of 78%. Management also said Venmo's payment volume over the past 12 months amounted to $46 billion.
Venmo. Image source: PayPal.
8. Mobile payment volume increased 49%
This sharp year-over-year growth highlights how mobile is still a key catalyst for PayPal. Total mobile payment volume across its platforms was $54 billion during the quarter, accounting for 39% of TPV.
9. PayPal announced four acquisitions during Q2
The acquisitions "advance our merchant value proposition and geographic reach," said PayPal CEO Dan Schulman. Those acquisitions include small business platform iZettle, AI-powered commerce platform Jetlore, online payment company Hyperwallet, and fraud prevention and risk management platform Simility.
10. PayPal authorized a $10 billion stock repurchase program
This doubles the size of PayPal's previous $5 billion repurchase program. The new program will begin when the current program expires, management said. But $2.7 billion of the $5 billion program had yet to be used as of the end of June.
Speaking of repurchases, PayPal spent about $500 million repurchasing 6.1 million shares during Q2.
PayPal's strong second-quarter results prompted management to boost its outlook for full-year revenue growth. Management now expects revenue to increase 16% to 18% year over year on a currency-neutral basis, up from a previous forecast for currency neutral growth of 15% to 16%.
PayPal's second-quarter performance showed more of what the company has consistently delivered since it split from eBay in 2015: shrewd execution in key growth markets and rapid overall business growth.
