What happened

Payment processing company PayPal Holdings (NASDAQ:PYPL) was having an incredibly strong day on Thursday. As of 10:50 a.m. EDT today, shares of the fintech giant were up by 14% and hit an all-time high. The main driver behind PayPal's big move was its first-quarter results, which were released on Wednesday afternoon.

So what

From the stock's price action, it's fair to say that investors liked what they saw in PayPal's report. It didn't even matter than the bottom-line earnings figure missed analysts' expectations.

Woman typing on laptop computer.

Image source: Getty Images.

Here are some highlights: 

  • PayPal added 20.2 million net new accounts, including 10.2 million that came from its acquisition of Honey, and ended the quarter with 325 million active accounts. Excluding Honey, the 10 million new active accounts were a record for PayPal in a first quarter.
  • Total payment volume on PayPal's platforms grew by 19% year over year to $191 billion for the first quarter.
  • PayPal earned $0.66 per share (adjusted), after a negative impact from increasing its loss reserves. The company generated $1.3 billion in free cash flow for the quarter, representing 60% year-over-year growth.
  • It ended the quarter with $12.6 billion in cash and equivalents on its balance sheet, giving it plenty of liquidity if the pandemic worsens or losses unexpectedly spike.

Now what

PayPal provided some color on the performance after the first quarter ended as well, since the COVID-19 pandemic didn't have its full effects on the economy until very late in March.

In April, PayPal added 7.4 million net new active accounts, more than double the average number added per month during the first quarter. This means that PayPal added about 250,000 new accounts per day throughout April, a remarkable acceleration in growth.

Not only did PayPal report an excellent first quarter, but it also appears that its business is doing rather well during the pandemic.