PayPal soared to an all-time peak early Thursday after the company announced a record day of online transactions on May 1, beating the most successful shopping events of 2019 - Black Friday and Cyber Monday.
In addition, PayPal's Venmo app witnessed its biggest transaction on the same day. The digital payment giant has made public its record number after it disclosed Wednesday's first quarter income.
Paypal posted $4.62 billion in sales in the first quarter (up 12 per cent annually) and $0.66 in non-GAAP earnings per share. Revenue missed a consensus of $4.74 billion, while EPS, which had seen a $237 million ($0.17 per share) hit from credit risk reserves generated as a result of updated macro estimates, missed a consensus of $0.75.
Following in the footsteps of several other firms, PayPal withdrew its full-year guidance, citing a lack of clarity in COVID-19's near-term economic impact and the broader range of future outcomes.
According to Paypal chief financial officer John Rainey, the coronavirus crisis has essentially transformed some consumer habits, "which I think certainly play to our benefit." As the company looks at the landscape today, its platform is "more relevant than ever before."
PayPal has not been completely safe from the negative impact of Covid-19, which resulted in the shutdown of dozens of U.S. companies and a dramatic decline in global consumer spending.
PayPal is expected to announce earnings in the March-Quarter after the closing bell on Wednesday. UBS analyst Eric Wasserstrom wrote that recent updates from Visa Inc and Mastercard Inc. were "most promising for PayPal because of its e-commerce focus.
The credit card giants pointed to online transactions as a high point due to fluctuations in personal spending. Over the past three months, PayPal's shares have risen 6 percent as the S&P 500 stocks have declined 13 percent.
"Some of our major clients, including Airbnb, Uber, and Live Nation, have seen rapid declines in the volumes of transactions," chief executive officer Dan Schulman stated on the company's earnings call.
Because of the coronavirus, the company announced a 17-cent hit on earnings per share, or $237 million, for raising its credit risk reserve as many customers struggle to pay their debts, with over 33 million people becoming jobless during the past seven weeks.
Meanwhile, the business said in April it added 7.4 million net new customers, up year-over-year by 135 per cent. Sales growth rose again to 17 percent in the same month. PayPal is seeing net new active accounts rise by 15 million to 20 million for the second quarter.
