PayPal sign at its corporate office

This week PayPal released their fourth-quarter earnings report, which like Amazon and eBay‘s earnings reports includes the busy holiday season.

  • Total Payment Volume (TPV) of $277 billion, growing 39% (36% on an FX-neutral basis).
  • Revenue of $6.12 billion; growing 23% on a spot and FXN basis.
  • Added 16.0 million Net New Active Accounts (NNAs).
  • 72.7 million NNAs added for the full year 2020, bringing total active accounts to 377 million accounts, up 24%.

“PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic. In this historic year, we released more products than ever before and have dramatically scaled our acceptance worldwide, giving our 377 million consumer and merchant accounts even more reasons to use our platform.”

Dan Schulman, President and CEO

PayPal Earnings Call Highlights

Comments from PayPal CEO Dan Schulman

  • I’m pleased to report that PayPal just completed the strongest year in our history, achieving record growth in net new active customers, volume, revenue, operating income, earnings and free cash flow.
  • At the beginning of the pandemic, consumers in lockdown had no choice but to do all of their shopping online. Today, the vast majority of consumers state that post pandemic, they will continue to shop online at their current elevated levels because it is more convenient, easier and saves time.
  • The pandemic has accelerated a digital wave of change across almost every industry by three to five years, unleashing a profound and permanent structural transformation.
  • In the quarter, we added 16 million net new active customers, including an incremental 1.4 million new merchants. For the year, we delivered a record 73 million net new actives, ending the year with 377 million active accounts, up 24%. And we now have over 29 million merchants interacting with nearly 350 million consumers. In 2021, we expect to add another 50 million net new active accounts. [Editor note: Schulman mentioned in another portion of the webcast that the over 50 demographic had one of the strongest grow vectors.]
  • Our TPV excluding eBay was up a record 40% as we continue to gain market share. eBay TPV grew at 1% and exited the year at just under 6% of our total volume.
  • Venmo continued its strong performance with Q4 TPV of $47 billion, up 60% year-over-year. Venmo’s customer base grew by 32% in 2020, ending just shy of 70 million active accounts.
  • [We] are just [at] the beginning of an extensive road map around crypto, blockchain and digital currencies. We are already working with the regulators and central banks to reimagine and shape the next-generation of the financial system as consumers no longer want to handle cash. We all know, the current financial system is antiquated.
  • I would also highlight the rapid growth of our Buy Now Pay Later functionality. We saw tremendous and growing demand throughout the quarter, and witnessed the fastest start to any product we have ever launched.
  • We had almost 3 million customers using Buy Now Pay Later, hundreds of thousands of merchants.
  • We’re really pleased that we now own 100% of GoPay. And we’re the first and so far the only foreign payments company to operate a full domestic payments business in China.
  • We want to significantly increase the amount of cross-border that Chinese merchants can get from the 350 million consumers we have outside of China. And we also want to work inside China that Chinese consumers purchase from the 29 million merchants that we have outside of China.
  • We do want to work within the ecosystem inside of China with companies like China UnionPay, with the banks there, with the tech platform companies there as well to drive new types of payment services or incremental payment services inside the domestic market.
  • China is holding the Olympics in the next couple of years. There’s going to be a tremendous amount of visitors going into China. And we want our QR codes to be deployed so that people coming in to China don’t necessarily have to download WeChat Pay or Ant. They can use their PayPal wallet inside China to make purchases at merchants.

Comments from PayPal CFO and EVP, Global Customer Operations John Rainey

  • Our merchant services volume grew 40%, another record for PayPal, accelerating each quarter in 2020. Volume contribution from eBay Marketplaces continued to decline.
  • in 2021, we will absorb the greatest revenue impact from the loss of volumes from eBay.
  • Braintree continues to perform very well for us. But, it really suffers the brunt of the impact from the travel and events vertical, which was down 50%, five-zero percent for us. And so, that’s a pretty meaningful impact when you consider that that’s in excess of 10% of our volume.

Complete PayPal Earnings Information

Please see the PayPal Investor Relations website for more details on the company’s fourth-quarter and full-year 2020 results.

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