PayPal Ends Q1 2021 With 392 Million Active Accounts – Earnings Call Highlights

On Thursday, PayPal reported first-quarter results for 2021, beating Wall Street expectations with record earnings and volume amid sustained demand in online commerce. In addition, the company raised its annual targets for revenue, EPS (Earnings Per Share), TPV (Total Payment Volume), and net new active accounts.

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“I’m pleased to say that on the heels of the strongest year in PayPal’s history, we just completed our strongest quarter ever with record financial and operating results. Customers across the world have clearly embraced the digital economy, and PayPal has become an essential platform for both consumers and merchants.”

Dan Schulman, President and Chief Executive Officer, PayPal

Here are curated highlights for PayPal users from the PayPal first-quarter 2021 earnings call on Thursday afternoon. All bullet points are direct quotes. Editorial clarifications are noted in brackets.

Comments from PayPal President and CEO Dan Schulman

• As much of the world begins to shift its attention toward a post-pandemic recovery, we continue to see strong demand for a comprehensive set of services from both our merchants and consumers. Over the coming year, we will accelerate our customers’ digital engagement through the rapid innovation of our digital wallet and merchant commerce platform.
• We believe that the shift in consumer digital behavior will remain essentially unchanged in a post-COVID world.
• Consumers have expanded their digital lives into a seamless online and offline experience. Our products are an essential enabler of the digital economy.
• Our transactions in the quarter were approximately 4.4 billion, growing 34% year over year. We added 14.5 million net new active accounts, ending the quarter with 392 million active accounts, up 21% year over year.
• We added 1.4 million new merchants in the quarter, continuing the heightened pace from prior quarters, and we now have 31 million merchant accounts on our platform.
• By the end of Q2 [2021], we expect to exceed 400 million active accounts.
• Venmo continued its strong performance in Q1 with $51.4 billion of TPV, up 63% year over year… We are heavily investing in Venmo’s commerce capabilities, which include rapidly upgrading the Pay with Venmo customer experience with [the] initial rollout beginning this quarter.
• And we’re also making it easier for small businesses and casual sellers to accept Venmo payments. We now have over 300,000 small business profiles currently established, including 200,000 in Q1 alone.
• Small businesses who used PayPal during the peak of the pandemic saw their overall revenues grow by 25% versus a negative 9% for all other small businesses in the same time period.
• Small businesses who used PayPal last year drove 75% of their online sales from outside their local neighborhood, clearly expanding their addressable market.
• 65% of small businesses in the U.S. who use PayPal have cross-border sales versus less than 5% of all other small businesses.
• According to market research reported by Nielsen, merchants with PayPal experienced 17% more repeat buyers. Their checkout completion goes up by 34%.
• PayPal consumers spend an average of 12% more at PayPal merchants… consumers are loyal to PayPal merchants, buying 11% more often when PayPal is accepted.
• We’ve processed over $1 billion in TPV in the U.S. alone. Early results continue to show a significant 15% engagement lift in transactions and TPV.
• Nearly 30,000 merchants have implemented our Buy Now, Pay Later capabilities upstream on their product pages with a corresponding lift in our overall share of checkout.
• [PayPal has processed] over $2 billion of TPV globally since launch [of Buy Now, Pay Later]. Over $1 billion in the U.S., over 14 million loans have been done, over 5 million unique customers.
• 50% of the customers who have used Buy Now, Pay Later have repeated within three months.
• Demand for our PayPal and Venmo QR codes and in-store payments remains strong, with an additional merchant signing up every 28 seconds. We now have nearly 1 million merchants accepting our QR codes with continued momentum across our large enterprise merchants. Our early adopters of QRC are spending 19% more TPV on the PayPal platform. Our overall in-store efforts across QR and cards equaled $6.4 billion in Q1.

Comments Specific to eBay

• eBay now represents 5.5% of our volume, and we expect their TPV to be approximately 3% of total volumes by year-end.
• eBay revenues declined 12%, and we expect they will substantially complete their migration to manage payments by year-end.
• The expiration of our operating agreement with eBay has enabled us to launch an extensive partnership with Alibaba. This global agreement will enable hundreds of millions of consumers outside of China to shop across Alibaba sites in China.

Complete PayPal Earnings Information

Please see the PayPal Investor Relations website for more details on the company’s first quarter 2021 results.