While PayPal finished strong in 2019, beating analyst estimates in terms of revenue, active usership and total payments volume processed, the company is distancing itself from eBay and looking to the future with its recent acquisition of Honey Science.
In Q4 of 2019, PayPal reported adjusted earnings per share of $.86, an increase from $.69 at the same time last year. Revenue stood at $4.96 billion, up from $4.22 billion, and total payments volume (TPV) was up 22 percent to $199 billion. The company also reported that it had processed a total of around 3.5 billion payment transactions.
For the full year, PayPal generated revenue of $17.77 billion and earnings per share of $3.10, and added 9.3 million users in Q4, bringing its total active user base to 305 million.
Dan Schulman, president and CEO of PayPal, said on the company’s earnings call that the biggest factors in PayPal's growth were increases in net active accounts, growth in mobile usage, increases in one-touch adoption, improvements in Venmo volume and customer engagement.
In addition, the company saw Venmo’s active user accounts rise to 52 million by the end of the quarter, processing more than $29 billion of total payments volume, an increase of 56 percent over the same period last year. Venmo’s revenue run rate is more than $450 million.
And while PayPal and eBay signed a new agreement in 2018, enabling eBay to offer PayPal as a payment method until July of 2023, eBay‘s TPV fell by 4 percent on an FX neutral basis. "Consequently we anticipate that eBay will be approximately 6 percent of PayPal's TPV by mid-year,” explained Schulman.
Instead, the company is looking to the future with its recent $4 billion acquisition of shopping rewards platform Honey Science.
“In 2020 we expect to add approximately 35 million net new active accounts inclusive of our acquisitions and this does not include any one-time impact on NNAs associated with the acquisition of Honey,” Schulman said.
In addition, PayPal acquired a 70 percent equity stake in China’s GoPay in December, making PayPal the first foreign ePayments firm able to operate in China. That led to a cross-border payments partnership with UnionPay that was announced last week.