Shares in PayPal Holdings Inc. surged in late trading after the financial services firm delivered stronger-than-expected second-quarter results and confirmed Elliot Management as an investor.

For the quarter ending June 30, PayPal reported non-generally accepted accounting principles earnings per share of 93 cents, down 19% compared to the same quarter of last year on revenue of $6.81 billion, up 10% year-over-year. Analysts had been expecting EPS of 86 cents on revenue of $6.79 billion.

Operating cash flow in the quarter came in at $1.5 billion and free cash flow at $1.3 billion, up 12% and 22% year-over-year, respectively. Total payment volume was $339.8 billion, up 9%.

Highlights in the quarter included the rollout of new credit offers for small to medium enterprises, including the PayPal Business Cashback Mastercard in the U.S. PayPal also announced expanded cryptocurrency features in June to allow users to send and receive cryptocurrency to and from other wallets.

“Our second quarter results were solid with currency-neutral revenue and non-GAAP earnings growth exceeding expectations,” PayPal President and Chief Executive Officer Dan Schulman said in the earnings release. “We continue to gain share as we execute across our key strategic initiatives, even as we drive operational efficiency across our business.”

Along with the regular financials, PayPal also authorized a $15 billion share buyback scheme, a cost-saving program and confirmed that Elliot Management Corp. has taken a strategic stake in the company. Elliot Management – well known as an activist fund, now holds a $2 billion stake in PayPal and is a key driver in PayPal’s cost-saving program.

Schulman confirmed that discussions on improving the business with Elliot Management are ongoing. “Our discussions are focused on operational improvements, revenue-generating investments and capital allocation and they are consistent with our short and long-term objectives and plans,” Schuman said.

In the third quarter, PayPal said that they expected a non-GAAP EPS of between 94 cents and 96 cents on revenue of $6.8 billion. For the full year, PayPal is predicting an EPS of $3.87 to $3.97 on revenue of $1.4 trillion.

The combination of an earnings beat and confirmation that Elliot Management has taken a stake in the company saw PayPal’s share price surge 11.69% after the bell to be sitting at $100.11 as of 6:44 p.m. EDT.

Image: PayPal

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