PayPal on Wednesday delivered better-than-expected fourth quarter and fiscal year financial results, noting that fiscal 2020 was its strongest year ever, with record-setting payment volume and new account additions bolstering its scale.
PayPal also used its financial report to provide more details about its recent foray into cryptocurrency. In October, PayPal confirmed its entry into the crypto market after receiving a conditional license from the New York State Department of Financial Services (NYDFS), which allows US users of its Venmo service to buy, hold, and sell cryptocurrencies.
On a call with analysts, PayPal CEO Dan Schulman said the company has designed an extensive product roadmap around crypto, blockchain and digital currencies.
"We are significantly investing in our new crypto, blockchain and digital currencies business unit, Schulman said. "We also saw an exceptional response from our crypto launch, even with high initial expectations the volume of crypto traded on our platform greatly exceeded our projections. We are excited to build upon this early success by allowing customers to use their crypto balance as a funding source whenever they shop at our 29 million merchants. We anticipate the rollout of that capability to begin late this quarter, and we hope to launch our first international market in the next several months. These initial steps are just the beginning of an extensive road map around crypto, blockchain and digital currencies."
Looking at the numbers, PayPal reported net income of $1.5 billion, or $1.32 a share. Non-GAAP earnings were $1.08 per share on revenue of $6.12 billion, up 23% year over year. Wall Street was looking for fourth quarter earnings of $1.00 per share on revenue of $6.09 billion.
The company added 16 million net new active accounts during the fourth quarter, bringing its total active accounts to 377 million. For all of fiscal 2020, PayPal added 72.7 million net new active accounts.
Meanwhile, PayPal said it processed a record-setting $277 billion in total payment volume during the fourth quarter through roughly 4.4 billion payment transactions. PayPal said its social payments platform Venmo processed more than $47 billion of TPV. That marks an increase of 60% over the same period last year.
For the fiscal year, PayPal's revenue came to $21.45 billion, up 21% year over year, on earnings per share of $3.88. Both metrics are in line with analyst expectations. TPV for the fiscal year came to $936 billion.
"PayPal delivered record performance in 2020 as businesses of all sizes have digitized in the wake of the pandemic," said PayPal CEO Dan Schulman. "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."
In terms of outlook, analysts are expecting first quarter revenue of $5.62 billion with earnings of 99 cents a share. PayPal expects 28% revenue growth along with 50% growth in adjusted EPS. Shares of PayPal were up slightly after hours.