PayPal (NYSE: PYPL) stock price rose to a record level after the company announced substantial growth in net new accounts for the first quarter along with the robust outlook for the second quarter.
It had added close to 10m new accounts in the last few weeks of March due to lockdown restrictions, bringing the new active accounts to 20.2m for the first quarter – up sharply from 9.3m new active accounts in the same period last year.
Its total payment volume surged by 18% year over year to $191bn in the first quarter, driven by robust growth in merchant services and Venmo volume.
The company’s first-quarter revenue of $4.62bn increased 13% from the year-ago period, but declined almost $100m from analysts’ expectations.
Paypay stock rally is also supported by the rosy outlook for the second quarter, with expectations for revenue growth of almost 15% from the past year period.
In addition, the company says net new active accounts in April jumped to 7.4 million with expectations for similar momentum in May. The company also claims that they have generated record largest single day of transactions on May 1. PayPal expects second-quarter total new active accounts in the range of 15 million to 20 million.
“I would argue that April was probably the strongest month for PayPal since we became a public company,” Chief Executive Dan Schulman said.
Dan Schulman also believes that the new active users will stick to their new habits of using digital payments even if the economy normalizes in the coming days. “Our view is, we think we are hitting a tipping point across the world where people are seeing just how simple and easy it is to use digital payments to pay for services,” Schulman said on PayPal’s earnings call.