PayPal reported a 19.0% increase in revenue for the third quarter ended Sept. 30, up to $4.38 billion from $3.68 billion the year before.
The payment processor says that the upcoming loss of eBay Inc.’s business will have an impact on next year’s performance. It gave a preliminary forecast saying the transition would knock a percentage point off the company’s revenue growth rate. PayPal expects growth in 2020 to be about 17%. EBay is No. 5 in the ranking of Internet Retailer Online Marketplaces.
In 2018, eBay said it would shift payment processing to Adyen NV, ending a long relationship with PayPal dating back to when it was a subsidiary of eBay. The online shopping site’s share of PayPal’s business had been a declining, but the payments company will need to make up for the lost revenue elsewhere.
Investments in Uber Technologies Inc. and Latin American ecommerce company MercadoLibre Inc. (No. 8) were meant to forge new partnerships to increase sales revenue, ingraining PayPal’s payment tech in these burgeoning online businesses, but the partnerships haven’t performed well financially.
PayPal indicated that growth is slowing for Venmo as it seeks to turn a profit from the popular peer-to-peer payments app. Venmo transactions were $27 billion in the third quarter, growing 64% from a year earlier. The growth rate was 78% in the same period last year.
PayPal has been trying to increase revenue through a new Pay With Venmo feature in Uber and other apps. By the end of the third quarter, revenue from Venmo was almost $400 million on an annualized basis, CEO Dan Schulman said on a conference call.
In other earnings news:
- Snap Inc., the company behind photo-based social network Snapchat, reported a 49.9% increase in revenue to $446.2 million from $297.7 million and a 12.9% increase in daily active users for the third quarter ended Sept. 30. The 210 million users now open the app an average of 30 times a day, according to the company. “Google and Facebook dominate mobile advertising, but there is plenty of room for other winners as mobile time spent continues to scale,” said Rich Greenfield, an analyst at Lightshed Partners. “Our conviction in Snapchat’s recovery has grown meaningfully over the course of 2019, as we hear positive first-hand feedback from advertising clients.”
- Twitter Inc. blamed a bug in its advertising product for reduced growth in the third quarter ended Sept. 30. Third-quarter sales increased 8.7% to $823.7 million from $758.1 million during the same period last year. In a letter to shareholders, the social media company blamed “greater-than-expected advertising seasonality” in July and August for the third-quarter results and also referenced “revenue product issues” that reduced sales by 3 or more percentage points. The product issue Twitter is referring to is when it previously shared user information without permission. After fixing the issue, it saw a decline in revenue from advertisers.
- Ecommerce growth kept children’s clothier Carter’s Inc. from declining this quarter, with total sales up 2.1% for the third quarter ended Sept. 30 to $943.3 million from $923.9 million during the same period last year, the retailer said in its quarterly filing. Carter’s is No. 108 in the Internet Retailer 2019 Top 1000. It did not disclose exact ecommerce figures.