Fintech: E-Payment Companies Report Earnings

Frank
July 20, 2017
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At the lead of the fintech​ revolution, digital payments companies have transformed the way consumers shop and spend money across the world. While PayPal Holdings Inc. (PYPL), founded by serial entrepreneurs Peter Thiel and Elon Musk, paved the way for the segment in the late ’90s, the space has become increasingly encroached by smaller rivals and big tech players such as Apple Inc. (AAPL) seeking to jump on the high-growth trend. (See also: Apple in Talks to Launch Peer-to-Peer Payments.)

Square

Jack Dorsey’s Silicon Valley-based mobile payments processor and merchant services platform Square Inc. (SQ) beat estimates on May 4, closing up 9% on Thursday. Trading down 1.2% at a price of $19.54 on Monday, shares of the e-payments provider reflect a 91.2% surge over the 12-month period as investors and analysts alike applaud the company’s transition away from being simply a point-of-sale product manufacturer to a one-stop shop for small to large businesses to take electronic payments, track inventory, order restaurant delivery with Caviar, and even use the company’s mentorship program.

Square’s adjusted loss of $0.04 per share in Q1 surpassed estimates for a loss of $0.08. Gross payment revenues grew 33% over last year to $13.6 billion, as revenues of $461.6 million surpassed the consensus estimate of $450.7 million.

PayPal

Shares of Palo Alto, Calif.-based PayPal Holdings have jumped about 10% near all-time highs on first-quarter results released April 26. The fintech pioneer’s dealmaking with payment card giants and new mobile initiatives helped to drive earnings per share (EPS) $0.03 above estimates at $0.44, while revenue up 17% year-over-year (YOY) to $2.98 billion surpassed estimates of $2.93 billion.

The company’s strong user growth, up to 203 million active users from 184 million over the same period last year, has given a reason for more retailers to accept PayPal. The mobile payments giant saw small-business lending, also a strong segment for Square, surpassing $3 billion as the firm deploys new new tools for business owners.

First Data

First Data Corp. (FDC) has seen its stock gain 3.5% on results reported on Monday before the opening bell. The Atlanta-based company posted adjusted earnings of $0.28 which were in line with Q1 estimates, after posting a loss in the same period last year.

The ecommerce and payment services provider reported adjusted sales up 2% YOY to $1.73 billion, above the Street’s forecasts for $1.71 billion.

“We continue to make steady progress across key initiatives such as expanding our presence in the enterprise space, steadily improving the foundations of our SMB direct business in North America, and growing our international franchise,” stated Chief Executive Officer (CEO) Frank Bisignano. (See also: First Data, Silicon Valley Bank Form Accelerator.)

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