Shares at PayPal went up 9 percent today. This comes in just after the company’s positive announcement about the earnings and revenue coming in from its application, Venmo, reports CNBC. Stock in PayPal has actually hit above $86 USD, accounting for an overall 26 percent for the entirety of 2018.
These earnings during the third-quarter beat out Wall Street’s expectation, cites CNBC in a prior announcement on Thursday. Despite that unexpected increase during its third-quarter, payment volumes did fall slightly short of estimates. The company also raised its fourth-quarter and overall year guidance.
For those who are unfamiliar with what exactly Venmo is, this app is a digital wallet that — just as with PayPal — allows users to share payments with friends and family. Venmo also allows utilizing its qualities to split fares and purchases with other users. The app’s payment option on websites and other applications is known as “Pay with Venmo.” Originally, Braintree had acquired Venmo; however, in December, 2013, PayPal purchased Braintree, thereby acquiring the peer-to-peer Venmo app as well.
Up until the third-quarter, it seemed as though Venmo was fighting to contribute notably toward PayPal’s bottom line. Clearly the app has came out strong in the end, with total payment volumes raising 78 percent and hitting $17 billion. Overall, PayPal’s total is $143 billion; however, the $17 billion is certainly a positive and notable sign, says PayPal’s CEO, Dan Schulman. He recently spoke with analysts, stating the app showed a definite ability to make money.
“Our monetization efforts appear to be reaching a tipping point.”
Schulman is calling user participation “monetizable action.” In fact, PayPal says it has processed over $1 billion in instant transfers on Venmo since September alone.
Venmo also provides users with a physical debit card, an action that came to be this summer. The debit card has seen approximately 320 percent month-to-month growth from August to September, suggesting a rapidly growing popularity. The “Pay with Venmo” feature saw active users increasing by about 185 percent during that same time span. Schulman also noted to reporters that Venmo jumped a staggering 300 percent for use on Uber and Uber Eats.
Mark Palmer, an analyst with BTIG spoke about the increase to reporters.
“A more eye-catching aspect of PYPL’s 3Q18 report was the progress the company made during the quarter in monetizing Venmo, an important initiative with regard to the stock’s valuation inasmuch as many investors’ future estimates are predicted on the success of that monetization effort.”