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PayPal Financial Results

PayPal's parent eBay announced third quarter financial results this afternoon.

The following highlights regarding PayPal's third quarter financial performance were included:

  • Payments net revenues grew to $247.1 million, an increase of 44 percent year over the same quarter last year and up 1.3 percent vs. the prior quarter.
  • PayPal's user accounts grew to 86.6 million accounts, up 53 percent year over year and up 9.8 percent vs. the prior quarter. Active accounts grew to 24.5 million, up 41 percent year over year and 7 percent vs. the prior quarter.
  • Total gross payment volume handled by PayPal grew to $6.7 billion, up 44 percent year over year and 3 percent vs. the prior quarter. Total number of payments grew to 117.4 million, up 41 percent year over year and 4 percent vs. the prior quarter. 69 percent of PayPal's payment volume was eBay-related.
  • PayPal earned revenues of 3.60% on payment volume totaling $247.1 million, had expenses of 1.11% of payment volume totaling $74 million and losses of 24 basis points totaling approximately $16 million.

PayPal's expenses include the funding costs associated with card payments used to make payments via PayPal. PayPal's transaction processing expense rate, likely reflecting both a combination of economies of scale in processing as well as its hybrid cost of payment funding (from cards, via ACH and PayPal accounts), has declined from 1.30 percent in the third quarter of 2004 to 1.11 percent in the third quarter this year -- nearly a 15 percent improvement.

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