CEO Dan Schulman of PayPal told CNBC’s Jimmy Cramer on Thursday that the ongoing global health crises have sped up the adoption of digital payments and the industry is now more important than it ever was.
“What I think what’s happened is the world has accelerated from physical to digital across almost every industry,” he said in a “Mad Money” interview. This accelerated thrust adds up to a digital portfolio that includes Venmo, Honeywell, and Braintree, which saw its revenue surge 22% last quarter.
As in the US is battling the coronavirus, business strategies have been radically redefined to adjust to the “contactless” online platforms across various spectrums of businesses, digital payment platforms included.
From remote learning and online technical courses to telemedicine, and of course, online jump in daily utility consumables such as groceries, food items, and even furniture and clothing, all industries are adhering to the new social distancing norms and are adjusting to the new definition of normal operations. New generation 3D technologies and virtual tours are the new promotional tools for businesses.
Health institutions are leveraging telemedicine, schools are equipping themselves with remote learning platforms, and retailers are going online or setting up contactless payment systems in their brick-and-mortar locations, said Schulman, who has been in charge of the company since 2015.
Restaurants are relying more on online payments with major delivery operators like Uber Eats, DoorDash, and Postmates leading the way. Dine-in has been restricted by capacity caps which has further fueled the delivery market.
Schulman told Cramer that digital was poised to be a key part of the economy, but the pandemic only accelerated the need for online commerce from a timeframe of three-to-five years to three-to-five months.
Between April and June, the peak COVID period which also included shutdowns, PayPal recorded $221.7 billion worth of user transactions on its platforms, an increase of 29% year over year from $172.4 billion. It further added 21.3 million new net active accounts in the quarter, which was its paciest used growth on record.
“Across every industry, we’re seeing this surge towards a digital-first strategy, and all of the tools and products and services that we offer are probably more relevant and important across multiple industries than they’ve ever been before,” Schulman said.
PayPal reported $5.26 billion in revenue, up from $4.3 billion the year prior, in the quarter ending June 30. Furthermore, the profit was $1.26 billion on a non-GAAP basis, or $1.07 of earnings per share, a 49% increase as compared to the previous year.
Wall Street estimated sales of $5 billion and earnings of 87 cents per share, according to Factset. Shares of PayPal are on an upswing with a rise of 0.91% to $193.07 at Thursday’s close.
The stock is up more than 78% year to date with a strong growth momentum poised for the future.