(Bloomberg) — PayPal Holdings Inc. slumped in New York trading after reporting second-quarter revenue that fell short of analysts’ estimates.
Revenue climbed just 17% to $6.24 billion, missing the $6.27 billion estimate and below the forecast the company set just three months ago.
PayPal said it expects revenue in the third quarter of as much as $6.25 billion, below the $6.45 billion average of analysts’ estimates compiled by Bloomberg. The firm is battling the loss of EBay Inc., which has been rolling out a new payments system after the two decided to end their longtime partnership.
“We’ve always known that EBay is going to move their managed payments away from PayPal, it’s a matter of timing,” Chief Executive Officer Dan Schulman said Wednesday in an interview. “That’s happening faster than we anticipated.”
Shares of the company dropped 8.5% to $276.36 in New York trading at 4:27 p.m.
Despite EBay’s moves, PayPal said it still expects revenue for the year to climb roughly 18.5% when adjusting for fluctuations in currencies.
Despite the revenue setback, the company’s total payments volume soared 40% to $311 billion in the second quarter, topping analysts’ estimates and exceeding $300 billion for the first time ever in a three-month period. Volume is now expected to rise as much as 35% this year, up from the roughly 30% PayPal previously expected.
“On the heels of a record year, we continued to drive strong results in the second quarter, reflecting some of the best performance in our history,” Schulman said Wednesday in a statement. “PayPal has evolved into an essential service in the emerging digital economy.”
Spending on PayPal’s platform soared during the coronavirus pandemic, when consumers spent months sheltering in place to stem the spread of the deadly virus.
The firm — known for its buy button on e-commerce sites around the world — has expanded its offerings in recent years. It now gives customers the ability to buy, sell and hold cryptocurrencies and allows users to split their payments into four installments.
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