(Bloomberg) — PayPal Holdings Inc. saw growth in spending on its platform continue to slow during the fourth quarter as economies around the world reopen and consumers return to in-store shopping. The shares plunged nearly 18%.
Total payments volume climbed 23% to $339.5 billion in the final three months of last year, PayPal said Tuesday in a statement. That was the smallest increase in two years and fell short of analyst expectations as its former parent company EBay Inc. continues to move its payments offerings away from PayPal.
PayPal Chief Executive Officer Dan Schulman called 2021 “one of the strongest years” in company history, according to the statement. “The future is moving in our direction, and we are investing in our consumer and merchant capabilities to seize the opportunity in front of us.”
Online commerce soared in the early days of the pandemic to encompass more than one-fifth of overall retail spending amid widespread lockdowns. That share has slipped as supply-chain disruptions hurt shipping times and consumers return to in-store shopping.
PayPal shares tumbled to $144.51 at 4:47 p.m. in extended New York trading following the announcement. They had advanced 2.2% to $175.80 in regular trading.
To gin up activity on its platform, PayPal has been adding a bevy of services, including a high-yield savings account as well as the ability to buy and trade cryptocurrencies. Transactions per active account jumped to 45.4 in the quarter, topping the 42.9 average of analyst estimates.
After adding 48.9 million net new active accounts last year, PayPal said it plans to add just 15 million to 20 million this year. PayPal has previously said it is aiming to have 750 million new users on its site by 2025.
PayPal and EBay decided to end their longtime partnership in 2018 and the e-commerce giant has begun to more rapidly move away from PayPal’s platform in recent quarters. In the final three months of the year, PayPal’s revenue climbed 13% to $6.9 billion, the smallest increase in two years.
PayPal said it expects revenue this year to climb as much as 17%, compared with a current forecast from analysts of 18%. The company said total payments volume for the year is expected to increase by as much as 24% while adjusted earnings per share is expected to be between $4.60 and $4.75.
(Updates with shares beginning in first paragraph.)
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
