PayPal Q2 Earnings Beat Estimates, Revenue Jumps 7% On 'Continued Momentum,' Shares Slide

PayPal Holdings Inc PYPL reported second-quarter results after the bell. Here's a rundown of the report and a look at what's driving the action.

What Happened: PayPal said second-quarter revenue increased 7% year-over-year to $7.29 billion, which beat the consensus estimate of $6.59 billion, according to Benzinga Pro. The payments company reported quarterly earnings of $1.16 per share, which beat analyst estimates of $1.05 per share.

Total payment volumes in the second quarter increased 11% year-over-year to $376.5 billion. Operating cash flow was negative $200 million. Free cash flow came in at negative $400 million, which includes approximately a $1.2 billion negative impact from European BNPL loans expected to be sold in the second half of the year. 

Total active accounts came in at 431 million, up from 429 million year-over-year, but down from 433 million in the first quarter. 

PayPal ended the quarter with cash, equivalents, and investments of $14.4 billion. Debt totaled $10.5 billion as of June 30. 

The company said it repurchased approximately 22 million shares of its common stock during the quarter. 

"Our second quarter results show continued momentum. We have high confidence that our business is on the right path and we're seeing clear signs that the investments we've made are paying off," said Dan Schulman, president and CEO of PayPal.

PayPal anticipates third-quarter revenue of approximately $7.4 billion, vs. consensus of $7.33 billion. The company sees adjusted earnings in a range of $1.22 to $1.24 per share, compared to estimates of $1.22. 

PayPal also reiterated full-year earnings guidance of approximately $4.95 per share, compared to estimates of $4.94. 

Management will hold a conference call to discuss these results at 5 p.m. ET.

Check This Out: Trading Strategies For PayPal Stock Heading Into Q2 Earnings

PYPL Price Action: PayPal shares were down 7.38% after hours at $67.91 at the time of publication, according to Benzinga Pro.

Photo: courtesy of PayPal.