Online payment service PayPal Inc. sloughed off the dot-com downturn to ring in a second quarter profit Tuesday, reporting a marked increase in revenue and transactions over the same period last year.
Citing the service's continual uptake by eBay Inc. users, PayPal reported second quarter revenues of US$53.8 million, compared to $19.7 million during the same period last year, marking a 173 percent increase. Net income for the quarter came in at $529,000, or $0.01 per diluted share under Generally Accepted Accounting Principles (GAAP), compared to a net loss of $27.7 million or $4.47 a share for the second quarter of 2001.
Pro forma net income for the quarter ended June 30 was $5.7 million, or $0.09 per diluted share, compared to $7.2 million or $1.17 per share in the year-ago quarter. These pro forma results, which exclude noncash expenses related to stock-based compensation and nonrecurring charges, beat a Thomson Financial/First Call analyst consensus estimate of $0.08 a share.
The Mountain View, California, company's move into the black was led by the company's tightened relationship with online auction powerhouse eBay, which bought PayPal earlier this month. Even before the purchase, PayPal launched a series of services geared at eBay users, such as Auction Finder, which allows winning bidders to pay for multiple auctions at one time, and Winning Bidder Notification, which encourages buyers to use PayPal at the end of an auction. Thanks to efforts such as these, PayPal said that 75 percent of eBay auctions listed PayPal as a payment option during the second quarter of this year.
The payment service reported that while it boasted 15.4 million accounts during the first quarter of this year, it had 17.8 million accounts in the second quarter.
Given its steady growth, PayPal predicted it would have third quarter revenues ranging from $56 million to $57 million.
Stock in the company (PYPL) inched up .28 percent to $21.28 after the results were released Tuesday.