Venmo is Proving to Be a Big Success for PayPal

Peer-to-peer lending app Venmo just saw a blowout fourth quarter with $19 billion in payments volume. This proved to be an 80% YOY increase and is a big win for PayPal, the parent company who owns it.

For the full year, Venmo processed $62 billion in payments, a 79 percent increase from a year earlier. Venmo is on course to do another $100 billion in payment volume this year.

“Perhaps the biggest positive of the quarter was management’s commentary around progress on the company’s Venmo monetization efforts,” remarked Raymond James analyst John Davis says.

“We don’t want to get again too far ahead of ourselves, but we’re pretty pleased with what we’re seeing on Venmo — it’s really going from strength to strength,” said PayPal CEO Dan Schulman.

According to Schulman, the app has annual revenue of over $200 million, but it wont be until at least mid 2019 until it is in the black.

“The next phase for us is to get Venmo to break even. And that’s not something that’s going to happen in the next quarter or two, but there’s line of sight to that with what we’re doing,” PayPal CFO John Rainey explained.

For the fourth quarter, PayPal reported $0.69 EPS for the quarter, beating analysts’ consensus estimates of $0.67 by $0.02. The company’s revenue of $4.23 billion during the quarter, was in line with the estimate of $4.23 billion.

“Overall, although we had expected slightly better, the somewhat weaker results were largely due to further deceleration at eBay and therefore we are not overly concerned,” Raymond James analyst John Davis said in a note to clients Thursday. “Perhaps the biggest positive of the quarter was management’s commentary around progress on the company’s Venmo monetization efforts.”

Disclaimer: We have no position in Paypal Holdings Inc. (NASDAQ: PYPL) and have not been compensated for this article.