PayPal stock plummets 10% after it lowers its guidance for the year

PayPal’s stock fell Tuesday after it lowered its fourth-quarter guidance on revenue and earnings per share.

On Monday, the online payments company reported revenue of $6.18 billion, a 13% increase in third quarter revenue compared to the same quarter last year, but still fell short of the $6.23 billion analysts expected. It reported adjusted earnings of $1.11 per share, higher than the $1.07 analysts expected.

PayPal also said it added another 13.3 million user accounts and it estimates 55 million new active accounts will have joined by the end of 2021. The company also announced that U.S.-based Amazon customers will be able to pay with Venmo at checkout starting next year.

Despite the growth, the company’s stock closed down more than 10% Tuesday because of its subpar projections for the next quarter. PayPal said it expected $6.85 billion to $6.95 billion in revenue and $1.12 in adjusted earnings per share, far below what analysts expected. Other companies such as Apple and Amazon have also lowered guidance for the end of the year because of complications including supply chain issues and increased costs.

PayPal has increasingly focused on expanding its crypto offerings in the past year. It introduced its Cashback to Crypto program in August and recently expanded it to include U.K. customers, marking the first international expansion of the company’s crypto offerings. The program enables Venmo credit card users to automatically purchase cryptocurrency with cashback from purchases.

Venmo overall experienced growth, with its payment volume increasing 36% year-over-year to $60 billion. This helped boost PayPal’s total payment volume, which increased to $310 billion, 26% higher than the same quarter a year earlier.

The new partnership with Amazon shows PayPal’s decreased connection with eBay, which bought the company in 2002 and spun it off in 2015. PayPal said in its third-quarter results that eBay transactions using its technology fell 45% this quarter now represent less than 4% of its revenue.

In October, there were reports that PayPal was interested in buying the social media site Pinterest, but the company backed away from the deal saying it was not currently pursuing the acquisition.