PayPal boosts eBay’s third quarter revenue gains

Revenue for the fiscal third quarter increased 1% to $2.2 billion, or up 10% excluding Skype, compared to the same period of 2009. The company recorded third quarter net income on a GAAP basis of $431.9 million, or $0.33 per diluted share, and non-GAAP net income of $530.6 million, or $0.40 per diluted share, representing a 14% increase excluding Skype, compared to the same period of 2009.

In total the company’s third quarter income rose 23%. The increase in revenue is largely attributed to PayPal, an eBay company.

The company’s PayPal business delivered strong third quarter performance, expanding its leadership position in online payments with growth in revenue, total payment volume and active registered accounts. PayPal ended the quarter with 90 million active accounts worldwide adding more than a million new accounts each month during the quarter. And for the fourth consecutive quarter, Merchant Services net total payment volume grew 40% or more year over year.

“We delivered strong third quarter results, with great performance at PayPal and stable results at eBay,” said John Donahoe, eBay Inc. President and CEO. “PayPal gained share globally and eBay continued to improve key metrics. Our company is strong and we are managing our global portfolio to balance strengths, challenges and opportunities, invest in growth and deliver consistent performance.”

PayPal is the driving force behind eBay’s growth in revenue and is set to surpass eBay as the number one revenue generator for the company. Undoubtedly, some of the innovation occurring at PayPal, such as depositing checks over a smartphone, has been incredibly popular. In the first 36 hours of launching that feature on the updated PayPal application, over $100,000 in deposits were made.

Once the bread and butter of eBay, its merchant site has been floundering. Users have found competitors, such as, fees and technology more appealing than eBay. The company has been working to lower fees and improve its technology in light of eBay’s dwindling popularity.

Shares of eBay jumped $1.77, or 6.9 percent, to $27.43 in premarket trading. The stock had closed at $25.66 Wednesday.

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