PayPal Is the Obvious Winner of the Mobile Commerce Revolution

Investors in PayPal Holdings Inc. (NASDAQ: PYPL) had plenty of reason to cheer when the company reported its third-quarter results on Oct. 19. PayPal's net revenue came in at $3.24 billion, a 21% increase year over year, and its non-GAAP earnings per share rose to $0.46, good for a 31% annual increase. This quarter was better than just consistently good revenue and earnings growth. The company's metrics on customer growth and engagement levels also showed accelerating growth.

PayPal added 8.2 million net new active customer accounts in the quarter, a record for the company in its recent history. PayPal now has 218 million active accounts, a 14% year-over-year increase. Not only does the company have more accounts, but users are also using their accounts more often. Active accounts are now averaging 32.8 transactions over the trailing 12 months, a 9% increase over last year's third-quarter numbers. As PayPal CEO Dan Schulman said, "I pay particular attention to these measures, as they represent a direct form of feedback on our value proposition, customer experiences, and brand."

What's driving this strong customer growth and deepening user engagement? While there are obviously several factors at play, one of the biggest is that PayPal is riding the massive macro trend of mobile commerce, also known as m-commerce. As buying things on smartphones and other mobile devices increases, there might be no better company poised to capitalize on this growth than PayPal.

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Source: Fool.com