Q3 Earnings Show Continued Momentum for Major PFs: PayPal, Square, Shopify and Blackbaud

Third quarter of this year has seen a continuation in acquisitions and partnerships for some of the major PF brands, as well as strong momentum to kick off the upcoming holiday season.

Highlighted in this article are Square, PayPal, Shopify and Blackbaud and RealPage.


“We continue to drive strong revenue growth at scale: In the third quarter of 2018, total net revenue grew 51% year over year and Adjusted Revenue grew 68% year over year, compared to 48% and 60%, respectively, in the second quarter of 2018,” said the company in their shareholder letter.


Square’s momentum this quarter includes the launch of both Square Terminal and Square Installments.

  • Total net revenue was up 51% at $882 million.
  • Adjusted revenue was also up 68% from last year at $431 million.
  • Net income was $20 million compared to a net loss of $16 million in Q3 of 2017.
  • Adjusted EBITDA was $71 million in the third quarter of 2018, compared to $34 million in the third quarter of 2017.
  • Gross payment volume came in at $22.5 billion, up 29%.


“PayPal had another excellent quarter.  New partnerships with American Express and Walmart will increase the value that we can offer to our customers.  Our strong balance sheet and cash flow enable us to aggressively invest in innovation and growth, creating sustainable and long-term value for our shareholders.” said Dan Schulman, president and CEO of PayPal.


In addition to the two major partnerships highlighted above, PayPal reports upward momentum in both their financial and operating numbers.

  • The company reports a revenue growth of 14% to $3.68 billion (on both a spot and foreign currency-neutral basis).
  • The GAAP operating margin closed the quarter at 13.3% (up 24 basis points) with non-GAAP at 21.4% (up 142 basis points).
  • 1 million active accounts have been added, ending the quarter with 254 million active accounts (up 15%).
  • Payment transactions are also up 27% at 2.5 billion.
  • And total payment volume is up 24% at $143 billion.


“Solid execution and continued rapid growth drove our strong results in the third quarter,” stated Amy Shapero, Shopify’s CFO. “We’re well positioned to close 2018 and enter 2019 with excellent momentum.”


Shopify’s Q3 financial results prove impressive right out of the gate with a 58% revenue spike year over year.  And it doesn’t stop there.

  • Total revenue for the third quarter is $270.1 million.
  • Subscription solutions revenue grew 46% to $120.5 million.
  • Merchant solutions revenue is also up 68% at $149.5 million.
  • Gross merchandise volume (GMV) grew by 55% at $10.0 billion.
  • Gross payments volume increased to $4.1 billion and accounted for 41% of total GMV processed for Q3.
  • Gross profit dollars increased 50% to $149.7 million.


“We are driving digital transformation in each of the industry segments we serve through the delivery of innovative new cloud software technology, which has expanded the addressable markets for Blackbaud,” said Mike Gianoni, Blackbaud’s president and CEO.


And this strong momentum from market expansion holds steady in the company’s Q3 financial results.

  • Total GAAP revenue is up 7.8% at $209.5 million.
  • GAAP recurring revenue totaled $188.7 million (up 12.6%) and accounted for 90.0% of total GAAP revenue.
  • Total non-GAAP revenue is up 7.9% at $210.1 million.
  • Non-GAAP recurring revenue is up 12.8% ($189.2 million) and accounts for 90.1% of total non-GAAP revenue.
  • Non-GAAP organic revenue increased 1.2% and non-GAAP organic recurring revenue by 4.9%.


“Third quarter financial performance demonstrated accelerating momentum and continued progress towards early achievement of our 2020 financial goals,” said Steve Winn, Chairman and CEO of RealPage.


The company recently acquired Rentlytics, largely expanding their business intelligence and performance analytics platform.

  • Total revenue closed out at $225.0 million, up 33% year over year.
  • Non-GAAP net income was $35.4 million ($0.38 in non-GAAP net income per diluted share), up 93% and 73% year over year.
  • Net income was up 33% at $9.1 million with $0.09 in net income per diluted share, up 13% from last year.
  • Adjusted EBITDA increased 48% year-over-year at $59.1 million.


*Generally Accepted Accounting Principles (GAAP) income equates to operating income, operating margin and earnings per share.

*Non-GAAP earnings are calculated by adding back the non-cash expenses of depreciation and amortization to a company’s operating income.