PayPal does not mention crypto as it changes business priorities

PayPal went all in on crypto in 2021, building a wallet and unveiling big plans for both Venmo and its core payments unit. But the company was conspicuously silent on crypto on Tuesday — barely mentioning the technology during its second-quarter earnings call.

The earnings announcement was largely upbeat on news of a $15 billion share buyback program and that activist investor Elliott Investment Management was now one of its largest shareholders. That development, along with PayPal beating analysts’ expectations, sent its stock up 14% in after-hours trading.

This was a welcome turnaround for shareholders as the company, struggling to maintain momentum during the pandemic, had lost 54% of its share value since the start of the year.

PayPal’s Tuesday earnings also included the appointment of a new CFO, but crypto was relegated to the background. In a press release, the company noted that it has launched crypto transfers between PayPal and other wallets and exchanges and added free sending and receiving to family and friends on PayPal in the US

Crypto has been hammered so far in 2022 with the most popular cryptocurrency, Bitcoin, down around 50% since the start of the year and the second most popular crypto, Ether, down around 55%. Although both cryptocurrencies have gotten a boost since the Federal Reserve raised interest rates by three-quarters of a percentage point last week, the two most popular cryptocurrencies are down about 66% from their peaks last November.

Instead of elaborating on the company’s crypto strategy, Schulman only said on the earnings call that “digital wallets are the future,” adding that the company is doubling down on this area of ​​the business, which was first introduced in 2021.

“We’re seeing some, really, quite a bit of adoption, quite a bit of churn reduction for those coming in. So we’ll continue to invest there,” he said.

Despite the lack of publicity, a PayPal spokesperson said the company’s stance on crypto has not changed.

“Crypto continues to be a strategic priority for PayPal and was mentioned in the Strategic Initiatives & Business Updates section of our release as such,” the spokesperson said Fortune in an email.

Changing priorities

The emphasis on digital wallets is one of three things that have been prioritized as PayPal has cut back on some areas like marketing and headcount and narrowed its focus — as Schulman emphasized on the earnings call. Besides digital wallets, Schulman also highlighted two other areas of the business as priorities: checkout, the core of PayPal’s business, and Braintree, which enables merchants to customize their shopping carts and integrate them with their own platforms.

Schulman also said the company was pulling back on other areas, including a plan to offer stock trading on its platform that CNBC reported the company was exploring last year. The company created a division called Invest at PayPal last year to lead the effort, according to CNBC, but on Tuesday Schulman said the company has changed its focus.

“We were going to focus on Invest this year, like stock trading, that kind of thing. We’re not going to do that,” Schulman said. We don’t have the same regulatory footprint that we thought we might have.”

Although PayPal has confirmed its commitment to crypto for now, it is unclear whether the company’s shifting priorities and pressure from activist investor Elliott will change things for crypto in the future.

PayPal on Tuesday reported revenue of $6.8 billion in the second quarter, slightly more than the $6.78 billion analysts expected, according to Factset. It also came in at $0.93 per share, above the $0.87 that analysts were expecting. As of Wednesday, PayPal stock was up about 9.7% at $98.40.