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Xoom Slips into Loss in Q3; Revenues Miss Expectations

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Xoom CorporationXOOM reported third-quarter 2015 adjusted net loss of 16 cents per share that compared unfavorably with the year-ago earnings of 1 cent. The underperformance mainly stemmed from high expenses.

Including amortization of acquired intangible assets in the reported quarter and merger-related costs, Xoom's net loss came in at 41 cents per share. The reported figure compared unfavorably with a net income of 1 cent in the year-ago quarter.

Operational Updates

Xoom reported revenues of $42.4 million in the quarter, up 8% year over year. However, the top line missed the Zacks Consensus Estimate of $48 million.

Gross sending volume increased 12% year over year to $1.9 billion, while transactions increased 33% to 4.3 million.

The number of active customers soared 21% year over year to 1.5 million, while gross additional customers surged 57% to 0.2 million in the reported quarter.

Operating expenses increased 58.6% year over year to $43.4 million on higher marketing, technology and development, customer service and operations, and general and administrative costs.

Adjusted EBITDA was $(1.3) million comparing unfavorably with $5 million last year.

Financial Position

Cash and cash equivalents, disbursement prefunding and short-term investments were $207 million as of Sep 30, 2015, down from $250.2 million at the end of 2014. Total assets came in at $284.6 million as of Sep 30, 2015, down from $315.7 as of Dec 31, 2014.

Stockholders' equity decreased 2.2% from the 2014-end level to $250.1 million as of Sep 30, 2015.

Business Update

During the quarter, Xoom began offering its services in Singapore to enable its customers to deposit funds through their U.S. bank accounts, credit cards or debit cards.

Additionally, the company strengthened its operations in Vietnam by launching desktop and mobile sites in the Vietnamese language.

In order to sustain itself post its separation from eBay Inc. EBAY , PayPal Holdings, Inc. PYPL entered into a definitive agreement on Jul 1, 2015, to acquire Xoom. The purchase price has been fixed at $25 per share in cash or $890 million. The deal, subject to approval by Xoom shareholders, antitrust regulators and other closing conditions, is expected to close in the fourth quarter of 2015.

Another Financial Transaction Service Provider

Alliance Data Systems Corporation ADS reported adjusted earnings per share (EPS) of $3.72 in the third quarter of 2015 that surpassed the Zacks Consensus Estimate of $3.68.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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