Major growth in users and transaction volumes drives earnings
PayPal results hammer forecasts
Digital payments company PayPal raised its earnings outlook after reporting better than expected quarterly results, driven by growth in users and transaction volumes.
The San Jose, California-based company beat Wall Street expectations for both profit and revenue in the second quarter, and raised its full-year adjusted earnings forecast to a range of US$1.80 per share to $1.84 per share, from $1.74 per share to $1.79 per share.
PayPal shares rose 2.9 per cent to $60.50 in after-hours trading.
Since separating from eBay in 2015, PayPal has been signing more partnerships and making acquisitions in a bid to gain an edge over rivals in the highly competitive digital payments market.
The chief executive Dan Schulman pointed to efforts PayPal has made to improve the customer experience, especially on mobile devices, and deals it has inked with the Chinese digital services provider Baidu and Bank of America to expand its customer base.
This month PayPal also struck deals with JP Morgan and Apple.
The company added 6.5 million accounts in the second quarter, up 80 per cent from the year-ago period. It was the highest quarterly growth in three years.
The company processed $1.8 billion in total payment volumes, up 23 per cent from the second quarter of 2016. Mobile payments rose 50 per cent to about $36bn.
Volumes at Venmo, PayPal's mobile peer-to-peer payments app popular with younger consumers, more than doubled to $8bn.
The company is trying to leverage the app more, by allowing shoppers to use Venmo to pay at U.S. merchants who process payments through PayPal.
PayPal is maintaining a goal to get customers to use its service twice a week, on average, something Mr Schulman said is "within our reach".
For the second quarter, it reported adjusted earnings of 46 cents per share, above the average analyst estimate of 43 cents, according to Reuters.
Revenue rose 18.3 per cent to $3.14bn, beating analysts' average estimate of $3.09bn.