by Anna Irrera and Nikhil Subba
Digital payments company PayPal Holdings Inc raised its earnings outlook on Wednesday 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 $1.80 per share to $1.84 per share, from $1.74 per share to $1.79 per share.
PayPal shares rose 2.9 percent to $60.50 in after-hours trading.
Since separating from eBay Inc 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.
On a conference call with analysts, Chief Executive Officer Dan Schulman pointed to efforts PayPal has made to improve the customer experience, especially on mobile devices, and deals it has inked with Chinese digital services provider Baidu Inc and No. 2 U.S. lender Bank of America Corp to expand its customer base.
Earlier this month PayPal also struck deals with JPMorgan Chase & Co. and Apple Inc.
The company added 6.5 million accounts in the second quarter, up 80 percent 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 percent from the second quarter of 2016. Mobile payments rose 50 percent to about $36 billion.
Volumes at Venmo, PayPal’s mobile peer-to-peer payments app popular with younger consumers, more than doubled to $8 billion.
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 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 Thomson Reuters I/B/E/S.
Revenue rose 18.3 percent to $3.14 billion, beating analysts’ average estimate of $3.09 billion.
Reporting by Anna Irrera in New York and Nikhil Subba in Bengaluru; Editing by Sriraj Kalluvila and Andrew Hay