PayPal tops estimates on pandemic-driven boost to online spending

PayPal Holdings Inc beat Wall Street estimates for quarterly profit on Wednesday and forecast an about 28% jump in revenue for the current quarter as coronavirus-related restrictions across the world drove a surge in digital payments. Online payments have got a boost since the start of the pandemic as people stuck indoors rely on mobile apps for shopping and paying bills.

PayPal Holdings Inc beat Wall Street estimates for quarterly profit on Wednesday and forecast an about 28% jump in revenue for the current quarter as coronavirus-related restrictions across the world drove a surge in digital payments.

Online payments have got a boost since the start of the pandemic as people stuck indoors rely on mobile apps for shopping and paying bills. The San Jose, California-based company said 2020 was its strongest ever annual performance as it processed a record $936 billion in payments.

Processed payments in the last quarter rose 39% to $277.1 billion, with an additional 16 million net new active customers. The blowout showing comes despite PayPal having earlier projected a more prudent estimate, partly because of pandemic's impact on the global economy, as well as the U.S. presidential election and concerns about social unrest.

Quarterly revenue rose about 23% to $6.12 billion, above analysts' average estimate of $6.09 billion, according to Refinitiv IBES. Venmo, PayPal's service which allows individuals in the United States to send each other money through an app, processed $47 billion in payments in the quarter, up 60% from a year earlier.

Net income jumped to $1.57 billion, or $1.32 per share, from $507 million, or 43 cents per share, a year earlier. PayPal reported adjusted diluted earnings of $1.08 per share, higher than analysts' average estimate of $1.00 per share.

Visa Inc, the world's biggest payment processor, also beat Wall Street estimates for quarterly profit at the end of last month, showing signs of a recovery in payment volumes from the coronavirus-induced slump.