The revenue of PayPal Holdings Inc grew in the third quarter at a level higher than predicted by analysts, helped by continuing stable growth in the number of active customer accounts over the past few years.
Net revenue for the quarter was up to $2.67 billion, according to a release from the online payment processor Thursday. The figure represents an increase of 18 percent on the revenue for same period a year ago.
The third-quarter revenue slightly bettered average estimate of $2.65 billion from analysts.
PayPal said the number of active customer accounts jumped 11 percent, while the number of transactions processed gained 24 percent. It now boasts 192 million active accounts, up from 173 million in 2015. Total payment volume in the quarter jumped to $87 billion, up 25 percent from a year ago.
The number of active customer accounts has been steadily growing over the past five years, as reported by CNBC. Aside its core service, the payments company attributed the growth mainly to Venmo. The peer-to-peer payment platform handled $4.9 billion in transactions during the third quarter – that was about 131 percent more than the figure for same period last year.
“We are further expanding the ubiquity and value of the PayPal brand and moving deliberately towards achieving our vision of becoming an everyday, essential financial service for people around the world,” PayPal President and Chief Executive Dan Schulman said.
The report also identified money transfer service Xoom as a driver of growth in active customer accounts.
PayPal reported adjusted earnings of $425 million, or 35 cents a share, an improvement on profit of $377 million, or 31 cents per share, a year ago. The earnings were in line with Wall Street expectations.
Shares of the popular payment processor were trading at more than 3 percent higher in after-hours trading following the announcement. The stock closed at $40.09 during regular trading on Thursday.
The PayPal results were also boosted by the resolution of the faceoff the company had with the world’s leading card networks. In the quarter, it reached agreement with both Visa and MasterCard that would enable users to choose its service as an option when paying for purchases with their smartphones. The deal with Visa allows debit users to instantly move money on PayPal and Venmo accounts.
The online payments firm expects total revenue in the range $2.92 billion to $2.99 billion during the current quarter, which will represent growth of 14 percent to 17 percent. It has also forecast between 40 cents and 42 cents in adjusted earnings per share.
PayPal has also slightly boosted the lower threshold of its revenue guidance for the current fiscal year. It is now $10.78 billion, up from the previous $10.75 billion. The upper revenue range for the year remains at $10.85 billion.
Edward Jones analyst John Olson said in a note that his company expects peer-to-peer transactions handled by Venmo to grow considerably in the coming years. He predicted transaction volume would rise to roughly $84 billion in 2019, according to CNBC. The peer-to-peer payment platform processed $14 billion in transactions in 2014.