Dive Brief:
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PayPal reported on Thursday 18% third quarter revenue growth to $2.67 billion, 21% year-over-year growth after accounting for currency fluctuations, while Q3 net income rose 7% to $323 million. Both measures bested expectations by a hair, with analysts expecting $2.65 billion in revenue.
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The payments company reported an 11% increase in active customer accounts, up 19 million to 192 million, and a 24% increase in the number of transactions, which totaled 1.5 billion in the quarter. Total payment volume in the quarter rose 25% to $87 billion, or 28% on a currency-neutral basis.
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PayPal said it now expects Q4 revenue to increase from 14% to 17% to a range of $2.920 to $2.990 billion, and raised its full year 2016 revenue guidance slightly, from a range of $10.75 to $10.85 billion to a range of $10.78 to $10.85 billion.
Dive Insight:
PayPal’s strong third quarter may assuage concerns it raised with its summer pact with Visa, which had investors worried that would hit revenues and turn the payments business into more of a traditional finance company instead of a tech disrupter.
A lot of the relief comes not just in the revenue and earnings numbers and improved future guidance, but also its growth in mobile and global payments. PayPal announced an extension of its previous agreements with Alibaba, and the company says it is in the first stages of becoming a payment option on Alibaba's global retail marketplace, AliExpress.
In the third quarter, PayPal processed nearly $26 billion in mobile payment volume, up 56%, representing 29% of total purchase volume for the quarter. Venmo, the company's social payments platform that has been a hit with millennials to share meals and cab far, processed $4.9 billion of TPV, up 131%.
PayPal added notable new merchants to the platform, ending the quarter with 15 million active merchant accounts, including leading brands like H&M in four European countries, Costco de Mexico, Yelp, and Yandex Direct.
“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/ CEO Dan Schulman said in a statement. PayPal shares rose more than 3% late Thursday.
