PayPal profit tops estimates on digital payments boom

PayPal beat profit estimates, with a coronavirus-driven shift to online shopping and digital transactions

PayPal reported its strongest first quarter on record and beat profit estimates on Wednesday, with a coronavirus-driven shift to online shopping and digital transactions boosting payment volumes.

PayPal's quarterly performance builds on an equally strong 2020 for the company, which also saw record levels of payment volumes.

San Jose, California-based PayPal processed a total of $285 billion in payments in the first quarter, up 50% from a year earlier, and added 14.5 million net new active customers.

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"Our strong first-quarter results demonstrate sustained momentum in our business as the world shifts into the digital economy," Chief Executive Officer Dan Schulman said in a statement.

The company has been among the big winners of the pandemic as more people used its payment services to shop online and pay bills while staying indoors during the health crisis.

Visa, the world's biggest payment processor, is emerging from the Covid-19 pandemic, its top boss said last month, helped by a surge in online shopping. 

Venmo, PayPal's app which allows individuals in the United States to send each other money, processed $51 billion in payments in the quarter, up 63%.

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PayPal also said it expects to add 52–55 million net new active accounts in 2021, with an about 30% rise in total payments volume on a spot and forex neutral basis.

The company in February forecast an addition of about 50 million active users in 2021.

It also expects annual revenue and diluted earnings per share ahead of analyst estimates, according to Refinitiv IBES data.

PayPal reported a first-quarter net income of $1.22 per share, beating analysts' average estimates of $1.01 per share.

Revenue also beat estimates, rising 31%.

Rival Square will report quarterly results on Thursday.