Third-quarter revenue reached $3.68 billion, up 14% from the $3.24 billion in the same period a year ago and the consensus it would be at $3.66 billion.
Earnings per share was at $0.58, some 26% up on the year-ago level of $0.46 and the consensus of $0.54.
Shares of PayPal climbed 7.2% to $83.05 in Friday's premarket, having settled 3.3% down Thursday at $77.48.
A prime catalyst for the company is the steady rise in the number of accounts.
PayPal said 9.1 million active accounts were added in the quarter, versus an increase of 8.2 million in the third quarter of 2017. The company ended the quarter with 254 million active accounts, up 15% from the prior period.
There were 2.5 billion payment transactions, up 27% and $143 billion in total payment volume (TPV), up 24% or 25% on a foreign exchange-neutral basis.
“PayPal had another excellent quarter. New partnerships with American Express and Walmart will increase the value that we can offer to our customers. Our strong balance sheet and cash flow enable us to aggressively invest in innovation and growth, creating sustainable and long-term value for our shareholders,” said Dan Schulman, president and CEO of PayPal.
As part of PayPal’s efforts to further improve its value proposition for merchants, Funds Now was launched in the third quarter. This initiative gives merchants instant access to funds by eliminating holds, delays and reserves and is now available to sellers in the US, UK and Australia.
In the third quarter, PayPal closed the acquisition of iZettle, a leading small business commerce platform in Europe and Latin America. This acquisition expands PayPal’s suite of products and services for small businesses.
Oppenheimer Equity Research wrote in a note Friday that the numbers in the report are encouraging, upping their earnings forecasts.
"We raise our FY18E/FY19E EPS to $2.40 (from $2.35) and $2.86 (from $2.77), respectively, and introduce FY20E EPS of $3.44," analysts Glen Greene and Andrew Hummel wrote.
The analysts are also encouraged by PayPal's early 2019 revenue and EPS growth outlooks. "The further acceleration in account growth (appears sustainable), and early and accelerating Venmo monetization success," the note said.
Oppenheimer reiterated a rating of Outperform and $95 price target, especially after the shares' recent sharp correction.
PayPal is a company whose platform, including Braintree, Venmo and Xoom, enables consumers and merchants to receive money in more than 100 currencies, withdraw funds in 56 currencies and hold balances in their PayPal accounts in 25 currencies.
The company is based in San Jose, California.
Reporting by Rene Pastor, contactable on [email protected]