(Reuters) – PayPal Holdings Inc beat Wall Street estimates for quarterly revenue and profit on Monday, boosted by a surge in digital payments as COVID-19 lockdowns worldwide drove more businesses online, but it forecast current-quarter profit below expectations.
Shares of the digital payments processor fell more than 6% in extended trade.
For the fourth quarter, PayPal expects adjusted profit to grow in a range of 17% to 18%, below analysts’ estimated growth of about 24%, according to IBES data from Refinitiv.
PayPal Chief Executive Dan Schulman said in a call with analysts that the company was giving a more prudent estimate for the fourth quarter in part because of uncertainty due to the pandemic and its impact on the global economy, as well as Tuesday’s U.S. presidential election and concerns about social unrest.
Like other companies in the digital payments sector, PayPal has been profiting from a boom in online transactions this year, heavily driven by pandemic restrictions that have pushed more business into the virtual realm.
The San Jose, California-based company processed a total of $247 billion in payments in the third quarter, up 36% from the year-earlier period, and added 15.2 million net new active customers.
The company said it was on track to process just shy of $1 trillion in payments this year.
While pandemic lockdowns eased in many regions during the third quarter, PayPal said momentum for digital payments continued, and it recorded its all-time highest daily payments volume level in October.
“The world continues to accelerate towards a digital first economy,” Schulman said in an interview. “That drove an incredibly strong quarter for us.”
Revenue rose about 25% to $5.46 billion, compared with analysts’ average estimate of $5.43 billion.
Venmo, the company’s service which allows individuals in the United States to send each other money through an app, processed $44 billion in payments in the third quarter, up 61%.
The company forecasts revenue for Venmo to approach $900 million in 2021, Schulman said.
PayPal has been focusing on expanding the breadth of services available to customers of its online wallets.
In October PayPal announced it would allow customers to hold bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network.
On an adjusted basis, PayPal earned $1.07 per share. Analysts had expected it to earn 94 cents per share.
Net income jumped to $1.02 billion, or 86 cents per share, for the quarter ended Sept. 30, from $462 million, or 39 cents per share, a year earlier.
(Reporting by Niket Nishant and Eva Mathews in Bengaluru and Anna Irrera in London; Editing by Leslie Adler)