PayPal's strategy to partner with large institutions and push its popular Venmo social transfer app are literally paying off, as the company raised its earnings outlook and reported earnings that beat analysts' expectations.

For the second quarter PayPal reported revenue of $3.14 billion, an 18% increase over the prior year and over expectations of $3.09 billion. It also earned $0.46 per share, over the estimate of $0.43 per share. The company raised its guidance for the rest of 2017 to a range of $1.80 to $1.84 per share, up from $1.74 per share to $1.79 per share.

PayPal's strategy since it separated from eBay in 2015 has been to innovate, expand the Venmo P-to-P service and to collaborate with banks and other large companies.

Bloomberg News

To that end, it has entered revenue-boosting deals with Visa and Mastercard, ending a previously cantankerous relationship and promising to share data and marketing. PayPal has also partnered with Citigroup, Apple and others to expand its reach and to extend the payment company's presence inside stores as PayPal builds its own mobile wallet app. And in just the past day, PayPal has entered partnerships with Bank of America and with Baidu, a Chinese digital service provider.

Additionally, volume at Venmo, a key unit for PayPal, has doubled in the past year, reaching $8 billion in payments and benefiting from deals to allow Venmo use at U.S. merchants that accept PayPal, and keeping the social payment app competitive with the rival bank-powered Zelle service. As part of its earnings report, PayPal reiterated a goal of getting consumers to use its service at least twice per week.