PayPal Holdings Inc. reported first-quarter sales and profit that beat estimates, adding customers against an onslaught of competition from credit-card issuers, startups and smartphone makers looking for a piece of the fast-growing digital payments market.
Profit, excluding certain items, was 37 cents a share on revenue of $2.54 billion, the San Jose, California-based company said Wednesday in a statement. Analysts on average projected earnings of 35 cents and revenue of $2.50 billion, according to data compiled by Bloomberg. Revenue was $2.14 billion in the period a year earlier.
Chief Executive Officer Dan Schulman wants to transform the company from a payment button on a website into a versatile financial tool that lets users pay merchants, send money to friends and discover nearby dining and shopping options through smartphone apps. He hopes adding new functions will make PayPal users more engaged with the platform on mobile devices and less likely to defect to alternative payment options from Apple Inc., Visa Inc. and Samsung Electronics Co.
“PayPal has been surprisingly resilient in the face of all this competition,” Victor Anthony, an analyst at Axiom Capital Management, said in advance of the results.
PayPal gained as much as 6 percent to $42.42 in extended trading after earlier closing at $40.01 in New York. The company’s stock has increased 11 percent this year.