PayPal posts strong Q2, partners with Visa for tokenization services

The Visa partnership will allow PayPal's digital wallet to be accepted in brick-and-mortar retail stores.

PayPal delivered a solid second quarter earnings report Thursday after the bell.

The San Jose, Calif.-based payments company, which was spun off from eBay last year, reported a net income of $323m, or 27 cents per share (statement).

Non-GAAP earnings were 36 cents per share on revenue of $2.65bn, up 15 percent year-over-year.

Wall Street was looking for earnings of 36 cents per share on revenue of $2.6bn.

Looking at the rest of PayPal's numbers, the company says it grew its active account base to 188 million, an increase of 11 percent. On the merchant side, PayPal ended the quarter with 14.5 million active merchant accounts.

PayPal says it processed $86bn in total payment volume (TPV) during the quarter, with $24bn coming from mobile payments.

Venmo, the company's social payments platform, processed $3.9bn of TPV, up 141 percent year over year.

Breaking the numbers down further, PayPal says it processed 1.4 billion payment transactions, which is equal to 29 transactions for each active account.

PayPal also announced a new partnership with Visa that will make it easier for joint customers to integrate their Visa cards with their PayPal accounts. In turn, PayPal will gain access to Visa's tokenization services, which will let PayPal's digital wallet be accepted in brick-and-mortar retail stores.

As for the current quarter, PayPal expects non-GAAP earnings between 33 cents and 35 cents, with revenue in the range of $2.62bn to $2.67bn. Wall Street wants to see an EPS of at least 35 cents on revenue of $2.61bn.

PayPal's stock price ticked up around two percent in after-market trading.

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