PayPal beats Q4 estimates, Venmo growth soars

The company grew its active account base by 6.6 million during Q4, ending the year with 179 million active customer accounts.

PayPal reported fourth quarter and fiscal year earnings and revenue Wednesday after the bell.

The San Jose, Calif.-based payments company reported a net income of $367 million, or 30 cents per share (statement).

Non-GAAP earnings were 36 cents per share on revenue of $2.6 billion, up 17 percent year-over-year.

Wall Street was looking for earnings of 35 cents per share on revenue of $2.5 billion.

For the year, PayPal brought in $9.2 billion in revenue on non-GAAP earnings of $1.28 per share.

Once again, the real star of the earnings report was Venmo, the company's social payments platform. PayPal said Venmo processed $2.5 billion of TPV, up 174 percent year-over-year. The service has become a growing asset to PayPal, and now the company plans to leverage every ounce of its growth potential.

Here's what PayPal had to say about Venmo:

PayPal also expanded the ways to use the popular social payments app Venmo by introducing the ability for Venmo users to make in-app purchases at participating merchants in the U.S. Now in limited release, select users can use Venmo to pay for concert and sports tickets on Gametime, and gourmet meals delivered on Munchery. The pilot program will gradually open to more consumers and merchants with a general public launch planned for later this year.

Looking at the rest of PayPal's numbers, the company says it grew its active account base by 6.6 million during Q4, ending the year with 179 million active customer accounts.

PayPal says it processed $82 billion in total payment volume during the fourth quarter. Breaking the numbers down further, PayPal says it processed 1.4 billion payment transactions, which is equal to 27 payment transactions for each active account.

In a prepared statement, PayPal president and CEO Dan Schulman touted the fact that, even in the face of "a slow global economy and foreign exchange headwinds," PayPal still managed to surpass its full year revenue expectations.

PayPal's shares have dropped about 20 percent since it was spun off from eBay last July. The plunge is likely due to increased competition from companies either experimenting with or pursuing digital payment ventures. Unlike PayPal's early days, the company now competes with the likes of Apple, Google, Visa and most recently Walmart for dominance in digital payments.