PayPal had revenue of $3.69 billion, higher than analysts’ projections, signaling that it’s weathering the loss of EBay Inc. as it continues to sign up new accounts.

(Bloomberg) —PayPal Holdings Inc. reported earnings that beat analysts’ estimates in the first quarter and gave an optimistic forecast for the second, signaling that it’s weathering the loss of EBay Inc. as it continues to sign up new accounts.

For the current quarter, the San Jose, California-based company projected net revenue of $3.78 billion to $3.83 billion, compared with the average analyst estimate of $3.75 billion. In first three months of the year, PayPal had revenue of $3.69 billion, higher than analysts’ projections for $3.59 billion.

EBay, PayPal’s former parent company and longtime payments processor, said in January that it would gradually shift its business to Adyen BV, a startup based in the Netherlands. PayPal will remain a checkout option for EBay shoppers until at least July 2023, but Adyen will gradually take over processing of EBay payments, beginning this year in North America.

The initial excitement over EBay’s switch soon turned to malaise. EBay’s stock has been sliding since the beginning of February and fell even further in late trading Wednesday after EBay reported earnings. The online marketplace gave a weak outlook for revenue growth in the current quarter.


Dan Schulman, PayPal’s chief executive officer, has been expanding partnerships with companies once viewed as threats, like Apple Inc. and Facebook Inc., and making acquisitions to strengthen its position. He’s pushing for PayPal to become a more versatile financial tool, rather than just a payment button on a website, and expand access across the financial services industry. But competition is strong from startups and incumbents alike, with large U.S. banks spending millions on their own digital offering, Zelle.

PayPal’s popular peer-to-peer payments system has continued to see strong growth, but it has yet to be a key revenue driver. Schulman said earlier this year that he believes it will make money some day. But transaction growth on Venmo slowed to 80% last quarter compared with the prior period. Last quarter, PayPal handled $132 billion in payment volume, an increase of 32%.

Shares of PayPal rose as much as 3.4% in extended trading after the results were posted. The stock, which rose more than 80% in 2017, has hit the pause button, rising just over 2% since the start of the year. Of 44 analysts covering the company, 31 had buy ratings on the stock. The other ratings were all holds.