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(Bloomberg) -- The proliferation of vaccines around the world hasn’t stopped people from shopping online with PayPal Holdings Inc., which boosted its forecasts for growth in new users and revenue for the year.
Total payments volume in the first three months of the year surged a record 50% to $285 billion, topping the $265 billion average of analyst estimates, even as local governments continued to loosen restrictions throughout the quarter. The firm now expects to add as many as 55 million new users to its platform this year, an increase from earlier guidance.
PayPal has benefited as consumers swarmed to online shopping over the course of the last year, spurred by pandemic-related shutdowns and orders to shelter in place as much as possible. Still, investors worried that the trend would reverse as the pandemic eased. Wednesday’s results show PayPal doesn’t believe that shift is slowing down anytime soon.
“Even as stores begin to open up, as restaurants begin to open, as events begin to open, people will be paying for those things in a digital fashion,” Chief Executive Officer Dan Schulman said in an interview. “We now believe the shift to consumer digital behavior is going to remain essentially unchanged in a post-Covid world.”
PayPal shares rose 4.9% to $259.55 in extended New York trading after the announcement. The stock had climbed 5.6% this year through the close of regular trading Wednesday, outpacing the 4.6% advance of the S&P 500 Information Technology Index.
The payments giant now expects revenue for the full year to climb 20% to $25.75 billion, a slight increase from the 19% jump it was previously expecting. Total payments volume is likely to jump by roughly 30%.
PayPal added 14.5 million new users to its platform during the first three months of the year, an increase that also topped estimates. Overall revenue surged 29% to $6.03 billion, greater than the $5.88 billion analysts were anticipating.
Even the firm’s person-to-person payments service Venmo has benefited from the pandemic after the firm debuted a new credit-card for the service last year. Volumes inside Venmo rose 63% to $51 billion.
PayPal has been adding new services and capabilities to its apps as part of a bigger push to become a so-called super app, which would allow consumers to shop and manage finances all inside the PayPal platform.
The firm in recent months, for instance, has added the ability for consumers to split up their purchases and pay them off over time as well as the ability to buy, sell and hold certain cryptocurrencies.
Payment transactions per active account -- a measure of usage on the firm’s platform -- jumped 7% to 42.2.
“That’s really significant,” Schulman said. “The new products and services were putting into place like buy-now-pay-later, crypto, the Venmo credit card, those are performing well beyond our expectations.”
(Updates with CEO interview beginning in the fourth paragraph.)
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