EBAY eBay Inc

By Ezequiel Minaya 

PayPal Holdings Inc., which has worked to extend its reach since splitting with eBay Inc. last year, said Thursday it had forged a new partnership with credit-card issuer Visa Inc.

The money-moving service also posted a 15% rise in quarterly revenue and an increase in profit, with payment transactions climbing during the three-month period.

Shares of the company, up 27% over the past six months, rose 2% to $41 in after-hours trading.

PayPal has one of the largest market values of any financial-technology company. At the end of its first quarter, PayPal's customers had more than $13 billion in accounts at the online-commerce company.

And since breaking off from its former parent company, PayPal has worked to build its reach. In addition to linking to a credit or debit card or bank account, there are some 66,000 partner stores in which consumers add cash into their PayPal accounts. PayPal accounts allows customers to buy things on the web or transfer money.

With the Visa deal, PayPal will join Visa's commercial framework for mobile payments. "This will enhance transaction security and expand acceptance for PayPal's digital wallet to all physical retail locations where Visa contactless transactions are enabled," the companies said in a statement.

Consumers will be able to move money from their PayPal and Venmo accounts to their bank accounts via their Visa debit card. The pact also installs economic incentives, including Visa incentives for increased volume, among other facets.

"We want to democratize financial services and become an everyday, essential service for underserved consumers," said Dan Schulman, chief executive of PayPal, in a statement.

PayPal also raised its annual revenue guidance to between $10.75 billion and $10.85 billion, from $10.5 billion to $10.7 billion previously. The company now expects adjusted earnings on a per-share basis between $1.47 and $1.50, up from $1.45 to $1.50 previously.

For the third quarter, PayPal expects adjusted earnings between 33 cents and 35 cents, compared with analysts' expectations of 33 cents.

In the June quarter, the company processed 1.4 billion payment transactions, which translates to 29 payment transactions per active account, an increase from 26 transactions per active account a year earlier.

For the quarter, PayPal's earnings rose to $323 million, or 27 cents a share, from $305 million, or 25 cents a share, a year earlier. Excluding certain items, the company posted per-share earnings of 36 cents, up from 33 cents a year earlier, on a pro forma basis, in line with the average analyst estimate of 36 cents, according to Thomson Reuters. The company had forecast adjusted earnings between 34 cents and 36 cents.

The San Jose, Calif., company said revenue rose 15% to $2.65 billion, above the average analyst estimate of $2.6 billion. The company had projected quarterly revenue of $2.57 billion to $2.62 billion.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

(END) Dow Jones Newswires

July 21, 2016 17:19 ET (21:19 GMT)

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