PayPal earnings: 36 cents per share, a penny beat

Source: CNBC

Shares of payments platform PayPal were up more than 6 percent in after-hours trading Wednesday after it reported quarterly earnings and revenue that beat analysts' expectations.

PayPal posted fourth-quarter earnings per share of 36 cents on revenue of $2.56 billion. Analysts had expected the company to report earnings of about 35 cents a share on $2.51 billion in revenue, according to a consensus estimate from Thomson Reuters.

The results mark 21 percent revenue growth and 27 percent EPS growth on an adjusted, currency-neutral basis. PayPal's board also authorized a $2 billion stock buyback program.

"As money becomes digital and the world goes mobile, we see tremendous opportunity ahead to expand our leadership, transform the way people move and manage their money, and deliver increased value to shareholders," Daniel Schulman, chief executive of PayPal, said in a statement.

The company's active user base grew to 179 million in the fourth quarter, from 173 million last quarter, the earnings release said. And it processed 1.4 billion transactions, up from 1.2 billion reported in the third quarter.

PayPal is just seven months out of a spinoff from e-commerce giant eBay. Breaking off from eBay has made PayPal more nimble to respond to fast-changing technology, like consumers' move to mobile, Schulman told CNBC's Jim Cramer in December.

In December, Schulman highlighted mobile peer-to-peer payment app Venmo, calling it one of the "jewels of Paypal."

Venmo processed $2.5 billion in total payment volume in the fourth quarter, a 174 percent year-on-year increase, PayPal said.

Citing the value of Venmo, Mizuho Securities initiated coverage of PayPal at a "buy" rating earlier this month.

"We like PayPal's revised strategy," analyst Neil Doshi wrote in a Jan. 12 research note. "PayPal spent years chasing the 'offline' world, creating cumbersome integration with large retailers. Over the past year, we have seen PayPal returning to its online roots and more focused on online and mobile payments."

In addition to lauding Venmo, PayPal highlighted in the release its recent acquisition of Xoom and partnership with Alibaba as evidence of its "solidified" role in the digital payments space.

In a look ahead into the next period, PayPal guided investors to expect adjusted earnings per share of 34 cents to 36 cents for the first quarter, and net revenue of $2.47 billion to $2.52 billion.

Shares of PayPal are down more than 12 percent so far this year.

— CNBC's Kirsten Chang and Abigail Stevenson contributed to this article.