The company reported a 22% increase in revenue to $5.26 billion with earnings up 49% to $1.07 per share. Analysts were expecting the company to report revenue of $4.99 billion on earnings of 88 cents per share.
The revenue and earnings for the quarter represented the company's strongest quarter to date.
"Our second quarter performance highlights the benefits of PayPal’s diversification and scale, and our resulting earnings power," said CFO John Rainey. "We delivered 25% revenue growth on a currency neutral basis, 49% growth in non-GAAP earnings per share, and generated $2.2 billion dollars in free cash flow.”
For the third quarter, PayPal expects revenue to grow 23% year over year, with earnings expected to grow 25% to $3.88 per share. Analysts are expecting earnings of $3.39 for the quarter.
PayPal shares continued their surge after jumping more than 70% over the past three months, thanks in part to a surge in online transactions that have been driven by the coronavirus stay at home orders. Shares were rising 1.8% to $188 after-hours on Wednesday after jumping 4.7% during the day's session.
"In the midst of the COVID-19 pandemic, digital payments have become more important and essential than ever. Our record performance in the second quarter -- our strongest quarter ever -- reaffirms the relevance of PayPal in the unfolding digital future," said CEO Dan Schulman.
PayPal was recently the subject of a bullish note from Guggenheim, which said that the company is "helping a sizable -- and underserved -- segment of the economy," which are underbanked small-and-medium-sized businesses.