PayPal Holdings, Inc. (NASDAQ: PYPL) reported strong financial results for the third quarter, beating market expectations and driving the company's stock up 1.4% in after-hours trading. The payment technology company's impressive performance was driven by an increase in transactions per user and total payment volume.

In Q3 2023, PayPal achieved adjusted earnings per share (EPS) of $1.30, surpassing the consensus estimate of $1.23. This marked an improvement from the previous quarter's EPS of $1.16, as well as a significant year-on-year increase. However, the company's projected EPS for the fourth quarter fell short of the average analyst estimate, with PayPal expecting adjusted EPS of $1.38 compared to the anticipated $1.40.

PayPal demonstrated robust revenue growth, with Q3 revenue reaching $7.42 billion, exceeding the consensus estimate of $7.38 billion. This represented a sequential increase from the prior quarter's revenue of $7.29 billion, as well as a substantial rise from the $6.85 billion generated in the same period the previous year.

The total payment volume (TPV) for Q3 saw a notable increase, reaching $387.7 billion, up from $367.5 billion in Q2. This upward trend in TPV reflects the growing number of transactions facilitated by PayPal's platform.

While the total number of active accounts slightly declined from 431 million in June to 428 million at the end of September, PayPal witnessed a boost in transactions per active account. The average number of transactions per user rose to 56.6 in Q3 from 54.7 in Q2, showing a 13% increase on a trailing 12-month basis.

PayPal also provided insight into its capital allocation plans for the future, reaffirming its expectation to repurchase approximately $5 billion worth of shares in 2023.

In terms of cash flow, PayPal reported net cash provided by operating activities of $1.26 billion in Q3, a decrease from $1.76 billion in the same period in 2022. However, adjusted free cash flow improved to $1.91 billion, compared to $1.57 billion a year ago.

These strong financial results position PayPal for continued growth and solidify its position as a leading player in the global payments industry. The company's ability to drive higher transactions per user and increase total payment volume underscores its commitment to innovation and customer satisfaction. With a focus on capital allocation and share repurchases, PayPal remains poised for long-term success in the evolving digital payments landscape.