![]() In particular, management now expects adjusted earnings per share to grow by 20% to about $4.95, which is 2% higher than the guidance the company shared back in February. That said, most investors seem to be overlooking the company’s full-year guidance, which points towards a new record in profitability. It clearly implies notable sequential deceleration, a trend the market never likes to see. For the quarter, management expects revenues to grow by roughly 7.5% to 8.0% on a CC basis and by about 6.5% to 7.0% based on the current spot FX rates. If there was something that the market found distasteful, that would be the company’s guidance for Q2. Overall, it looks like this was an excellent quarter for PayPal, both operationally and financially. On an adjusted basis, which excludes stock-based compensation and other non-cash items, earnings-per-share grew by 33% to $1.17. Earnings per share (EPS) also grew by a significant 61% to $0.70. The combination of double-digit revenue growth against a much humbler mid-single-digit growth in operating expenses resulted in substantial operating income growth of 46.6% to $999 million. Hence, total operating expenses grew by just 4.7% to $6.04 billion. In fact, customer support, sales & market, technology & development, and general & administrative expenses all declined compared to the prior-year period. Still, the company was able to control most of its other operating expenses. When it comes to PayPal’s expenses, total volume-based expenses grew by 17%, while transaction margin dollars grew by 1%, resulting in total transaction expenses (which comprise just over half of PayPal’s operating expenses) growing by nearly 18% to $3.3 billion. ![]() This growth was primarily driven by higher interest income on customer store balances and strong consumer and merchant credit performance.Ĭonsequently, the company was able to post total revenue growth of 10.4% in CC to $7.04 billion, which was actually about 1.5 percentage points higher than management’s prior guidance that targeted ~9% CC growth. Specifically, Total Payment Volume (TPV) came in at $354.5 billion, rising by 10% year-over-year or by 12% on a constant-currency (CC) basis.Īdditionally, there was a noteworthy 39% increase in revenue from value-added services, totaling $676 million. While investors may have had a negative reaction to PayPal’s Q1 results, the company has positioned itself to achieve new levels of profitability this year.įor the quarter, Transaction revenues advanced 6% to $6.4 billion, driven primarily by higher processing volumes. Q1: Setting the Stage for Record FY2023 Profits The company generates strong free cash flow, keeps returning substantial amounts of cash to shareholders, and appears to be trading at a rather attractive valuation. That said, PayPal’s most recent results demonstrated that its core business model remains intact. Take Block ( NYSE:SQ), for instance, which despite growing its revenues by 26% in Q1, failed to achieve positive net income. The increasing competition and unstable trading landscape have led to less promising prospects for profitability. This is likely the result of investors treating PayPal similarly to most fintech companies, which have been underperforming in the current environment. The company’s continued avoiding of cryptocurrencies in its public messaging coincides with the crypto industry’s implosion in 2022.Shares of PayPal ( NASDAQ:PYPL) are currently trading at 6-year lows, with the market lacking confidence in the company’s medium-term outlook despite its rather robust results. Unlike prior recent earnings when it touted its crypto initiatives, PayPal mentioned its crypto business only once in the latest release. That’s up from $6.37 billion in the year-ago period. The payments provider said transaction revenue, which includes revenue from its main payments business along with crypto transactions, totaled $6.7 billion in the fourth quarter of 2022. ![]() PayPal’s share price rose in after-hours trading, reaching $83.50, a 6% increase over its close in regular trading. “I am confident that we are well positioned to utilize our unique assets to remain a market leader in digital payments,” Schulman said in the earnings release. Profits in the fourth quarter of 2022 increased to $921 million compared to $801 million in the same period in 2021. ![]() PayPal reported a 7% increase in overall revenue from $6.92 billion in the fourth quarter of 2021 to $7.4 billion in same period of 2022. ![]()
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