PayPal Reports Third Quarter 2024 Results

Rhea-AI Impact

(Neutral)

Rhea-AI Sentiment

(Positive)

Rhea-AI Summary

PayPal (PYPL) reported strong Q3 2024 results with net revenues increasing 6% to $7.8 billion. Total payment volume grew 9% to $422.6 billion, while transaction margin dollars rose 8% to $3.7 billion. GAAP operating income increased 19% to $1.4 billion, with operating margin expanding 198 basis points to 17.7%. GAAP EPS increased 6% to $0.99, while non-GAAP EPS grew 22% to $1.20. Active accounts increased 0.9% to 432 million. The company returned $1.8 billion to stockholders through share repurchases and raised its full-year non-GAAP guidance.

Positive

Net revenues increased 6% to $7.8 billion
Total payment volume grew 9% to $422.6 billion
GAAP operating income increased 19% to $1.4 billion
Operating margin expanded 198 basis points to 17.7%
Non-GAAP EPS grew 22% to $1.20
Returned $1.8 billion to stockholders through share repurchases

Negative

Slowing active account growth at 0.9% YoY
Adjusted free cash flow declined 19% YoY
Q4 guidance indicates low single-digit revenue growth
Projected low to mid-single-digit decrease in Q4 non-GAAP EPS

Insights

PayPal's Q3 2024 results demonstrate solid financial performance with notable improvements in key metrics. Revenue grew 6% to $7.8 billion, while operating margins expanded significantly by 194 basis points to 18.8%. The company's transaction volume growth of 9% to $422.6 billion shows resilient consumer spending.

Particularly impressive is the 22% growth in non-GAAP EPS to $1.20, significantly outpacing revenue growth and reflecting improved operational efficiency. The company's strong cash position of $16.2 billion and substantial share buybacks of $1.8 billion in Q3 demonstrate robust capital return to shareholders.

However, slower active account growth of just 0.9% and conservative Q4 guidance suggesting low single-digit revenue growth indicate some headwinds in user acquisition and competitive pressures.

The payments landscape shows interesting dynamics in PayPal's results. The 9% increase in payment transactions per active account to 61.4 indicates deeper user engagement, offsetting slower account growth. This suggests PayPal's strategy shift toward monetizing existing users is gaining traction.

The company's BNPL initiatives and strategic partnerships are important differentiators in a competitive market. The raised full-year guidance, particularly for non-GAAP EPS projecting high teens growth, reflects management's confidence in executing their transformation strategy despite macro uncertainties.

10/29/2024 - 07:01 AM

SAN JOSE, Calif., Oct. 29, 2024 /PRNewswire/ -- PayPal Holdings, Inc. (NASDAQ: PYPL) today announced its third quarter 2024 results for the period ended September 30, 2024. The earnings release and related materials discussing these results can be found on PayPal's investor relations website at https://investor.pypl.com/financials/quarterly-results/default.aspx.

PayPal Holdings, Inc. will host a conference call to discuss these results at 5:00 a.m. Pacific time (8:00 a.m. Eastern time) today. A live webcast of the conference call will be available at https://investor.pypl.com. In addition, an archive of the webcast will be accessible for 90 days through the same link.

PayPal delivers strong third quarter results and full year guidance

PayPal Holdings, Inc. (NASDAQ: PYPL) today reported results for the third quarter ending September 30, 2024.

“PayPal delivered strong financial and operating results during a highly productive third quarter. We are making solid progress in our transformation as we bring new innovations to market, forge important partnerships with leading commerce players, and drive awareness and engagement through new marketing campaigns.

We are raising our full year non-GAAP guidance and are pleased with the strength we are seeing across the business. We’ve built a solid foundation in this last year that will serve us in the years to come.”

Alex Chriss
President and CEO

3Q'24 Financial Results

Net revenues increased 6% to $7.8 billion; 6% currency-neutral (FXN).
Transaction margin dollars increased 8% to $3.7 billion.
GAAP operating income increased 19% to $1.4 billion; non-GAAP¹ operating income increased 18% to $1.5 billion.
GAAP operating margin expanded 198 basis points to 17.7%; non-GAAP operating margin expanded 194 basis points to 18.8%.
GAAP EPS increased 6% to $0.99; non-GAAP EPS increased 22% to $1.20.

3Q'24 Operating Results

Total payment volume increased 9% to $422.6 billion; 9% FXN.
Payment transactions increased 6% to 6.6 billion.
Payment transactions per active account on a trailing 12-month basis increased 9% to 61.4.
Active accounts increased 0.9% to 432 million. On a sequential basis, active accounts increased 0.6%, or by 2.6 million.

Cash Flow

Cash flow from operations of $1.6 billion and free cash flow of $1.4 billion.
Adjusted free cash flow of $1.5 billion, which excludes the net timing impact between originating European buy now, pay later (BNPL) receivables as held for sale and the subsequent sale of these receivables.

Balance Sheet and Liquidity

Cash, cash equivalents, and investments totaled $16.2 billion as of September 30, 2024.
Debt totaled $12.4 billion as of September 30, 2024.
Returned $1.8 billion to stockholders by repurchasing approximately 28 million shares of common stock.
- On a trailing 12-month basis, returned $5.4 billion to stockholders by repurchasing approximately 87 million shares of common stock.

3Q'24 Financial Results

Presented in millions, except per share data and percentages

	3Q'24	3Q'23	YoY Growth	FXN YoY Growth
Total payment volume	$422,641	$387,701	9%	9%
GAAP
Net revenues	$7,847	$7,418	6%
Transaction margin dollars	$3,654	$3,369	8%
Operating income	$1,391	$1,168	19%
Operating margin	17.7%	15.7%	198bps
Effective tax rate	23.0%	17.8%	5.2pts
Net income (loss)	$1,010	$1,020	(1%)
Earnings per diluted share	$0.99	$0.93	6%
Net cash provided by operating activities	$1,614	$1,259	28%
Non-GAAP
Net revenues	$7,847	$7,418	6%	6%
Transaction margin dollars	$3,654	$3,369	8%
Operating income	$1,477	$1,252	18%
Operating margin	18.8%	16.9%	194bps
Effective tax rate	21.7%	17.2%	4.5pts
Net income	$1,228	$1,077	14%
Earnings per diluted share	$1.20	$0.98	22%
Free cash flow	$1,445	$1,101	31%
Adjusted free cash flow	$1,540	$1,911	(19%)

Financial Guidance

Presented in millions, except per share data and percentages

	October 2024 Guidance	July 2024 Guidance	Prior year period
4Q'24 Revenue	Low single-digit growth Reflects impact of price-to-value strategy and prioritization of profitable growth	N/A	$8,026
GAAP EPS	$1.03 - $1.07	Implied: ~$1.05²	$1.29
Non-GAAP EPS¹	Low to mid-single-digit decrease Reflects elevated marketing spend to support key initiatives and new products	Implied: Mid-single-digit decrease²	$1.14
FY'24
GAAP EPS³	$3.92 - $3.96	$3.88 - $3.98	$3.84
Non-GAAP EPS	High teens growth	Low to mid-teens growth	$3.83

Please see "Non-GAAP Financial Measures" and "Non-GAAP Measures of Financial Performance" for reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures and important additional information.

About PayPal

PayPal has been revolutionizing commerce globally for more than 25 years. The company creates innovative experiences that make moving money, selling, and shopping simple, personalized, and secure. PayPal empowers consumers and businesses in approximately 200 markets to join and thrive in the global economy. For more information, visit https://www.paypal.com, https://about.pypl.com/ and https://investor.pypl.com/.

Investor Relations Contact
investorrelations@paypal.com

Media Relations Contact
mediarelations@paypal.com

View original content:https://www.prnewswire.com/news-releases/paypal-reports-third-quarter-2024-results-302289931.html

SOURCE PayPal Holdings, Inc.

FAQ

What was PayPal's (PYPL) revenue growth in Q3 2024?

PayPal's revenue grew 6% year-over-year to $7.8 billion in Q3 2024.

How much was PayPal's (PYPL) total payment volume in Q3 2024?

PayPal's total payment volume reached $422.6 billion, representing a 9% increase year-over-year.

What was PayPal's (PYPL) EPS in Q3 2024?

PayPal reported GAAP EPS of $0.99 (up 6%) and non-GAAP EPS of $1.20 (up 22%) in Q3 2024.

How many active accounts does PayPal (PYPL) have as of Q3 2024?

PayPal had 432 million active accounts, showing a 0.9% increase year-over-year.

PayPal Reports Third Quarter 2024 Results