PayPal Holdings Inc (PYPL, Financial) released its Q3 2023 earnings report on November 1, 2023. The company reported solid performance, delivering on both revenue and EPS. The total payment volume (TPV) was $387.7 billion, growing 15% and 13% on an FX-neutral (FXN) basis. Net revenues were $7.4 billion, growing 8% and 9% FXN. GAAP operating income was $1.2 billion, growing 4%; non-GAAP operating income was $1.6 billion, growing 8%. GAAP EPS was $0.93 compared to $1.15 in Q3'22; non-GAAP EPS was $1.30 compared to $1.08 in Q3'22, growing 20%. Operating cash flow was $1.3 billion with free cash flow of $1.1 billion.
Financial Highlights
PayPal's Q3 2023 results showed a solid performance with net revenues increasing by 8% and 9% FXN. GAAP operating income grew by 4% to $1.2 billion, while non-GAAP operating income grew by 8% to $1.6 billion. GAAP EPS was $0.93, compared to $1.15 in Q3'22, while non-GAAP EPS was $1.30, compared to $1.08 in Q3'22, representing a 20% growth.
Balance Sheet and Liquidity
As of September 30, 2023, PayPal's cash, cash equivalents, and investments totaled $15.4 billion. The company's debt totaled $10.6 billion. In Q3'23, PayPal repurchased approximately 23 million shares of common stock, returning $1.4 billion to stockholders.
Cash Flow
In Q3'23, PayPal generated cash flow from operations of $1.3 billion, and free cash flow of $1.1 billion. Cash flow from operations and free cash flow include a $0.8 billion negative impact from European buy now, pay later (BNPL) loans originated as held for sale (HFS) in the quarter.
Financial Guidance
For Q4'23, PayPal expects net revenues to grow ~6%-7% on a spot basis and ~7%-8% FXN. GAAP earnings per diluted share are expected to be ~$1.20, compared to $0.81 in the prior year period, and non-GAAP earnings per diluted share are expected to grow ~10% to $1.36, compared to $1.24 in the prior year period.
Explore the complete 8-K earnings release (here) from PayPal Holdings Inc for further details.
