On July 30, 2024, PayPal Holdings Inc (PYPL, Financial) released its 8-K filing for the second quarter of 2024, showcasing robust financial results that surpassed analyst expectations. PayPal, a leading provider of electronic payment solutions, reported significant growth in both revenue and earnings per share (EPS), reinforcing its position in the credit services industry.
Company Overview
PayPal was spun off from eBay in 2015 and has since become a dominant player in the electronic payments sector, focusing on online transactions. By the end of 2023, the company boasted 426 million active accounts. PayPal also owns Venmo, a popular person-to-person payment platform.
Q2 2024 Financial Highlights
PayPal Holdings Inc (PYPL, Financial) reported net revenues of $7.9 billion for Q2 2024, an 8% increase year-over-year, and 9% on a currency-neutral basis. This figure exceeded the analyst estimate of $7.811 billion. The company's GAAP EPS rose by 17% to $1.08, while non-GAAP EPS surged by 36% to $1.19, both surpassing the estimated EPS of $1.16.
| Metric | Q2 2024 | Q2 2023 | YoY Growth |
|---|---|---|---|
| Total Payment Volume (TPV) | $416.8 billion | $376.5 billion | 11% |
| Net Revenues | $7.9 billion | $7.3 billion | 8% |
| GAAP Operating Income | $1.3 billion | $1.1 billion | 17% |
| GAAP EPS | $1.08 | $0.92 | 17% |
| Non-GAAP EPS | $1.19 | $0.87 | 36% |
Operational Metrics
PayPal's total payment volume (TPV) increased by 11% to $416.8 billion, reflecting the company's expanding transaction base. Payment transactions grew by 8% to 6.6 billion, and payment transactions per active account rose by 11% to 60.9. Despite a slight year-over-year decrease of 0.4% in active accounts to 429 million, the company saw a sequential increase of 0.4%, adding 1.8 million new accounts.
Cash Flow and Balance Sheet
PayPal generated $1.5 billion in cash flow from operations and $1.4 billion in free cash flow. Adjusted free cash flow, which excludes the net timing impact of originating and selling European buy now, pay later (BNPL) receivables, was $1.1 billion. The company ended the quarter with $18.3 billion in cash, cash equivalents, and investments, and $12.2 billion in debt.
Shareholder Returns
PayPal returned $1.5 billion to shareholders by repurchasing approximately 24 million shares of common stock during the quarter. Over the trailing 12 months, the company has repurchased approximately 82 million shares, returning $5.0 billion to shareholders.
CEO Commentary
"PayPal delivered a strong second quarter and first half, and I’m confident we’re on the right track. We delivered our best transaction margin dollar growth since 2021, and we are making steady progress on our strategic transformation, while investing in innovation and operating more efficiently. Given the strength of our business, we are raising our 2024 guidance and increasing share repurchases. We are operating from a position of strength, delivering for our customers, and focusing on long-term profitable growth."
— Alex Chriss, President and CEO
Financial Guidance
PayPal has raised its full-year 2024 guidance, now expecting GAAP EPS to be in the range of $3.88 to $3.98, up from the previous estimate of approximately $3.65. Non-GAAP EPS growth is projected to be in the low to mid-teens, compared to the prior mid- to high-single digit growth estimate.
For the third quarter of 2024, PayPal anticipates mid-single-digit revenue growth, GAAP EPS between $0.96 and $0.98, and high single-digit non-GAAP EPS growth.
PayPal Holdings Inc (PYPL, Financial) continues to demonstrate strong financial performance, driven by its strategic initiatives and operational efficiency. Investors and stakeholders can access the full earnings release and additional details through the company's Investor Relations website.
Explore the complete 8-K earnings release (here) from PayPal Holdings Inc for further details.
