Key TakeawaysPayPal shares fell after the digital payments company issued weaker-than-expected guidance for the first quarter and full year amid a company transformation.The company posted fourth-quarter earnings that surpassed analysts' expectations due to a strong holiday season.The PayPal share price may find support around $46.50 from the lower trendline of a descending channel if a deeper earnings retracement occurs over the coming weeks. PayPal Holdings, Inc. Source: TradingView.com.Shares in digit ...

Financial Data and Key Metrics Changes - In Q4 2023, PayPal reported a 9% revenue growth on $8 billion, with total payment volume (TPV) of $410 billion, representing a 15% growth at spot and 13% growth on a currency-neutral basis [6][27][30] - Non-GAAP earnings per share increased by 19% year-over-year to $1.48 in Q4, and for the full year, it rose 24% to $5.10 [7][28] - Transaction margin dollars were flat year-over-year in Q4 and declined 1% for the full year, with transaction take rate decreasing by 10 basis points to 1.78% in Q4 [27][33][36] Business Line Data and Key Metrics Changes - Global branded checkout volumes grew approximately 5% on a currency-neutral basis in Q4, with full-year growth at 6% [30][31] - PSP processing volumes grew 29% in Q4, driven by Braintree's performance [31] - Other value-added services revenue grew 9% in Q4 to $743 million, with full-year growth of 26% primarily due to increased interest income on customer stored balances [32] Market Data and Key Metrics Changes - U.S. TPV grew 11% in Q4, while international TPV grew 17% on a currency-neutral basis, mainly driven by strength in Europe and improvements in Asia [30][32] - Monthly active accounts increased by 1% for both the quarter and the full year, with total active accounts at 426 million [28][29] Company Strategy and Development Direction - The company is focused on reshaping commerce and enhancing customer experience through a new leadership team and organizational structure [6][9] - Key strategic priorities for 2024 include accelerating growth in branded checkout, improving profitability, and unlocking data value [11][12] - The company plans to reduce its global workforce by approximately 9% to enhance operational efficiency [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the foundation being set for future growth, emphasizing the importance of execution in 2024 [6][12] - The company anticipates a relatively consistent macroeconomic environment with some interest rate declines, expecting non-GAAP EPS for 2024 to be roughly in line with the prior year [40][41] Other Important Information - PayPal will include stock-based compensation in its non-GAAP results starting in Q1 2024, aiming for greater transparency [39][70] - The company is committed to maintaining an investment-grade credit rating and plans to allocate approximately 70% to 80% of its free cash flow to share buybacks [41] Q&A Session Summary Question: Outlook for transaction margin dollars - Management acknowledged the significant changes within the company and identified three levers for transaction margin growth: branded experience, unbranded processing, and value-added services [43][45][46] Question: Branded TPV growth trends - Management indicated that branded checkout performance was consistent, with expectations for continued growth in 2024, focusing on improving consumer value propositions [50][51][52] Question: Measuring success of new initiatives - Management emphasized the importance of execution before incorporating new initiatives into guidance, with a focus on improving customer engagement and transaction margins [55][56][58] Question: Pricing strategy in Braintree - Management highlighted a shift towards a price-to-value conversation with merchants, focusing on profitable growth and higher-margin opportunities [60][62] Question: Balancing cost control and growth - Management confirmed the ability to manage expenses while investing in growth, emphasizing the need for ongoing efficiency improvements [64][65] Question: Impact of regulatory changes in Europe - Management is closely monitoring regulatory changes and is prepared to deliver omnichannel solutions for customers [73][74]

Slowing growth. A churning of inactive accounts.A slew of puts and takes dominated PayPal’s earnings Wednesday (Feb. 7), and a number of flat metrics sent investors headed, at least initially, for the exits in after-hours trading.The stock was down 7% Wednesday evening.Revenue rose 9% to $8 billion in the quarter, as calculated in constant currency.As detailed in the supplemental materials, active accounts were down 2% year over year, and were down 0.6% sequentially, to a recent 426 million. Management attr ...

Paypal (PYPL) reported $8.03 billion in revenue for the quarter ended December 2023, representing a year-over-year increase of 8.7%. EPS of $1.48 for the same period compares to $1.24 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $7.88 billion, representing a surprise of +1.81%. The company delivered an EPS surprise of +8.82%, with the consensus EPS estimate being $1.36.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

Paypal (PYPL) came out with quarterly earnings of $1.48 per share, beating the Zacks Consensus Estimate of $1.36 per share. This compares to earnings of $1.24 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 8.82%. A quarter ago, it was expected that this technology platform and digital payments company would post earnings of $1.22 per share when it actually produced earnings of $1.30, delivering a surprise of 6.56%.Over the la ...

A PayPal sign is seen at its headquarters on January 30, 2024 in San Jose, California. PayPal announced plans to lay off 2,000 employees or 7 percent of its workforce.PayPal reported better-than-expected fourth-quarter results on Wednesday, but issued guidance that was a bit below estimates. The shares slipped in extended trading.Here's how the company did:Earnings per share: $1.48 adjusted, vs. $1.36 expected by LSEG, formerly known as RefinitivRevenue: $8.03 billion, vs. $7.87 billion expected, according ...

When big-named investors make their positions public, the investing public tends to take notice. That certainly appears to be the case today with PayPal (NASDAQ:PYPL), as Altimeter Capital’s Brad Gerstner announced a position in the fintech giant via a post on X (formerly Twitter). Shares of PYPL stock have moved slightly lower in today’s market, and this fintech company does lag the overall Nasdaq at the time of writing.Gerstner is a notable investor in other major tech companies and has been very right on ...

Financial Performance - Net revenues increased by $2.3 billion, or 8%, in 2023 compared to 2022, driven by a 13% growth in total payment volume (TPV)[184] - Operating income increased by $1.2 billion, or 31%, in 2023 compared to 2022, with operating margins improving to 17% from 14%[185] - Net income increased by $1.8 billion, or 76%, in 2023 compared to 2022, driven by higher operating income and gains on strategic investments[186] - Total Payment Volume (TPV) increased by 13% to $1.53 trillion in 2023 compared to $1.36 trillion in 2022[203] - Number of payment transactions grew by 12% to 25.0 billion in 2023 from 22.3 billion in 2022[203] - Transaction revenues grew by 7% or $1.7 billion in 2023, driven by growth in TPV and payment transactions from Braintree products[202] - Revenues from other value-added services increased by 26% or $602 million in 2023, primarily due to higher interest earned on customer account balances[206] - Cross-border TPV accounted for 13% of total TPV in 2023, down from 16% in 2021[203] - Transaction revenues were negatively impacted by a $190 million decline in contractual compensation from sellers violating terms, primarily in international markets[202] - The company's PayPal branded credit programs funded by a partner institution exceeded the minimum return threshold through December 31, 2023[207] - No individual quarter in 2023 accounted for more than 30% of annual net revenue, indicating minimal seasonality[208] Operational Metrics - Total Payment Volume (TPV) reached $1.53 trillion in 2023[13] - 25.0 billion payment transactions were processed in 2023[13] - Active accounts totaled 426 million, including 391 million consumer accounts and 35 million merchant accounts as of December 31, 2023[9][17] - Active accounts decreased by 2% to 426 million in 2023 from 435 million in 2022[203] - Number of payment transactions per active account increased by 14% to 58.7 in 2023 from 51.4 in 2022[203] Global Presence and Market Operations - PayPal operates in approximately 200 markets globally[17] - The payments platform supports transactions in approximately 200 markets and 150 currencies, with fund withdrawals in 56 currencies and account balances in 24 currencies[35] - Approximately 42% of net revenues in 2023 were generated from customers outside the U.S., subjecting the company to foreign currency exchange risks[187] - Foreign currency exchange rate movements had a favorable impact of $239 million on net revenues in 2023, partially offset by hedging impacts[188] - The company operates in approximately 200 markets but allows customers in only about half of these markets to receive payments, with restrictions on balance holding and fund withdrawals[86] Product and Service Offerings - PayPal's payment solutions support a variety of funding sources, including bank accounts, credit/debit cards, cryptocurrencies, and stored value products[10][23] - PayPal's merchant financing solutions, such as PayPal Working Capital and PayPal Business Loan, provide access to capital for small and medium-sized businesses[21] - PayPal's consumer credit products, including buy now, pay later options, are available in markets like the U.S., U.K., France, and Germany[26] - PayPal's Venmo digital wallet is a leading mobile application in the U.S. for P2P payments and purchases at select merchants[24] - PayPal's Xoom service enables secure, fast, and cost-effective international money transfers[24] - PayPal's protection programs help safeguard merchants and consumers from financial loss due to fraud or non-performance[28] - The company's cryptocurrency offerings, including the PYUSD stablecoin, are subject to evolving regulations, which could lead to additional compliance costs and operational changes[91][92] Regulatory and Compliance - The company holds a full Bitlicense in New York for cryptocurrency services and operates under money transmitter licenses in the U.S. and other jurisdictions[44] - PayPal's AML program is designed to prevent money laundering, terrorist financing, and illicit activities, overseen by an AML/Bank Secrecy Act Officer[52] - The company is subject to EU Multilateral Interchange Fee Regulation, which caps interchange fees and imposes business rules for payment card transactions[53] - The company operates under financial services supervision in the U.K. and EU, regulated by the FCA and CSSF, respectively[47] - PayPal's consumer short-term, interest-free installment products are subject to federal and state laws in the U.S. and local regulations in various countries[48] - The company is subject to extensive and complex regulatory requirements across multiple jurisdictions, including banking, data protection, and cryptocurrency regulations[82][83] - Non-compliance with regulations could result in significant fines, penalties, and enforcement actions, potentially harming the company's reputation and financial condition[84] - In Europe, the company's subsidiary PayPal (Europe) may face increased regulatory scrutiny and costs if deemed a significant supervised entity by the European Central Bank[87] - The company's Singapore-based subsidiary, PayPal Pte. Ltd., holds a Major Payment Institution license, requiring compliance with regulatory requirements that increase operational complexity and costs[88] - The company's U.K. subsidiary faces post-Brexit regulatory requirements, including authorizations as an electronic money institution and cryptoasset business, which could impact operations if not met[100] - The company must comply with anti-money laundering and counter-terrorist financing regulations, which could increase compliance costs and operational challenges[100] - PayPal relies on Binding Corporate Rules and Standard Contractual Clauses for transferring personal data of EEA individuals to the U.S., with the EU-U.S. Data Privacy Framework becoming effective in July 2023[102] - The company faces risks from inconsistent privacy and data protection laws, which could result in significant fines, penalties, and reputational harm[101] - PayPal is subject to regulatory scrutiny and potential legal proceedings under antitrust and competition laws in the U.S. and internationally[104] Cybersecurity and Technology - PayPal's technology infrastructure incorporates multiple layers of protection for business continuity, system redundancy, and cybersecurity risk mitigation[37] - The company's systems and operations are vulnerable to cyberattacks, which could result in significant costs, third-party liabilities, and reputational damage[69][70][72] - PayPal continues to undertake system upgrades and re-platforming efforts to improve the availability, reliability, resiliency, and speed of its payments platform[76] - The company faces risks related to third-party technology access and development, which could limit its ability to innovate and adapt to new technologies[81] - Cybersecurity risks are managed through a three-lines-of-defense model, with regular assessments and 24/7 monitoring via the PayPal Cyber Defense Center[160][163] - The Board oversees cybersecurity risks, with the ARC Committee receiving periodic reports from the Chief Information Security Officer[165][166] - The company's cybersecurity efforts are overseen by the CISO organization, which monitors cyber regulation requirements and conducts risk assessments[169] Employee and Workforce - PayPal employed approximately 27,200 people globally as of December 31, 2023, with 45% in the Americas, 42% in Asia-Pacific, and 13% in Europe and the Middle East[59] - 78% of employees reported that the leadership principles are now part of their day-to-day work, a year after their launch in 2022[60] - The 2023 annual employee survey had an 82% response rate, with an engagement score of 77% and an intent-to-stay score of 77%[61] - 46% of PayPal's Board and 75% of the senior leadership team identified as women and/or from a diverse ethnic group as of December 31, 2023[64] - PayPal's workforce reached 55% overall diverse representation, including 43% global gender diversity and 54% U.S. ethnic diversity as of December 31, 2023[64] - PayPal supports employee financial wellness by offering individual financial coaching and matching eligible employee donations and volunteer time up to $2,500 annually per employee[63] - PayPal's global Community Impact program matches employee donations and volunteer time with non-profit organizations[63] - PayPal's employee resource groups promote community and belonging for employees identifying as Black, Latinx/Hispanic, women, interfaith, veterans, LGBTQ+, Asian, and disabled persons[65] - The company faces intense competition for skilled talent, particularly in technology and executive roles, which could harm business operations[157] Risk Management - The company is regularly involved in litigation, regulatory investigations, and government inquiries, which could result in substantial judgments, fines, and reputational harm[106] - PayPal may face intellectual property infringement claims, which could lead to costly litigation and require changes to products or services[107] - The company operates in a highly competitive global payments industry, with intense competition from both larger and smaller companies[110] - Changes in payment card network fees, rules, or practices could increase operating costs and reduce PayPal's competitive position[112] - PayPal's financial performance is sensitive to changes in how consumers fund transactions, with higher costs associated with payment card usage[116] - The company's credit products expose it to risks related to credit risk management and regulatory compliance[117] - PayPal's ability to offer consumer credit and merchant financing products depends on partnerships with unaffiliated financial institutions, which could be interrupted or limited[118] - The company faces risks of increased non-payment rates among account holders due to factors such as economic downturns, rising interest rates, and high unemployment, which could negatively impact financial performance[120] - The company relies on third-party funding for its credit portfolio, and failure to secure such funding could adversely affect growth and financial condition[123] - Cross-border trade, a significant revenue source, may be negatively impacted by factors like currency fluctuations, tariffs, and trade restrictions, potentially reducing transaction volumes and profits[125][126] - The company incurs substantial losses from fraud, abusive behaviors, and erroneous transactions, which could harm business operations and customer confidence[127][128] - Purchase and Seller Protection Programs result in significant losses, with potential challenges in recovering funds from merchants[129] - The company is exposed to risks from illegal activities on its platform, including money laundering and fraud, which could lead to legal and regulatory actions[132][133] - Strategic transactions, including acquisitions and investments, carry risks such as integration challenges, regulatory hurdles, and potential financial losses[135][136] - International operations generate a significant portion of revenues but are subject to risks like regulatory compliance, currency fluctuations, and political instability[137][138] - Adverse global economic conditions, such as recessions or financial market turmoil, could reduce demand for the company's products and services[140] - Key metrics are calculated using internal company data and require significant judgment, with potential inaccuracies harming the company's reputation[142] - The company continuously improves fraud detection models and removes illegitimate activity from key metrics, though prior periods are not typically updated[143] - ESG issues, including climate-related risks, could adversely affect the company's business, reputation, and financial condition[144][146] - The company holds significant cash and investments with financial institutions, exposing it to counterparty default risks[148] - Customer fund management is critical, with regulatory compliance and public confidence being key to business success[149] - The company has significant indebtedness, which could limit financial flexibility and impact cash flow for other purposes[150] - Changes in tax laws, including digital services taxes and global minimum tax provisions, could materially affect the company's effective tax rate and cash flows[153] - The company faces macroeconomic risks, including global conflicts, inflation, and supply chain shortages, which could impact future financial results[183] Corporate Governance and ESG - The company is committed to ESG management, focusing on responsible business practices, employee culture, social innovation, and environmental sustainability[58] - Regulatory scrutiny on privacy, data protection, and cybersecurity is increasing globally, with evolving laws and potential impacts on business costs[55] - The company repurchased 10.1 million shares in Q4 2023 at an average price of $60.37 per share, totaling $6.4 billion[178] - As of December 31, 2023, the company owned and leased properties totaling 3.8 million square feet, with 2.0 million square feet in the U.S.[170] - The company has a stock repurchase program authorized for up to $15 billion, with $10.859 billion remaining as of December 31, 2023[176] - In June 2023, the company entered into a multi-year agreement to sell up to €40 billion of U.K. and European BNPL loan receivables, with sales beginning in October 2023[122]

In this video, I will talk about PayPal (PYPL 3.53%), the current state of the stock, what I'm expecting from the company after watching the First Look event it recently had, and what the market is expecting the company to report for the fourth quarter and full fiscal year of 2024.*Stock prices used were from the trading day of Feb. 6, 2024. The video was published on Feb. 6, 2024. ...

PayPal (PYPL 3.53%) was once the top name in financial technology. It's still the dominant player in the fintech field, but it has lost its luster. Investors haven't been pleased with its progress, and PayPal stock is down 27% over the past year.There's a lot of change taking place right now at the company as it strives to right its ship. Let's go through the bull and bear cases for PayPal and see if its stock is worth taking a chance on.An attractive customer value propositionParkev Tatevosian: My bull cas ...