10-KPeriod: FY2018

PayPal Holdings, Inc. Annual Report, Year Ended Dec 31, 2018

Filed February 7, 2019For Securities:PYPL

Summary

PayPal Holdings, Inc. (PYPL) reported its 2018 annual results on February 6, 2019. The company demonstrated robust growth in net revenues, increasing by 18% year-over-year, driven primarily by a 27% increase in Total Payment Volume (TPV). This growth was fueled by an expanding active account base and an increase in payment transactions per active account. Significant strategic moves during the year included the acquisition of iZettle, Simility, and Hyperwallet, aimed at expanding PayPal's in-store presence, enhancing fraud prevention capabilities, and strengthening its payout solutions. The company also completed the sale of its U.S. consumer credit receivables portfolio to Synchrony Bank, which impacted revenue streams but improved balance sheet capacity. PayPal continued its share repurchase program, returning capital to shareholders while also investing in product development and technology infrastructure to maintain its competitive edge in the evolving digital payments landscape.

Financial Highlights

55 data points
Beta

Revenue

$15.45B

Net Income

$2.06B

13.3% Net Margin

EPS (Diluted)

$1.71

Total Assets

$43.33B

Cash & Equivalents

$7.58B

Free Cash Flow

$4.66B

Financial Statements
Beta
Revenue$15.45B
R&D Expenses$1.07B
Operating Expenses$13.26B
Operating Income$2.19B
Interest Expense$77.00M
Net Income$2.06B
EPS (Basic)$1.74
EPS (Diluted)$1.71
Shares Outstanding (Basic)1.18B
Shares Outstanding (Diluted)1.20B

Key Highlights

  • 1Net revenues grew 18% to $15.45 billion, driven by a 27% increase in Total Payment Volume (TPV) to $578.4 billion.
  • 2Active accounts increased by 17% to 267 million by the end of 2018.
  • 3The company completed strategic acquisitions of iZettle, Simility, and Hyperwallet, expanding its service offerings and market reach.
  • 4PayPal completed the sale of its U.S. consumer credit receivables portfolio to Synchrony Bank in July 2018.
  • 5Stock repurchases continued, with $3.5 billion of common stock repurchased during 2018 under authorized programs.
  • 6Operating income saw a modest increase of 3% to $2.19 billion, while operating margin slightly decreased to 14%.
  • 7Investments in product development and technology infrastructure remained a focus, with $1.07 billion allocated to product development expenses.

Frequently Asked Questions

PayPal's net revenues increased by 18% in 2018, reaching $15.45 billion, primarily driven by a 27% increase in Total Payment Volume (TPV).

In 2018, PayPal completed the acquisitions of iZettle (for in-store presence), Simility (for fraud prevention), and Hyperwallet (for payout capabilities).

The sale of the U.S. consumer credit receivables portfolio to Synchrony Bank in July 2018 resulted in a negative impact of approximately four percentage points on the net revenue growth rate in 2018 due to lower interest and fee income, but it freed up balance sheet capacity and cash flow.

PayPal actively engages in stock repurchase programs, intending to offset dilution from equity compensation and opportunistically reduce its outstanding share count. In 2018, the company repurchased approximately $3.5 billion of its common stock.