10-QPeriod: Q1 FY2021

PayPal Holdings, Inc. Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:PYPL

Summary

PayPal Holdings, Inc. reported strong financial performance for the first quarter of 2021, ending March 30, 2021. The company demonstrated significant year-over-year growth, with net revenues increasing by 31% to $6.03 billion, driven by a 50% rise in total payment volume (TPV). This growth was propelled by a 21% increase in active accounts to 392 million. Net income saw a dramatic surge of 1,206% to $1.097 billion, or $0.92 per diluted share, compared to the prior year. This substantial profitability improvement was a result of revenue growth combined with a significant decrease in transaction and credit losses, which fell by 54%. The company also managed operating expenses effectively, with a notable 18% increase that was outpaced by revenue growth, leading to a substantial expansion in operating margin from 9% to 17%.

Financial Highlights

52 data points
Beta

Revenue

$6.03B

Net Income

$1.10B

18.2% Net Margin

EPS (Diluted)

$0.92

Total Assets

$72.52B

Cash & Equivalents

$5.72B

Free Cash Flow

$1.54B

Financial Statements
Beta
Revenue$6.03B
Operating Expenses$4.99B
Operating Income$1.04B
Interest Expense$58.00M
Net Income$1.10B
EPS (Basic)$0.94
EPS (Diluted)$0.92
Shares Outstanding (Basic)1.17B
Shares Outstanding (Diluted)1.19B

Key Highlights

  • 1Net revenues grew 31% year-over-year to $6.03 billion, driven by a 50% increase in Total Payment Volume (TPV).
  • 2Net income increased by 1,206% to $1.097 billion, with diluted EPS rising to $0.92.
  • 3Active accounts grew 21% to 392 million, indicating strong user engagement and platform expansion.
  • 4Transaction and credit losses decreased significantly by 54%, contributing to improved profitability.
  • 5Operating margin expanded substantially from 9% to 17% due to revenue growth outpacing expense increases.
  • 6The company repurchased $1.3 billion of its common stock during the quarter, demonstrating a commitment to shareholder returns.

Frequently Asked Questions

The primary driver of PayPal's revenue growth was a 50% increase in Total Payment Volume (TPV) and a 34% increase in the number of payment transactions, fueled by a 21% rise in active accounts to 392 million.

Transaction and credit losses decreased by 54% year-over-year, falling to $273 million from $591 million. This substantial reduction significantly contributed to the company's improved operating income and net income.

The company's credit products portfolio saw mixed performance. While consumer loans and interest receivables increased by 63%, merchant loans and advances decreased by 61% due to reduced originations and a shift in risk parameters. The company continues to manage credit risk and is exploring external funding sources for its loan portfolio.

PayPal utilizes a foreign currency exchange exposure management program, including foreign currency exchange contracts designated as cash flow and net investment hedges, to mitigate the impact of currency fluctuations on its consolidated cash flows and results of operations. These hedging activities are designed to reduce, but not entirely eliminate, currency risk.