10-QPeriod: Q3 FY2022

PayPal Holdings, Inc. Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 4, 2022For Securities:PYPL

Summary

PayPal Holdings, Inc. (PYPL) reported a net revenue of $6.85 billion for the third quarter of 2022, an 11% increase year-over-year. Net income for the quarter rose 22% to $1.33 billion, or $1.15 per diluted share, up from $1.09 billion, or $0.92 per diluted share, in the same period last year. This growth was driven by an increase in Total Payment Volume (TPV) and a favorable impact from hedging, alongside contributions from Venmo. However, for the first nine months of 2022, net income saw a significant 56% decrease to $1.50 billion, impacted by a substantial rise in operating expenses and a decrease in other income (expense), net, largely due to losses on strategic investments and increased income tax expense. Despite the year-over-year growth in the third quarter, the company highlighted increased transaction expenses and transaction and credit losses. For the nine-month period, operating expenses grew 15%, outpacing revenue growth and leading to a 19% decrease in operating income. The company also reported a significant increase in credit losses within transaction and credit losses, particularly for consumer receivables which grew 59%. PayPal also announced a substantial $15.0 billion stock repurchase program authorization in June 2022, demonstrating a commitment to returning capital to shareholders. The company ended the quarter with $6.66 billion in cash and cash equivalents.

Financial Highlights

51 data points
Beta

Revenue

$6.85B

Net Income

$1.33B

19.4% Net Margin

EPS (Diluted)

$1.15

Total Assets

$76.44B

Cash & Equivalents

$6.66B

Free Cash Flow

$1.57B

Financial Statements
Beta
Revenue$6.85B
Operating Expenses$5.73B
Operating Income$1.12B
Interest Expense$87.00M
Net Income$1.33B
EPS (Basic)$1.15
EPS (Diluted)$1.15
Shares Outstanding (Basic)1.15B
Shares Outstanding (Diluted)1.16B

Key Highlights

  • 1Net revenues increased by 11% to $6.85 billion in Q3 2022 compared to Q3 2021.
  • 2Net income increased by 22% to $1.33 billion in Q3 2022, with diluted EPS growing to $1.15 from $0.92 in Q3 2021.
  • 3Total Payment Volume (TPV) grew by 9% year-over-year in Q3 2022.
  • 4Operating expenses increased by 11% in Q3 2022, primarily due to higher transaction expenses and transaction and credit losses.
  • 5For the nine months ended September 30, 2022, net income decreased by 56% to $1.50 billion compared to the same period in 2021.
  • 6Consumer loans and interest receivable balance increased by 59% year-over-year, reaching $4.4 billion.
  • 7The company authorized an additional $15.0 billion stock repurchase program in June 2022.

Frequently Asked Questions

For the third quarter of 2022, PayPal reported net revenues of $6.85 billion, an 11% increase compared to the prior year's third quarter. Net income rose 22% year-over-year to $1.33 billion, and diluted earnings per share increased to $1.15 from $0.92 in the same period last year.

Operating expenses increased by 11% in the third quarter of 2022, mainly due to higher transaction expenses and an increase in transaction and credit losses. For the first nine months of 2022, operating expenses grew by 15%, significantly impacting profitability.

PayPal's credit portfolio showed significant growth, with the consumer loans and interest receivable balance increasing by 59% year-over-year to $4.4 billion as of September 30, 2022. This growth was driven by the expansion of installment credit products. Credit losses also increased year-over-year, with net charge-offs for consumer receivables rising to 4.8% from 2.6%.

PayPal demonstrated a strong commitment to returning capital to shareholders by authorizing an additional stock repurchase program of up to $15.0 billion in June 2022. During the first nine months of 2022, the company repurchased approximately $3.2 billion of its common stock.