10-QPeriod: Q3 FY2024

PayPal Holdings, Inc. Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 29, 2024For Securities:PYPL

Summary

PayPal Holdings, Inc. reported solid financial performance for the third quarter and first nine months of fiscal year 2024, demonstrating revenue growth and improved operating income. Net revenues increased by 6% year-over-year for the quarter to $7.85 billion and by 8% for the nine-month period to $23.43 billion. Operating income saw a significant jump of 19% and 18% for the respective periods, reaching $1.39 billion and $3.88 billion, driven by revenue growth outpacing expense increases, aided by a reduction in transaction and credit losses. While net income saw a slight dip of 1% for the quarter to $1.01 billion, it grew by 6% for the nine months to $3.03 billion. The company continued its focus on capital returns, repurchasing approximately $4.8 billion of its common stock during the first nine months of 2024. The balance sheet remains robust, with substantial cash and investments, although cash and cash equivalents decreased compared to the end of the prior year, primarily due to these repurchase activities and strategic investments. The company also highlighted continued operational efficiency improvements and a reduction in transaction and credit loss rates.

Financial Highlights

49 data points
Beta

Revenue

$7.85B

Net Income

$1.01B

12.9% Net Margin

EPS (Diluted)

$0.99

Total Assets

$83.51B

Cash & Equivalents

$7.20B

Free Cash Flow

$1.45B

Financial Statements
Beta
Revenue$7.85B
Operating Expenses$6.46B
Operating Income$1.39B
Net Income$1.01B
EPS (Basic)$1.00
EPS (Diluted)$0.99
Shares Outstanding (Basic)1.01B
Shares Outstanding (Diluted)1.02B

Key Highlights

  • 1Net revenues grew 6% to $7.85 billion for Q3 2024 and 8% to $23.43 billion for the first nine months of 2024.
  • 2Operating income increased significantly by 19% to $1.39 billion for Q3 and 18% to $3.88 billion for the nine months, with operating margins improving to 18% and 17% respectively.
  • 3Transaction and credit losses decreased by 21% for the quarter and 22% for the nine months, contributing to improved profitability.
  • 4The company repurchased approximately $4.8 billion of its common stock in the first nine months of 2024.
  • 5Total Payment Volume (TPV) increased by 9% for the quarter and 11% for the nine months, indicating continued platform activity.
  • 6Active accounts grew to 432 million as of September 30, 2024.
  • 7Net income for the quarter decreased slightly by 1% to $1.01 billion, but grew by 6% for the nine months to $3.03 billion.

Frequently Asked Questions

PayPal's net revenues for the third quarter of 2024 increased by 6% year-over-year to $7.85 billion. This growth was primarily driven by a 9% increase in Total Payment Volume (TPV).

Total operating expenses increased by 3% for the quarter, a slower rate than revenue growth, leading to improved operating income. Operating income rose by 19% to $1.39 billion, with the operating margin expanding to 18% from 16% in the prior year. This improvement was also aided by a significant 21% decrease in transaction and credit losses.

PayPal continues to return capital to shareholders, repurchasing approximately $4.8 billion of its common stock during the first nine months of 2024 under its authorized stock repurchase program. As of September 30, 2024, approximately $6.1 billion remained available for future repurchases.

PayPal continues to manage its credit risk through proprietary risk models and monitoring. While consumer loan balances increased, the net charge-off rate declined due to improved credit quality. For merchant loans, a significant improvement in credit quality led to a lower net charge-off rate. The company also has an agreement to sell a substantial portion of its UK and European buy now, pay later loan receivables.