8-KEarnings & Results

PayPal Holdings, Inc. 8-K Report, Financial Results (Jan 9, 2020)

Filed January 9, 2020For Securities:PYPL

Summary

PayPal Holdings, Inc. (PYPL) filed an 8-K on January 9, 2020, to provide an update on its financial results for the quarter and full year ended December 31, 2019. The primary focus of this filing is the impact of strategic investments on the company's earnings. PayPal expects to report a pre-tax gain of $38 million ($29 million after-tax) for the fourth quarter of 2019, contributing approximately $0.02 to diluted earnings per share. This gain was not included in the company's previously issued guidance for the fourth quarter and full year 2019. For the full year ended December 31, 2019, PayPal anticipates a pre-tax gain of $208 million ($164 million after-tax) from its strategic investments. This translates to a positive impact of $0.14 per diluted share for the full year. For comparative purposes, the company reported a pre-tax gain of $87 million ($67 million after-tax) for the full year 2018, which added $0.06 per diluted share. Investors should note that these gains are from strategic investments and were not part of the original non-GAAP earnings guidance.

Key Highlights

  • 1PayPal expects a pre-tax gain of $38 million ($29 million after-tax) from strategic investments for Q4 2019.
  • 2This Q4 gain is estimated to add $0.02 to diluted earnings per share.
  • 3The Q4 2019 gain from strategic investments was not included in prior company guidance.
  • 4For the full year 2019, PayPal expects a pre-tax gain of $208 million ($164 million after-tax) from strategic investments.
  • 5The full year 2019 gain is projected to add $0.14 to diluted earnings per share.
  • 6This compares to a pre-tax gain of $87 million ($67 million after-tax) or $0.06 per diluted share from strategic investments in the full year 2018.
  • 7The filing is an 8-K, specifically addressing Item 2.02 (Results of Operations and Financial Condition) and Item 9.01 (Financial Statements and Exhibits).

Frequently Asked Questions

The main purpose of this 8-K filing is to update investors on PayPal's expected financial results for the fourth quarter and full year ended December 31, 2019, specifically detailing the impact of gains from the company's strategic investments.

For the fourth quarter of 2019, PayPal expects a pre-tax gain of $38 million ($29 million after-tax) from strategic investments, which is estimated to positively impact diluted earnings per share by $0.02.

No, as previously disclosed, PayPal's non-GAAP earnings per diluted share guidance for the fourth quarter and full year 2019 did not include any expectation of unrealized gains or losses from its strategic investments portfolio.

For the full year ended December 31, 2019, PayPal expects a pre-tax gain of $208 million ($164 million after-tax) from its strategic investments, contributing approximately $0.14 to diluted earnings per share.