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PayPal Holdings, Inc. (PYPL - Free Report) reported non-GAAP earnings of $1.19 per share for second-quarter 2024, which improved 36% on a year-over-year basis. The figure surpassed the Zacks Consensus Estimate by 23.96%.
Net revenues of $7.9 billion exhibited year-over-year growth of 9% on an FX-neutral basis and 8% on a reported basis. The figure topped the Zacks Consensus Estimate by 1.04%.
Growing transaction revenues drove year-over-year top-line growth in the reported quarter. Accelerating U.S. and international revenues further drove the results.
PayPal Holdings, Inc. Price, Consensus and EPS Surprise
By Type: Transaction revenues amounted to $7.15 billion (91% of net revenues), up 9% from the year-ago quarter. Other value-added services generated revenues of $732 million (accounting for 9% of net revenues), up 0.1% year over year.
By Geography: Revenues from the United States totaled $4.55 billion (58% of net revenues), up 8% on a year-over-year basis. International revenues were $3.33 billion (42% of net revenues), up 8% from the prior-year quarter.
Key Metrics to Consider
PayPal witnessed a year-over-year decline of 0.5% in total active accounts to 429 million in the quarter under review. The figure topped the Zacks Consensus Estimate of 428 million.
The total number of payment transactions was 6.6 billion, up 8% on a year-over-year basis. The figure missed the consensus mark of 6.9 billion.
PYPL’s payment transactions per active account were 60.9 million, which improved 11% from the year-ago quarter.
The total payment volume was $416.81 billion for the reported quarter, indicating year-over-year growth of 11% on a spot-rate basis, as well as on a currency-neutral basis. The reported figure lagged the Zacks Consensus Estimate of $419.54 billion.
Operating Details
PayPal’s operating expenses were $6.6 billion in the second quarter, up 6.6% from the prior-year quarter. As a percentage of net revenues, the figure contracted 130 basis points (bps) on a year-over-year basis.
The non-GAAP operating margin was 18.5%, expanding 230 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash equivalents and investments were $13.6 billion, down from $14.3 billion as of Mar 31, 2024.
PayPal had a long-term debt balance of $9.73 billion as of Jun 30, 2024, compared with $9.68 billion as of Mar 31, 2024.
PYPL generated $1.5 billion in cash from operations in the reported quarter compared with $1.9 billion in the previous quarter. The free cash flow was $1.4 billion in the second quarter.
The company returned $1.5 billion to its shareholders by repurchasing 24 million shares.
Guidance
For third-quarter 2024, PayPal expects year-over-year mid-single-digit growth in revenues. The Zacks Consensus Estimate for revenues is pegged at $7.94 billion.
Non-GAAP earnings per share are expected to exhibit high-single-digit growth on a year-over-year basis. The Zacks Consensus Estimate for earnings is pegged at $1.01 per share.
For 2024, PayPal anticipates non-GAAP earnings per share to see growth of low to mid-teens from that reported in 2023. The Zacks Consensus Estimate for the same is pegged at $4.17.
The company expects low to mid-single-digit growth in the transaction margin.
The free cash flow is projected at $6 billion. Management also expects to repurchase shares worth $6 billion.
Image: Bigstock
PayPal (PYPL) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
PayPal Holdings, Inc. (PYPL - Free Report) reported non-GAAP earnings of $1.19 per share for second-quarter 2024, which improved 36% on a year-over-year basis. The figure surpassed the Zacks Consensus Estimate by 23.96%.
Net revenues of $7.9 billion exhibited year-over-year growth of 9% on an FX-neutral basis and 8% on a reported basis. The figure topped the Zacks Consensus Estimate by 1.04%.
Growing transaction revenues drove year-over-year top-line growth in the reported quarter. Accelerating U.S. and international revenues further drove the results.
PayPal Holdings, Inc. Price, Consensus and EPS Surprise
PayPal Holdings, Inc. price-consensus-eps-surprise-chart | PayPal Holdings, Inc. Quote
Top Line in Detail
By Type: Transaction revenues amounted to $7.15 billion (91% of net revenues), up 9% from the year-ago quarter. Other value-added services generated revenues of $732 million (accounting for 9% of net revenues), up 0.1% year over year.
By Geography: Revenues from the United States totaled $4.55 billion (58% of net revenues), up 8% on a year-over-year basis. International revenues were $3.33 billion (42% of net revenues), up 8% from the prior-year quarter.
Key Metrics to Consider
PayPal witnessed a year-over-year decline of 0.5% in total active accounts to 429 million in the quarter under review. The figure topped the Zacks Consensus Estimate of 428 million.
The total number of payment transactions was 6.6 billion, up 8% on a year-over-year basis. The figure missed the consensus mark of 6.9 billion.
PYPL’s payment transactions per active account were 60.9 million, which improved 11% from the year-ago quarter.
The total payment volume was $416.81 billion for the reported quarter, indicating year-over-year growth of 11% on a spot-rate basis, as well as on a currency-neutral basis. The reported figure lagged the Zacks Consensus Estimate of $419.54 billion.
Operating Details
PayPal’s operating expenses were $6.6 billion in the second quarter, up 6.6% from the prior-year quarter. As a percentage of net revenues, the figure contracted 130 basis points (bps) on a year-over-year basis.
The non-GAAP operating margin was 18.5%, expanding 230 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2024, cash equivalents and investments were $13.6 billion, down from $14.3 billion as of Mar 31, 2024.
PayPal had a long-term debt balance of $9.73 billion as of Jun 30, 2024, compared with $9.68 billion as of Mar 31, 2024.
PYPL generated $1.5 billion in cash from operations in the reported quarter compared with $1.9 billion in the previous quarter. The free cash flow was $1.4 billion in the second quarter.
The company returned $1.5 billion to its shareholders by repurchasing 24 million shares.
Guidance
For third-quarter 2024, PayPal expects year-over-year mid-single-digit growth in revenues. The Zacks Consensus Estimate for revenues is pegged at $7.94 billion.
Non-GAAP earnings per share are expected to exhibit high-single-digit growth on a year-over-year basis. The Zacks Consensus Estimate for earnings is pegged at $1.01 per share.
For 2024, PayPal anticipates non-GAAP earnings per share to see growth of low to mid-teens from that reported in 2023. The Zacks Consensus Estimate for the same is pegged at $4.17.
The company expects low to mid-single-digit growth in the transaction margin.
The free cash flow is projected at $6 billion. Management also expects to repurchase shares worth $6 billion.
Zacks Rank & Other Stocks to Consider
Currently, PayPal carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are Badger Meter (BMI - Free Report) , Arista Networks (ANET - Free Report) and Apple (AAPL - Free Report) . Badger Meter sports a Zacks Rank #1 (Strong Buy) at present, and Arista Networks and Apple carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Badger Meter shares have gained 32.7% in the year-to-date period. The long-term earnings growth rate for BMI is projected at 17.92%.
Arista Networks shares have gained 41.5% in the year-to-date period. The long-term earnings growth rate for ANET is expected to be 16.07%.
Apple shares have gained 16.4% in the year-to-date period. The long-term earnings growth rate for AAPL is anticipated to be 12.71%.