PayPal’s first quarter revenue was US$7.699 billion, a year-on-year increase of 9%, and net profit was US$888 million, a year-on-year increase of 12%

Morning news on May 1, Beijing time, payment service provider PayPal today announced the company’s first quarter financial report for fiscal year 2024.

PayPal’s net revenue in the first quarter was US$7.699 billion, an increase of 9% compared with US$7.040 billion in the same period last year. Excluding the impact of exchange rate changes, it was a year-on-year increase of 10%; net profit was US$888 million. An increase of 12% compared with US$795 million in the same period last year; not in accordance with US GAAP, PayPal's adjusted net profit in the first quarter was US$1.155 billion, an increase of 20% compared with US$959 million in the same period last year.

PayPal’s first-quarter revenue exceeded Wall Street analysts’ expectations, but adjusted diluted earnings per share failed to meet expectations. At the same time, the company's outlook for the second quarter of fiscal 2024 and the entire fiscal year 2024 also failed to meet expectations, causing its stock price to fall nearly 1% after hours.

Financial Performance and Operating Metrics:

For the fiscal quarter ended March 31, PayPal's net profit was US$888 million, an increase of 12% compared with US$795 million in the same period last year; diluted earnings per share was US$0.83, an increase of 18% compared with US$0.70 in the same period last year.

According to data provided by Yahoo Finance Channel, 33 analysts had previously expected PayPal’s adjusted net profit in the first quarter to be US$1.155 billion, an increase of 20% compared with US$959 million in the same period last year; adjusted Post-earnings per share were $1.08, an increase of 27% compared with $0.85 in the same period last year, but this performance failed to meet analyst expectations.

PayPal’s first-quarter net revenue was $7.699 billion, an increase of 9% compared with $7.040 billion in the same period last year, and a year-on-year increase of 10% excluding the impact of currency changes. The results beat analysts' expectations. According to data provided by Yahoo Finance, 31 analysts had expected PayPal's first-quarter revenue to reach $7.51 billion on average.

By business department: (1) PayPal’s revenue from transaction business in the first quarter was US$7.034 billion, an increase of 11% compared with US$6.364 billion in the same period last year, and a decrease of 3% compared with US$7.283 billion in the previous quarter; in The proportion of total revenue was 91%, compared with 90% in the same period last year and 91% in the previous quarter. (2) PayPal’s revenue from other value-added services in the first quarter was US$665 million, a decrease of 2% compared with US$676 million in the same period last year, and a decrease of 10% compared with US$743 million in the previous quarter; in The proportion of total revenue was 9%, compared with 10% in the same period last year and 9% in the previous quarter.

PayPal’s U.S. net revenue in the first quarter was US$4.467 billion, a year-on-year increase of 8% and a decrease of 4% compared with the previous quarter; accounting for 58% of total revenue, compared with the same period last year It was 59%, compared with 58% in the previous quarter. International net revenue was US$3.232 billion, a year-on-year increase of 12%. Excluding the impact of exchange rate changes, it increased by 14% year-on-year, a decrease of 5% compared with the previous quarter; it accounted for 42% of total revenue. This compares with 41% in the same period last year and 42% in the previous quarter.

PayPal’s total payment volume (TPV) in the first quarter was US$403.86 billion, an increase of 14% compared with US$354.508 billion in the same period last year. Excluding the impact of exchange rate fluctuations, the growth rate was still 14%.

PayPal’s total operating expenses for the first quarter were $6.531 billion, up from $6.041 billion a year earlier. Of which:

- Transaction expenses were US$3.917 billion, an increase from US$3.283 billion in the same period last year;

- Transaction and loan losses were US$321 million, an increase from US$3.283 billion in the same period last year - Customer support and operating expenses were $454 million, down from $488 million a year ago;

- Sales and Marketing expenses were $421 million, down from $436 million in the same period last year; Technology and development expenses were $742 million, up from $721 million in the same period last year. ;

-General and administrative expenses were $464 million, a decrease from $507 million in the prior year;

-Reorganization and other expenses were $212 million, a decrease from the prior year This was an increase from US$164 million in the same period.

PayPal’s operating profit in the first quarter was US$1.168 billion, an increase of 17% compared with the operating profit of US$999 million in the same period last year; operating profit margin was 15.2%, an increase of 98% compared with 14.2% in the same period last year base point. Excluding certain one-time items (not in accordance with U.S. GAAP), PayPal's first quarter adjusted operating profit was $1.399 billion, an increase of 15% compared with adjusted operating profit of $1.220 billion in the same period last year; adjusted operating profit The profit margin was 22.4%, a decrease of 0.7 percentage points compared with 23.1% in the same period last year.

PayPal’s cash flow from business operating activities in the first quarter was US$1.917 billion, an increase of 64% compared with US$1.170 billion in the same period last year; free cash flow was US$1.763 billion, compared with US$1.170 billion in the same period last year. An increase of 76% compared with US$1.00 billion; adjusted free cash flow was US$1.856 billion, an increase of 86% compared with US$1.000 billion in the same period last year.

Over the past 12 months, PayPal's cash flow from operating activities was $5.6 billion, free cash flow was $5.0 billion, and adjusted free cash flow was $5.4 billion.

As of December 31, 2024, PayPal held cash and cash equivalents and investments totaling $17.7 billion and total liabilities of $11.0 billion.

PayPal’s effective tax rate in the first quarter was 26.6%, an increase of 0.6 percentage points compared with 26.0% in the same period last year; not in accordance with U.S. GAAP, PayPal’s adjusted effective tax rate in the first quarter was 22.4%, compared with 26.0% in the same period last year. A decrease of 0.7 percentage points compared with 23.1% in the same period last year.

During the first quarter, PayPal returned $1.5 billion in cash to shareholders by repurchasing approximately 25 million shares of common stock.

PayPal’s total active accounts in the first quarter were 427 million, a decrease of 1% compared with the same period last year, but an increase of 2 million compared with the previous quarter, a sequential increase of 0.4%. During the first quarter, PayPal processed 6.5 billion transactions, an increase of 11% compared to the same period a year earlier. Over the past 12 months, PayPal processed 60.0 transactions per active account, an increase of 13% compared to the same period a year ago.

Performance Outlook:

Performance Outlook for the second quarter of fiscal year 2024:

PayPal expects that the second quarter of fiscal year 2024 The company's quarterly net revenue will increase by about 6.5% year-on-year, and the year-on-year increase excluding the impact of exchange rate changes is expected to be about 7%.

According to PayPal's previously announced financial report, the company's net revenue in the second quarter of fiscal year 2023 was US$7.287 billion, which means that PayPal expects the company's revenue in the second quarter of fiscal year 2024 to reach 77.61 billion This performance outlook failed to meet analysts' expectations. According to data compiled by Yahoo Finance, 30 analysts had expected PayPal's second-quarter revenue to reach $7.8 billion on average.

PayPal expects the company’s diluted earnings per share to reach $0.83 in the second quarter of fiscal 2024, a decrease from $0.92 in the same period last year; non-GAAP adjusted earnings per share Earnings are expected to reach $0.87, a low double-digit increase compared with the same period last year, but this outlook also falls short of analyst expectations. According to data compiled by Yahoo Finance Channel, 31 analysts had expected PayPal to earn $1.21 per share in the second quarter.

For the second quarter of fiscal 2023, PayPal's GAAP earnings per share outlook includes a positive impact of approximately $0.09 per share from the company's strategic investment portfolio.

PayPal's non-GAAP earnings guidance for the second quarter of fiscal 2024 reflects an adjustment of approximately $150 million, which primarily includes pro forma restructuring charges expected to be approximately $70 million to $90 million .

Full-year fiscal 2024 performance outlook:

PayPal expects full-year diluted earnings per share in fiscal 2024 to reach $3.65, compared with $3.84 in fiscal 2023 Down from $3.83; non-GAAP adjusted earnings per share are expected to be $3.83, a mid- to high-single-digit increase compared to fiscal 2023 adjusted diluted earnings per share. The performance outlook failed to meet analysts' expectations. According to data compiled by Yahoo Finance Channel, 42 analysts had expected PayPal's full-year earnings per share to reach $5.08.

For fiscal 2023, PayPal's GAAP earnings per share outlook includes a gain of approximately $0.24 per share from the sale of Happy Returns, as well as a gain of approximately $0.24 per share. The positive impact was $0.14 per share, which came from the company's strategic investment portfolio.

PayPal's non-GAAP earnings guidance for fiscal 2024 reflects an adjustment of approximately $490 million, which mainly includes second-quarter restructuring charges expected to be approximately $70 million to $90 million. Also included are approximately $175 million in restructuring charges incurred in the first quarter of fiscal 2024.

Stock price changes:

On the same day, PayPal’s stock price rose $0.93 in regular trading on the Nasdaq market, closing at $67.92, an increase of 1.39%. In subsequent after-hours trading as of 6:09 pm ET on Tuesday (6:09 am on Tuesday, Beijing time), PayPal shares fell $0.62, or 0.91%, to $67.30. Over the past 52 weeks, PayPal's high price was $76.54 and its low price was $50.25.

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