PayPal Holdings, Inc. (PYPL) reported robust financial results for the third quarter of 2024, showcasing significant growth across various operational metrics. The company achieved a 6% increase in net revenues, amounting to $7.8 billion, as well as an 8% rise in transaction margin dollars, reaching $3.7 billion.

The GAAP operating income saw a remarkable 19% growth, totaling $1.4 billion, while the non-GAAP operating income increased by 18% to $1.5 billion. This strong performance was further highlighted by an expansion in GAAP operating margin by 198 basis points to 17.7%, and a non-GAAP operating margin increase of 194 basis points to 18.8%.

PayPal’s total payment volume (TPV) surged by 9% to $422.6 billion, demonstrating the company’s ability to facilitate a growing number of transactions, which also rose by 6% to 6.6 billion. The number of active accounts increased slightly by 0.9% to 432 million, indicating a steady user base expansion. On a sequential basis, active accounts grew by 0.6%, adding 2.6 million new accounts. Cash flow from operations was robust at $1.6 billion, with free cash flow reaching $1.4 billion, underscoring PayPal’s strong liquidity position.

In terms of shareholder returns, PayPal repurchased approximately 28 million shares of common stock, returning $1.8 billion to stockholders during the quarter. Over the trailing 12 months, the company returned $5.4 billion to stockholders by repurchasing about 87 million shares. This reflects PayPal’s commitment to enhancing shareholder value through strategic capital allocation.

PayPal Reports Strong Third Quarter Performance

When comparing PayPal’s third-quarter performance to market expectations, the company exceeded the anticipated earnings per share (EPS) and revenue targets. Analysts had forecasted an EPS of $1.07, but PayPal reported a non-GAAP EPS of $1.20, reflecting a 22% year-over-year increase and surpassing expectations by a notable margin. This robust EPS growth was achieved despite the GAAP EPS being impacted by approximately $0.14 due to strategic investment portfolio adjustments.

Revenue expectations were set at $7.88 billion, while PayPal reported $7.8 billion in net revenues, aligning closely with the forecast. The slight variance in revenue was mitigated by strong transaction margin growth and effective cost management, which bolstered operating income and margins. The company’s ability to deliver results in line with revenue expectations while outperforming on EPS highlights its operational efficiency and strategic focus on profitable growth.

The company’s strategic initiatives, including new marketing campaigns and partnerships with leading commerce players, contributed to the strong financial results. These efforts helped drive awareness and engagement, further solidifying PayPal’s position in the digital payments landscape.

PayPal Raises Full Year Non-GAAP Guidance, Projects $1.03 to $1.07 Range for Q4

PayPal has raised its full-year non-GAAP guidance, reflecting confidence in its ongoing business strength. For the fourth quarter of 2024, the company projects GAAP EPS to range between $1.03 and $1.07, with an implied midpoint of approximately $1.052. Non-GAAP EPS is expected to see a low to mid-single-digit decrease, influenced by elevated marketing expenditures to support key initiatives and product launches.

For the full fiscal year 2024, PayPal anticipates GAAP EPS to be between $3.92 and $3.96, slightly narrowing the range from the previous guidance of $3.88 to $3.98. Non-GAAP EPS is projected to achieve high teens growth, aligning with the company’s strategic focus on enhancing core operations and driving sustainable profitability. The guidance reflects PayPal’s commitment to balancing growth investments with disciplined financial management.

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