PayPal exceeded market expectations in the second quarter of 2024, reporting a robust financial performance.

PayPal Holdings, Inc. (PYPL) reported robust financial results for the second quarter ending June 30, 2024. The company posted an 8% increase in net revenues, reaching $7.9 billion, with a currency-neutral growth of 9%.

The transaction margin dollars also saw an 8% rise, amounting to $3.6 billion. GAAP operating income surged 17% to $1.3 billion, and non-GAAP operating income increased 24% to $1.5 billion. The GAAP operating margin expanded by 126 basis points to 16.8%, while the non-GAAP operating margin grew by 231 basis points to 18.5%.

The company’s earnings per share (EPS) also showed significant growth. GAAP EPS increased 17% to $1.08, and non-GAAP EPS saw a 36% rise to $1.19. Total payment volume (TPV) for the quarter was $416.8 billion, reflecting an 11% increase.

Payment transactions grew by 8% to 6.6 billion, and payment transactions per active account on a trailing 12-month basis increased by 11% to 60.9. Despite a slight decrease in active accounts by 0.4% to 429 million, there was a sequential increase of 0.4%, or 1.8 million active accounts.

In terms of cash flow, PayPal generated $1.5 billion from operations and $1.4 billion in free cash flow. Adjusted free cash flow stood at $1.1 billion, excluding the net timing impact between originating European buy now, pay later (BNPL) receivables as held for sale and the subsequent sale of these receivables.

The company also returned $1.5 billion to stockholders by repurchasing approximately 24 million shares of common stock.

PayPal Beats Q2 Revenue and EPS Expectations, Reports 17% Increase in GAAP Operating Income

When comparing PayPal’s current performance against market expectations, the company outperformed on several fronts. Analysts had anticipated an EPS of $0.98 and revenue of $7.82 billion for the quarter. PayPal exceeded these expectations by delivering a GAAP EPS of $1.08 and non-GAAP EPS of $1.19, significantly higher than the forecasted $0.98.

The actual revenue of $7.9 billion also surpassed the expected $7.82 billion, marking a notable achievement for the company.

The company’s operating income and margins also outpaced expectations. GAAP operating income increased by 17% to $1.3 billion, while non-GAAP operating income saw a 24% rise to $1.5 billion. The GAAP operating margin expanded by 126 basis points to 16.8%, and the non-GAAP operating margin grew by 231 basis points to 18.5%.

Furthermore, the total payment volume (TPV) of $416.8 billion and the 11% increase in payment transactions per active account underscore the company’s strong performance. Despite a slight decrease in active accounts, the sequential increase of 0.4% suggests that PayPal is successfully retaining and growing its user base, which is crucial for sustaining long-term growth.

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