Shulou(Shulou.com)11/24 Report--

On the morning of November 4, Beijing time, payment service provider PayPal today announced the company's third quarter results for fiscal year 2022. According to the report, PayPal's third-quarter net income was $6.846 billion, up 11% from $6.182 billion a year earlier, and 12% year-on-year, excluding exchange rate changes; net profit was $1.33 billion, up 22% from $1.087 billion a year earlier; and diluted earnings per share was $1.15, up 26% from $0.92 a year earlier.

PayPal's third-quarter revenue and adjusted earnings per share both beat Wall Street analysts' expectations, but its revenue outlook for the fourth quarter and the whole of fiscal 2022 was weaker than expected, sending its shares down more than 7 per cent in after-hours trading.

Main results: for the quarter ended September 30, PayPal's net profit was $1.33 billion, up 22% from $1.087 billion a year earlier, and diluted earnings per share were $1.15, up 26% from $0.92 a year earlier.

Excluding some one-time items (not in accordance with US GAAP), PayPal's adjusted net income for the third quarter was $1.254 billion, down 5 per cent from $1.319 billion a year earlier, and adjusted diluted earnings per share was $1.08, down 2 per cent from $1.11 a year earlier, but it still beat analysts' expectations. On average, 36 analysts expect PayPal to earn 96 cents a share in the third quarter, according to data provided by Yahoo Finance.

PayPal's third-quarter net revenue was $6.846 billion, up 11 per cent from $6.182 billion a year earlier, and 12 per cent year-on-year, excluding currency changes, which beat analysts' expectations. On average, 34 analysts expect PayPal's third-quarter revenue to reach $6.82 billion, according to Yahoo Finance.

PayPal's total payment (TPV) in the third quarter was $336.973 billion, up 9% from $309.91 billion in the same period last year, and 14% year-on-year growth excluding exchange rate changes.

PayPal's total operating expenses were $5.728 billion in the third quarter, compared with $5.139 billion a year earlier. Of this total, transaction expenses were $2.988 billion, compared with $2.564 billion in the same period last year; trading and credit losses were $367 million, compared with $268 million in the same period last year; customer support and operating expenses were $509 million, compared with $504 million in the same period last year; sales and marketing expenses were $544 million, compared with $549 million in the same period last year Expenditure on technology and development was $801 million, compared to $755 million in the same period last year; general and administrative expenses were $463 million, compared to $498 million in the same period last year; and restructuring and other expenses were $56 million, compared with $1 million in the same period last year.

PayPal's third-quarter operating profit was $1.118 billion, compared with $1.043 billion a year earlier. Excluding certain one-time items (not in accordance with GAAP), PayPal made an adjusted operating profit of $1.532 billion in the third quarter, compared with $1.47 billion a year earlier.

PayPal's operating margin in the third quarter was 16.3%, down 54 basis points from 16.9% a year earlier. Excluding some one-time items (not in accordance with GAAP), PayPal's adjusted operating profit margin was 22.4% in the third quarter, down 140bp from 23.8% a year earlier.

The effective tax rate of PayPal in the third quarter was 15.7%, up 9.0 percentage points from 6.7% in the same period last year. Excluding some one-time items (not in accordance with GAAP), the PayPal adjusted effective tax rate was 16.2% in the third quarter, up 9.2 percentage points from 7.0% in the same period last year.

Other financial information and performance indicators: PayPal's operating cash flow was $1.948 billion in the third quarter, up 29% from $1.513 billion in the same period last year, and free cash flow was $1.766 billion, up 37% from $1.286 billion in the same period last year.

Total cash and cash equivalents and restricted cash held by PayPal as of September 30, 2022 were $16.724 billion, compared with $19.969 billion as of September 30, 2021. As of September 30, 2022, PayPal's total debt was $10.7 billion.

In the third quarter, PayPal bought back about 10 million common shares and returned $939 million in cash to shareholders. By the end of the third quarter this year, PayPal had returned $3.2 billion in cash to shareholders in the form of share buybacks.

PayPal added 2.9 million active user accounts in the third quarter, an increase of 4% over the same period last year, bringing the total number of active accounts to 432 million. In the third quarter, PayPal handled 5.6bn transactions, up 15 per cent from a year earlier. In the past 12 months, PayPal handled 50.1 transactions per active account, an increase of 13% over the same period last year.

Performance outlook: fourth quarter performance outlook:

PayPal expects net revenue to reach about $7.375 billion in the fourth quarter of fiscal 2022, an increase of 7% year-on-year, excluding currency changes. (revenue growth is expected to reach 8% excluding eBay and 10% year-on-year growth excluding currency changes, but it falls short of analysts' expectations. Earnings per share are expected to reach $0.83 to $0.85, compared with $0.68 in the same period last year. Adjusted earnings per share, which are not in accordance with GAAP, are expected to be between $1.18 and $1.20, compared with $1.11 for the same period last year, reflecting an adjustment of about $470 million, which mainly represents an estimated equity incentive expense of about $350 million and related employer payroll taxes, with an average outlook of $1.19 exceeding analysts' expectations.

On average, 34 analysts expect PayPal's fourth-quarter revenue to reach $7.74 billion, while 36 analysts expect PayPal's fourth-quarter adjusted earnings per share to reach $1.18, according to Yahoo Finance.

Performance outlook for fiscal year 2022:

PayPal also expects the company's total payments to grow by 8.5% year-on-year in fiscal year 2022, and 12.5% year-on-year, excluding exchange rate changes. Net revenue will reach about $27.5 billion, a year-on-year increase of 12%. Excluding exchange rate changes, the year-on-year growth rate is 13% (excluding eBay, revenue growth is expected to reach 12%, year-on-year growth is expected to reach 13%, excluding exchange rate changes), falling short of analysts' expectations; earnings per share are expected to be between $2.11 and $2.13, compared with $3.52 in fiscal year 2021 Earnings per share, which are not in accordance with GAAP, are expected to reach $4.07 to $4.09, compared with $4.60 in fiscal 2021, reflecting an adjustment of about $2.1 billion. This mainly represents an estimated equity incentive expense of about $1.4 billion and related employer payroll taxes, a performance outlook that exceeds analysts' expectations.

According to Yahoo Finance, 44 analysts expect PayPal's annual revenue to reach $27.81 billion on average, while 43 analysts expect PayPal's adjusted earnings per share to reach $3.93 for the full year.

Changes in stock prices:

PayPal shares fell $2.90, or 3.65%, to close at $76.55 in regular trading on the Nasdaq. In after-hours trading as of 05:44 EDT on the 3rd (05:44 Beijing time on the 4th), PayPal shares fell sharply again, or 7.12%, to $71.10. In the past 52 weeks, the highest price for PayPal is $231.92 and the lowest price is $67.58.

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