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

On the morning of February 10, Beijing time, payment service provider PayPal today released its fourth quarter and full-year results for fiscal year 2022. According to the report, PayPal's fourth-quarter net revenue was $7.383 billion (currently about 50.131 billion yuan), up 7 percent from $6.918 billion in the same period last year, and 9 percent year-on-year, excluding exchange rate changes (not in accordance with GAAP). Net profit was $921 million (currently about 6.254 billion yuan), up 15 percent from $801 million in the same period last year Excluding some one-time items (not in accordance with US GAAP), PayPal's adjusted net profit for the fourth quarter was $1.417 billion (currently about RMB 9.621 billion), up 7 per cent from $1.319 billion a year earlier.

PayPal's fourth-quarter revenue was largely in line with Wall Street analysts' expectations, adjusted earnings per share beat expectations, and the company's outlook for adjusted earnings per share for the first quarter and full year of fiscal 2023 beat analysts' expectations, sending its shares up more than 1 per cent in after-hours trading.

Fourth quarter main results: PayPal's net profit for the quarter ended December 31 was $921 million, up 15% from $801 million a year earlier, and diluted earnings per share were $0.81, up 19% from $0.68 a year earlier.

Excluding some one-time items (not in accordance with US GAAP), PayPal's adjusted net income for the fourth quarter was $1.417 billion, up 7 per cent from $1.319 billion a year earlier, and adjusted earnings per share was $1.24, up 11 per cent from $1.11 a year earlier, beating analysts' expectations. On average, 37 analysts had expected PayPal to earn $1.20 a share in the fourth quarter, according to data compiled by Yahoo Finance.

PayPal's fourth-quarter net revenue was $7.383 billion, up 7 per cent from $6.918 billion a year earlier. Without GAAP, PayPal's fourth-quarter net revenue was also $7.383 billion, up 7 per cent year-on-year, and 9 per cent year-on-year, excluding currency changes, which was basically in line with analysts' expectations. On average, 35 analysts had expected PayPal's fourth-quarter revenue to reach $7.39 billion, according to data compiled by Yahoo Finance.

By region, PayPal's fourth-quarter net revenue in the US was $4.295 billion, up 10 per cent from $3.901 billion a year earlier, and accounted for 58 per cent of total net revenue, compared with 56 per cent in the same period a year earlier. PayPal's fourth-quarter revenue from its international business was $3.088 billion, up 2 per cent from $3.017 billion a year earlier, up 6 per cent year-on-year, excluding exchange rate changes, and accounting for 42 per cent of total net revenue, compared with 44 per cent in the same period last year.

By business, PayPal's fourth-quarter trading revenue was $6.702 billion, up 5 per cent from $6.377 billion a year earlier, and accounted for 91 per cent of total net revenue, compared with 92 per cent a year earlier. PayPal's revenue from other value-added services was $681 million in the fourth quarter, up 26 per cent from $541 million a year earlier, and accounted for 9 per cent of total net revenue, compared with 8 per cent a year earlier.

Fourth-quarter financial details: PayPal's fourth-quarter total payments (TPV) were $357.378 billion, up 5% from $339.53 billion in the same period last year, and 9% year-on-year growth excluding exchange rate changes.

PayPal's total operating expenses were $6.139 billion in the fourth quarter, compared with $5.868 billion a year earlier. Of this total, transaction expenses were $3.324 billion, compared with $2.952 billion in the same period last year; transaction and loan losses were $388 million, compared with $350 million in the same period last year; customer support and operating expenses were $541 million, compared with $532 million in the same period last year; sales and marketing expenses were $524 million, compared with $666 million in the same period last year Expenditure on technology and development was $822 million, compared to $796 million in the same period last year; general and administrative expenses were $515 million, compared to $570 million in the same period last year; and restructuring and other expenditures were $25 million, compared with $2 million in the same period last year.

PayPal's fourth-quarter operating profit was $1.244 billion, compared with $1.05 billion a year earlier, and its operating margin was 16.8%, up 167bp from 15.2% a year earlier. Excluding certain one-time items (not in accordance with GAAP), PayPal's adjusted operating profit in the fourth quarter was $1.693 billion, compared with $1.507 billion a year earlier, and its adjusted operating margin was 22.9%, up 115bp from 21.8% a year earlier.

The effective tax rate of PayPal in the fourth quarter was 17.0%, up 30.5 percentage points from-13.5% in the same period last year. Excluding some one-time items (not in accordance with GAAP), the adjusted effective tax rate of PayPal in the fourth quarter was 16.6%, up 7.4 percentage points from 9.2% in the same period last year.

PayPal's fourth-quarter operating cash flow was $1.591 billion, compared with $1.64 billion a year earlier, down 3% from a year earlier, while free cash flow was $1.433 billion, compared with $1.427 billion a year earlier, roughly flat.

PayPal added a net 2.9 million active user accounts in the fourth quarter; the total number of active user accounts reached 435 million at the end of the quarter, an increase of 2 per cent.

In the fourth quarter, PayPal handled 6 billion transactions, up 13% from a year earlier. In the past 12 months, the number of payment transactions per active account in PayPal has increased by 13% to 51.4.

PayPal bought back about 12 million common shares in the fourth quarter, returning a total of $1 billion in cash to shareholders.

As of December 31, 2022, PayPal had total cash and cash equivalents and investments of $15.9 billion and total debt of $10.8 billion.

Main results for fiscal year 2022: PayPal's full-year net revenue was $27.518 billion, compared with $25.371 billion in fiscal 2021, a year-on-year increase of 8%. Excluding exchange rate changes, it grew by 10% year-on-year, basically in line with analysts' expectations. On average, 43 analysts had expected PayPal's full-year revenue to reach $27.52 billion, according to data compiled by Yahoo Finance.

PayPal's full-year net income was $2.419 billion, compared with $4.169 billion in fiscal 2021, and diluted earnings per share were $2.09, compared with $3.52 in fiscal 2021.

Excluding certain one-time items (not in accordance with GAAP), PayPal's full-year adjusted net income was $4.782 billion, compared with $5.455 billion in fiscal 2021, and adjusted earnings per share of $4.13, compared with $4.60 in fiscal 2021, beating analysts' expectations. According to data compiled by Yahoo Finance, 44 analysts had expected PayPal to earn an average of $4.09 per share for the full year.

PayPal added a net 8.6 million active user accounts for the year; the total number of active user accounts reached 435 million by the end of the year, an increase of 2 per cent.

PayPal's total payments for the year were $1.36 trillion, an increase of 9% year-on-year, and 13% year-on-year growth excluding exchange rate changes. PayPal handled 22.3 billion transactions for the year, up 16% from a year earlier.

PayPal's full-year cash flow from business operations was $5.8 billion and its free cash flow was $5.1 billion.

Throughout fiscal year 2022, PayPal bought back about 41 million common shares, returning a total of $4.2 billion in cash to shareholders.

Performance outlook: first quarter of fiscal 2023 performance outlook: PayPal expects the company's net revenue to grow by 7.5% year-on-year in the first quarter of 2023, excluding exchange rate changes. Diluted earnings per share are expected to be between $0.62 and $0.64 per share, compared with $0.43 a year earlier (including a positive impact of about $0.02 per share from PayPal's strategic portfolio). Earnings per share, which are not in accordance with GAAP, are expected to be between $1.08 and $1.10, compared with $0.88 a year earlier, a year-on-year increase of between 23% and 25%, a performance outlook that beat analysts' expectations.

According to Yahoo Finance, 32 analysts had expected PayPal to earn an average of $1.07 per share in the first quarter, while 30 analysts had expected first-quarter revenue of $7 billion for PayPal.

PayPal's outlook for adjusted earnings per share (not in accordance with GAAP) for the first quarter reflects an adjustment of about $550 million, including expected equity incentive expenses of about $400m and related payroll taxes and restructuring expenses of about $100m.

Outlook for fiscal 2023: PayPal also expects earnings per share of $3.27 for fiscal 2023, compared with $2.09 for fiscal 2022, and earnings per share, which are not in accordance with GAAP, are expected to reach $4.87, compared with $4.13 for fiscal 2022, up 18% from a year earlier, a better-than-expected outlook.

According to Yahoo Finance, 45 analysts had expected PayPal's adjusted earnings per share to reach $4.75 on average, while 44 analysts had expected PayPal's annual revenue to reach $29.9 billion.

PayPal's outlook for adjusted earnings per share (not in accordance with GAAP) for fiscal 2023 reflects an adjustment of approximately $2 billion, including expected equity incentive expenses of approximately $1.7 billion and related payroll taxes and restructuring expenses of approximately $100m.

Share price reaction: PayPal shares fell $1.30, or 1.63%, to close at $78.42 in regular trading on the Nasdaq. In after-hours trading as of 04:57 EDT on the 9th (05:57 Beijing time on the 10th), PayPal shares rose $1.07, or 1.36 per cent, to $79.49. In the past 52 weeks, the highest price for PayPal is $125.28 and the lowest price is $66.39.

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