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

On the morning of May 9, Beijing time, payment service provider PayPal today announced the company's first-quarter results for fiscal year 2023.

According to the report, PayPal's net revenue in the first quarter was $7.04 billion, up 9% from $6.483 billion in the same period last year, and 10% year-on-year, excluding exchange rate changes. Net profit was $795 million, up 56% from $509 million in the same period last year. Without GAAP, PayPal's adjusted net profit for the first quarter was $1.326 billion, up 28% from $1.032 billion a year earlier.

PayPal's first-quarter revenue and adjusted diluted earnings per share both beat Wall Street analysts' expectations and beat expectations for second-quarter results in fiscal 2023, but its shares still fell more than 5 per cent in after-hours trading.

Financial results and operating indicators: for the quarter ended March 31, PayPal's net profit was $795 million, up 56% from $509 million a year earlier, and diluted earnings per share were $0.70, up 61% from $0.43 a year earlier.

Excluding some one-time items (not in accordance with GAAP), PayPal's adjusted net income for the first quarter was $1.326 billion, up 28% from $1.032 billion a year earlier, and adjusted earnings per share was $1.17, up 33% from $0.88 a year earlier, beating analysts' expectations. On average, 34 analysts had expected PayPal to earn 98 cents a share in the first quarter, according to data provided by Yahoo Finance.

PayPal's first-quarter net revenue was $7.04 billion, up 9 per cent from $6.483 billion a year earlier, and 10 per cent year-on-year, excluding currency changes, which also beat analysts' expectations. On average, 32 analysts had expected PayPal's first-quarter revenue to reach $6.22 billion, according to Yahoo Finance.

By business unit: (1) PayPal's revenue from trading business in the first quarter was $6.364 billion, up 6% from $5.998 billion in the same period last year; it accounted for 90% of total revenue, compared with 93% in the same period last year. (2) PayPal's revenue from other value-added services in the first quarter was $676 million, up 39% from $485 million in the same period last year; it accounted for 10% of total revenue, compared with 7% in the same period last year.

By region: (1) PayPal's first-quarter US net revenue was $4.147 billion, up 13% from $3.671 billion in the same period last year; it accounted for 59% of total revenue, compared with 57% in the same period last year. (2) International net income was US $2.893 billion, an increase of 3 per cent compared with US $2.812 billion in the same period last year, an increase of 7 per cent year-on-year excluding exchange rate changes, and accounted for 41 per cent of total revenue, compared with 43 per cent in the same period last year.

Total PayPal payments (TPV) in the first quarter were $354.508 billion, up 10% from $322.981 billion in the same period last year, and 12% year-on-year growth excluding exchange rate changes.

PayPal's total operating expenses were $6.041 billion in the first quarter, compared with $5.772 billion in the same period last year. Where:

-transaction expenses were $3.283 billion, compared with $2.817 billion in the same period last year

-Trading and loan losses were $442 million, compared with $369 million in the same period last year

-customer support and operating expenses were $488 million, compared with $534 million in the same period last year

-sales and marketing expenses were $436 million, compared with $594 million in the same period last year

-Technology and development expenditure was $721 million, compared with $815 million in the same period last year

-General and administrative expenses were $507 million, compared with $607 million in the same period last year

-restructuring and other expenses were $164 million, compared with $36 million in the same period last year.

PayPal's first-quarter operating profit was $999 million, compared with $711 million in the same period last year; operating margin was 14.2 per cent, up 322bp from 11.0 per cent in the same period last year. Excluding certain one-time items (not in accordance with GAAP), PayPal's adjusted operating profit in the first quarter was $1.6 billion, compared with $1.343 billion in the same period last year, and its adjusted operating margin was 22.7%, up 201bp from 20.7% in the same period last year.

PayPal's cash flow from business operations activities was $1.17 billion in the first quarter, down 4 per cent from $1.242 billion in the same period last year, while free cash flow was $1 billion, down 3 per cent from $1.026 billion in the same period last year.

As of December 31, 2023, PayPal held cash and cash equivalents and non-equity investments totaling $15.3 billion and total liabilities of $10.9 billion.

The effective tax rate of PayPal in the first quarter was 26.0%, up 6.9 percentage points from 19.1% in the same period last year; without general accounting standards, the adjusted effective tax rate of PayPal in the first quarter was 18.5%, up 1.3 percentage points from 17.2% in the same period last year.

In the first quarter, PayPal returned $1.4 billion in cash to shareholders by buying back about 19 million common shares.

PayPal's total active accounts reached 433 million in the first quarter, up 1 per cent from 429 million in the same period last year. In the first quarter, PayPal handled 5.8 billion transactions, up 13% from a year earlier. In the past 12 months, PayPal handled 53.1 transactions per active account, up 1 per cent from a year earlier.

Performance outlook: second quarter of fiscal 2023 performance outlook: PayPal expects net revenue to grow by 6.5% to 7% year-on-year in the second quarter of 2023, and 7.5% to 8% year-on-year, excluding currency changes.

PayPal previously reported net revenue of $6.806 billion in the second quarter of fiscal 2022, meaning PayPal expects revenue of between $7.248 billion and $7.282 billion in the second quarter of fiscal 2023, a performance outlook that beat analysts' expectations. On average, 32 analysts had expected PayPal's second-quarter revenue to reach $6.48 billion, according to Yahoo Finance.

PayPal expects diluted earnings per share to be between 81 cents and 83 cents a share in the second quarter of fiscal 2023, compared with-29 cents a share in the same period last year. Earnings per share, which are not adjusted in accordance with GAAP, are expected to be between 15 and 117 million dollars, up 24% to 26% from 93 cents a year in the same period last year, and exceeding analysts' expectations. On average, 34 analysts had expected PayPal to earn $1.04 a share in the second quarter, according to Yahoo Finance.

In the second quarter of fiscal 2022, PayPal's earnings per share outlook under GAAP included a negative impact of approximately $0.45 per share, which came from the company's strategic portfolio.

PayPal's earnings forecast for the second quarter of fiscal 2023 that does not comply with GAAP reflects an adjustment of about $450 million, which mainly includes estimated equity incentive expenses of approximately $390 million and related payroll taxes.

Full-year earnings outlook for fiscal year 2023: PayPal expects diluted earnings per share for the full year of fiscal 2023 to be between $3.42; earnings per share, not in accordance with GAAP, are expected to reach between $4.95 and $4.13 in fiscal 2022, up 20% from a year earlier, exceeding analysts' expectations. On average, 42 analysts had expected PayPal's full-year earnings per share to reach $4.36, according to Yahoo Finance.

In fiscal year 2022, PayPal's earnings per share outlook under GAAP included a negative impact of approximately $0.20 per share, which came from the company's strategic portfolio.

PayPal's profit forecast for fiscal 2023 that does not comply with GAAP reflects an adjustment of approximately $2 billion, which mainly includes estimated equity incentive expenses of approximately $1.6 billion and related payroll taxes, as well as approximately $117 million of restructuring expenses that occurred in the first quarter of fiscal 2023.

Share price movements: PayPal shares rose 55 cents, or 0.73%, to close at $75.52 in regular trading on the Nasdaq. PayPal shares fell 5.32 per cent, or 5.32 per cent, to $71.50 in after-hours trading as of 07:38 est on Monday (07:38 on Tuesday, Beijing time). In the past 52 weeks, the highest price for PayPal is $103.03 and the lowest price is $66.39.

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