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PayPal
🇺🇸 NASDAQ:PYPL
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•
Jun 30, 2020

PayPal Q2 2020 Earnings Report

Record performance across key operating and financial metrics was achieved.

Key Takeaways

PayPal reported a record performance in Q2 2020, driven by the increasing importance of digital payments amidst the COVID-19 pandemic. The company saw strong growth in revenue, EPS, and free cash flow, as well as a significant increase in net new active accounts.

Total Payment Volume (TPV) reached $222 billion, up 29% (30% FXN).

Revenue was $5.26 billion, reflecting a 22% increase (25% FXN).

GAAP EPS grew by 86% to $1.29, and non-GAAP EPS increased by 49% to $1.07.

Net New Active Accounts (NNAs) increased by 21.3 million.

Total Revenue
$5.26B
Previous year: $4.31B
+22.2%
EPS
$1.07
Previous year: $0.86
+24.4%
Active Accounts
346M
Previous year: 286M
+21.0%
Payment Transactions
3.74B
Previous year: 2.97B
+25.9%
Transactions per Account
39.2
Gross Profit
$2.98B
Previous year: $2.36B
+26.2%
Cash and Equivalents
$6.35B
Previous year: $4.91B
+29.4%
Free Cash Flow
$2.2B
Previous year: $1.04B
+112.6%
Total Assets
$63.2B
Previous year: $48.4B
+30.5%

PayPal

PayPal

PayPal Revenue by Geographic Location

Forward Guidance

PayPal provided guidance for Q3 2020 and full year 2020, expecting continued growth in revenue, TPV, and EPS. However, the guidance excludes the impact of incremental credit loss reserves due to macroeconomic projections.

Positive Outlook

  • PayPal expects TPV growth of ~30%.
  • PayPal expects revenue to grow ~23% at current spot rates and ~25% on an FXN basis.
  • PayPal expects GAAP earnings per diluted share to grow ~45% and non-GAAP earnings per diluted share to grow ~25%.
  • PayPal expects TPV growth on a percentage basis to be in high 20s.
  • PayPal expects revenue to grow ~20% at current spot rates and ~22% on an FXN basis.

Challenges Ahead

  • GAAP and non-GAAP earnings per diluted share exclude the impact of incremental credit loss reserves due to macroeconomic projections.
  • In the third quarter of 2020, GAAP earnings per diluted share excludes the impact of net realized and unrealized gains and losses on PayPal’s strategic investment portfolio.
  • In the third quarter of 2019, GAAP earnings per diluted share included approximately $0.15 of net unrealized losses from PayPal’s strategic investment portfolio.
  • GAAP earnings per diluted share guidance includes $0.51 of net unrealized gains recognized in the first and second quarters of 2020 related to PayPal’s strategic investment portfolio.
  • In 2019, GAAP earnings per diluted share included approximately $0.14 of net unrealized gains related to PayPal’s strategic investment portfolio.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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