At first glance, it looks like another solid quarter, with PayPal hitting the high side of its guidance. Full year guidance for 2017 looked fine, first quarter guidance did look a bit light, as this article mentions. However, I really don’t see anything that looks unexpected either way. Shares are trading down about 1.5% in AH trading.
Payments processor PayPal (PYPL) posted Q4 earnings and revenue after the close Thursday that met Wall Street expectations, but the midpoint of its Q1 guidance came in a bit light and shares fell late.
Analysts had expected the company to get a boost from a holiday shopping season that was robust for online sellers, though many brick-and-mortar retailers had troubles, but some Q4 metrics lagged Q3.
PayPal has yet to ink a partnership with e-tail king Amazon.com (AMZN), but last year it did so with credit card giants Visa (V) and MasterCard (MA). It also inked a mobile payments partnership with Facebook (FB) last year.
Read more at http://www.investors.com/news/technology/paypal-q4-earnings-…
Here’s a look at the numbers we’re following. I’ve added non-GAAP operating margin to the mix too, since last quarter.
Revenues (millions) Q1 Q2 Q3 Q4
2014 1874 1983 1971 2193
2015 2137 2297 2258 2556
2016 2544 2650 2667 2981
EPS (non-GAAP) Q1 Q2 Q3 Q4
2014 0.27 0.28 0.24 0.28
2015 0.29 0.32 0.31 0.36
2016 0.37 0.36 0.35 0.42
2016 Q4 Earnings
Revenue Growth (billions)
2015 Q4 TTM Revenue = 9.248
2016 Q4 TTM Revenue = 10.842
YOY Revenue Growth = 17.2%, previous quarter 17.2%
EPS Growth (non-GAAP)
2015 Q4 TTM EPS = 1.28
2016 Q4 TTM EPS = 1.5
YOY EPS Growth =17.2%, previous quarter 20%
P/E (Check Current Price) = 41.50/1.5 = 27.7
1YPEG = 1.61
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 197 million, +10%
Payment transactions: 1.755 billion, +23%
Payment transactions per active account: 31.1, +13%
Total Payment Volume (TPV): 99.348 billion, +25% (FXN)
Transaction margin: 57.7%
Operating margin (non-GAAP): 21%
And here’s a look at the historic growth of those numbers:
# of Active Accounts (millions) Q1 Q2 Q3 Q4
2014 148 152 157 162
2015 165 169 173 179
2016 184 188 192 197
Payment Transactions (millions) Q1 Q2 Q3 Q4
2014 918 930 972 1144
2015 1123 1161 1216 1428
2016 1414 1448 1512 1755
Transactions Per Active Account Q1 Q2 Q3 Q4
2014 23 23 24 24.5
2015 25.2 26.1 26.9 27.5
2016 28.4 29.4 30.2 31.1
TPV (billions) Q1 Q2 Q3 Q4
2014 53.676 56.736 58.184 66.039
2015 63.021 67.482 69.738 81.523
2016 81.056 86.208 87.403 99.348
Transaction Margin (%) Q1 Q2 Q3 Q4
2014 65.0 65.7 63.1 63.5
2015 64.2 63.8 62.3 61.1
2016 60.4 59.8 58.7 57.7
Operating Margin (%)(non-GAAP) Q1 Q2 Q3 Q4
2014 18.4 20.4
2015 22.1 22.6 19.9 20.8
2016 21.1 19.9 18.4 21.1
If anything sticks out, its that operating margin was strong, though transaction margin did trickle down another percentage point. I will be interested to hear if that’s attributed to the MA and V deals on the conference call. Everything else looks like it grew by the same, steady amount except TPV, which really jumped high. Good to see!
I will listen to the conference call within the next day or two and report back with notes.
Matt
Long MA, PYPL
MasterCard (MA), Nestle (NSRGY), PayPal (PYPL), and Verizon (VZ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx