PayPal Reports 2017 Q1 Earnings

We’ll see how tomorrow goes, but shares were up +5% in AH trading. EPS, revenue up double digit percentages YOY and beat expectations.

PayPal, the payments company, posted first-quarter earnings results after the bell on Wednesday. After surpassing analyst estimates with an adjusted 44 cents per share, compared to the 41 cents that many were predicting, shares rose 7 percent in initial after-hours trading. Net income was $384 million, up 5 percent from last year.

Revenue was also slightly better than expected, coming in at $2.975 billion, when compared to the $2.94 billion that analysts surveyed by FactSet were expecting. That’s growth of 17 percent year-over-year.

PayPal also announced a $5 billion share repurchase program.

Read more at https://techcrunch.com/2017/04/26/paypal-shares-up-7-after-b…

Here’s what CEO Dan Schulman said in the earnings press release:

“With another quarter of strong financial results, we continue to deliver on our vision to democratize financial services for our consumers and drive the global transition from cash to digital payments,” said Dan Schulman, President and CEO of PayPal. “We are deepening our merchant offerings and relationships, and expanding our network of strategic partnerships to make PayPal more available in new contexts and new markets.”

Read the entire press release at https://investor.paypal-corp.com/releasedetail.cfm?ReleaseID…

Here’s a look at the company’s earnings and revenue growth:


Revenues (millions)			Q1		Q2		Q3		Q4	
2014					1874		1983		1971		2193	
2015					2137		2297		2258		2556
2016					2544		2650		2667		2981
2017					2975

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
2017					0.44

Revenue Growth (billions)
2016 Q1 TTM Revenue = 9.655
2017 Q1 TTM Revenue = 11.273
YOY Revenue Growth = 16.75%, previous quarter 17.2%

EPS Growth (non-GAAP)
2016 Q1 TTM EPS = 1.36
2017 Q1 TTM EPS = 1.57
YOY EPS Growth = 15.4%, previous quarter 17.2%

Non-GAAP P/E (Check Current Price) = 44.41/1.57 = 28.29

1YPEG = 28.29/15.4 = 1.83

And here’s a look at some of the other metrics we follow:

of active accounts: 203M, +11% YOY

Payment transactions: 1.73B, +23% YOY
Payment transactions per active account: 31.7, +12% YOY
Total Payment Volume (TPV): 99.33B, +23% YOY
Transaction margin: 56.7%
Operating margin (non-GAAP): 21.6%
Venmo processed $6.8B TPV, +112% YOY

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
2017					203

Payment Transactions (millions)	        Q1		Q2		Q3		Q4
2014					918		930		972		1144
2015					1123		1161		1216		1428
2016					1414		1448		1512		1755
2017					1732

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
2017					31.7

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
2017					99.327

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
2017					56.7

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
2017					21.6

I will be going through the conference call soon. Hopefully tomorrow.

Matt
Long 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

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PYPL is one of those like GOOG that’s not growing as rapidly as some others, but is so solid for the long term that it deserves a premium valuation. It’s not quite exciting enough for me, but both my parents own in as part of FDN, which is up an incredible 14.5% this year. ETF discussions are not for this board, but look at the holdings of FDN, and you’ll see several stocks that are:

https://www.ftportfolios.com/retail/etf/ETFholdings.aspx?Tic…

Even after the big FANG positions, it just does the heart good to see FDN’s positions in ANET, VEEV, HUBS, and others of interest here.

But back to the point, Matt, thanks for the Paypal update. Everything seems to be humming along.

Bear

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