Short version: Just another quarter of solid top- and bottom-line growth, strong user growth (~10M accounts added this quarter alone!), with a nice increase of user engagement on the side. In other words, exactly what we almost always see from PayPal. Shares are basically flat in AH trading, but who knows what tomorrow may bring.
From the earnings release:
“We had a great start to the year, with strong growth in revenue, net new active accounts and engagement across our platform. We launched new strategic relationships with some of the world’s largest marketplaces and platforms including Instagram and MercadoLibre.We now have 277 million customer accounts, including 22 million merchant accounts and over 40 million active Venmo accounts. We are confident in the 2019 targets we outlined last quarter as we continue to leverage our wide range of unique assets in our global digital payments platform,” said Dan Schulman, President and CEO of PayPal.
Read the whole thing at https://investor.paypal-corp.com/news-releases/news-release-…
Quarter highlights:
The big reveal this quarter was that there was “over” 40M Venmo accounts, a figure never before given by PayPal management.
Revenue was negatively affected by 7 percentage points from the sale of its consumer credit portfolio to Synchrony Financial last year.
eBay market place volume declined 4% YOY. eBay now makes up less than 10% of TPV for first time.
After investing $750M in MercadoLibre this quarter, the two companies made plans to enter into a commercial agreement establishing initiatives to strengthen both companies’ networks.
Payments related to Instagram’s new checkout experience for shopping will be processed in partnership with PayPal.
Now let’s get to the numbers:
Revenues (millions) Q1 Q2 Q3 Q4
2014 1874 1983 1971 2193
2015 2137 2297 2258 2556
2016 2544 2650 2667 2981
2017 2975 3136 3239 3744
2018 3685 3857 3683* 4226
2019 4128
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 0.46 0.46 0.55
2018 0.57 0.58 0.58 0.69
2019 0.78
*Sale of consumer debt to Synchrony Financial in July 2018
2019 Q1 Earnings (Current)
Revenue Growth (billions)
2018 Q1 TTM Revenue = 13.804
2019 Q1 TTM Revenue = 15.894
YOY TTM Revenue Growth = 15.1%, previous quarter 17.9%
EPS Growth (non-GAAP)
2018 Q1 TTM EPS = 2.04
2019 Q1 TTM EPS = 2.63
YOY TTM EPS Growth = 28.9%, previous quarter 26.7%
Non-GAAP P/E (Check Current Price) = 107.22/2.63 = 40.77, previously 38.2
Trailing 1YPEG = 40.77/28.9 = 1.41
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 277M, +17% YOY
Payment transactions: 2.84B, +28% YOY
Payment transactions per active account: 37.9, +9% YOY
Total Payment Volume (TPV): $161.5B, +25% YOY
No mobile payment volume figures given
Venmo processed $21B TPV, +73% YOY
Over 40M Venmo accounts
P2P payment volume: $42B, +41% YOY, representing 26% of TPV
Transaction margin: 52.6%
Operating margin (non-GAAP): 22.6%
Cash and cash equivalents: $9.5B
Short term borrowings: $2.0B
Repurchased approx. 7.7M shares for $750M in Q1
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 203 210 218 227
2018 237 244 254 267
2019 277
Payment Transactions (millions) Q1 Q2 Q3 Q4
2014 918 930 972 1144
2015 1123 1161 1216 1428
2016 1414 1448 1512 1755
2017 1771 1817 1941 2240
2018 2214 2327 2463 2867
2019 2838
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 32.3 32.8 33.6
2018 34.7 35.7 36.5 36.9
2019 37.9
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 99.327 106.44 114.05 131.45
2018 132.36 139.40 143.00 163.65
2019 161.49
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 56.3 54.8 65.1
2018 57.1 56.0 54.9 54.6
2019 54.2
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 21.0 20.0 22.0
2018 22.5 21.3 21.0 22.0
2019 22.6
I’ll be back soon with an article or more notes from the conference call. Until then, please ask any questions or leave your thoughts on the quarter!
Matt
Long PYPL
Phoenix 1 Contributor
MasterCard (MA), PayPal (PYPL), and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/TMFCochrane/info.aspx