TL;DR: Another solid quarter, revenue came in at $4.31B, +12% YOY, non-GAAP EPS $0.86, +47% YOY. Remember, we’re still lapping the sale of the credit portfolio to Synchrony Financial last year, which negatively affected revenue growth by 7% this quarter.
The big news – and why shares were down about 4% in AH trading, is that the company cut full-year revenue guidance to $17.6B-$17.8B from its previous range of $17.85B-$18.10B. compares with consensus estimate of $17.98B. It did boost 2019 adjusted EPS outlook to $3.12-$3.17 from prior range of $2.94-$3.01. From the earnings release:
“PayPal delivered another solid quarter, and consequently we are raising EPS guidance for the year. Net new active accounts increased by a record 41 million over the last 12 months, and engagement per active account once again increased by 9% to 39 times a year. Venmo’s momentum continues, with 70% growth in total payment volume to $24 billion. Earlier this month, Xoom expanded to 32 new send markets throughout Europe,” said Dan Schulman, President and CEO of PayPal.
Read the entire release at https://investor.paypal-corp.com/news-releases/news-release-…
Let’s take a look at 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 4305
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 0.86
*Sale of consumer debt to Synchrony Financial in July 2018
2019 Q2 Earnings (Current)
Revenue Growth (billions)
2018 Q2 TTM Revenue = 14.425
2019 Q2 TTM Revenue = 16.342
YOY TTM Revenue Growth = 13.3%, previous quarter 15.1%
EPS Growth (non-GAAP)
2018 Q2 TTM EPS = 2.16
2019 Q2 TTM EPS = 2.91
YOY TTM EPS Growth = 34.7%, previous quarter 28.9%
Non-GAAP P/E (Check Current Price) = 121.30/2.91 = 41.7, previously 40.8
Trailing 1YPEG = 41.7/34.7 = 1.2
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 286M, +17% YOY
Payment transactions: 2.97B, +28% YOY
Payment transactions per active account: 39.0, +9% YOY
Total Payment Volume (TPV): $172.4B, +24% YOY
Venmo processed $24B TPV, +70% YOY
P2P volume: $46B, +40% YOY, representing 27% of TPV
Mobile TPV: $73B, +37% YOY
Transaction margin: 54.8%
Operating margin (non-GAAP): 23.2%
Cash, cash equivalents, and investments: $10.7B
Short term borrowings: $2.5B
No share buybacks in Q2
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 277 286
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 2973
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 39.0
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 161.49 172.36
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 54.8
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 23.2
I’ll be back w/more thoughts after I read through the conference call.
Matt
Long PYPL
Phoenix 1 Contributor
BlackLine (BL), MasterCard (MA), Ollie’s (OLLI), PayPal (PYPL), and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/TMFCochrane/info.aspx