Paypal Holdings, Inc. · NASDAQ:PYPL
Paypal — Q2 2024 Earnings Presentation
27 slides from Paypal's earnings presentation, Jul 30, 2024
Slide 1: PayPal Second Quarter 2024 Performance
PayPal Second Quarter 2024 Performance Financial results & company highlights July 30, 2024 © 2024 PayPal Holdings, Inc.
Slide 2: Non-GAAP Financial Measures, Growth Rates, Forward-Looking Statements
Non-GAAP Financial Measures This presentation contains non-GAAP measures relating to our performance. These measures may exclude certain expenses, gains and losses that may not be indicative of our core operating results and business outlook, and, in each case, may be different from the non-GAAP fin
Slide 3: PayPal: 2Q Key Messages
PayPal: 2Q Key Messages Strong execution on transformation • Building foundation for durable, profitable growth… strong 2Q and 1H results • Branded checkout, Braintree, and Venmo contributing to highest TM$ growth rate since 2021 • Driving consumer momentum with monthly active account growth across
Slide 4: Partnering to unlock value from PayPal's two-sided network at scale
Partnering to unlock value from PayPal’s two-sided network at scale Tens of millions of Approximately merchant 400M consumer accounts accounts $1.6T volume Leveraging our key assets... 26B transactions 1 ...to build an open global commerce platform • Trusted global brand with unmatched • Enabling co
Slide 5: Enhancing customer experiences for our next phase of growth
Enhancing customer experiences for our next phase of growth Large Enterprises Small & Medium Businesses Consumers Expanded DoorDash relationship: PSP processing, Enhancing in-app risk mitigation, branded Building SMB offers with major checkout enhancements, and momentum: brands: related GMV new ads
Slide 6: 2Q'24 snapshot
2Q'24 snapshot (in millions, except % and per share data) Results Y/Y growth Total payment volume (TPV) $416,814 11%; 11% FXN Revenue $7,885 8%; 9% FXN Transaction margin $ $3,608 8% 1 Non-GAAP EPS $1.19 36% 1 Free cash flow $1,368 ** All growth rates reference 2Q'24 year-over-year growth unless oth
Slide 7: Account and activity metrics
Account and activity metrics1 (in millions, except % and TPA) 2Q'24 Active accounts2 429 • Active accounts2 +0.4% (+2M) sequentially, driven by lower churn vs. FY'23 and includes growth in PayPal merchant and consumer Y/Y growth —% accounts 3 Monthly active accounts (MAA) 222 • MAA3 +3%, driven by V
Slide 8: TPV mix across PayPal's payments platform
TPV mix across PayPal’s payments platform 2Q'23 1Q'24 2Q'24 Prior year period Prior quarter Current quarter • Branded checkout TPV +6%, in FXN GROWTH 5% 7% 6% Branded checkout line with 1Q which included a 1pt % OF TOTAL 28% 27% 27% benefit from leap day 28% 26% 19% • Consistent with price-to-value
Slide 9: 2Q'24 key financial results
2Q'24 key financial results (in millions, except % and per share data) 2Q'24 Total revenue $7,885 • Transaction revenue +9%, primarily driven by Braintree, branded checkout, and Venmo Y/Y growth 8% FXN Y/Y growth 9% • Flat other value-added services (OVAS) revenue, with higher interest income offset
Slide 10: Guidance
Guidance 3Q'24 FY'24 Low to mid-single digit growth Revenue Mid-single-digit growth Transaction margin $ Prior: Slightly positive Non-GAAP non-transaction Slight increase Non-GAAP effective tax rate Approximately 23% operating expenses No change from prior Approximately 22% Non-GAAP EPS 1 High singl
Slide 11: Demonstrating the strength of PayPal's global commerce platform
Demonstrating the strength of PayPal’s global commerce platform • Strong quarter with best TM$ growth since 2021, as branded checkout continues to grow profitably and Braintree contributed to TM$ growth • Innovating across our platform and optimizing consumer and merchant experiences with leading co
Slide 12: Q&A
Q&A ©2024 PayPal Holdings, Inc.
Slide 13: Supplemental Information
Supplemental Information ©2024 PayPal Holdings, Inc.
Slide 14: Account and activity metrics detail
1 Account and activity metrics detail (in millions, except % and TPA) 3Q'21 4Q'21 1Q'22 2Q'22 3Q'22 4Q'22 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Active accounts 416 426 429 429 432 435 433 431 428 426 427 429 Y/Y growth 15% 13% 9% 6% 4% 2% 1% —% (1%) (2%) (1%) —% Monthly active accounts (MAA) 213 219 2
Slide 15: TPV, revenue, & take rate detail
TPV, revenue, & take rate detail (in millions, except %) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Total payment volume $354,508 $376,538 $387,701 $409,832 $403,860 $416,814 • International TPV +11% FXN, driven by Y/Y growth 10% 11% 15% 15% 14% 11% continued strength in Europe and FXN Y/Y growth 12% 11% 1
Slide 16: Transaction margin (TM) detail
Transaction margin (TM) detail (in millions, except %) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Transaction expense (TE) $3,283 $3,541 $3,603 $3,958 $3,917 $3,942 • TE rate +1bps, driven by Braintree volume TE rate 0.93% 0.94% 0.93% 0.97% 0.97% 0.95% growth Transaction loss (TL) $300 $286 $329 $277 $260
Slide 17: Non-GAAP operating margin detail
1 Non-GAAP operating margin detail (in millions, except %) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Customer support and operations $488 $492 $474 $465 $454 $436 Y/Y growth (9%) (8%) (7%) (14%) (7%) (11%) Sales and marketing $395 $423 $400 $425 $379 $406 Y/Y growth (27%) (22%) (18%) (9%) (4%) (4%) Techno
Slide 18: Free cash flow (FCF) and capital allocation detail
Free cash flow (FCF) and capital allocation detail (in millions, except %) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 Free cash flow $1,000 ($350) $1,101 $2,469 $1,763 $1,368 • Free cash flow of $1.4B, which includes a Y/Y growth (3%) (133%) (30%) 72% 76% ** 1 $0.2B net positive timing impact between Adjus
Slide 19: Hedging impacts and credit reserve builds and releases
Hedging impacts and credit reserve builds and releases (in millions, except %) 1Q'23 2Q'23 3Q'23 4Q'23 1Q'24 2Q'24 (1) Hedging Impacts Favorable (unfavorable) impact to net revenues (exclusive of hedging impact) $ (139) $ 6 $ 141 $ 120 $ 32 $ (33) Hedging impact 76 34 7 (6) — 22 Favorable (unfavorab
Slide 20: GAAP to non-GAAP reconciliations
GAAP to non-GAAP reconciliations ©2024 PayPal Holdings, Inc.
Slide 21: Reconciliation of GAAP operating expenses to non-GAAP operating expenses
Reconciliation of GAAP operating expenses to non-GAAP operating expenses Three Months Ended Year Ended December 31, March 31, December 31, September March 31, December 31, September March 31, (In Millions/Unaudited) Note June 30, 2024 June 30, 2023 June 30, 2022 2023 2022 2021 2024 2023 30, 2023 202
Slide 22: Reconciliation of GAAP operating income to non-GAAP operating income
Reconciliation of GAAP operating income to non-GAAP operating income, and GAAP operating margin to non-GAAP operating margin Three Months Ended Year Ended December 31, June 30, March 31, December September June 30, March 31, December September June 30, March 31, 2023 2022 2021 (In Millions, Except P
Slide 23: Reconciliation of GAAP net income to non-GAAP net income and EPS
Reconciliation of GAAP net income (loss) to non-GAAP net income, GAAP diluted EPS to non-GAAP diluted EPS, and GAAP effective tax rate to non-GAAP effective tax rate Three Months Ended Year Ended December 31, (In Millions, Except Percentages and Per Share June 30, March 31, December September June 3
Slide 24: Reconciliation of operating cash flow to free cash flow
Reconciliation of operating cash flow to free cash flow and adjusted free cash flow Three Months Ended Year Ended December 31, June 30, March 31, December September June 30, March 31, December September June 30, March 31, (In Millions/Unaudited) 2023 2022 2021 2024 2024 31, 2023 30, 2023 2023 2023 3
Slide 25: Definitions (page 1 of 2)
Definitions (page 1 of 2) Our key metrics are calculated using internal company data based on the activity we measure on our payments platform and compiled from multiple systems, including systems that are internally developed or acquired through business combinations. While the measurement of our k
Slide 26: Definitions (page 2 of 2)
Definitions (page 2 of 2) Total Payment Volume or “TPV” is the value of payments, net of payment reversals, successfully completed on our payments platform, or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions. Branded checkout TPV comprises PayPal brande
Slide 27: PayPal
> PayPal