Revenue increased 18% to $3.136 billion, 20% FX-neutral revenue growth
GAAP EPS increased 27% to $0.34, non-GAAP EPS increased 27% to $0.46
SAN JOSE, Calif.--(BUSINESS WIRE)--
Global technology platform and digital payments leader PayPal Holdings,
Inc. (NASDAQ:PYPL) today announced second quarter results for the period
ended June 30, 2017.
Financial highlights for the second quarter include:
-
Revenue growth of 18% to $3.136 billion, or 20% on a foreign currency
neutral (FX-neutral) basis
-
GAAP operating margin of 13.7% and non-GAAP operating margin of 21.0%
-
GAAP earnings per diluted share (EPS) growth of 27% to $0.34, non-GAAP
EPS growth of 27% to $0.46
-
Operating cash flow of $921 million, free cash flow of $747 million
Operating highlights for the second quarter include:
-
6.5 million active customer accounts added with net new additions up
80%
-
Ended the quarter with 210 million active customer accounts, including
17 million merchant accounts
-
1.8 billion payment transactions, up 23%
-
32.3 payment transactions per active account on a trailing twelve
months basis, up 10%
-
$106 billion in total payment volume (TPV), up 23%, or 26% on an
FX-neutral basis
"The accelerating and extensive scale of our two-sided global platform
creates a strong foundation for PayPal's growth, enabling consumers and
merchants to transact in new contexts and across operating systems,
technologies and platforms," said Dan Schulman, President and CEO of
PayPal. "Our strong results reflect PayPal's transformation from a
single product to a platform company, from a vendor to a strategic
partner to both merchants and ecosystem players, and from a checkout
option to an increasingly more central way for consumers to manage and
move their money."
Building Momentum with Strategic Partnerships
Important strategic partnerships are broadening the relevance of
PayPal's platform and increasing PayPal's addressable market. Recently,
PayPal announced the following agreements:
-
Baidu: Today, PayPal announced a partnership with Baidu to allow
Chinese consumers to pay with Baidu Wallet and PayPal at PayPal's
millions of merchants outside of China.
-
BofA: Enables Bank of America-issued cards to be easily added to
PayPal accounts.
-
Citi: Enables eligible Citi cardmembers to use their ThankYou Points
to pay for all or part of their purchases when shopping online at
millions of merchants that accept PayPal in the United States.
-
JPMorgan Chase: Enables Chase-issued cards to be easily added to
PayPal accounts and allows joint customers to use their Chase Ultimate
Rewards points anywhere PayPal is accepted online and in app.
-
Visa: Existing partnership agreement extended into Europe.
-
Samsung Pay: Users of Samsung Pay in the U.S. will be able to use
PayPal to make purchases in stores where Samsung Pay is accepted.
-
Apple: iTunes users can buy games, music, movies and in app purchases
with PayPal in the Apple App Store, iBooks, Apple Music and iTunes
stores in 12 countries, including the U.S., Australia and parts of
Europe.
-
Google: Android Pay users on Google's Chrome mobile web will be able
to pay at millions of online merchants that accept PayPal, using their
PayPal account and fingerprint authentication.
Expanding Value Proposition with Product Innovation
Mobile-first product development focus is driving performance across
PayPal's business. PayPal processed $106 billion in TPV in the quarter.
Approximately 34% of payment volume came through a mobile device and
mobile payment volume increased 50% over the same period last year to
approximately $36 billion. In addition, Venmo, the company's social
payments platform, processed $8.0 billion of TPV, growing 103% over the
same period last year.
PayPal finished the quarter with more than 60 million consumer accounts
opted in to One Touch. In addition, more than 5.5 million merchant
accounts and 75% of the Internet Retailer 100 now accept One Touch on
their mobile and desktop shopping experiences.
On July 18, 2017, PayPal announced the closing of the acquisition of TIO
Networks for approximately $238 million. TIO is a leading cloud-based,
multi-channel bill payment processor, serving leading telecom, wireless,
cable, and utility bill issuers in North America. Through this
acquisition, PayPal intends to expand its scale of operations,
complement its product portfolio, and accelerate its entry into the bill
pay market, enabling millions of customers to improve their financial
health through access to TIO's valuable services.
|
|
|
|
|
|
Second Quarter 2017 Financial and
Operating Highlights
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
(presented in millions, except per share data and percentages)
|
|
|
2017
|
|
|
2016
|
|
|
YoY Growth
|
|
|
FX-Neutral
YoY Growth
|
|
Total Payment Volume (TPV)
|
|
|
$106,444 |
|
|
$86,208 |
|
|
$20,236 |
23%
|
|
|
26%
|
|
GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$3,136 |
|
|
$2,650 |
|
|
$486 |
18%
|
|
|
20%
|
|
Operating margin
|
|
|
13.7%
|
|
|
14.0%
|
|
|
**
|
(30)bps
|
|
|
N/A
|
|
Effective tax rate
|
|
|
8.1%
|
|
|
15.0%
|
|
|
**
|
(690)bps
|
|
|
N/A
|
|
Net income
|
|
|
$411 |
|
|
$323 |
|
|
$88 |
27%
|
|
|
N/A
|
|
Earnings per diluted share
|
|
|
$0.34 |
|
|
$0.27 |
|
|
$0.07 |
27%
|
|
|
N/A
|
|
Net cash provided by operating activities
|
|
|
$921 |
|
|
$696 |
|
|
$225 |
32%
|
|
|
N/A
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$3,136 |
|
|
$2,650 |
|
|
$486 |
18%
|
|
|
20%
|
|
Operating margin
|
|
|
21.0%
|
|
|
19.9%
|
|
|
**
|
110bps
|
|
|
N/A
|
|
Effective tax rate
|
|
|
18.0%
|
|
|
18.8%
|
|
|
**
|
(80)bps
|
|
|
N/A
|
|
Net income
|
|
|
$554 |
|
|
$436 |
|
|
$118 |
27%
|
|
|
N/A
|
|
Earnings per diluted share
|
|
|
$0.46 |
|
|
$0.36 |
|
|
$0.10 |
27%
|
|
|
N/A
|
|
Free cash flow
|
|
|
$747 |
|
|
$495 |
|
|
$252 |
51%
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, Cash Equivalents and Investments - PayPal's cash, cash
equivalents and investments totaled $6.6 billion as of June 30, 2017.
2017 Financial Guidance
Full Year 2017 Revenue and Earnings Guidance Raised
-
PayPal expects revenue to grow 18 - 19% at current spot rates and 19 -
20% on an FX-neutral basis, to a range of $12.775 - $12.875 billion.
-
PayPal expects GAAP earnings per diluted share in the range of $1.32 -
$1.36 and non-GAAP earnings per diluted share in the range of $1.80 -
$1.84.
-
Estimated non-GAAP amounts above for the twelve months ending December
31, 2017, reflect adjustments of approximately $840 - $880 million,
primarily representing estimated stock-based compensation expense and
related employer payroll taxes in the range of $690 - $720 million.
Third Quarter 2017 Revenue and Earnings Guidance
-
PayPal expects revenue to grow 18% - 20% at current spot rates and 18%
- 20% on an FX-neutral basis, to a range of $3.140 - $3.190 billion.
-
PayPal expects GAAP earnings per diluted share in the range of $0.30 -
$0.32 and non-GAAP earnings per diluted share in the range of $0.42 -
$0.44.
-
Estimated non-GAAP amounts above for the three months ending September
30, 2017, reflect adjustments of approximately $200 - $215 million,
primarily representing estimated stock-based compensation expense and
related employer payroll taxes in the range of $180 - $190 million.
Please see "Non-GAAP Financial Measures" and "Non-GAAP Measures of
Financial Performance" for important additional information.
Quarterly Conference Call and Webcast
PayPal Holdings, Inc. will host a conference call to discuss second
quarter 2017 results at 2:00 p.m. Pacific Time today. A live webcast of
the conference call, together with a slide presentation that includes
supplemental financial information and reconciliations of certain
non-GAAP and non-GAAP pro forma measures to their most directly
comparable GAAP measures, can be accessed through the company's Investor
Relations website at https://investor.paypal-corp.com.
In addition, an archive of the webcast will be accessible for 90 days
through the same link.
PayPal Holdings, Inc. uses its Investor Relations website (https://investor.paypal-corp.com),
its PayPal Stories Blog (https://www.paypal.com/stories/us),
Twitter handle (@PayPal), LinkedIn page (https://www.linkedin.com/company/paypal),
Facebook page (https://www.facebook.com/PayPalUSA/)
and YouTube channel (https://www.youtube.com/paypal)
as a means of disclosing information about the company and for complying
with its disclosure obligations under Regulation FD. The information we
post through these channels may be deemed material. Accordingly,
investors should monitor these channels in addition to PayPal's press
releases, SEC filings, public conference calls and webcasts.
About PayPal
Fueled by a fundamental belief that having access to financial services
creates opportunity, PayPal (Nasdaq: PYPL) is committed to democratizing
financial services and empowering people and businesses to join and
thrive in the global economy. Our open digital payments platform gives
PayPal's 210 million active account holders the confidence to connect
and transact in new and powerful ways, whether they are online, on a
mobile device, in an app, or in person. Through a combination of
technological innovation and strategic partnerships, PayPal creates
better ways to manage and move money, and offers choice and flexibility
when sending payments, paying or getting paid. Available in more than
200 markets around the world, the PayPal platform, including Braintree,
Venmo and Xoom, enables consumers and merchants to receive money in more
than 100 currencies, withdraw funds in 56 currencies and hold balances
in their PayPal accounts in 25 currencies. For more information on
PayPal, visit https://www.paypal.com/about.
For PayPal financial information, visit https://investor.paypal-corp.com.
Presentation
All growth rates represent year-over-year comparisons, except as
otherwise noted. FX-neutral results are calculated by translating the
current period local currency results by the prior period exchange rate.
FX-neutral growth rates are calculated by comparing the current period
FX-neutral results by the prior period results, excluding the impact
from hedging activities. All amounts in tables are presented in U.S.
dollars, rounded to the nearest millions, except as otherwise noted. As
a result, certain amounts may not sum or recalculate using the rounded
dollar amounts provided.
Non-GAAP Financial Measures
This press release includes the following financial measures defined as
"non-GAAP financial measures" by the Securities and Exchange Commission
(SEC): non-GAAP net income, non-GAAP earnings per diluted share,
non-GAAP operating margin, non-GAAP effective tax rate and free cash
flow. For an explanation of the foregoing non-GAAP measures, please see
"Non-GAAP Measures of Financial Performance" included in this press
release. These measures may be different from non-GAAP financial
measures used by other companies. The presentation of this financial
information, which is not prepared under any comprehensive set of
accounting rules or principles, is not intended to be considered in
isolation of, or as a substitute for, the financial information prepared
and presented in accordance with generally accepted accounting
principles (GAAP). In addition, the company has included certain pro
forma adjustments in its presentation of certain historical revenue
measures. The company believes that this presentation provides investors
a consistent basis for assessing the company's performance and helps to
facilitate comparisons across different periods. These pro forma
adjustments reflect items that are factually supportable, directly
attributable to the separation of the company from eBay Inc. on July 17,
2015, and expected to have a continuing impact on the company's results
of operations. For a reconciliation of these non-GAAP financial measures
and non-GAAP pro forma comparisons to the most directly comparable GAAP
measures, see "Non-GAAP Measures of Financial Performance,"
"Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin,"
"Reconciliation of GAAP Net Income to Non-GAAP Net Income, GAAP Diluted
EPS to Non-GAAP Diluted EPS and GAAP Effective Tax Rate to
Non-GAAP Effective Tax Rate," "Reconciliation of Operating Cash Flow to
Free Cash Flow", "Reconciliation of GAAP Net Revenues by Type to
Non-GAAP Pro Forma Net Revenues by Type" and GAAP Net Revenues by
Geography to Non-GAAP Pro Forma Net Revenues by Geography".
Forward-Looking Statements
This press release contains forward-looking statements relating to,
among other things, the future results of operations, financial
condition, expectations and plans of PayPal Holdings, Inc. and its
consolidated subsidiaries that reflect PayPal's current projections and
forecasts. Forward-looking statements can be identified by words such as
"may," "will," "would," "should," "could," "expect," "anticipate,"
"believe," "estimate," "intend," "plan," "project," "forecast" and other
similar expressions. Forward-looking statements include, but are not
limited to, statements regarding projected financial results for third
quarter and the full year 2017 and projected future growth of PayPal's
businesses. Forward-looking statements are based upon various estimates
and assumptions, as well as information known to PayPal as of the date
of this press release, and are inherently subject to numerous risks and
uncertainties. Accordingly, actual results could differ materially from
those predicted or implied by forward-looking statements. Factors that
could cause or contribute to such differences include, but are not
limited to: changes in political, business and economic conditions,
including any regional or general economic downturn or crisis and any
conditions that affect payments or e-commerce growth; fluctuations in
foreign currency exchange rates; the competitive, regulatory, payment
card association-related and other risks specific to the PayPal, PayPal
Credit, Braintree, Venmo, Xoom and Paydiant products, especially as
PayPal continues to expand geographically and introduce new products and
as new laws and regulations related to payments and financial services
come into effect; the impact of PayPal's customer choice initiatives,
including on its funding mix and transaction expense; PayPal's ability
to successfully react to the increasing importance of mobile payments
and mobile commerce; PayPal's ability to deal with the increasingly
competitive environment for its businesses, including competition for
consumers and merchants; the outcome of legal and regulatory proceedings
and PayPal's need and ability to manage other regulatory, tax and
litigation risks as its products and services are offered in more
jurisdictions and applicable laws become more restrictive; changes to
PayPal's capital allocation or management of operating cash; uncertainty
surrounding the implementation and impact of the United Kingdom's formal
notification of its intent to withdraw from the European Union; PayPal's
need to manage an increasingly large enterprise with a broad range of
businesses of varying degrees of maturity and in many different
geographies; the effect of management changes and business initiatives;
any changes PayPal may make to its product offerings; PayPal's ability
to timely upgrade and develop its technology systems, infrastructure and
customer service capabilities at reasonable cost; PayPal's ability to
maintain the stability, security and performance of its Payment Platform
while adding new products and features in a timely fashion; risks that
planned acquisitions will not be completed on contemplated terms, or at
all, and that any businesses PayPal may acquire will not perform in
accordance with its expectations, and PayPal's ability to profitably
integrate, manage and grow businesses that have been acquired or may be
acquired in the future. The forward-looking statements in this release
do not include the potential impact of any acquisitions or divestitures
that may be announced and/or completed after the date hereof.
More information about factors that could adversely affect PayPal's
results of operations, financial condition and prospects or that could
cause actual results to differ from those expressed or implied in
forward-looking statements is included under the captions "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in PayPal's most recent annual report on Form
10-K and its subsequent quarterly reports on Form 10-Q, copies of which
may be obtained by visiting PayPal's Investor Relations website at https://investor.paypal-corp.com
or the SEC's website at www.sec.gov.
All information in this release is as of July 26, 2017. For the reasons
discussed above, you should not place undue reliance on the
forward-looking statements in this press release. PayPal assumes no
obligation to update such forward-looking statements.
Copyright © 1999-2017 PayPal. All rights reserved. Other company and
product names may be trademarks of their respective owners.
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Unaudited Condensed Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions, except par value)
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
1,271
|
|
|
|
$
|
1,590
|
|
|
Short-term investments
|
|
|
2,820
|
|
|
|
3,385
|
|
|
Accounts receivable, net
|
|
|
176
|
|
|
|
214
|
|
|
Loans and interest receivable, net
|
|
|
5,752
|
|
|
|
5,348
|
|
|
Funds receivable and customer accounts
|
|
|
16,178
|
|
|
|
14,363
|
|
|
Prepaid expenses and other current assets
|
|
|
838
|
|
|
|
833
|
|
|
Total current assets
|
|
|
27,035
|
|
|
|
25,733
|
|
|
Long-term investments
|
|
|
2,511
|
|
|
|
1,539
|
|
|
Property and equipment, net
|
|
|
1,479
|
|
|
|
1,482
|
|
|
Goodwill |
|
|
4,062
|
|
|
|
4,059
|
|
|
Intangible assets, net
|
|
|
143
|
|
|
|
211
|
|
|
Other assets
|
|
|
60
|
|
|
|
79
|
|
|
Total assets
|
|
|
$
|
35,290
|
|
|
|
$
|
33,103
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
171
|
|
|
|
$
|
192
|
|
|
Funds payable and amounts due to customers
|
|
|
16,978
|
|
|
|
15,163
|
|
|
Accrued expenses and other current liabilities
|
|
|
1,407
|
|
|
|
1,459
|
|
|
Income taxes payable
|
|
|
85
|
|
|
|
64
|
|
|
Total current liabilities
|
|
|
18,641
|
|
|
|
16,878
|
|
|
Deferred tax liability and other long-term liabilities
|
|
|
1,651
|
|
|
|
1,513
|
|
|
Total liabilities
|
|
|
20,292
|
|
|
|
18,391
|
|
|
Equity:
|
|
|
|
|
|
|
|
Common stock, $0.0001 par value; 4,000 shares authorized; 1,202 and
1,207 outstanding
|
|
|
—
|
|
|
|
—
|
|
|
Treasury stock at cost, 41 and 27 shares
|
|
|
(1,601
|
)
|
|
|
(995
|
)
|
|
Additional paid-in-capital
|
|
|
13,873
|
|
|
|
13,579
|
|
|
Retained earnings
|
|
|
2,824
|
|
|
|
2,069
|
|
|
Accumulated other comprehensive income
|
|
|
(98
|
)
|
|
|
59
|
|
|
Total equity
|
|
|
14,998
|
|
|
|
14,712
|
|
|
Total liabilities and equity
|
|
|
$
|
35,290
|
|
|
|
$
|
33,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Unaudited Condensed Consolidated Statement of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
|
$
|
3,136
|
|
|
|
$
|
2,650
|
|
|
|
$
|
6,111
|
|
|
|
$
|
5,194
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction expense
|
|
|
1,064
|
|
|
|
810
|
|
|
|
2,051
|
|
|
|
1,562
|
|
Transaction and loan losses
|
|
|
308
|
|
|
|
255
|
|
|
|
608
|
|
|
|
510
|
|
Customer support and operations(1) |
|
|
335
|
|
|
|
318
|
|
|
|
652
|
|
|
|
614
|
|
Sales and marketing (1) |
|
|
284
|
|
|
|
250
|
|
|
|
522
|
|
|
|
483
|
|
Product development (1) |
|
|
232
|
|
|
|
209
|
|
|
|
446
|
|
|
|
404
|
|
General and administrative (1) |
|
|
282
|
|
|
|
261
|
|
|
|
547
|
|
|
|
492
|
|
Depreciation and amortization (1) |
|
|
201
|
|
|
|
176
|
|
|
|
384
|
|
|
|
351
|
|
Restructuring
|
|
|
—
|
|
|
|
—
|
|
|
|
40
|
|
|
|
—
|
|
Total operating expenses
|
|
|
2,706
|
|
|
|
2,279
|
|
|
|
5,250
|
|
|
|
4,416
|
|
Operating income
|
|
|
430
|
|
|
|
371
|
|
|
|
861
|
|
|
|
778
|
|
Other income (expense), net
|
|
|
17
|
|
|
|
9
|
|
|
|
24
|
|
|
|
24
|
|
Income before income taxes
|
|
|
447
|
|
|
|
380
|
|
|
|
885
|
|
|
|
802
|
|
Income tax expense
|
|
|
36
|
|
|
|
57
|
|
|
|
90
|
|
|
|
114
|
|
Net income
|
|
|
$
|
411
|
|
|
|
$
|
323
|
|
|
|
$
|
795
|
|
|
|
$
|
688
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.34
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.66
|
|
|
|
$
|
0.57
|
|
Diluted
|
|
|
$
|
0.34
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.65
|
|
|
|
$
|
0.56
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
1,202
|
|
|
|
1,210
|
|
|
|
1,203
|
|
|
|
1,213
|
|
Diluted
|
|
|
1,215
|
|
|
|
1,215
|
|
|
|
1,216
|
|
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Includes stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer support and operations
|
|
|
34
|
|
|
|
22
|
|
|
|
64
|
|
|
|
40
|
|
Sales and marketing
|
|
|
33
|
|
|
|
22
|
|
|
|
61
|
|
|
|
38
|
|
Product development
|
|
|
59
|
|
|
|
35
|
|
|
|
104
|
|
|
|
68
|
|
General and administrative
|
|
|
51
|
|
|
|
33
|
|
|
|
93
|
|
|
|
60
|
|
Depreciation and amortization
|
|
|
3
|
|
|
|
1
|
|
|
|
5
|
|
|
|
2
|
|
|
|
|
$
|
180
|
|
|
|
$
|
113
|
|
|
|
$
|
327
|
|
|
|
$
|
208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Unaudited Condensed Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
411
|
|
|
|
$
|
323
|
|
|
|
$
|
795
|
|
|
|
$
|
688
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction and loan losses
|
|
|
308
|
|
|
|
255
|
|
|
|
608
|
|
|
|
510
|
|
|
Depreciation and amortization
|
|
|
201
|
|
|
|
176
|
|
|
|
384
|
|
|
|
350
|
|
|
Stock-based compensation
|
|
|
176
|
|
|
|
111
|
|
|
|
321
|
|
|
|
206
|
|
|
Deferred income taxes
|
|
|
49
|
|
|
|
66
|
|
|
|
102
|
|
|
|
88
|
|
|
Excess tax benefits from stock-based compensation
|
|
|
—
|
|
|
|
(31
|
)
|
|
|
—
|
|
|
|
(32
|
)
|
|
Gain on sale of principal loans receivable held for sale, net
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
|
(12
|
)
|
|
|
(12
|
)
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
2
|
|
|
|
(8
|
)
|
|
|
38
|
|
|
|
(30
|
)
|
|
Principal loans receivable held for sale, net
|
|
|
6
|
|
|
|
6
|
|
|
|
12
|
|
|
|
12
|
|
|
Accounts payable
|
|
|
5
|
|
|
|
9
|
|
|
|
4
|
|
|
|
22
|
|
|
Income taxes payable
|
|
|
4
|
|
|
|
42
|
|
|
|
21
|
|
|
|
37
|
|
|
Other assets and liabilities
|
|
|
(235
|
)
|
|
|
(247
|
)
|
|
|
(601
|
)
|
|
|
(405
|
)
|
|
Net cash provided by operating activities
|
|
|
921
|
|
|
|
696
|
|
|
|
1,672
|
|
|
|
1,434
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(174
|
)
|
|
|
(201
|
)
|
|
|
(322
|
)
|
|
|
(334
|
)
|
|
Changes in principal loans receivable, net
|
|
|
(491
|
)
|
|
|
(356
|
)
|
|
|
(627
|
)
|
|
|
(476
|
)
|
|
Purchases of investments
|
|
|
(4,847
|
)
|
|
|
(6,118
|
)
|
|
|
(11,956
|
)
|
|
|
(10,209
|
)
|
|
Maturities and sales of investments
|
|
|
3,955
|
|
|
|
5,139
|
|
|
|
9,536
|
|
|
|
9,335
|
|
|
Acquisitions, net of cash acquired
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(19
|
)
|
|
Funds receivable and customer accounts
|
|
|
(387
|
)
|
|
|
(270
|
)
|
|
|
367
|
|
|
|
222
|
|
|
Net cash (used in) investing activities
|
|
|
(1,944
|
)
|
|
|
(1,806
|
)
|
|
|
(3,002
|
)
|
|
|
(1,481
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
|
|
74
|
|
|
|
51
|
|
|
|
86
|
|
|
|
57
|
|
|
Purchases of treasury stock
|
|
|
(89
|
)
|
|
|
(300
|
)
|
|
|
(606
|
)
|
|
|
(896
|
)
|
|
Excess tax benefits from stock-based compensation
|
|
|
—
|
|
|
|
31
|
|
|
|
—
|
|
|
|
32
|
|
|
Tax withholdings related to net share settlements of equity awards
|
|
|
(23
|
)
|
|
|
(79
|
)
|
|
|
(124
|
)
|
|
|
(94
|
)
|
|
Borrowings (repayments) under financing arrangements
|
|
|
(6
|
)
|
|
|
—
|
|
|
|
(6
|
)
|
|
|
(21
|
)
|
|
Funds payable and amounts due to customers
|
|
|
1,086
|
|
|
|
841
|
|
|
|
1,638
|
|
|
|
1,579
|
|
|
Net cash provided by financing activities
|
|
|
1,042
|
|
|
|
544
|
|
|
|
988
|
|
|
|
657
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
12
|
|
|
|
1
|
|
|
|
23
|
|
|
|
15
|
|
|
Net change in cash and cash equivalents
|
|
|
31
|
|
|
|
(565
|
)
|
|
|
(319
|
)
|
|
|
625
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
1,240
|
|
|
|
2,583
|
|
|
|
1,590
|
|
|
|
1,393
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
1,271
|
|
|
|
$
|
2,018
|
|
|
|
$
|
1,271
|
|
|
|
$
|
2,018
|
|
|
Supplemental cash flow disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
$
|
1
|
|
|
|
$
|
1
|
|
|
|
$
|
2
|
|
|
|
$
|
2
|
|
|
Cash paid for income taxes
|
|
|
$
|
25
|
|
|
|
$
|
12
|
|
|
|
$
|
73
|
|
|
|
$
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
Unaudited Summary of Consolidated Net Revenues
We earn revenue from the following types of transactions:
-
Transaction revenues: Net transaction fees charged to consumers
and merchants based on the volume of activity processed through our
Payments Platform, including our PayPal, PayPal Credit, Venmo,
Braintree and Xoom products.
-
Other value added services: Net revenues derived principally
from interest and fees earned on our PayPal Credit loans receivable
portfolio, subscription fees, gateway fees, gain on sale of
participation interest in certain consumer loans receivable, revenue
share we earn through partnerships, interest earned on certain PayPal
customer account balances, fees earned through our Paydiant products
and other services that we provide to consumers and merchants.
|
|
|
|
|
|
Net Revenues by Type
|
|
|
Three Months Ended
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
|
|
|
|
(In millions, except percentages)
|
|
Transaction revenues
|
|
|
$
|
2,749
|
|
|
|
$
|
2,599
|
|
|
|
$
|
2,615
|
|
|
|
$
|
2,314
|
|
|
|
$
|
2,323
|
|
|
Current quarter vs prior quarter
|
|
|
6
|
%
|
|
|
(1
|
)%
|
|
|
13
|
%
|
|
|
—
|
%
|
|
|
4
|
%
|
|
Current quarter vs prior year quarter
|
|
|
18
|
%
|
|
|
16
|
%
|
|
|
16
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
Percentage of total
|
|
|
88
|
%
|
|
|
87
|
%
|
|
|
88
|
%
|
|
|
87
|
%
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other value added services
|
|
|
387
|
|
|
|
376
|
|
|
|
366
|
|
|
|
353
|
|
|
|
327
|
|
|
Current quarter vs prior quarter
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
4
|
%
|
|
|
8
|
%
|
|
|
7
|
%
|
|
Current quarter vs prior year quarter
|
|
|
18
|
%
|
|
|
23
|
%
|
|
|
24
|
%
|
|
|
28
|
%
|
|
|
—
|
%
|
|
Percentage of total
|
|
|
12
|
%
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
$
|
3,136
|
|
|
|
$
|
2,975
|
|
|
|
$
|
2,981
|
|
|
|
$
|
2,667
|
|
|
|
$
|
2,650
|
|
|
Current quarter vs prior quarter
|
|
|
5
|
%
|
|
|
—
|
%
|
|
|
12
|
%
|
|
|
1
|
%
|
|
|
4
|
%
|
|
Current quarter vs prior year quarter(1) |
|
|
18
|
%
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Q2'16 total net revenues current quarter vs prior
year quarter growth rate on a non-GAAP pro forma basis was 16%.
|
|
For a reconciliation to GAAP net revenues, please see
"Reconciliation of GAAP Net Revenues by Type to Non-GAAP Pro Forma
Net Revenues by Type, and GAAP Net Revenues by Geography to Non-GAAP
Pro Forma Net Revenues by Geography" included in this press release.
|
|
|
|
|
|
|
|
|
Net Revenues by Geography
|
|
|
Three Months Ended
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
|
2016
|
|
|
|
|
(In millions, except percentages)
|
|
U.S. net revenues
|
|
|
$
|
1,690
|
|
|
|
$
|
1,606
|
|
|
|
$
|
1,574
|
|
|
|
$
|
1,436
|
|
|
|
$
|
1,407
|
|
|
Current quarter vs prior quarter
|
|
|
5
|
%
|
|
|
2
|
%
|
|
|
10
|
%
|
|
|
2
|
%
|
|
|
5
|
%
|
|
Current quarter vs prior year quarter(1) |
|
|
20
|
%
|
|
|
20
|
%
|
|
|
21
|
%
|
|
|
26
|
%
|
|
|
20
|
%
|
|
Percent of total
|
|
|
54
|
%
|
|
|
54
|
%
|
|
|
53
|
%
|
|
|
54
|
%
|
|
|
53
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International net revenues
|
|
|
1,446
|
|
|
|
1,369
|
|
|
|
1,407
|
|
|
|
1,231
|
|
|
|
1,243
|
|
|
Current quarter vs prior quarter
|
|
|
6
|
%
|
|
|
(3
|
)%
|
|
|
14
|
%
|
|
|
(1
|
)%
|
|
|
3
|
%
|
|
Current quarter vs prior year quarter
|
|
|
16
|
%
|
|
|
14
|
%
|
|
|
12
|
%
|
|
|
10
|
%
|
|
|
10
|
%
|
|
(FXN) Current quarter vs prior year quarter
|
|
|
20
|
%
|
|
|
18
|
%
|
|
|
17
|
%
|
|
|
16
|
%
|
|
|
18
|
%
|
|
Percent of total
|
|
|
46
|
%
|
|
|
46
|
%
|
|
|
47
|
%
|
|
|
46
|
%
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
$
|
3,136
|
|
|
|
$
|
2,975
|
|
|
|
$
|
2,981
|
|
|
|
$
|
2,667
|
|
|
|
$
|
2,650
|
|
|
Current quarter vs prior quarter
|
|
|
5
|
%
|
|
|
—
|
%
|
|
|
12
|
%
|
|
|
1
|
%
|
|
|
4
|
%
|
|
Current quarter vs prior year quarter(2) |
|
|
18
|
%
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
18
|
%
|
|
|
15
|
%
|
|
(FXN) Current quarter vs prior year quarter
|
|
|
20
|
%
|
|
|
19
|
%
|
|
|
19
|
%
|
|
|
21
|
%
|
|
|
19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Q2'16 U.S. net revenues current quarter vs prior year
quarter growth rate on a non-GAAP pro forma basis was 21%.
|
|
(2) Q2'16 total net revenues current quarter vs prior
year quarter growth rate on a non-GAAP pro forma basis was 16%.
|
|
For a reconciliation to GAAP net revenues, please see
"Reconciliation of GAAP Net Revenues by Type to Non-GAAP Pro Forma
Net Revenues by Type, and GAAP Net Revenues by Geography to Non-GAAP
Pro Forma Net Revenues by Geography" included in this press release.
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Unaudited Supplemental Operating Data
|
|
|
|
|
|
|
|
|
|
Three Months Ended,
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
|
|
2017
|
|
|
2017
|
|
|
2016
|
|
|
2016
|
|
|
2016
|
|
|
|
|
(In millions, except percentages)
|
|
Active customer accounts(1) |
|
|
210
|
|
|
203
|
|
|
197
|
|
|
192
|
|
|
188
|
|
Current quarter vs prior quarter
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
2
|
%
|
|
Current quarter vs prior year quarter
|
|
|
12
|
%
|
|
|
11
|
%
|
|
|
10
|
%
|
|
|
11
|
%
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of payment transactions(2) |
|
|
1,775
|
|
|
|
1,732
|
|
|
|
1,755
|
|
|
|
1,512
|
|
|
|
1,448
|
|
|
Current quarter vs prior quarter
|
|
|
2
|
%
|
|
|
(1
|
)%
|
|
|
16
|
%
|
|
|
4
|
%
|
|
|
2
|
%
|
|
Current quarter vs prior year quarter
|
|
|
23
|
%
|
|
|
23
|
%
|
|
|
23
|
%
|
|
|
24
|
%
|
|
|
25
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment transactions per active account(3) |
|
|
32.3
|
|
|
|
31.7
|
|
|
|
31.1
|
|
|
|
30.2
|
|
|
|
29.4
|
|
|
Current quarter vs prior quarter
|
|
|
2
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
Current quarter vs prior year quarter
|
|
|
10
|
%
|
|
|
12
|
%
|
|
|
13
|
%
|
|
|
13
|
%
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Payment Volume(4) |
|
|
$
|
106,444
|
|
|
|
$
|
99,327
|
|
|
|
$
|
99,348
|
|
|
|
$
|
87,403
|
|
|
|
$
|
86,208
|
|
|
Current quarter vs prior quarter
|
|
|
7
|
%
|
|
|
—
|
%
|
|
|
14
|
%
|
|
|
1
|
%
|
|
|
6
|
%
|
|
Current quarter vs prior year quarter
|
|
|
23
|
%
|
|
|
23
|
%
|
|
|
22
|
%
|
|
|
25
|
%
|
|
|
28
|
%
|
|
(FXN) Current quarter vs prior year quarter
|
|
|
26
|
%
|
|
|
25
|
%
|
|
|
25
|
%
|
|
|
28
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transaction Expense Rate(5) |
|
|
1.00
|
%
|
|
|
0.99
|
%
|
|
|
0.96
|
%
|
|
|
0.95
|
%
|
|
|
0.94
|
%
|
|
Transaction and Loan Loss Rate(6) |
|
|
0.29
|
%
|
|
|
0.30
|
%
|
|
|
0.31
|
%
|
|
|
0.31
|
%
|
|
|
0.30
|
%
|
|
Transaction Margin(7) |
|
|
56.3
|
%
|
|
|
56.7
|
%
|
|
|
57.7
|
%
|
|
|
58.7
|
%
|
|
|
59.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) An active customer account is a registered account
that successfully sent or received at least one payment or payment
reversal through our Payments Platform, excluding transactions
processed through our gateway and Paydiant products, in the past 12
months.
|
|
(2) Payment transactions is the total number of payments,
net of payment reversals, successfully completed through our
Payments Platform, excluding transactions processed through our
gateway and Paydiant products.
|
|
(3) Number of payment transactions per active account
reflects the total number of payment transactions within the
previous 12 month period, divided by active customer accounts at the
end of the period.
|
|
(4) Total Payment Volume or "TPV" is the value of
payments, net of payment reversals, successfully completed through
our Payments Platform, excluding transactions processed through our
gateway and Paydiant products.
|
|
(5) Transaction expense rate is calculated by dividing
transaction expense by TPV.
|
|
(6) Transaction and loan loss rate is calculated by
dividing transaction and loan loss by TPV.
|
|
(7) Transaction margin is total revenue less transaction
expense and transaction and loan loss, divided by total revenue.
|
|
|
PayPal Holdings, Inc.
Non-GAAP Measures of Financial Performance
To supplement the company's condensed consolidated financial statements
presented in accordance with generally accepted accounting principles,
or GAAP, the company uses non-GAAP measures of certain components of
financial performance. These non-GAAP measures include non-GAAP net
income, non-GAAP earnings per diluted share, non-GAAP operating margin,
non-GAAP effective tax rate and free cash flow.
These non-GAAP measures are not in accordance with, or an alternative
to, measures prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules or
principles. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with the company's results of
operations as determined in accordance with GAAP. These measures should
only be used to evaluate the company's results of operations in
conjunction with the corresponding GAAP measures.
Reconciliation to the most directly comparable GAAP measure of all
non-GAAP measures included in this press release can be found in the
tables included in this press release.
These non-GAAP measures are provided to enhance investors' overall
understanding of the company's current financial performance and its
prospects for the future. Specifically, the company believes the
non-GAAP measures provide useful information to both management and
investors by excluding certain expenses, gains and losses, as the case
may be, that may not be indicative of its core operating results and
business outlook. In addition, because the company has historically
reported certain non-GAAP results to investors, the company believes
that the inclusion of non-GAAP measures provides consistency in the
company's financial reporting.
For its internal budgeting process, and as discussed further below, the
company's management uses financial measures that do not include
stock-based compensation expense, employer payroll taxes on stock-based
compensation, amortization or impairment of acquired intangible assets,
impairment of goodwill, restructuring-related charges, other certain
gains, losses or charges that are not indicative of the company's core
operating results and the income taxes associated with the foregoing. In
addition to the corresponding GAAP measures, the company's management
also uses the foregoing non-GAAP measures in reviewing the financial
results of the company.
The company excludes the following items from non-GAAP net income,
non-GAAP earnings per diluted share, non-GAAP operating margin and
non-GAAP effective tax rate:
Stock-based compensation expense and related employer payroll taxes.
This consists of expenses for equity awards under our equity incentive
plans. We exclude stock-based compensation expense from our non-GAAP
measures primarily because they are non-cash expenses. The related
employer payroll taxes are dependent on our stock price and the timing
and size of exercises and vesting of equity awards, over which
management has limited to no control, and as such management does not
believe it correlates to the operation of our business.
Amortization or impairment of acquired intangible assets, impairment
of goodwill, and transaction expenses from the acquisition or disposal
of a business. We incur amortization or impairment of acquired
intangible assets and goodwill in connection with acquisitions and may
incur significant gains or losses from the acquisition or disposal of a
business and therefore exclude these amounts from our non-GAAP measures.
We exclude these items because management does not believe they are
reflective of our ongoing operating results.
Restructuring. These consist of significant expenses for employee
severance and other exit and disposal costs. The company excludes
significant restructuring charges primarily because management does not
believe they are reflective of ongoing operating results.
Certain other significant gains, losses, or charges that are not
indicative of the company's core operating results. These expenses
are significant gains, losses, or charges during a period that are the
result of isolated events or transactions which have not occurred
frequently in the past and are not expected to occur regularly or be
repeated in the future. The company excludes these amounts from its
results primarily because management does not believe they are
indicative of its current or ongoing operating results.
Tax effect of non-GAAP adjustments. This amount is used to
present stock-based compensation and the other amounts described above
on an after-tax basis consistent with the presentation of non-GAAP net
income.
The company also uses free cash flow, a non-GAAP measure. Free cash flow
represents operating cash flows less purchases of property and
equipment. The company considers free cash flow to be a liquidity
measure that provides useful information to management and investors
about the amount of cash generated by the business after the purchases
of property, buildings, and equipment, which can then be used to, among
other things, invest in the company's business, make strategic
acquisitions, and repurchase stock. A limitation of the utility of free
cash flow as a measure of financial performance is that it does not
represent the total increase or decrease in the company's cash balance
for the period.
In addition to the non-GAAP measures discussed above, the company also
analyzes certain measures, including net revenues and operating
expenses, on an FX-neutral basis to better measure the comparability of
operating results between periods. The company believes that changes in
foreign currency exchange rates are not indicative of the company's
operations and evaluating growth in net revenues and operating expenses
on an FX-neutral basis provides an additional meaningful and comparable
assessment of these measures to both management and investors.
FX-neutral results are calculated by translating the current period's
local currency results by the prior period's exchange rate. FX-neutral
growth rates are calculated by comparing the current period's FX-neutral
results by the prior period's results, excluding the impact from hedging
activities.
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Reconciliation of GAAP Operating Margin to Non-GAAP Operating
Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions, except percentages)
|
|
GAAP operating income
|
|
|
$
|
430
|
|
|
|
$
|
371
|
|
|
|
$
|
861
|
|
|
|
$
|
778
|
|
|
Stock-based compensation expense and related employer payroll taxes
|
|
|
192
|
|
|
|
122
|
|
|
|
341
|
|
|
|
218
|
|
|
Amortization of acquired intangible assets
|
|
|
22
|
|
|
|
35
|
|
|
|
45
|
|
|
|
69
|
|
|
Restructuring
|
|
|
—
|
|
|
|
—
|
|
|
|
40
|
|
|
|
—
|
|
|
Other(1) |
|
|
15
|
|
|
|
—
|
|
|
|
15
|
|
|
|
—
|
|
|
Total non-GAAP operating income adjustments
|
|
|
229
|
|
|
|
157
|
|
|
|
441
|
|
|
|
287
|
|
|
Non-GAAP operating income
|
|
|
$
|
659
|
|
|
|
$
|
528
|
|
|
|
$
|
1,302
|
|
|
|
$
|
1,065
|
|
|
Non-GAAP operating margin
|
|
|
21
|
%
|
|
|
20
|
%
|
|
|
21
|
%
|
|
|
21
|
%
|
|
(1) Impairment of investment in intellectual property
fund.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income 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 June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions, except percentages)
|
|
|
|
|
(unaudited)
|
|
GAAP income before income taxes
|
|
|
$
|
447
|
|
|
|
$
|
380
|
|
|
|
$
|
885
|
|
|
|
$
|
802
|
|
|
GAAP income tax expense
|
|
|
36
|
|
|
|
57
|
|
|
|
90
|
|
|
|
114
|
|
|
GAAP net income
|
|
|
411
|
|
|
|
323
|
|
|
|
795
|
|
|
|
688
|
|
|
Non-GAAP adjustments to net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income adjustments (see table above)
|
|
|
229
|
|
|
|
157
|
|
|
|
441
|
|
|
|
287
|
|
|
Tax effect of non-GAAP adjustments
|
|
|
(86
|
)
|
|
|
(44
|
)
|
|
|
(148
|
)
|
|
|
(87
|
)
|
|
Non-GAAP net income
|
|
|
$
|
554
|
|
|
|
$
|
436
|
|
|
|
$
|
1,088
|
|
|
|
$
|
888
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
$
|
0.34
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.65
|
|
|
|
$
|
0.57
|
|
|
Non-GAAP
|
|
|
$
|
0.46
|
|
|
|
$
|
0.36
|
|
|
|
$
|
0.89
|
|
|
|
$
|
0.73
|
|
|
Shares used in GAAP diluted share calculation
|
|
|
1,215
|
|
|
|
1,215
|
|
|
|
1,216
|
|
|
|
1,220
|
|
|
Shares used in non-GAAP diluted share calculation
|
|
|
1,215
|
|
|
|
1,215
|
|
|
|
1,216
|
|
|
|
1,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP effective tax rate
|
|
|
8
|
%
|
|
|
15
|
%
|
|
|
10
|
%
|
|
|
14
|
%
|
|
Tax effect of non-GAAP adjustments to net income
|
|
|
10
|
%
|
|
|
4
|
%
|
|
|
8
|
%
|
|
|
4
|
%
|
|
Non-GAAP effective tax rate
|
|
|
18
|
%
|
|
|
19
|
%
|
|
|
18
|
%
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PayPal Holdings, Inc.
|
|
Reconciliation of Operating Cash Flow to Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(In millions/unaudited)
|
|
Net cash provided by operating activities
|
|
|
$
|
921
|
|
|
|
$
|
696
|
|
|
|
$
|
1,672
|
|
|
|
$
|
1,434
|
|
|
Less: Purchases of property and equipment
|
|
|
(174
|
)
|
|
|
(201
|
)
|
|
|
(322
|
)
|
|
|
(334
|
)
|
|
Free cash flow
|
|
|
$
|
747
|
|
|
|
$
|
495
|
|
|
|
$
|
1,350
|
|
|
|
$
|
1,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Revenues by Type to Non-GAAP Pro Forma
Net Revenues by Type,
|
|
and GAAP Net Revenues by Geography to Non-GAAP Pro Forma Net
Revenues by Geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
Net Revenues by Type
|
|
|
Three Months Ended,
|
|
|
December 31,
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
March 31,
|
|
|
|
|
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
|
|
(In millions/unaudited)
|
|
|
|
|
Transaction revenues
|
|
|
$
|
2,262
|
|
|
|
$
|
1,982
|
|
|
|
$
|
1,970
|
|
|
|
$
|
1,914
|
|
|
|
$
|
8,128
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
(3
|
)
|
|
|
(7
|
)
|
|
Non-GAAP pro forma transaction revenues
|
|
|
2,262
|
|
|
|
1,982
|
|
|
|
1,966
|
|
|
|
1,911
|
|
|
|
8,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other value added services
|
|
|
$
|
294
|
|
|
|
276
|
|
|
|
327
|
|
|
|
223
|
|
|
|
$
|
1,120
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
Non-GAAP pro forma other value added services
|
|
|
294
|
|
|
|
276
|
|
|
|
327
|
|
|
|
223
|
|
|
|
1,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
$
|
2,556
|
|
|
|
$
|
2,258
|
|
|
|
$
|
2,297
|
|
|
|
$
|
2,137
|
|
|
|
$
|
9,248
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
(3
|
)
|
|
|
(7
|
)
|
|
Total non-GAAP pro forma net revenues
|
|
|
2,556
|
|
|
|
2,258
|
|
|
|
2,293
|
|
|
|
2,134
|
|
|
|
9,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects the impact of lower transaction revenues
from payment services provided by PayPal to eBay as the result of
the terms of certain commercial agreements negotiated between the
parties that stipulate lower transaction fees than those
historically charged to eBay.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
Net Revenues by Geography
|
|
|
Three Months Ended,
|
|
|
December 31,
|
|
|
|
|
December 31,
|
|
|
September 30,
|
|
|
June 30,
|
|
|
March 31,
|
|
|
|
|
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
2015
|
|
|
|
|
(In millions/unaudited)
|
|
|
|
|
U.S. net revenues
|
|
|
$
|
1,302
|
|
|
|
$
|
1,138
|
|
|
|
$
|
1,170
|
|
|
|
$
|
1,030
|
|
|
|
$
|
4,640
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
(5
|
)
|
|
Non-GAAP pro forma U.S. net revenues
|
|
|
1,302
|
|
|
|
1,138
|
|
|
|
1,167
|
|
|
|
1,028
|
|
|
|
4,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International net revenues
|
|
|
$
|
1,254
|
|
|
|
$
|
1,120
|
|
|
|
$
|
1,127
|
|
|
|
$
|
1,107
|
|
|
|
$
|
4,608
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
Non-GAAP pro forma international net revenues
|
|
|
1,254
|
|
|
|
1,120
|
|
|
|
1,126
|
|
|
|
1,106
|
|
|
|
4,606
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenues
|
|
|
$
|
2,556
|
|
|
|
$
|
2,258
|
|
|
|
$
|
2,297
|
|
|
|
$
|
2,137
|
|
|
|
$
|
9,248
|
|
|
Pro forma adjustment(1) |
|
|
—
|
|
|
|
—
|
|
|
|
(4
|
)
|
|
|
(3
|
)
|
|
|
(7
|
)
|
|
Non-GAAP pro forma net revenues
|
|
|
2,556
|
|
|
|
2,258
|
|
|
|
2,293
|
|
|
|
2,134
|
|
|
|
9,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reflects the impact of lower transaction revenues
from payment services provided by PayPal to eBay as the result of
the terms of certain commercial agreements negotiated between the
parties that stipulate lower transaction fees than those
historically charged to eBay.
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170726006194/en/
PayPal
Investor Relations Contact
Gabrielle Rabinovitch
Vice
President, Investor Relations
grabinovitch@paypal.com
or
Media
Relations Contact
Amanda Miller, 408-219-0563
Director,
Corporate Communications
amandacmiller@paypal.com
Source: PayPal Holdings, Inc.
News Provided by Acquire Media