PayPal Grows Revenue 18% in Q4 2019

PayPal grew revenue 18% year-over-year in the fourth quarter of 2019 (foreign currency-neutral), it announced on Wednesday.

The number of payment transactions in the quarter – 3.5 billion – was up 21% year over year. Merchant Services volume grew 26%.

The following is an excerpt of PayPal’s press release announcing earnings.

PayPal Reports Fourth Quarter and Full Year 2019 Results
Q4 2019 Revenue grew 17% to $4.96 billion; 18% FX-neutral revenue growth
Q4 2019 GAAP EPS of $0.43 with non-GAAP EPS of $0.86

Global technology platform and digital payments leader PayPal Holdings, Inc. (NASDAQ: PYPL) today announced fourth quarter and full year results for the period ended December 31, 2019.

“PayPal delivered strong results in 2019, achieving many records including revenue, net income and operating margin performance. We added 37.3 million net new active accounts, bringing total active accounts to 305 million, up 14% year over year. In Q4 alone, we processed nearly $200 billion of TPV and engagement grew 10% to 40.6 transactions per active account. We strengthened our value proposition for consumers and merchants, expanded our international scope and scale, and announced transformative strategic acquisitions, investments and commercial partnerships,” said Dan Schulman, President and CEO of PayPal.

Financial highlights for fourth quarter 2019

• Revenue of $4.96 billion; growing 17% on a spot basis and 18% on a foreign currency-neutral (FX-neutral or FXN) basis.
• GAAP operating income of $0.8 billion, increasing 34%; non-GAAP operating income of $1.2 billion, increasing 28%.
• GAAP operating margin of 16.1% with non-GAAP operating margin of 23.6%.
• GAAP EPS of $0.43, decreasing 13%; non-GAAP EPS of $0.86, increasing 24%.
• GAAP and non-GAAP EPS include a net unrealized gain of $0.02 on strategic investments, driven primarily by MercadoLibre (NASDAQ: MELI).
• GAAP EPS also includes an approximate $0.19 of negative impact from taxes related to the acquisition of iZettle.
• Cash flow from operations of $1.3 billion with free cash flow of $1.1 billion.
• Repurchased approximately 2.9 million shares of common stock, returning $305 million to stockholders.

Operating highlights for fourth quarter 2019

• 9.3 million net new active accounts, bringing total active accounts to 305 million accounts, up 14%.
• 3.5 billion payment transactions, up 21%.
• $199 billion in total payment volume (TPV), up 22% on a spot and FX-neutral basis.
• Merchant Services volume grew 25% on a spot basis and 26% on an FX-neutral basis.
• Venmo processed more than $29 billion of TPV, growing 56%.

Financial highlights for full year 2019

• Revenue of $17.77 billion; growing 15% on a spot and FX-neutral basis.
• The completed sale of the U.S. consumer credit receivables portfolio to Synchrony in July 2018 negatively affected revenue growth by approximately three and one-half percentage points.
• GAAP operating income of $2.7 billion, increasing 24%; non-GAAP operating income of $4.1 billion, increasing 23%.
• GAAP operating margin of 15.3% with non-GAAP operating margin of 23.2%.
• GAAP EPS of $2.07, increasing 21%; non-GAAP EPS of $3.10, increasing 28%.
• GAAP and non-GAAP EPS include a net unrealized gain of $0.14 on strategic investments, driven primarily by MercadoLibre.
• GAAP EPS also includes an approximate $0.19 of negative impact from taxes related to the acquisition of iZettle.
• Cash flow from operations of $4.6 billion with free cash flow of $3.9 billion.
• Repurchased approximately 14 million shares of common stock, returning $1.4 billion to stockholders.

Operating highlights for full year 2019

• 37.3 million net new active accounts, bringing total active accounts to 305 million accounts, up 14%.
• 12.4 billion payment transactions, up 25%.
• $712 billion in total payment volume (TPV), up 23%, or 25% on an FX-neutral basis.
• Merchant Services volume grew 27% on a spot basis and 29% on an FX-neutral basis.
• Venmo processed more than $102 billion, up 65%.
• 40.6 payment transactions per active account on a trailing twelve months basis, up 10%.

See PayPal’s Investor Relations website for the full press release including PayPal’s key business initiatives, charts, and guidance.

Ina Steiner

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.