PayPal Q4 Earnings: Revenue And EPS Beat, Margin Pressure, $15 Billion Buyback, Outlook And More

PayPal Holdings Inc PYPL reported fiscal fourth-quarter revenue growth of 4% year over year to $8.37 billion, topping the analyst consensus estimate of $8.26 billion. 

The company reported an adjusted EPS of $1.19, beating the analyst consensus estimate of $1.12. The stock dipped after the print.

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Total payment volumes increased 7% year-over-year to $437.8 billion in the quarter. Payment transactions were down 3% to $6.6 billion, and the payment transactions per active account increased 3% on a trailing 12-month basis to $60.6.

Total active accounts increased by 2.1% to 434 million. On a sequential basis, active accounts increased by 0.6%, or 2.6 million.

The operating margin declined 431 basis points to 17.2%, and the adjusted operating margin decreased 34 bps to 18.0%.

Operating cash flow was $2.4 billion, and free cash flow was $2.2 billion. PayPal held $15.4 billion in cash and equivalents as of December 31, 2024, and had a debt of $11.1 billion on its balance sheet.

Buyback: PayPal’s Board approved a new $15 billion stock repurchase program.

CEO Alex Chriss flagged improvements to branded checkout, peer-to-peer, and Venmo, plus the progress to its price-to-value strategy behind the quarterly print.

Outlook: PayPal expects first-quarter adjusted EPS of $1.15-$1.17, compared to $1.08 for the previous year’s period and the consensus of $1.13.

PayPal expects full-year 2024 adjusted EPS of $4.95-$5.10, compared to $4.65 Y/Y. Current analyst estimates call for an EPS of $4.90.

PayPal stock surged over 45% in the last 12 months. At least four Wall Street firms, including Susquehanna, Citigroup, Wells Fargo, and Piper Sandler, raised their price targets on the stock in January 2025.

Price Action: At the last check on Tuesday, PYPL stock was down 8.02% at $82.33 premarket.

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