PayPal Q1 Profits In-Line With Street Expectation, FY22 Outlook Lags Street Consensus

PayPal Holdings Inc PYPL reported first-quarter FY22 revenue growth of 8% year-over-year to $6.5 billion, beating the consensus of $6.4 billion. Revenue excluding eBay grew 15% on a spot basis.
Adjusted EPS was $0.88 (-28% Y/Y), in line with the consensus of $0.88.
Adjusted operating income reduced 20% Y/Y to $1.3 billion, and margin contracted by 702 bps to 20.7%.
PayPal reported $323 billion in TPV, up 13% on a spot basis and 15% FXN; TPV excluding eBay grew 17% on a spot basis and 19% FXN, representing more than 97% of TPV.
Total active accounts increased 9% Y/Y to 429 million.
Payment transactions were up 18% Y/Y to 5.2 billion, and payment transactions per active account on a trailing twelve-month basis grew 11% Y/Y to 47.
PayPal held cash, cash equivalents, and investments of $15.1 billion as of March 31, 2022, and Debt totaled $9.2 billion.
PYPL generated cash flow from operations of $1.2 billion (-29% Y/Y) and free cash flow of $1.1 billion (-32% Y/Y).
PYPL repurchased ~11 million shares of common stock during the quarter, returning $1.5 billion to stockholders.
2Q22 Outlook: PayPal expects net revenues to grow ~9% on a spot and FXN basis.
It expects GAAP EPS of ~$0.44-$0.46 compared to $1.00 in the prior-year period and non-GAAP EPS of ~$0.86 compared to $1.15 in the prior-year period.
FY22 Outlook: The company expects TPV to grow ~13%-15% on a spot basis and ~15%-17% FXN. Net revenues to grow ~11%-13% on a spot and FXN basis.
It expects GAAP EPS of ~$2.19-$2.34 and non-GAAP EPS ~$3.81-$3.93 vs. a consensus of $4.63, compared to $4.60 in FY’21.
Price Action: PYPL shares are trading 2.03% higher at $84.29 during the post-market session on Wednesday.

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