Fintech Giant PayPal's Q2 Earnings: Revenue And EPS Beat, Payment Volumes And Transactions Surge, Guidance Boost

PayPal Holdings Inc PYPL reported fiscal second-quarter revenue growth of 8% year over year to $7.89 billion, beating the analyst consensus estimate of $7.81 billion. 

The company reported a quarterly adjusted EPS of $1.19, beating analyst consensus estimates of $0.98. The stock price gained after the print.

Total payment volumes increased 11% year-over-year to $416.8 billion in the quarter.

Payment transactions were up 8% to $6.6 billion, and the payment transactions per active account increased 11% on a trailing 12-month basis.

Total active accounts decreased by 0.4% to 429 million. On a sequential basis, active accounts increased by 0.4%, or 1.8 million.

The operating margin expanded 126 basis points to 16.8%, and the adjusted operating margin increased 231 bps to $18.5 billion.

Operating cash flow was $1.5 billion, and free cash flow was $1.4 billion. PayPal held $18.3 billion in cash and equivalents as of June 30, 2024.

“PayPal delivered a strong second quarter and first half, and I’m confident we’re on the right track. We delivered our best transaction margin dollar growth since 2021, and we are making steady progress on our strategic transformation while investing in innovation and operating more efficiently,” CEO Alex Chriss said.

Outlook: PayPal expects third-quarter revenues to increase by a mid-single-digit percentage compared to $7.42 billion in the prior year’s period and the consensus of $7.81 billion.

It expects adjusted EPS to grow in the high single-digit percentage compared to $0.98 for the previous year’s period and the consensus of $0.98.

PayPal expects full-year 2024 adjusted EPS to increase by the low-mid-teens percentage (prior mid- to high single-digit percentage) compared to $3.83 Y/Y. Current analyst estimates are calling for an EPS of $4.23 per share.

PayPal Holdings stock lost over 22% in the last 12 months. Analysts have projected upside from Venmo and PayPal digital wallets.

Price Action: PYPL shares traded higher by 5.99% at $62.47 premarket at the last check on Tuesday.

Photo courtesy of PayPal