PayPal Reports Solid Q3 Performance with 6% Revenue Growth

PayPal Holdings, Inc. (NASDAQ: PYPL) reported growth in its third-quarter financial results for 2024, achieving a 6% increase in net revenues to $7.8 billion. 

We reported third quarter 2024 results today, delivering strong performance on the back of a highly productive third quarter. We’re making good progress on our continued transformation and building the foundation for long-term, durable, and profitable growth. Thanks to the PayPal… pic.twitter.com/u4uADB1j79

— PayPal (@PayPal) October 29, 2024

PayPal’s performance highlighted its operational resilience and strategic initiatives, which have contributed to sustained revenue increases and expanded transaction capabilities. A substantial 8% increase in transaction margin dollars, totaling $3.7 billion, further highlighted PayPal’s enhanced operational efficiency during the quarter.

Operating Income and Margins See Significant Gains

PayPal reported a marked improvement in operating income, with GAAP figures climbing 19% to $1.4 billion. Non-GAAP operating income reflected similar growth, increasing 18% to $1.5 billion. 

The company’s GAAP operating margin expanded by 198 basis points, reaching 17.7%, while its non-GAAP margin grew by 194 basis points to 18.8%. These figures illustrate PayPal’s effective cost management and focus on profitable growth, even as it continued to invest in strategic initiatives.

Transaction Volume and User Base Expansion

During Q3, PayPal processed a total payment volume (TPV) of $422.6 billion, representing a 9% year-over-year increase. This growth was accompanied by a 6% rise in transaction numbers, totaling 6.6 billion, demonstrating robust demand for PayPal’s digital payment solutions. 

Additionally, the company’s active account base expanded by 0.9% to 432 million, with a sequential quarterly growth of 0.6%, adding 2.6 million new accounts. This steady increase underscores PayPal’s ability to retain and attract users in a competitive payment landscape.

The company maintained strong liquidity, with cash flow from operations at $1.6 billion and free cash flow totaling $1.4 billion. This robust cash position allowed PayPal to return capital to shareholders, repurchasing approximately 28 million shares during the quarter for a total of $1.8 billion. 

Over the trailing 12 months, PayPal has repurchased about 87 million shares, totaling $5.4 billion, reflecting its ongoing commitment to shareholder returns through strategic capital deployment.

Exceeding EPS Expectations and Revised Guidance

PayPal’s non-GAAP earnings per share (EPS) outperformed market forecasts, reaching $1.20—surpassing the projected $1.07 and marking a 22% year-over-year increase. 

Despite a GAAP EPS impact of $0.14 due to adjustments in the company’s investment portfolio, PayPal met revenue expectations closely with $7.8 billion, compared to an anticipated $7.88 billion. The company’s ability to align revenue performance with forecasts while achieving EPS growth reflects operational efficiency.

Moreover, PayPal raised its full-year non-GAAP guidance and projects GAAP EPS for Q4 to fall between $1.03 and $1.07. For the full fiscal year, PayPal anticipates GAAP EPS of $3.92 to $3.96, a narrowed adjustment from prior guidance.