PayPal - Earnings Review Q4'21
PayPal - Earnings Review Q4'21
Highlights
PayPal shares fell more than 29% after reporting mixed results for Q4’21 and after providing a lower-than-expected guidance for FY’22 on February 1st, 2022.
Non-GAAP EPS for Q4’21 of $1.11 Vs $1.12 estimates (up 4% compared to Q4’20).
Revenue for Q4’21 of $6.92B Vs $6.89B estimates (up 13% compared to Q4’20).
TPV reached $1.25 trillion for FY’21, up 33% whereas Venmo TPV reached c. $230.1B, up 44%.
A record 5.3B of payment transactions in Q4’21 alone, up 21%. Total for FY’21 is 19.3B, up 25%.
In Q4’21, 9.8M Net New Active Accounts were added, including 3.2M from the acquisition of Paidy and affected by 4.5M adjustment for illegitimate accounts, reaching a total of 426M, up 13%.
Cash & cash equivalents, and investments amount to $16.3B as of December 31, 2021, whereas debt totaled approximately $9.0B.
Generated $6.3B cash from operations (up 8%) in FY’21 and returned $3.4B to shareholders.
Free cash flow of $5.4B for FY’21, up 9% and 21% of revenue.
Outlook and key takeaways
TPV is expected to reach $1.5 trillion in FY’22, whereas revenue is expected to grow 15-17% on a spot and FXN basis, surpassing $29B; excluding eBay, revenue is expected to grow 19%-21%. E-commerce growth is underlying the growth for FY’22.
+50% revenue growth is expected for Venmo during FY’22.
Non-GAAP EPS from $4.6 in FY’21 to $4.6 - $4.75 for FY’22.
15 to 20M Net New Active Accounts are expected to be added in FY’22. As per John Rainey - Chief Financial Officer and Executive Vice President, Global Customer Operations, it was indicated that the 750M medium-term target is no longer appropriate. The focus will be on “sustainable growth and driving engagement”.
Q1’22 Revenue and Non-GAAP EPS guidance is on the low side, i.e., revenue growth of 6%; 14% excluding eBay and Non-GAAP EPS of $0.87 compared to $1.22 in prior year.