PayPal Holdings Inc (NASDAQ:PYPL) stock rose 9.85% (As on August 3, 11:42:35 AM UTC-4, Source: Google Finance) after the company posted better than expected results for the second quarter of FY 22. During its earnings presentation, PayPal said it had entered into an information-sharing agreement on value creation with Elliott Management. The company has reported a $341 million net loss, compared with a $1.18 billion profit during the year-earlier period. At the end of the quarter, PayPal had 429 million active accounts, up 6% year over year but below the 432.8 million consensus among analysts polled by StreetAccount. The company stressed the progress it has made on capital efficiency. It expects to reduce costs by $900 million this year, and it said annualized benefits from the cuts and other changes should save at least $1.3 billion in 2023. During the second quarter, mainly thanks to Venmo growth, PayPal added about 400,000 net new active accounts, or NNAs. In the first quarter, PayPal reported 2.4 million NNAs, for a total of about 2.8 million in the first half of 2022. It said it still intends to add 10 million NNAs for the full year. Cash, cash equivalents, and investments had totaled $15.6 billion as of June 30, 2022. Debt totaled $10.6 billion as of June 30, 2022, including $3.0 billion of new issuance in May 2022. In Q2’22, generated cash flow from operations of $1.5 billion, increasing 12%, and free cash flow of $1.3 billion, increasing 22%.
PYPL in the second quarter of FY 22 has reported the adjusted earnings per share of $0.93, beating the analysts’ estimates for the adjusted earnings per share of $0.86, according to Refinitiv. The company had reported the adjusted revenue growth of 9 percent to $6.81 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $6.79 billion.
Additionally, PayPal announced a new $15 billion share buyback program, four years after kicking off a $10 billion program.
For the full year, PayPal said it expects $3.87 to $3.97 in adjusted earnings per share, up from the range of $3.81 to $3.93 that it provided in April. Analysts polled by Refinitiv had expected $3.82 per share.
Meanwhile, the company has rolled out new credit offerings for SMBs, including the PayPal Business Cashback Mastercard in the U.S. and expansion of PayPal Working Capital to France and the Netherlands.