PayPal Holdings (NASDAQ:PYPL) reported Q3 non-GAAP earnings of $1.30 per share, surpassing estimates by 6.56% and increasing 20.4% YoY. Net revenues of $7.42 billion grew 9% YoY on an FX-neutral (FXN) basis and 8.4% on a spot basis, exceeding expectations by 0.37%.
Total payment volume reached $387.701 billion, showing 15% YoY growth on a spot basis and 13% on an FXN basis, beating estimates by 1.53%. Transaction revenues, which accounted for 90% of net revenues, were $6.654 billion, up 7% YoY. Other value-added services contributed $764 million (10% of net revenues), reflecting a 25% increase YoY.
U.S. net revenues constituted 57% of total revenues and rose 7% YoY to $4.257 billion. International revenues increased 10% on a spot basis and 11% on an FXN basis to $3.161 billion. PayPal reported 428 million total active accounts, reflecting a 1% YoY decline.
Total payment transactions reached 6.275 billion, marking an 11% YoY increase. Payment transactions per active account on a trailing 12-month basis amounted to 56.6 million, demonstrating a 13% YoY improvement. The non-GAAP operating margin was 22.2%, down 18 bps YoY.
On the balance sheet, as of Sep 30, 2023, cash equivalents and investments stood at $15.4 billion, up from $9.96 billion as of Jun 30, 2023. Long-term debt balance as of Sep 30, 2023, was $10.6 billion compared to $10.55 billion as of Jun 30, 2023.
PYPL generated $1.3 billion in cash from operations in the reported quarter, with free cash flow of $1.1 billion, a significant improvement from the $350 million reported in the previous quarter. The company also repurchased 23 million shares, returning $1.4 billion to shareholders.
For the fourth quarter of 2023, PayPal expects revenues to grow by approximately 6-7% on a spot basis and 7-8% on an FXN basis. Non-GAAP earnings are projected to increase by roughly 10% YoY to $1.36 per share. The Consensus Estimate for fourth-quarter earnings is $1.41 per share, up by a penny over the past 30 days.
For 2023, PayPal raised its guidance for non-GAAP earnings to $4.98 from $4.95, indicating growth of around 21% over 2022.
Featured Image: Unsplash @ Marques Thomas
Author Stephanie Bédard-Châteauneuf 
