PayPal released its fourth quarter and full-year 2024 financial results, presenting a mixed picture but with a strong foundation for future development. Q4 net revenues increased 4% to $8.4 billion, while total payment volume grew 7% to $437.8 billion. However, it’s important to note that these growth rates may be decelerating. The company’s Q4 GAAP operating income decreased 17% to $1.4 billion, with GAAP EPS declining 15% to $1.11. This is concerning and warrants further investigation.
For the full year 2024, net revenues rose 7% to $31.8 billion, with total payment volume reaching $1.68 trillion. Active accounts increased by 8.8 million to 434 million. However, the sequential quarterly growth was only 0.6%, which may suggest difficulties in user acquisition. The company generated $6.8 billion in free cash flow for 2024 and returned $6.0 billion to stockholders through share repurchases. Notably, PayPal’s Board authorized a new $15 billion stock repurchase program, in addition to the $4.86 billion remaining from its June 2022 program. This could indicate that the company sees limited investment opportunities for organic growth.
The number of payment transactions in Q4 decreased 3% to 6.6 billion. This is a major concern and requires further investigation. Why are transaction numbers declining? Is PayPal losing market share to competitors?
PayPal’s results present a mixed picture. There are some positive signs, but the declining operating income, margin, and transaction numbers are worrisome and require further investigation.