PayPal (PYPL) Tops Q4 EPS by 3c, Beats on Revenues; Offers FY18 EPS Mid-Point Guidance Above Consensus, FY18 Revenue Guide In-Line

PayPal (NASDAQ: PYPL) reported Q4 EPS of $0.55, $0.03 better than the analyst estimate of $0.52. Revenue for the quarter came in at $3.71 billion versus the consensus estimate of $3.63 billion.

2018 Financial Guidance

Full year 2018 revenue and earnings guidance

• PayPal expects revenue to grow 15 - 17% at current spot rates and 14 - 16% on an FX-neutral basis, to a range of $15.00 - $15.25 billion. Full year 2018 revenue guidance includes an expected impact related to the sale of U.S. consumer credit receivables to Synchrony Financial of ~3.5 percentage points for full year 2018, assuming the transaction closes on July 1, 2018.
• PayPal expects GAAP earnings per diluted share in the range of $1.79 - $1.86 and non-GAAP earnings per diluted share in the range of $2.24 - $2.30.
• Estimated non-GAAP amounts above for the twelve months ending December 31, 2018, reflect adjustments of approximately $910 - $950 million, primarily representing estimated stock-based compensation expense and related payroll taxes in the range of $820 - $850 million.

First quarter 2018 revenue and earnings guidance

• PayPal expects revenue to grow 20% - 22% at current spot rates and 20% - 21% on an FX-neutral basis, to a range of $3.58 - $3.63 billion.
• PayPal expects GAAP earnings per diluted share in the range of $0.41 - $0.43 and non-GAAP earnings per diluted share in the range of $0.52 - $0.54.
• Estimated non-GAAP amounts above for the three months ending March 31, 2018, reflect adjustments of approximately $215 - $230 million, primarily representing estimated stock-based compensation expense and related payroll taxes in the range of $190 - $200 million.

GUIDANCE:

PayPal sees FY2018 EPS of $2.24-$2.30, versus the consensus of $2.25. PayPal sees FY2018 revenue of $15-15.25 billion, versus the consensus of $15.16 billion.

Financial highlights for fourth quarter 2017 include:

• GAAP revenue growth of 26% to $3.74 billion, or 26% on a foreign currency neutral (FX-neutral) basis with non-GAAP revenue growth of 24% to $3.71 billion, or 24% on a FX-neutral basis
• GAAP operating margin of 22.5% with non-GAAP operating margin of 21.8%
• GAAP EPS growth of 57% to $0.50, which includes the impact of held for sale accounting of $0.25, partially offset by the impact from the Tax Act of ($0.15), with non-GAAP EPS growth of 30% to $0.55
• Entered into a $3.0 billion unsecured, term loan credit facility

For earnings history and earnings-related data on PayPal (PYPL) click here.

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