HomeIdeas ➟ 13 Business Activity Statement Form Y Reports

Business Activity Statement Form Y Reports

“PayPal delivered able after-effects in 2019, accomplishing abounding annal including revenue, net assets and operating allowance performance.  We added 37.3 actor net new alive accounts, bringing absolute alive accounts to 305 million, up 14% year over year.  In Q4 alone, we candy about $200 billion of TPV and assurance grew 10% to 40.6 affairs per alive account. We adequate our bulk hypothesis for consumers and merchants, broadcast our all-embracing ambit and scale, and appear transformative cardinal acquisitions, investments and bartering partnerships,” said Dan Schulman, President and CEO of PayPal.

Form 13—Mortgage Interest Statement Definition business activity statement form y reports
Form 13—Mortgage Interest Statement Definition business activity statement form y reports business activity statement form y reports

Financial highlights for fourth division 2019

Operating highlights for fourth division 2019

Financial highlights for abounding year 2019

Operating highlights for abounding year 2019

PayPal’s key business initiatives

In November, PayPal appear its acceding to admission Honey Science Corporation, a rapidly-growing technology belvedere for arcade and rewards, for approximately $4 billion.  This transaction, which bankrupt in January 2020, is accustomed to transform the arcade acquaintance for PayPal’s consumers while accretion sales and chump assurance for merchants.

Following a cardinal advance in March 2019, PayPal accomplished a bartering acceding with MercadoLibre in December.  This acceding will acquiesce PayPal and MercadoLibre to accordingly advantage their calibration and capabilities to strengthen both companies’ networks.

In December, PayPal completed its accretion of a 70% disinterestedness absorption in Guofubao Advice Technology Co., Ltd. (GoPay), afterward approval of the transaction by the People’s Coffer of China in September 2019. With the achievement of this deal, PayPal became the aboriginal adopted payments platform accountant to accommodate online acquittal casework in China.

In January 2020, PayPal appear a cardinal affiliation with UnionPay All-embracing (UPI) whereby both companies will assignment calm to bigger serve collective consumers and merchants. As allotment of this partnership, UPI will abutment PayPal’s merchant and chump initiatives in China and PayPal will abutment UPI accepting globally area PayPal is accepted, accouterment UPI consumers added best back shopping.

Fourth Division 2019 Banking and Operating Highlights

Fourth Quarter

(presented in millions, except per allotment abstracts and percentages)

2019

2018

YoY Growth

FX-Neutral YoY Growth

Total Acquittal Aggregate (TPV)

$

199,404

$

163,648

$

35,756

22

%

22

%

GAAP

Net revenues

$

4,961

$

4,226

$

735

17

%

18

%

Operating margin

16.1

%

14.2

%

**

196

bps

N/A

Effective tax rate

40.6

%

14.9

%

**

25.7

pts

N/A

Net income

$

507

$

584

$

(77)

(13)

%

N/A

Earnings per adulterated share

$

0.43

$

0.49

$

(0.06)

(13)

%

N/A

Net banknote provided by operating activities

$

1,264

$

1,134

$

130

11

%

N/A

Non-GAAP

Net revenues

$

4,961

$

4,226

$

735

17

%

18

%

Operating margin

23.6

%

21.6

%

**

204

bps

N/A

Effective tax rate

17.2

%

17.7

%

**

(0.5

pts)

N/A

Net income

$

1,017

$

824

$

193

23

%

N/A

Earnings per adulterated share

$

0.86

$

0.69

$

0.17

24

%

N/A

Free banknote flow

$

1,090

$

910

$

180

20

%

N/A

Cash, Banknote Equivalents, and Investments – PayPal’s cash, banknote equivalents, and investments totaled $13.6 billion as of December 31, 2019.

Long-Term Debt – PayPal’s abiding debt totaled $5.0 billion as of December 31, 2019.

2020 Banking Guidance

Full year 2020 acquirement and antithesis guidance

First division 2020 acquirement and antithesis guidance

Please see “Non-GAAP Banking Measures” and “Non-GAAP Measures of Banking Performance” for important added information.

Quarterly appointment alarm and webcast

PayPal Holdings, Inc. will host a appointment alarm to altercate fourth division and abounding year 2019 after-effects at 2:00 p.m. Pacific Time today. A alive webcast of the appointment call, calm with a accelerate presentation that includes added banking advice and reconciliations of assertive non-GAAP measures to their best anon commensurable GAAP measures, can be accessed through the company’s Investor Relations website at https://investor.paypal-corp.com. In addition, an annal of the webcast will be attainable for 90 canicule through the aforementioned link.

PayPal Holdings, Inc. uses its Investor Relations website (https://investor.paypal-corp.com), its PayPal Stories Blog (https://www.paypal.com/stories/us), Twitter handles (@PayPal and @PayPalNews), LinkedIn folio (https://www.linkedin.com/company/paypal), Facebook folio (https://www.facebook.com/PayPalUSA/), YouTube approach (https://www.youtube.com/paypal), Dan Schulman’s LinkedIn contour (https://www.linkedin.com/in/dan-schulman/), John Rainey’s LinkedIn contour (www.linkedin.com/in/john-rainey-pypl) and Dan Schulman’s Facebook folio (https://www.facebook.com/DanSchulmanPayPal/) as a agency of advice advice about the aggregation and for acknowledging with its acknowledgment obligations beneath Regulation FD. The advice that is acquaint through these channels may be accounted material. Accordingly, investors should adviser these channels in accession to PayPal’s columnist releases, filings with the Securities and Barter Commission (“SEC”), accessible appointment calls, and webcasts.

About PayPal

PayPal has remained at the alpha of the agenda acquittal anarchy for added than 20 years. By leveraging technology to accomplish banking casework and business added convenient, affordable, and secure, the PayPal belvedere is allotment added than 300 actor consumers and merchants in added than 200 markets to accompany and advance in the all-around economy. For added information, visit paypal.com.

Presentation

All advance ante represent year-over-year comparisons, except as contrarily noted. FX-neutral after-effects are affected by advice the accustomed aeon bounded bill after-effects by the above-mentioned aeon barter rate. FX-neutral advance ante are affected by comparing the accustomed aeon FX-neutral after-effects with the above-mentioned aeon results, excluding the appulse from ambiguity activities. All amounts in tables are presented in U.S. dollars, angled to the abutting millions, except as contrarily noted. As a result, assertive amounts and ante may not sum or recalculate application the angled dollar amounts provided.

Non-GAAP financial measures

This columnist absolution includes banking measures authentic as “non-GAAP banking measures” by the SEC including: non-GAAP net income, non-GAAP antithesis per adulterated share, non-GAAP operating income, non-GAAP operating margin, non-GAAP able tax rate, chargeless banknote flow, and adapted chargeless banknote flow. For an annual of the aloft non-GAAP measures, amuse see “Non-GAAP Measures of Banking Performance” included in this columnist release. These measures may be altered from non-GAAP banking measures acclimated by added companies. The presentation of this banking information, which is not able beneath any absolute set of accounting rules or principles, is not advised to be advised in abreast of, or as a acting for, the banking advice able and presented in accordance with about accustomed accounting attempt (GAAP). For a adaptation of these non-GAAP banking measures to the best anon commensurable GAAP measures, see “Non-GAAP Measures of Banking Performance,” “Reconciliation of GAAP Operating Allowance to Non-GAAP Operating Margin,” “Reconciliation of GAAP Net Assets to Non-GAAP Net Income, GAAP Adulterated EPS to Non-GAAP Adulterated EPS and GAAP Able Tax Bulk to Non-GAAP Effective Tax Rate,” and “Reconciliation of Operating Banknote Breeze to Chargeless Banknote Breeze and Adapted Chargeless Banknote Flow.”

Forward-looking statements

This columnist absolution contains advanced statements apropos to, amid added things, the approaching after-effects of operations, banking condition, expectations, and affairs of PayPal Holdings, Inc. and its circumscribed subsidiaries that reflect PayPal’s accustomed projections and forecasts. Advanced statements can be articular by words such as “may,” “will,” “would,” “should,” “could,” “expect,” anticipate,” “believe,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “project,” “forecast,” and added agnate expressions. Advanced statements include, but are not bound to, statements apropos projected banking after-effects for the aboriginal division and abounding year 2020, appulse and timing of acquisitions, and projected approaching advance of PayPal’s businesses. Advanced statements are based aloft assorted estimates and assumptions, as able-bodied as advice accustomed to PayPal as of the date of this columnist release, and are inherently accountable to abundant risks and uncertainties. Accordingly, absolute after-effects could alter materially from those predicted or adumbrated by advanced statements. Factors that could annual or accord to such differences include, but are not bound to: the aftereffect of political, business, economic, market, and barter conditions, including any bounded or accustomed bread-and-butter abatement or crisis and any altitude that affect payments or e-commerce growth; fluctuations in adopted bill barter rates; the competitive, regulatory, acquittal agenda association-related and added risks specific to PayPal’s acquittal platform, including the PayPal, PayPal Credit, Braintree, Venmo, Xoom, iZettle, and added products, abnormally as PayPal continues to aggrandize geographically, acquaint new articles and abutment beyond technologies and acquittal methods and as new laws and regulations accompanying to payments and banking casework appear into effect; the appulse of PayPal’s chump best initiatives, including on its allotment mix and transaction expense; PayPal’s adeptness to auspiciously attempt in an added aggressive ambiance for its businesses, products, and services, including antagonism for consumers and merchants and the accretion accent of agenda and adaptable payments and adaptable commerce; the aftereffect of acknowledged and authoritative affairs and PayPal’s charge and adeptness to administer regulatory, tax and action risks as its articles and casework are offered in added jurisdictions and applicative laws become added restrictive; changes to PayPal’s basic allocation or administration of operating cash; ambiguity surrounding the accomplishing and appulse of the United Kingdom’s academic notification of its absorbed to abjure from the European Union; cyberattacks and aegis vulnerabilities in PayPal articles and casework that could agitate business, abate revenue, admission costs, abuse our aggressive position or our reputation, or advance to liability; the aftereffect of administration changes and business initiatives; any changes PayPal may accomplish to its artefact and annual offerings; the aftereffect of any accustomed disasters or added business interruptions on PayPal or PayPal’s customers; PayPal’s adeptness to appropriate advancement and advance its technology systems, infrastructure, and chump annual capabilities at reasonable cost; PayPal’s adeptness to advance the stability, security, and achievement of its Payments Belvedere while abacus new articles and appearance in a appropriate fashion; risks that planned acquisitions will not be completed on advised terms, or at all, and that any businesses PayPal may admission may not accomplish in accordance with its expectations; and PayPal’s adeptness to profitably integrate, manage, and abound businesses that accept been acquired or may be acquired in the future. The advanced statements in this absolution do not accommodate the abeyant appulse of any acquisitions or divestitures that may be appear and/or completed afterwards the date hereof.

More advice about factors that could abnormally affect PayPal’s after-effects of operations, banking action and prospects, or that could annual absolute after-effects to alter from those bidding or adumbrated in advanced statements is included beneath the captions “Risk Factors” and “Management’s Discussion and Analysis of Banking Action and After-effects of Operations” in PayPal’s best contempo anniversary address on Form 10-K and its consecutive annual letters on Form 10-Q, copies of which may be acquired by visiting PayPal’s Investor Relations website at https://investor.paypal-corp.com or the SEC’s website at www.sec.gov. All advice in this absolution speaks as of January 29, 2020. For the affidavit discussed above, you should not abode disproportionate assurance on the advanced statements in this columnist release. PayPal assumes no obligation to amend such advanced statements.

Copyright © 1999-2020 PayPal. All rights reserved. Added aggregation and artefact names may be trademarks of their agnate owners.

PayPal Holdings, Inc.

Unaudited Abridged Circumscribed Antithesis Sheets

December 31, 2019

December 31, 2018

(In millions, except par value)

ASSETS

Current assets:

Cash and banknote equivalents

$

7,349

$

7,575

Short-term investments

3,412

1,534

Accounts receivable, net

435

313

Loans and absorption receivable, net

3,972

2,532

Funds receivable and chump accounts

22,527

20,062

Prepaid costs and added accustomed assets

800

947

Total accustomed assets

38,495

32,963

Long-term investments

2,863

971

Property and equipment, net

1,693

1,724

Goodwill

6,212

6,284

Intangible assets, net

778

825

Other assets

1,292

565

Total assets

$

51,333

$

43,332

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

232

$

281

Short-term debt

1,998

Funds payable and amounts due to customers

24,527

21,562

Accrued costs and added accustomed liabilities

2,087

2,002

Income taxes payable

73

61

Total accustomed liabilities

26,919

25,904

Deferred tax accountability and added abiding liabilities

2,520

2,042

Long-term debt

4,965

Total liabilities

34,404

27,946

Equity:

Common stock, $0.0001 par value; 4,000 shares authorized; 1,173 and 1,174 shares outstanding as of December 31, 2019 and 2018, respectively

Preferred stock, $0.0001 par value; 100 shares authorized, unissued

Treasury banal at cost, 105 and 91 shares as of December 31, 2019 and 2018, respectively

(6,872)

(5,511)

Additional paid-in-capital

15,588

14,939

Retained earnings

8,342

5,880

Accumulated added absolute assets (loss)

(173)

78

Total PayPal Stockholders’ equity

16,885

15,386

Noncontrolling interest

44

Total equity

16,929

15,386

Total liabilities and equity

$

51,333

$

43,332

PayPal Holdings, Inc.

Unaudited Abridged Circumscribed Statements of Income

Three Months Concluded December 31,

Year Concluded December 31,

2019

2018

2019

2018

(In millions, except per allotment amounts)

Net revenues

$

4,961

$

4,226

$

17,772

$

15,451

Operating expenses:

Transaction expense

1,913

1,578

6,790

5,581

Transaction and accommodation losses

381

340

1,380

1,274

Customer abutment and operations(1)(2)

438

377

1,615

1,407

Sales and business (1)(2)

400

401

1,401

1,314

Technology and development (1)(2)

558

490

2,085

1,831

General and authoritative (1)(2)

472

430

1,711

1,541

Restructuring and added charges

12

71

309

Financial Stability Review, May 13 business activity statement form y reports
Financial Stability Review, May 13 business activity statement form y reports business activity statement form y reports

Total operating expenses

4,162

3,628

15,053

13,257

Operating income

799

598

2,719

2,194

Other assets (expense), net

55

88

279

182

Income afore assets taxes

854

686

2,998

2,376

Income tax expense

347

102

539

319

Net income

$

507

$

584

$

2,459

$

2,057

Net assets per share:

Basic

$

0.43

$

0.50

$

2.09

$

1.74

Diluted

$

0.43

$

0.49

$

2.07

$

1.71

Weighted boilerplate shares:

Basic

1,174

1,177

1,174

1,184

Diluted

1,187

1,196

1,188

1,203

(1) Includes stock-based advantage as follows:

Customer abutment and operations(2)

54

45

198

174

Sales and marketing(2)

32

32

127

125

Technology and development(2)

128

81

420

303

General and administrative(2)

79

77

305

269

$

293

$

235

$

1,050

$

871

(2) Above-mentioned aeon amounts accept been adapted to reflect the allocation changes declared in the Form 8-K filed on April 9, 2019.

PayPal Holdings, Inc.

Unaudited Abridged Circumscribed Statements of Banknote Flows

Three Months Concluded December 31,

Year Concluded December 31,

2019

2018

2019

2018

(In millions)

Cash flows from operating activities:

Net income

$

507

$

584

$

2,459

$

2,057

Adjustments:

Transaction and accommodation losses

381

340

1,380

1,274

Depreciation and amortization

227

223

912

776

Stock-based compensation

285

230

1,021

853

Deferred assets taxes

(147)

(137)

(269)

(171)

Cost base adjustments to loans and absorption receivable captivated for sale

244

Unrealized (gains) losses on cardinal investments

(37)

(55)

(207)

(86)

Other

(20)

(38)

(150)

(86)

Changes in assets and liabilities:

Accounts receivable

(17)

74

(120)

(59)

Changes in loans and absorption receivable captivated for sale, net

4

1,407

Accounts payable

55

21

4

26

Income taxes payable

(7)

(23)

(40)

(44)

Other assets and liabilities

37

(85)

(433)

(708)

Net banknote provided by operating activities

1,264

1,134

4,561

5,483

Cash flows from advance activities:

Purchases of acreage and equipment

(174)

(224)

(704)

(823)

Proceeds from sales of acreage and equipment

3

17

3

Changes in arch loans receivable, net

(520)

(452)

(1,631)

3,121

Purchases of investments

(8,073)

(6,740)

(27,881)

(22,381)

Maturities and sales of investments

7,488

5,951

24,878

21,898

Acquisitions, net of banknote and belted banknote acquired

(70)

12

(70)

(2,124)

Funds receivable

950

1,573

(342)

1,146

Net banknote (used in) provided by advance activities

(399)

123

(5,733)

840

Cash flows from costs activities:

Proceeds from arising of accustomed stock

60

61

138

144

Purchases of treasury stock

(305)

(595)

(1,411)

(3,520)

Tax withholdings accompanying to net allotment settlements of disinterestedness awards

(31)

(27)

(504)

(419)

Borrowings beneath costs arrangements

5,471

2,075

Repayments beneath costs arrangements

(7)

(14)

(2,516)

(1,115)

Funds payable and amounts due to customers

134

(1,194)

2,510

1,573

Net banknote (used in) provided by costs activities

(149)

(1,769)

3,688

(1,262)

Effect of barter bulk changes on cash, banknote equivalents, and belted cash

43

(24)

(6)

(113)

Net change in cash, banknote equivalents, and belted cash

759

(536)

2,510

4,948

Cash, banknote equivalents, and belted banknote at alpha of period

14,984

13,769

13,233

8,285

Cash, banknote equivalents, and belted banknote at end of period

$

15,743

$

13,233

$

15,743

$

13,233

Supplemental banknote breeze disclosures:

Cash paid for interest

$

2

$

22

$

78

$

69

Cash paid for assets taxes, net

$

445

$

100

$

665

$

328

PayPal Holdings, Inc.

Unaudited Summary of Circumscribed Net Revenues

We acquire acquirement from the afterward types of transactions:

Transaction revenues: Net transaction fees answerable to merchants and consumers on a transaction base primarily based on the aggregate of activity, or Absolute Acquittal Aggregate (“TPV”), completed on our Payments Platform, including our PayPal, PayPal Credit, Venmo, Braintree, Xoom, and iZettle products. We acquire added fees on affairs area we accomplish bill conversion, back we accredit cross-border affairs (i.e., affairs area the merchant and chump are in altered countries), to facilitate the burning alteration of funds for our barter from their PayPal or Venmo anniversary to their debit agenda or coffer account, and added assorted fees.

Other bulk added services: Net revenues acquired primarily from acquirement becoming through partnerships, cable fees, aperture fees, and added casework we accommodate to our merchants and customers. We additionally acquire revenues from absorption and fees becoming primarily on our portfolio of merchant and chump loans receivable, and absorption becoming on assertive PayPal chump anniversary balances.

Net Revenues by Type

Three Months Ended

December 31,2019

September 30,2019

June 30,2019

March 31,2019

December 31,2018

(In millions, except percentages)

Transaction revenues

$

4,535

$

3,955

$

3,878

$

3,731

$

3,851

Current division vs above-mentioned quarter

15

%

2

%

4

%

(3)

Business areas - Accionistas e Inversiones en Bolsa ..
Business areas – Accionistas e Inversiones en Bolsa .. business activity statement form y reports

%

15

%

Current division vs above-mentioned year quarter

18

%

18

%

17

%

17

%

19

%

Percentage of total

91

%

90

%

90

%

90

%

91

%

Other bulk added services

426

423

427

397

375

Current division vs above-mentioned quarter

1

%

(1)

%

8

%

6

%

10

%

Current division vs above-mentioned year quarter

14

%

24

%

(21)

%

(19)

%

(25)

%

Percentage of total

9

%

10

%

10

%

10

%

9

%

Total net revenues

$

4,961

$

4,378

$

4,305

$

4,128

$

4,226

Current division vs above-mentioned quarter

13

%

2

%

4

%

(2)

%

15

%

Current division vs above-mentioned year quarter

17

%

19

%

12

%

12

%

13

%

Net Revenues by Geography

Three Months Ended

December 31,2019

September 30,2019

June 30,2019

March 31,2019

December 31,2018

(In millions, except percentages)

U.S. net revenues

$

2,606

$

2,327

$

2,297

$

2,187

$

2,189

Current division vs above-mentioned quarter

12

%

1

%

5

%

%

12

%

Current division vs above-mentioned year quarter

19

%

19

%

7

%

8

%

7

%

Percent of total

53

%

53

%

53

%

53

%

52

%

International net revenues

2,355

2,051

2,008

1,941

2,037

Current division vs above-mentioned quarter

15

%

2

%

3

%

(5)

%

18

%

Current division vs above-mentioned year quarter

16

%

19

%

18

%

17

%

20

%

(FXN) Accustomed division vs above-mentioned year quarter

17

%

20

%

18

%

17

%

19

%

Percent of total

47

%

47

%

47

%

47

%

48

%

Total net revenues

$

4,961

$

4,378

$

4,305

$

4,128

$

4,226

Current division vs above-mentioned quarter

13

%

2

%

4

%

(2)

%

15

%

Current division vs above-mentioned year quarter

17

%

19

%

12

%

12

%

13

%

(FXN) Accustomed division vs above-mentioned year quarter

18

%

19

%

12

%

12

%

13

%

PayPal Holdings, Inc.

Unaudited Added Operating Data

Three Months Ended,

December 31,2019

September 30,2019

June 30,2019

March 31,2019

December 31,2018

(In millions, except percentages)

Active accounts(1)

305

295

286

277

267

Current division vs above-mentioned quarter

3

%

3

%

3

%

3

%

5

%

Current division vs above-mentioned year quarter

14

%

16

%

17

%

17

%

17

%

Number of acquittal transactions(2)

3,461

3,090

2,973

2,838

2,867

Current division vs above-mentioned quarter

12

%

4

%

5

%

(1)

%

16

%

Current division vs above-mentioned year quarter

21

%

25

%

28

%

28

%

28

%

Payment affairs per alive account(3)

40.6

39.8

39.0

37.9

36.9

Current division vs above-mentioned quarter

2

%

2

%

3

%

3

%

1

%

Current division vs above-mentioned year quarter

10

%

9

%

9

%

9

%

How are cash flow and revenue different? business activity statement form y reports
How are cash flow and revenue different? business activity statement form y reports business activity statement form y reports

9

%

Total Acquittal Volume(4)

$

199,404

$

178,670

$

172,359

$

161,492

$

163,648

Current division vs above-mentioned quarter

12

%

4

%

7

%

(1)

%

14

%

Current division vs above-mentioned year quarter

22

%

25

%

24

%

22

%

23

%

(FXN) Accustomed division vs above-mentioned year quarter

22

%

27

%

26

%

25

%

25

%

Transaction Bulk Rate(5)

0.96

%

0.95

%

0.94

%

0.96

%

0.96

%

Transaction and Accommodation Accident Rate(6)

0.19

%

0.19

%

0.18

%

0.21

%

0.21

%

Transaction Margin(7)

53.8

%

53.4

%

54.8

%

54.2

%

54.6

%

Amounts in the table are angled to the abutting million, except as contrarily noted. As a result, assertive amounts may not recalculate application the angled amounts provided.

(1) 

An alive anniversary is an anniversary registered anon with PayPal or a belvedere admission accomplice that has completed a transaction on our Payments Platform, not including gateway-exclusive transactions, aural the accomplished 12 months.

(2)

Payment affairs are the absolute cardinal of payments, net of acquittal reversals, auspiciously completed on our Payments Belvedere or enabled by PayPal via a accomplice acquittal solution, not including gateway-exclusive transactions.

(3) 

Number of acquittal affairs per alive anniversary reflects the absolute cardinal of acquittal affairs aural the antecedent 12-month period, disconnected by alive accounts at the end of the period.

(4) 

TPV is the bulk of payments, net of reversals, auspiciously completed on our Payments Belvedere or enabled by PayPal via a accomplice acquittal solution, not including gateway-exclusive transactions.

(5)

Transaction bulk amount is affected by adding transaction bulk by TPV.

(6)

Transaction and accommodation accident bulk is affected by adding transaction and accommodation accident by TPV.

(7)

Transaction allowance is absolute acquirement beneath transaction bulk and transaction and accommodation loss, disconnected by absolute revenue.

PayPal Holdings, Inc.Non-GAAP Measures of Banking Performance

To supplement the company’s abridged circumscribed banking statements presented in accordance with about accustomed accounting principles, or GAAP, the aggregation uses non-GAAP measures of assertive apparatus of banking performance. These non-GAAP measures accommodate non-GAAP net income, non-GAAP adulterated antithesis per share, non-GAAP operating income, non-GAAP operating margin, non-GAAP able tax rate, chargeless banknote flow, and adapted chargeless banknote flow.

These non-GAAP measures are not in accordance with, or an another to, measures able in accordance with GAAP and may be altered from non-GAAP measures acclimated by added companies. In addition, these non-GAAP measures are not based on any absolute set of accounting rules or principles. Non-GAAP measures accept limitations in that they do not reflect all of the amounts associated with the company’s after-effects of operations as bent in accordance with GAAP. These measures should alone be acclimated to appraise the company’s after-effects of operations in affiliation with the agnate GAAP measures.

Reconciliation to the best anon commensurable GAAP admeasurement of all non-GAAP measures included in this columnist absolution can be begin in the tables included in this columnist release.

These non-GAAP measures are provided to enhance investors’ all-embracing compassionate of the company’s accustomed banking achievement and its affairs for the future. Specifically, the aggregation believes the non-GAAP measures accommodate advantageous advice to both administration and investors by excluding assertive expenses, assets and losses, as the case may be, that may not be apocalyptic of its bulk operating after-effects and business outlook. In addition, because the aggregation has historically appear assertive non-GAAP after-effects to investors, the aggregation believes that the admittance of non-GAAP measures provides bendability in the company’s banking reporting.

For its centralized allotment process, and as discussed added below, the company’s administration uses banking measures that do not accommodate stock-based advantage expense, employer bulk taxes on stock-based compensation, acquittal or crime of acquired abstract assets, crime of goodwill, restructuring-related charges, assertive added gains, losses, benefits, or accuse that are not apocalyptic of the company’s bulk operating results, and the assets taxes associated with the foregoing. In accession to the agnate GAAP measures, the company’s administration additionally uses the aloft non-GAAP measures in reviewing the banking after-effects of the company.

The aggregation excludes the afterward items from non-GAAP net income, non-GAAP adulterated antithesis per share, non-GAAP operating income, non-GAAP operating margin, and non-GAAP able tax rate:

Stock-based advantage bulk and accompanying employer bulk taxes. This consists of costs for disinterestedness awards beneath our disinterestedness allurement plans. We exclude stock-based advantage bulk from our non-GAAP measures primarily because they are non-cash expenses. The accompanying employer bulk taxes are abased on our banal bulk and the timing and admeasurement of contest and vesting of disinterestedness awards, over which administration has bound to no control, and as such administration does not accept it correlates to the operation of our business.

Amortization or crime of acquired abstract assets, crime of goodwill, and transaction costs from the accretion or auctioning of a business. We acquire acquittal or crime of acquired abstract assets and amicableness in affiliation with acquisitions and may acquire cogent assets or losses or transactional costs from the accretion or auctioning of a business and accordingly exclude these amounts from our non-GAAP measures. We exclude these items because administration does not accept they are cogitating of our advancing operating results.

Restructuring. These abide of costs for agent severance and added avenue and auctioning costs. The aggregation excludes cogent restructuring accuse primarily because administration does not accept they are cogitating of advancing operating results.

Certain added cogent gains, losses, benefits, or accuse that are not apocalyptic of the company’s bulk operating results. These are cogent gains, losses, benefits, or accuse during a aeon that are the aftereffect of abandoned contest or affairs which accept not occurred frequently in the accomplished and are not accustomed to action consistently in the future. The aggregation excludes these amounts from its non-GAAP after-effects because administration does not accept they are apocalyptic of our accustomed or advancing operating results.

Tax aftereffect of non-GAAP adjustments. This acclimation is fabricated to present stock-based advantage and the added amounts declared aloft on an after-tax base constant with the presentation of non-GAAP net income.

The aggregation additionally uses chargeless banknote flow, a non-GAAP measure. Chargeless banknote breeze represents operating banknote flows beneath purchases of acreage and equipment. The aggregation considers chargeless banknote breeze to be a clamminess admeasurement that provides advantageous advice to administration and investors about the bulk of banknote generated by the business afterwards the purchases of property, buildings, and equipment, which can again be acclimated to, amid added things, advance in the company’s business, accomplish cardinal acquisitions and investments, and repurchase stock. A limitation of the account of chargeless banknote breeze as a admeasurement of banking achievement is that it does not represent the absolute admission or abatement in the company’s banknote antithesis for the period.

In accession to the non-GAAP measures discussed above, the aggregation additionally analyzes assertive measures, including net revenues and operating expenses, on an FX-neutral base to bigger admeasurement the allegory of operating after-effects amid periods. The aggregation believes that changes in adopted bill barter ante are not apocalyptic of the company’s operations and evaluating advance in net revenues and operating costs on an FX-neutral base provides an added allusive and commensurable appraisal of these measures to both administration and investors. FX-neutral after-effects are affected by advice the accustomed period’s bounded bill after-effects with the above-mentioned period’s barter rate. FX-neutral advance ante are affected by comparing the accustomed period’s FX-neutral after-effects by the above-mentioned period’s results, excluding the appulse from ambiguity activities.

PayPal Holdings, Inc.

Reconciliation of GAAP Operating Allowance to Non-GAAP Operating Margin

Three Months Concluded December 31,

Year Concluded December 31,

2019

2018

2019

2018

(In millions, except percentages)

(unaudited)

GAAP operating income

$

799

$

598

$

2,719

$

2,194

Stock-based advantage bulk and accompanying employer bulk taxes

297

237

1,104

920

Amortization of acquired abstract assets

51

59

211

146

Restructuring

78

25

Other(1)

23

12

16

40

Acquisition accompanying transaction expense

3

7

3

24

Total non-GAAP operating assets adjustments

374

315

1,412

1,155

Non-GAAP operating income

$

1,173

$

913

$

4,131

$

3,349

Non-GAAP operating margin

24

%

22

%

23

%

22

%

(1)Includes an accolade for a acknowledged proceeding for the three months and year concluded December 31, 2019. Additionally, the year end December 31, 2019 includes a accretion accompanying to the auction of our U.S. chump acclaim receivables portfolio accomplished during the year concluded December 31, 2018. Includes net accident accompanying to the auction of our U.S.consumer acclaim receivables portfolio for the three months and year concluded December 31, 2018.

Reconciliation of GAAP Net Assets to Non-GAAP Net Income,

GAAP Adulterated EPS to Non-GAAP Adulterated EPS,

and GAAP Able Tax Bulk to Non-GAAP Able Tax Rate

Three Months Concluded December 31,

Year Concluded December 31,

2019

2018

2019

2018

(In millions, except per allotment abstracts and percentages)

(unaudited)

GAAP assets afore assets taxes

$

854

$

686

$

2,998

$

2,376

GAAP assets tax expense

347

102

539

319

GAAP net income

507

584

2,459

2,057

Non-GAAP adjustments to net income:

Non-GAAP operating assets adjustments (see table above)

374

315

1,412

1,155

Other(1)

230

(6)

230

43

Tax aftereffect of non-GAAP adjustments

(94)

(69)

(417)

(342)

Non-GAAP net income

$

1,017

$

824

$

3,684

$

2,913

Diluted net assets per share:

GAAP

$

0.43

$

0.49

$

2.07

$

1.71

Non-GAAP

$

0.86

$

0.69

$

3.10

$

2.42

Shares acclimated in GAAP adulterated allotment calculation

1,187

1,196

1,188

1,203

Shares acclimated in non-GAAP adulterated allotment calculation

1,187

1,196

1,188

1,203

GAAP able tax rate

41

%

15

%

18

%

13

%

Tax aftereffect of non-GAAP adjustments to net income

(24)

%

3

%

(2)

%

5

%

Non-GAAP able tax rate

17

%

18

%

16

%

18

%

(1) Three months and year concluded December 31, 2019 accommodate tax bulk accompanying to intra-group alteration of bookish property; three months concluded December 31, 2018 accommodate tax account accompanying to Tax Cuts and Jobs Act of $15 actor and tax bulk accompanying to intra-group alteration of bookish acreage of $9 million. Year concluded December 31, 2018 includes tax bulk accompanying to intra-group alteration of bookish acreage of $23 actor and Tax Cuts and Jobs Act of $20 million.

PayPal Holdings, Inc.

Reconciliation of Operating Banknote Breeze to Chargeless Banknote Breeze and Adapted Chargeless Banknote Flow

Three Months Concluded December 31,

Year Concluded December 31,

2019

2018

2019

2018

(In millions/unaudited)

Net banknote provided by operating activities

$

1,264

$

1,134

$

4,561

$

5,483

Less: Purchases of acreage and equipment

(174)

(224)

(704)

(823)

Free banknote flow

$

1,090

$

910

$

3,857

$

4,660

Impact of captivated for auction accounting presentation accompanying to our U.S. chump acclaim receivables portfolio on banknote breeze from operating activities

(1,508)

Adjusted chargeless banknote flow

$

1,090

$

910

$

3,857

$

3,152

Financial Statements Definition business activity statement form y reports
Financial Statements Definition business activity statement form y reports business activity statement form y reports

SOURCE PayPal Holdings, Inc.

http://www.paypal.com

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