To The Moon

PayPal Holdings Inc $PayPal(PYPL)$reported it's second quarter fiscal 2022 earnings on Tuesday after the closing bell. 

Earnings per share came in at $0.93 per share, adjusted, vs $0.86 expected.

Revenue for the quarter at $6.81 billion, vs $6.79 expected. That represents 9% growth year-on-year.

On a GAAP basis, the company reported a netloss of $341 million, compared to net profit of $1.18 billion a year ago.

Some highlights for the quarter were:

• Total payment volume $340 billion, 9% spot and 13% FX-neutral basis YoY growth, 3-yearspot CAGR of 25%

• Number of active accounts 429 million, 6% YoY growth. Net new active accounts 0.4 million.

• 48.7 payment transactions per active account, 12% increase YoY. PayPal core daily activeaccounts are more than 40% higher relative to pre-pandemic period of Q2 FY19.

TPV Q2 2022 (Source: PayPal Q2 2022 Investor Update)

Healthy cash balances

Free cash flow of $1.3 billion, increase of 22%driven by higher cash earnings and favourablechanges in working captial relative to Q2-21. Cash and cash equivalents $4.6 billion, short term $4.7 billion and long term investments $6.3 billion. Long term debt $10.2 billion and short term debt $400 million. 

FCF Q2 2022

Guidance for FY2022

PayPal raised its guidance for fiscal 2022, revenue growth of ~10% at spot and ~11% FX-neutral. Non-GAAP EPS estimates $3.87 to $3.97 per share, free cash flow more than $5 billion. PayPal also announced a new share buyback program of $15 billion.

FY2022 Guidance

Technical Analysis PYPL

Expecting some resistance at $122 level after the share rose to $100 levels in post market after earnings report. If that resistance is breached, there is a gap to be filled between $140-$170 that was formed in February 2022. Current momentum indicator on MACD indicates short term bullish trend. Williams %R indicator indicates over bought region.

PYPL daily chart

Some competitors of PayPal include Square and Google Pay. 

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