Revenue from PayPal (PYPL) Q2 2022

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Dan Schulman, president and CEO of PayPal Holdings Inc., arrives for the morning session of the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, U.S., Wednesday, July 10, 2019. The 36th annual event brings together many of America’s wealthiest and most powerful people in media, technology and sports.

Patrick T. Fallon | Bloomberg | Getty Images

Shares of PayPal rose 13% in extended trading on Tuesday after the financial services company reported stronger-than-expected second-quarter results. In its earnings filings, PayPal said it entered into a value creation information sharing agreement with Elliott Management.

“As one of PayPal’s largest investors, with an investment of approximately $2 billion, Elliott strongly believes in PayPal’s value proposition. PayPal has an unrivaled, industry-leading footprint in its payment business and a right to earn short and long term,” Elliott managing partner Jesse Cohn said in a PayPal account. presentation of the results. The news comes a day after Elliott said he had become the biggest investor in social media operator Pinterest.

Here’s how PayPal fared in Q2:

  • Earnings: 93 cents per share, adjusted, versus 86 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $6.81 billion, versus $6.79 billion as forecast by analysts, according to Refinitiv.

Revenue rose 9% year-on-year, but the company posted a net loss of $341 million, compared with a profit of $1.18 billion in the year-ago quarter. At the end of the quarter, PayPal had 429 million active accounts, up 6% year-over-year, but below the consensus of 432.8 million among analysts polled by StreetAccount.

PayPal highlighted the progress it has made in capital efficiency. It plans to cut costs by $900 million this year, and it said annualized benefits from cuts and other changes are expected to save at least $1.3 billion in 2023. PayPal announced a new $15 billion share buyback, four years after launching a $10 billion program. .

And alongside its deal with Elliott Management, the firm has “committed to working with Elliott Investment Management LP on a comprehensive evaluation of capital return alternatives.”

PayPal said it was looking for a replacement for Mark Britto, its chief product officer for two years. Britto will retire later this year.

For the full year, PayPal said it expects adjusted earnings per share of $3.87 to $3.97, up from the $3.81 to $3.93 range it provided. in April. Analysts polled by Refinitiv had expected $3.82 per share.

Despite the after-hours move, PayPal shares had fallen 52% so far this year.

Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.

This story is developing. Please check for updates.

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