Not only is the fintech leader well positioned with 429 million active users and a cash and short-term investment position of $9.3 billion, but I love where management’s head is with its ambitious cost-cutting plans. It will be interesting to see how the company’s cost-saving plans pan out, but it looks like the company is heading in the right direction. While execution is much different than planning, it’s clear that PayPal is prioritizing cutting costs and increasing profits in the coming years. It also believes its initiatives will allow for $1.3 billion in savings in 2023. The company has also reduced its workforce and plans to shift its real estate footprint by hiring employees in lower-cost locations.Īs a result, the fintech leader believes it can realize its $900 million savings target across operating and transaction expenses in 2022. Chief Executive Officer Dan Schulman talked about leveraging its scale to drive cost reductions across its supplier base. In its second-quarter earnings call, management was very clear about plans to cut operating costs.
How does PayPal plan to fix its problems?Īlthough investors should closely watch the company’s expense and profit situation in the coming quarters, I think PayPal will bounce back. The company’s transaction and credit losses also rose 165% year over year to $448 million due to an ongoing insolvency proceeding and fraud schemes related to its Venmo service offering. To boot, management mentioned a shifting funding mix - specifically more normalized debit card usage compared to last year - for the increased transaction expense as well. Braintree, which PayPal acquired in 2013, generally has higher expenses than the fintech’s other services. Management traced the rise to Braintree, a mobile card payment system for e-commerce businesses. The company’s transaction expense grew 21% year over year to $3 billion, equal to 45% of total sales. Two of PayPal’s operating expenses, transaction costs and transaction and credit losses, experienced significant upticks from a year ago. Fortunately, it generated a positive operating profit of $764 million, although it declined 32.2% year over year. In its second quarter, the company reported a net loss of $341 million, a drastic swing from its $1.2 billion profit in the same quarter a year ago. PayPal’s stock has surely been a victim of the broader tech sell-off related to high inflation and rising borrowing costs, but the fintech company is facing problems of its own. Quote and option data delayed at least 15 minutes stock quote data powered by Ticker Technologies, and Mergent.Image source: Getty Images. Video widget and market videos powered by Market News Video.
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(SONN)Ĭopyright © 2013 - 2022, All Rights Reserved Below, we examine the compound annual growth rate - CAGR for short - of an investment into PayPal Holdings shares, starting with a $10,000 purchase of PYPL, presented on a split-history-adjusted basis factoring in the complete PayPal Holdings stock split history.Īmerican Virtual Cloud Technologies, Inc. Looking at the PayPal Holdings stock split history from start to finish, an original position size of 1000 shares would have turned into 1000 today. PayPal Holdings (PYPL) has 0 splits in our PayPal Holdings stock split history database.
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