Published - February 10, 2023 @ 12:41 PM (EET)
Shares of PayPal Holding Inc. (NASDAQ:PYPL) rose 2.3% in after-hours trading after the payments fintech beat expectations for quarterly earnings and announced CEO Dan Schulman's plans to retire at the end of 2023.
In a statement on Thursday, the company said Schulman, who joined the company after its split from eBay in 2015, will continue to work with the board to help find a successor.
"I'm so proud of all the things we accomplished, but as I'm getting older, I also want to spend more time on the things I'm passionate about outside of work," Shulman said in an interview.
EARNINGS RESULTS
Headed into the report, Wall Street was interested to see the company's full-year outlook. However, PayPal declined to provide one.
Instead, the company discussed its earnings forecast for 2023, with executives expecting about $4.87 in full-year adjusted EPS, up about 18% from a year earlier and higher than the average $4.79 per share analysts were projecting.
While the company is witnessing some improving trends, it is still showing caution, given the volatility around forecasting e-commerce movements for the year ahead.
"Our baseline assumption is that discretionary spend will remain under pressure and global e-commerce growth will be slightly positive year over year," Schulman said.
Meanwhile, PayPal's operating margin and adjusted earnings per share grew for the first time in a year. Calling the fourth quarter "a real positive inflection point," Schulman said net income came in at $921 million, up from $801 million in the year-earlier period.
Total payment volume of $357.4 billion, representing a 5% increase, came in slightly below forecasts of $360 billion for the fourth quarter.
NOW WHAT
As supply-chain shocks crimped e-commerce and inflation forced consumers to rein in shopping, PayPal has spent much of the last year contending with a slowdown in growth in spending on its platforms.
In response, Schulman has vowed to improve operating leverage and boost revenue faster than expenses. As part of those plans, the company announced plans last week to cut about 7%, or 2,000 employees, from its workforce.
Schulman said he "wanted to make sure PayPal was in good shape" before leaving. Last year was challenging, he said, but "we're in a good position to deliver a strong 2023."
Shares are up 10% so far this year.
