sign in sign up
<<
Home , PayPal, Zettle

PAYPAL HOLDINGS, INC. (: PYPL)

Second Quarter 2021 Results

San Jose, California, July 28, 2021

Q2’21: TPV reaches $311 billion with more than 400 million active accounts • Total Payment Volume (TPV) of $311 billion, growing 40%, and 36% on an FX-neutral basis (FXN); net revenue of $6.24 billion, growing 19%, and 17% on an FXN basis • GAAP EPS of $1.00 compared to $1.29 in Q2’20, and non-GAAP EPS of $1.15 compared to $1.07 in Q2’20 • 11.4 million Net New Active Accounts (NNAs) added; ended the quarter with 403 million active accounts

FY’21: Raising TPV and reaffirming full year revenue outlook • TPV growth now expected to be in the range of ~33%-35% at current spot rates and on an FXN basis; net revenue expected to grow ~20% at current spot rates and ~18.5% on an FXN basis, to ~$25.75 billion • GAAP EPS expected to be ~$3.49 compared to $3.54 in FY’20; non-GAAP EPS expected to grow ~21% to ~$4.70 • 52-55 million NNAs expected to be added in FY’21

Q2’21 Highlights

GAAP Non-GAAP On the heels of a record year, we continued to drive strong results in the YoY YoY second quarter, reflecting some of the USD $ Change USD $ Change best performance in our history. Our platform now supports 403 million

Net Revenues $6.24B 17%* $6.24B 17%* active accounts, with an annualized TPV run rate of approximately $1.25 trillion. Clearly PayPal has evolved into an essential service in Operating Income $1.13B 19% $1.65B 11% the emerging digital economy.” EPS $1.00 (23%) $1.15 8% President and CEO

* On an FXN basis; on a spot basis net revenues grew 19% Q2 2021 Results 2 3,4 Q2’21 $1.06B Q2’21 $6.24B 1 Free Cash Flow Free (33%) Q2’20 $1.58B +17% Net Revenues / Free Cash Flow / Free Q2’20 $5.26B 4 Q2’21 $1.31B strength, diversification, and breadth and breadth diversification, strength, of our two-sided platform.” John Rainey and EVP CFO Global Customer Operations PayPal sits at the intersection of intersection PayPal sits at the secular tailwinds and transformative is uniquely positioned to address opportunity in digital the massive reporting are another We payments. of the — indicative quarter strong (26%) Operating Flow Cash Operating Cash Flow Q2’20 $1.77B Q2’21 $311B 1 +36% Q2’20 $222B Total Payment Volume Total $1.15 Q2’21 3 Non-GAAP +8% $1.07 Q2’20 Q2’21 11.4M / Non-GAAP EPS 2 Q2’21 $1.00 GAAP (47%) GAAP Q2’20 21.3M (23%) PayPal’s strategic investment portfolio compared to a $0.58 net portfolio compared strategic investment PayPal’s gain in Q2’20 unrealized GAAP and non-GAAP EPS include an approximate $0.11 benefit GAAP and non-GAAPapproximate EPS include an to an approximate compared reserves of credit the release from in provisioning credit increased impact from $0.07 negative Q2’20 on gain of $0.20 GAAP EPS also includes a net unrealized

Net New Active Accounts Active Net New $1.29 Q2’20 GAAP EPS of $1.00, down 23%; non-GAAPGAAP EPS of $1.00, down EPS of $1.15, up 8% • • Net revenue of $6.24 billion, growing 19%, and 17% on an FXN basis of $6.24 billion, growing Net revenue year GAAP operatingto the prior of 18.1%, flat period; margin non- GAAP operating 171 basis points of 26.5%, declining margin

1. On an FXN basis; on a spot basis TPV grew 40% and net revenues grew 19% 2. Net unrealized gains on PayPal’s strategic investment portfolio favorably impacted EPS by $0.20 in Q2’21, compared to a favorable impact to a favorable compared in Q2’21, $0.20 by impacted EPS portfolio favorably investment strategic 19% 2. grew gains on PayPal’s Net unrealized basis; on a spot revenues and net 40% grew basis TPV On an FXN 1. and the Performance” please see the section titled “Non-GAAP Financial GAAP financial measures, of non-GAAP a reconciliation comparable of directly to the most Measures financial measures For in Q2’20 3. of $0.58 2021 3, February on Commission (“SEC”) Exchange Form 8-K filed with the Securities and reclassification as described the impact of Reflects in our 4. release tables at the end of this press subsequent • • • Q2’21: Another quarter of strong revenue growth revenue Q2’21: Another quarter of strong

Key Operating and Financial Metrics Operating Financial and Key Financial Highlights Financial Q2 2021 Results 3

Operating Highlights Q2’21: Total active accounts surpass 400 million

• 11.4 million NNAs added, bringing total active accounts to 403 million, up 16% • 4.7 billion payment transactions, up 27% • $311 billion in TPV, up 40% on a spot basis, and 36% FXN • Merchant Services volume grew 48% on a spot basis, and 43% FXN, representing 96% of TPV • eBay Marketplaces volume declined (37%) on a spot basis, and (41%) FXN, representing 4% of TPV, compared to 9% in the prior year period • processed approximately $58 billion in TPV, growing 58% • 43.5 payment transactions per active account on a trailing twelve months basis, growing 11%

Balance Sheet and Liquidity Strong balance sheet and cash flow

• Cash, cash equivalents, and investments totaled $19.4 billion as of June 30, 2021 • Debt totaled $8.9 billion as of the end of the second quarter • Generated cash flow from operations of $1.31 billion, declining 26%, and free cash flow of $1.06 billion, declining 33% • In Q2’21, PayPal repurchased approximately 765,000 shares of common stock, returning $200 million to stockholders

Strategic Initiatives and Business Updates Delivering new experiences and advancing the merchant value proposition

• Launched PayPal in the U.S., a digital point-of-sale solution enabling small businesses to seamlessly sell across in- person and online channels • Expanded ‘Buy Now, Pay Later’ offerings in key international markets, launching Pay in 4 in Australia and announcing the upcoming expansion of pay later options in , including more flexible repayment periods • Buy, sell, hold experiences fully ramped to Venmo users following initial April launch • Acquired Chargehound and Happy Returns, which enhance PayPal’s merchant value proposition by adding capabilities related to automation and returns solutions • In 2021, PayPal has provided access to ~$1 billion in loans through the U.S. Small Business Administration’s Paycheck Protection Program (PPP) to ~43,000 small businesses, with an average loan size of ~$22,700

“When I ramped up Brooklyn Pasta Lab at the start of the pandemic, nobody wanted to be in contact with anybody. I considered how we were going to accept payments, and automatically thought of Venmo because it was something I was already using with my friends. 90 percent of our payments now come through Venmo, and my Business Profile has helped new customers discover Brooklyn Pasta Lab through their friends’ Venmo feeds.” Michael Pini Founder, Brooklyn Pasta Lab Brooklyn, NY Q2 2021 Results 4

Recent Acquisitions

Chargehound

Dispute management platform that automates the chargeback response process for merchants and will expand PayPal’s initiative to externalize its fraud and risk capabilities in a Risk- As-A-Service product portfolio Happy Returns

Comprehensive return solutions provider, including software and in- person return bars, which extends PayPal’s commerce platform beyond discovery and payments to the post-purchase experience Curv

A leading provider of cloud-based infrastructure for digital asset security, which accelerates and expands PayPal’s initiatives to support and digital assets

Q2’21 Financial and Operating Highlights

FXN Presented in millions, except per share data and percentages Q2 2021 Q2 2020 YoY Growth YoY Growth

Total Payment Volume (TPV) $310,992 $221,731 $89,261 40% 36%

Net revenues $6,238 $5,261 $977 19% 17%

Operating margin 18.1% 18.1% ** (1bp) N/A

Effective tax rate 12.7% 15.0% ** (2.3pts) N/A

GAAP Net income $1,184 $1,530 ($346) (23%) N/A

Earnings per diluted share $1.00 $1.29 ($0.29) (23%) N/A

Net cash provided by operating activities $1,306 $1,7721 ($466) (26%) N/A

Net revenues $6,238 $5,261 $977 19% 17%

Operating margin 26.5% 28.2% ** (171bps) N/A

Effective tax rate 14.9% 12.6% ** 2.3pts N/A

Net income $1,362 $1,263 $99 8% N/A Non-GAAP

Earnings per diluted share $1.15 $1.07 $0.08 8% N/A

Free cash flow $1,059 $1,5791 ($520) (33%) N/A

1. Reflects the impact of reclassification as described in our Form 8-K filed with the SEC on February 3, 2021 ** Not meaningful Q2 2021 Results 5

approximately $1.70 billion approximately GAAP EPS guidance includes ~$0.11 of net realized and unrealized gains on PayPal’s strategic investment portfolio strategic investment gains on PayPal’s and unrealized realized GAAP EPS guidance includes ~$0.11 of net portfolio strategic investment ~$1.24 on PayPal’s In 2020, GAAP EPS included a net gain of months ending DecemberEstimated non-GAAP of adjustments amounts for the twelve 31, 2021 reflect of taxes compensation payroll expense and related including estimated stock-based $2.18 billion, approximately In the third quarter of 2020, GAAP EPS included a net gain of $0.13 on PayPal’s strategic strategic gain of $0.13 on PayPal’s of 2020, GAAP EPS included a net quarter In the third portfolio investment Estimated non-GAAP September months ending amounts for the three of approximately adjustments reflect 30, 2021 of approximately taxes compensation payroll expense and related $510 million, including estimated stock-based $400 million GAAP EPS guidance does not include any expectation of net realized and unrealized gains and losses on PayPal’s gains and losses on PayPal’s and unrealized doesGAAP EPS guidance any expectation not include of net realized portfolio strategic investment

PayPal expects GAAP EPS to be ~21% to ~$4.70 ~$3.49, and non-GAAP EPS to grow • • • PayPal expects to add NNAs in the range of 52–55 million to be of ~33%-35% on a spot in the range PayPal expects TPV growth basis and FXN spot billion rates and ~18.5% on an FXN basis, to ~$25.75 ~20% at current to grow PayPal expects net revenue • • current spot rates current period,PayPal expects$0.86 in the prior year to to be per GAAP earnings and for non- compared ~$0.68, diluted share period year ~$1.07, in- with the prior be to GAAP earnings per approximately share diluted • PayPal expects net revenue to be in the range of ~$6.15 billion to ~$6.25 billion, representing growth of ~13%-14% at of ~13%-14% growth to beto ~$6.25 billion, representing in the range of ~$6.15 billion PayPal expects net revenue

Please see “Non-GAAP Financial Measures” and “Non-GAAP Measures of Financial Performance” for important additional information. • • • • FY’21 Guidance • • Financial Guidance Financial Q3’21 Guidance company’s Investor Relations at https://investor.pypl.com. In addition, an archive of the webcast will be accessible for In addition, an archive at https://investor.pypl.com. Relations website Investor company’s same link. the through 90 days PayPal Holdings, Inc. will host a conference call to discuss second quarter 2021 results at 2:00 p.m. Pacific Time today. A Time today. Pacific at 2:00 p.m. call to discuss second quarter 2021 results PayPal Holdings, Inc. will host a conference that includes supplemental financial information and a slide presentation call, together with webcast of the conference live the can be comparable GAAP measures, accessed through of certain non-GAAP to their most directly reconciliations measures Conference Call and Webcast Q2 2021 Results 6

the captions “Risk Factors”, “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of of Financial Condition Discussion and Analysis Proceedings” and “Management’s “Legal the captions “Risk Factors”, More information about factors that could adversely affect PayPal’s results of operations, financial condition and prospects,results of operations, financial condition and information aboutMore affect PayPal’s factors that could adversely or implied in forward-looking statements is included under those expressed to differ from or that could cause actual results capabilities; our ability to successfully identify, manage, and integrate any existing and potential acquisitions; and our ability to capabilities; our ability to successfully identify, highly qualified release do not include the personnel. The forward-looking and retain statements in this potential attract, hire, contemplated after the date hereof. that may be announced and/or impact of any acquisitions or divestitures risks, and the outcome of legal and regulatory proceedings; fluctuations in foreign currency exchange rates; changes in tax exchange currency risks, and the outcome of legal and regulatory in foreign fluctuations proceedings; to additional tax liabilities; changes to our capital allocation,rates and exposure of operating management cash or incurrence and customer service our technology infrastructure of indebtedness; our ability to timely upgrade and develop systems, Platform; regulatory, antitrust, payment card association-related and other risks specific association-related and services; products to our business, payment card antitrust, Platform; regulatory, which expose worldwide, us to and changing laws and regulations fraud; the impact of complex our ability to detect and prevent regulatory effects on our business; our ability to manage and litigation costs, and other adverse potential liabilities, increased other business partners; the effect of global and regional political, economic, market, trade and related conditions that affect trade and regional political, economic, market, other business partners; the effect of global and to rapid technological and subject highly competitive that are our ability to compete in markets growth; payments or commerce and services new or enhanced products change, and to develop on a timely basis; and security vulnerabilities in security and performance of our Payments Platform and Honey and servicesour products and associated impacts; the stability, Our actual results could differ materially from those estimated or implied by forward-looking statements. Factors that could by forward-looking those estimated or implied statements. could differ materially from Our actual results not limited to: the impact of the COVID-19 include, but are cause or contribute to such differences pandemic, natural disasters vendors and suppliers, well as our customers, or other business interruptions on our business and financial condition, as projected financial results for the third quarter and full year 2021, impact and timing of acquisitions, and the projected future future the projected year 2021, impact and timing of acquisitions, and quarter and full third results for the financial projected based upon as estimates and assumptions, as well various statements are Forward-looking businesses. of PayPal’s growth risks and uncertainties. subject to numerous inherently and are release, of this press to PayPal as of the date information known current projections and forecasts. Forward-looking statements can be identified by words such as “may,” “will,” “would,” “should,” “should,” “would,” “will,” such as “may,” words by statements can be identified Forward-looking and forecasts. projections current and “forecast,” “project,” “plan,” “opportunity,” “future,” “strategy,” “intend,” “estimate,” “believe,” “anticipate,” “expect,” “could,” guidance and statements regarding to, not limited may include, but are statements Forward-looking other similar expressions. Forward-Looking Statements Forward-Looking of operations, results among other things, the future contains forward-looking to, statements relating release This press financial condition, expectations,reflect PayPal’s and its consolidated subsidiaries that and plans of PayPal Holdings, Inc. GAAP financial measures to the most directly comparable GAAP measures, see “Non-GAAP Measures of Financial Performance,” see “Non-GAAP measures, comparable GAAP of Financial Performance,” to the most directly GAAP financial measures Measures “Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and GAAP Operating Margin Non-GAAP to Operating Income to Non-GAAP “Reconciliation of GAAP Net Net Income, GAAP Diluted EPS to Non-GAAP Diluted EPS and GAAP Margin,” Free and “Reconciliation of Cash Flow.” Operating to Cash Flow Tax Rate,” Tax Rate to Non-GAAP Effective Effective used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of under any comprehensive of this financial information, which is not prepared other companies. The presentation used by the financial information or as a substitute for, in isolation of, to beaccounting rules or principles, is not intended considered of these non- a reconciliation (GAAP). For with generally accepted accounting principles in accordance and presented prepared income, non-GAAP non-GAAPearnings per diluted share, operating income, non-GAAP operating non-GAAP margin, effective non-GAAP please see “Non-GAAP of the foregoing For an explanation measures, of Measures cash flow. tax rate and free non-GAAP from financial measures may be different These measures release. Financial Performance” included in this press Non-GAAP Measures Financial defined as “non-GAAP non-GAAP by the SEC including: financial measures includes financial measures” net release This press not sum or recalculate using the rounded dollar amounts provided. dollar amounts using the rounded not sum or recalculate the current period local currency results by the prior period exchange rate. FXN growth rates are calculated by comparing the comparing by calculated rates are growth rate. FXN prior period the period by exchange the current results local currency amounts in tables are hedging activities. All the impact from period with the prior period excluding current results FXN results, as otherwise Asnoted. millions, except to the nearest certain amounts and rates may dollars, rounded a result, in U.S. presented Presentation translating by calculated as otherwise are noted. FXN results comparisons, except year-over-year represent rates All growth Q2 2021 Results 7 Amanda Miller amandacmiller@.com Josh Criscoe [email protected] Media Relations Contacts Media Relations

© 2021 PayPal Holdings, Inc. All rights reserved. Other company and product names may be trademarks of their respective owners. may be names Other company and product © 2021 PayPal Holdings, Inc. All rights reserved. trademarks of their respective [email protected] [email protected] Jesse Kreger Investor Relations Contacts Relations Investor Gabrielle Rabinovitch The information that is posted through these channels may be deemed material. Accordingly, investors should monitor these investors be these channels may The information that is posted Accordingly, deemed material. through webcasts. calls, and filings with the SEC, public conference releases, press channels in addition to PayPal’s John Rainey’s LinkedIn profile (www..com/in/john-rainey-pypl), Dan Schulman’s Facebookpage (https://www. Dan Schulman’s (www.linkedin.com/in/john-rainey-pypl), profile LinkedIn John Rainey’s as a .com/DanSchulmanPayPal/) (https://www.instagram.com/dan_schulman/) page and Dan Schulman’s means of disclosing information about obligations under Regulation FD. complying with its disclosure the company and for paypal-corp.com/), PayPal Stories Blog (https://www.paypal.com/stories/us), Twitter handles (@PayPal and @PayPalNews), handles Twitter PayPal Stories Blog (https://www.paypal.com/stories/us), paypal-corp.com/), YouTube page (https://www.facebook.com/PayPalUSA/), Facebook page (https://www.linkedin.com/company/paypal), LinkedIn (https://www.linkedin.com/in/dan-schulman/), profile LinkedIn Dan Schulman’s channel (https://www.youtube.com/paypal), Disclosure Channels Disclosure (https://newsroom. the PayPal Newsroom (https://investor.pypl.com), Relations website uses its Investor PayPal Holdings, Inc. statements. Operations” in PayPal’s most recent annual report on Form 10-K and its subsequent quarterly reports on Form 10-Q, copies of on Form reports subsequent quarterly 10-K and its on Form annual report most recent Operations” in PayPal’s at www. website or the SEC’s at https://investor.pypl.com website Relations Investor visiting PayPal’s bewhich may by obtained not place undue should you discussed above, the reasons speaks 28, 2021. For as of July in this release All information sec.gov. to update assumes no obligation PayPal the forward-looking on such forward-looking release. this press statements in reliance Q2 2021 Results 8

PayPal Holdings, Inc. Unaudited Condensed Consolidated Balance Sheets

June 30, December 31, 2021 2020 (In millions, except par value) ASSETS

Current assets: Cash and cash equivalents $ 5,745 $ 4,794 Short-term investments 6,650 8,289 Accounts receivable, net 693 577 Loans and interest receivable, net 3,283 2,769 Funds receivable and customer accounts 35,670 33,418 Prepaid expenses and other current assets 1,190 1,148 Total current assets 53,231 50,995 Long-term investments 6,968 6,089 Property and equipment, net 1,848 1,807 Goodwill 9,564 9,135 Intangible assets, net 920 1,048 Other assets 1,285 1,305 Total assets $ 73,816 $ 70,379 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 260 $ 252 Funds payable and amounts due to customers 38,370 35,418 Accrued expenses and other current liabilities 2,489 2,648 Income taxes payable 149 129 Total current liabilities 41,268 38,447 Deferred tax liability and other long-term liabilities 2,698 2,930 Long-term debt 8,945 8,939 Total liabilities 52,911 50,316 Equity: Common stock, $0.0001 par value; 4,000 shares authorized; 1,175 and 1,172 shares outstanding as of June 30, 2021 and December 31, 2020, respectively — — Preferred stock, $0.0001 par value; 100 shares authorized, unissued — — Treasury stock at cost, 123 and 117 shares as of June 30, 2021 and December 31, 2020, respectively (10,030) (8,507) Additional paid-in-capital 16,580 16,644 Retained earnings 14,647 12,366 Accumulated other comprehensive income (loss) (292) (484) Total PayPal stockholders’ equity 20,905 20,019 Noncontrolling interest — 44 Total equity 20,905 20,063 Total liabilities and equity $ 73,816 $ 70,379 Q2 2021 Results 9 2020 116 $ 86 246 203 651 $ 9,879 3,582 1,031 822 785 1,236 998 76 8,530 1,349 713 $ 2,062 448 1,614 $ $ 1.38 1.36 1,173 1,185 2021 Six Months Ended June 30, June Ended Months Six 149 $ 96 286 248 779 $ 12,271 4,799 442 1,039 1,230 1,487 1,046 10,102 59 2,169 $ 59 2,228 (53) 2,281 $ $ 1.94 1.92 1,174 1,188 2020 (In millions, except per share data) share per except millions, (In 64 $ 47 133 116 360 $ 5,261 1,843 440 423 414 631 512 47 4,310 951 848 $ 1,799 269 1,530 $ $ 1.30 1.29 1,173 1,184 1 2021 Three Months Ended June 30, June Ended Months Three 77 $ 48 147 129 401 $ 6,238 2,524 169 521 628 746 522 5,111 1,127 229 $ 1,356 172 1,184 $ $ 1.01 1.00 1,174 1,186 PayPal Holdings, Inc. Holdings, PayPal (1) (1) Unaudited Condensed Consolidated Statements of Income Statements Consolidated Condensed Unaudited (1) (1) Total operating expenses operating Total Transaction expense Transaction losses credit and Transaction operations and support Customer Sales and marketing development and Technology General and administrative charges other and Restructuring Basic Diluted Basic Diluted Customer support and operations and support Customer Sales and marketing development and Technology General and administrative Includes stock-based compensation as follows: as compensation stock-based Includes (1) Net revenues Net expenses: Operating income Operating net (expense), income Other taxes income before Income (benefit) expense tax Income Net income share: per income Net shares: average Weighted

Q2 2021 Results 10 3 (2) 71 78 70 31 47 (15) (72) (48) (55) 120 590 635 114 (399) (421) (764) 2020 (3,612) (1,145) (10,084) 6,966 (3,000) 6,623 9,224 $ 2,261 15,743 18,004 $ $ (14,844) 9,793 (1,000) $ 1,614 1,031

3,193 1 89 — — — 77 41 20 (34) 127 630 978 109 380 442 616 758 (316) (469) (468) (940) (103) (163) (112) (793) 2021 Six Months Ended June 30, June Ended Months Six (2,682) 3,004 $ 18,040 19,018 $ $ (20,240) 18,683 (1,523) $ 2,281

3,064 1 3 — 70 — 67 40 63 (19) (30) (27) (78) 389 106 440 297 352 110 (758) (193) (200) (888) (In millions) (In 2020 (7,530) 3,966 (3,000) 6,097 6,914 $ 1,262 16,742 18,004 $ $ (11,251) 4,282 $ 1,530

1,772 1 8 (7) 87 — — — 18 97 26 75 53 (77) (15) 307 293 169 316 390 (197) (247) (391) (469) (200) (103) (283) (506) 2021 Three Months Ended June 30, June Ended Months Three (1,099) $ 19,000 19,018 $ (9,265) 8,965 $ $ 1,184

1,306 PayPal Holdings, Inc. Holdings, PayPal Unaudited Condensed Consolidated Statements of Cash Flows of Cash Statements Consolidated Condensed Unaudited : : : (1) (1) (1) Transaction and credit losses Transaction Depreciation and amortization Stock-based compensation Stock-based Deferred income taxes Net gains on strategic investments Other Accounts receivable Accounts payable Income taxes payable Other assets and liabilities Changes in assets and liabilities: Proceeds from sales of property and equipment from sales Proceeds receivable Funds Borrowings under financing arrangements Repayments under financing arrangements payable and amounts due to customers Funds Other financing activities Cash paid for interest Proceeds from issuance of common stock from issuance Proceeds Changes in principal loans receivable, net of investments Purchases Maturities and sales of investments Acquisitions, net of cash and restricted cash acquired stock of treasury Purchases related to net share settlements of equity withholdings Tax awards Cash paid for income taxes, net Purchases of property and equipment of property Purchases Net income Adjustments to reconcile net income to net cash provided by Adjustments to reconcile operating activities: Reflects the impact of reclassification as described in our Form 8-K filed with the SEC on February 3, 2021. on February 8-K filed with the SEC Reflects the impact of reclassification as described in our Form operating activities Cash flows from Net cash used in investing activities Cash flows from financing activities Net cash (used in) provided by financing activities of exchange rate changes on cash, cash equivalents, and restricted Effect cash Net change in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash at beginning of period Cash, cash equivalents, and restricted cash at end of period cash flow disclosures: Supplemental Net cash provided by operating activities Cash flows from investing activities (1) Q2 2021 Results 11 7 % 6 % 15 % 50 % 21 % 30 % 36 % 50 % 14 % 22 % 25 % 17 % 28 % 94 % 14 % 22 % (22) % (22) % (26) 2020 2020 June 30, June June 30, June $ 2,651 2,610 $ 5,261 $ 4,945 316 $ 5,261 6 % 1 % 4 % 3 % 7 % 4 % 21 % 52 % 29 % 30 % 48 % 25 % 25 % (9) % (9) 28 % 93 % 21 % 25 % 2020 2020 September 30, September $ 2,820 2,639 $ 5,459 September 30, September $ 5,076 383 $ 5,459 9 % 2 % 7 % 18 % 50 % 15 % 29 % 29 % 50 % 12 % 23 % 23 % 12 % 25 % 93 % 13 % 12 % 23 % 2020 2020 December 31, December December 31, December $ 3,073 3,043 $ 6,116 $ 5,682 434 $ 6,116 Three Months Ended Months Three Three Months Ended Months Three 2 % 7 % (2) % (2) (1) % (1) — % (1) % (1) (5) % (5) (1) % (1) 24 % 51 % 38 % 35 % 49 % 31 % 29 % 33 % 93 % 31 % (In millions, except percentages) except millions, (In (In millions, except percentages) except millions, (In 2021 2021 March 31, March March 31, March $ 5,621 412 $ 6,033 $ 3,063 2,970 $ 6,033 3 % 7 % 7 % 3 % 7 % 3 % — % 17 % 93 % 40 % 19 % 23 % 52 % 14 % 10 % 48 % 19 % 17 % 2021 2021 June 30, June June 30, June $ 5,797 441 $ 6,238 $ 3,272 2,966 $ 6,238 PayPal Holdings, Inc. Holdings, PayPal : Net revenues derived primarily from revenue earned through partnerships, referral fees, subscription Unaudited Summary of Consolidated Net Revenues of Consolidated Summary Unaudited : Net transaction fees charged to merchants and consumers on a transaction basis primarily based on the volume of activity, or Transaction Transaction revenues Total Total Payment Volume (“TPV”), completed on our Payments Platform, including our core PayPal, PayPal Credit, , Venmo, Xoom, Zettle, and Hyperwallet products and services. We earn additional fees on border transactions transactions (i.e., where transactions where we the merchant perform and consumer currency are in different conversion, countries), to when facilitate the we instant transfer enable of funds cross- for customers our from their PayPal or Venmo account to their or bank account, to facilitate the purchase and sale of cryptocurrencies, and other miscellaneous fees. Revenues from other value added services fees, gateway fees, and other services we provide to our merchants and consumers. We also earn revenues from interest and fees earned primarily on balances. and interest earned on certain assets underlying customer our portfolio of loans receivable, • • Current quarter vs prior quarter Current quarter vs prior year quarter Percentage of total Percentage Current quarter vs prior quarter Current quarter vs prior year quarter of total Percentage Current quarter vs prior quarter Current quarter vs prior year quarter Current quarter vs prior quarter Current quarter vs prior year quarter Percentage of total Percentage Current quarter vs prior quarter Current quarter vs prior year quarter (FXN) Current quarter vs prior year quarter Current quarter vs prior year (FXN) Percentage of total Percentage Current quarter vs prior quarter Current quarter vs prior year quarter (FXN) Current quarter vs prior year quarter Current quarter vs prior year (FXN) Net Revenues by Type by Net Revenues Transaction revenues Transaction Revenues from other value added services added value from other Revenues Total net revenues Total net Net Revenues by Geography by Net Revenues U.S. net revenues net U.S. International net revenues net International Total net revenues Total net

Our revenues are classified into the following two categories: two categories: are classified into the following Our revenues Q2 2021 Results 12 7 % (1) % (1) — % 15 % 26 % 16 % 21 % 29 % 30 % 0.83 % 0.20 % 56.6 % 2020 June 30, June 346 3,742 39.2 $ 221,731 7 % 4 % 2 % 1 % 30 % 11 % 22 % 38 % 36 % 0.82 % 0.14 % 56.7 % 2020 September 30, September 361 4,013 40.1 $ 246,691 4 % 2 % 1 % 10 % 27 % 12 % 24 % 39 % 36 % 0.84 % 0.13 % 55.9 % 2020 December 31, December 377 4,408 40.9 $ 277,072 Three Months Ended Months Three 4 % 3 % 3 % 7 % (1) % (1) 34 % 21 % 50 % 46 % (In millions, except percentages) except millions, (In 0.80 % 0.10 % 57.8 % 2021 March 31, March 392 4,371 42.2 $ 285,447 3 % 8 % 3 % 9 % 27 % 16 % 40 % 11 % 36 % 0.81 % 0.05 % 56.8 % 2021 June 30, June PayPal Holdings, Inc. Holdings, PayPal $ 310,992 403 4,735 43.5 Unaudited Supplemental Operating Data Operating Supplemental Unaudited (3) (2) (6) (5) (7) (1) (4) TPV is the value of payments, net of payment reversals, successfully completed on our Payments Platform or enabled by PayPal via a partner payment Number of payment transactions per active account reflects the total number of payment transactions within the previous 12-month period, divided by An active account is an account registered directly with PayPal or a platform access partner that has completed a transaction on our Payments Platform or Number of payment transactions are the total number of payments, net of payment reversals, successfully completed on our Payments Platform or enabled Transaction margin is total revenue less transaction expense and transaction and credit loss, divided by total revenue. Transaction Transaction expense rate is calculated by dividing transaction expense by TPV. rate is calculated by dividing transaction expense by TPV. expense Transaction and credit loss rate is calculated by dividing transaction and credit losses by TPV. Transaction

Current quarter vs prior year quarter Current quarter vs prior Current quarter vs prior quarter Current quarter vs prior quarter Current quarter vs prior quarter Current quarter vs prior Current quarter vs prior quarter Current quarter vs prior year quarter Current quarter vs prior Current quarter vs prior year quarter Current quarter vs prior year quarter (FXN) Current quarter vs prior year quarter solution, not including gateway-exclusive transactions. solution, not including gateway-exclusive transactions. active accounts at the end of the period. (6) (7) (4) (5) through our Honey Platform, not including gateway-exclusive transactions, within the past 12 months. through our Honey Platform, (2) (3) Amounts in the table are rounded to the nearest million, amounts provided. except as otherwise noted. As a result, certain amounts (1) may not recalculate using the rounded by PayPal via a partner payment solution, not including gateway-exclusive transactions. by PayPal Active accounts Transaction and Credit Loss Rate Transaction Margin Payment transactions per active account Payment transactions Number of payment transactions Number of payment TPV Transaction Expense Rate Q2 2021 Results 13 These are uses free cash flow as a liquidity

. This consists of expenses for equity awards under our equity This consists of expenses for equity awards PayPal Holdings, Inc. Holdings, PayPal A limitation of the utility of free cash flow as a measure of financial performance is that it . We record gains and losses on our strategic investments related to our interest in companies . We record gains and losses on our strategic Non-GAAP Measures of Financial Performance of Financial Measures Non-GAAP This adjustment is made to present stock-based compensation and the other amounts described ts and goodwill in connection with acquisitions intangible assets and goodwill in connection with acquisitions We incur amortization or impairment of acquired t and disposal costs. The company excludes significant and other exit and disposal costs. The company excludes These consist of expenses for employee severance om our non-GAAP measures primarily because they are non-cash expense from our non-GAAP measures primarily because incentive plans. We exclude stock-based compensation of exercises and ve are dependent on our stock price and the timing and size sting of expenses. The related employer payroll taxes it correlates to the limited to no control, and as such management does not believe equity awards, over which management has operation of our business. from the acquisiti assets, impairment of goodwill, and transaction expenseson or Amortization or impairment of acquired intangible disposal of a business. h have not significant gains, losses, benefits, or charges during a period that are the result of isolated events or transactions whic its occurred frequently in the past and are not expected to occur regularly in the future. The company excludes these amounts from non-GAAP results because management does not believe they are indicative of our current or ongoing operating results. Tax effect of non-GAAP adjustments. above on an after-tax basis consistent with the presentation of non-GAAP net income Stock-based compensation expense and related employer payroll taxes. Stock-based compensation expense and related and theref transactional expenses from the acquisition or disposal of a businessore exclude and may incur significant gains or losses or are reflective of our We exclude these items because management does not believe they these amounts from our non-GAAP measures. ongoing operating results. Restructuring. results. does not believe they are reflective of ongoing operating restructuring charges primarily because management Gains and losses on strategic investments uch gains and losses in full because we lack control over the We exclude such gains and losses in full because we lack operations over which we have limited control and visibility. of the investee and the related gains and losses are not indicative of our ongoing operating results. Certain other significant gains, losses, benefits, or charges that are not indicative of the company’s core operating results. nd operating In addition to the non-GAAP measures discussed above, the company also analyzes certain measures, including net revenues a ves that expenses, on an FX-neutral basis to better measure the comparability of operating results between periods. The company belie nues and changes in foreign currency exchange rates are not indicative of the company’s operations and evaluating growth in net reve h operating expenses on an FX-neutral basis provides an additional meaningful and comparable assessment of these measures to bot th the prior period’s management and investors. FX-neutral results are calculated by translating the current period’s local currency results wi od’s results, exchange rate. FX-neutral growth rates are calculated by comparing the current period’s FX-neutral results by the prior peri excluding the impact from hedging activities. Free cash flow represents operating cash flows less purchases of property and equipment. The company the purchases measure that provides useful information to management and investors about the amount of cash generated by the business after trategic of property, buildings, and equipment, which can then be used to, among other things, invest in the company’s business, make s acquisitions and investments, and repurchase stock. does not represent the total increase or decrease in the company’s cash balance for the period. atements presented in accordance with generally accepted accounting with generally accepted in accordance financial statements presented consolidated the company’s condensed To supplement measures These non-GAAP of financial performance. of certain components uses non-GAAP measures or GAAP, the company principles, margin, non- non-GAAP operating operating income, per share, non-GAAP non-GAAP diluted earnings net income, include non-GAAP cash flow. tax rate, and free GAAP effective and may be with GAAP prepared in accordance or an alternative to, measures in accordance with, measures are not These non-GAAP measures are not based on any comprehensive set addition, these non-GAAP measures used by other companies. In different from non-GAAP not reflect all of the amounts associated with the ations in that they do principles. Non-GAAP measures have limit of accounting rules or should only be used to evaluate the company’s h GAAP. These measures as determined in accordance wit company’s results of operations P measures. conjunction with the corresponding GAA results of operations in included in can be found in the subsequent tables measures to the most directly comparable GAAP measures Reconciliation of all non-GAAP this press release. company’s current financial performance and its all understanding of the are provided to enhance investors’ over These non-GAAP measures ent and provide useful information to both managem Specifically, the company believes the non-GAAP measures prospects for the future. ng results and not be indicative of its core operati certain expenses, gains and losses, as the case may be, that may investors by excluding ny believes that results to investors, the compa because the company has historically reported certain non-GAAP business outlook. In addition, reporting. company’s financial measures provides consistency in the the inclusion of non-GAAP measures that further below, the company’s management uses financial do not include For its internal budgeting process, and as discussed of acquire payroll taxes on stock-based compensation, amortization or impairmentd intangible stock-based compensation expense, employer that are charges, certain other gains, losses, benefits, or charges not indicative of the assets, impairment of goodwill, restructuring-related GAAP measures, the taxes associated with the foregoing. In addition to the corresponding company’s core operating results, and the income non-GAAP measures in reviewing the financial results of the company. company’s management also uses the foregoing non-GAAP operating from non-GAAP net income, non-GAAP diluted earnings per share, The company excludes the following items non-GAAP effective tax rate: income, non-GAAP operating margin, and Q2 2021 Results 14 (2) % (2) 13 % 15 % 18 % 28 % 2020 2020 (888) 534 1,530 269 1,184 1,184 $ 1.07 26 $ 1.29 115 $ 1,263 365 $ 1,485 104 951 534 $ 1,799 (17) $ 5,261 28 2 % (unaudited) (unaudited) 15 % 13 % 27 % 18 % and percentages) and 2021 2021 Three Months Ended June 30, June Ended Months Three Three Months Ended June 30, June Ended Months Three (In millions, except percentages) except millions, (In (In millions, except per share data data share per except millions, (In (283) 527 1,184 1,186 1,186 $ 1.15 (5) $ 1.00 109 $ 1,362 417 $ 1,654 (59) 1,127 527 $ 1,356 172 (7) $ 6,238 6 includes tax benefit related to intra-group transfer of three months ended June 30, 2020 includes $7 million of . The early lease termination three months ended June 30, 2020 PayPal Holdings, Inc. Holdings, PayPal The The GAAP Operating Margin to Non-GAAP Operating Margin Operating Margin to Non-GAAP GAAP Operating GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate GAAP Effective Tax Rate to Non-GAAP ncome and Income Operating Non-GAAP Income to GAAP Operating of Reconciliation (1) (1) Diluted EPS to Non-GAAP Diluted EPS, and Net Income, GAAP Diluted EPS to Non-GAAP Diluted EPS, Reconciliation of GAAP Net Income to Non-GAAP Total non-GAAP operating income adjustments Total non-GAAP operating three months ended June 30, 2021 includes tax benefit related to the write-off of deferred tax liabilities on strategic investments as a result of acquiring three months ended June 30, 2021 includes charges associated with Other Net gains on strategic investments Non-GAAP operating income adjustments (see table above) Non-GAAP operating income adjustments Other Restructuring Amortization of acquired intangible assets Amortization of acquired Stock-based compensation expense and related employer payroll taxes expense and related employer payroll Stock-based compensation Tax effect of non-GAAP adjustments Non-GAAP GAAP The The The The

Non-GAAP adjustments to net income: GAAP net income Non-GAAP effective tax rate GAAP effective tax rate Tax effect of non-GAAP adjustments to net income Shares used in non-GAAP diluted share calculation Shares used in GAAP diluted share calculation Non-GAAP operating margin Diluted net income per share: GAAP operating margin Non-GAAP net income Non-GAAP operating income Non-GAAP operating GAAP income tax expense GAAP operating income GAAP income before income taxes GAAP net revenues (1) (1) intellectual property. the remaining interest in the investments during the period. additional expenses related to pre-acquisition contingencies of an acquired company identified certain lease related leasehold improvements in conjunction with exitingd properties. impairment charges for right-of-use lease asset and outside of the measurement period and $21 million of asset Q2 2021 Results 15 2020 1,579 (193) 1,772 (In millions/unaudited) (In 2021 Three Months Ended June 30, June Ended Months Three 1,059 (247) $ 1,306 PayPal Holdings, Inc. Holdings, PayPal (1) Reconciliation of Operating Cash Flow to Free Cash Flow Flow to Free Cash of Operating Cash Reconciliation Less: Purchases of property and equipment Less: Purchases of property Reflects the impact of reclassification as described in our Form 8-K filed with the SEC on February 3, 2021. on February 8-K filed with the SEC as described in our Form Reflects the impact of reclassification Free cash flow Net cash provided by operating activities Net cash provided by (1)