On February 1, PayPal Holdings Inc. (PYPL) released its Q4 and full-year 2021 earnings report. Consequently, the stock took a hit in the after-hours on Tuesday.
After fluctuating between $176.20 and $170.53, PYPL closed the regular session at $175.80. The stock remained in the green during the regular session with a mild gain of 2.24% at 23.29 million shares. Following the announcement, the stock plunged down by 17.92% at 9.19 million shares in the after-hours. Hence, PYPL was trading at $144.30 apiece in the after-hours on Tuesday.
The technology platform and digital payments company, PayPal Holdings Inc. has a market capitalization of $202.02 billion. Currently, the company has 1.17 billion shares outstanding in the market.
PYPL’s Earnings Report
In the Q4 of 2021, the company generated net revenues of $6.9B and $25.4B for the full year of 2021. Thus, the Q4 net revenue increased by 13% year over year and full-year revenue went up by 17% year over year.
Moreover, the non-GAAP operating income was $1.5B and $6.3B in Q4 2021 and full year 2021, respectively. Therefore, the respective growth of the operating income for Q4 and full-year 2021 was 0% and 17% year over year.
Additionally, the non-GAAP earnings per share were $1.11 and $4.60 for Q4 and full-year 2021, respectively. Resultantly, the Q4 2021 earnings increased by 4% YOY and full-year 2021’s increased by 19% YOY.
Future Guidance
PYPL expects 2022’s revenue to increase by 15% to 17%, surpassing $29 billion.
Furthermore, the company also expects non-GAAP EPS between $4.60 and $4.75 for 2022.
In addition, the company expects 15-20 million Net New Active Accounts (NNAs) to be added in 2022.
PYPL’s Recent Developments
On January 13, PYPL announced the introduction of a new method of gift payments to friends and family by Venmo. The new gift payment method gives customers access to eight animated gift-wrap designs to be added to the gift payment note.
According to the company’s survey, 78% of Venmo users have sent a gift payment to someone in the past year. Further, 86% declared the ease of payments as the reason for selecting Venmo for sending gifts.
Conclusion
While the company’s earnings did show some improvement year over year, investors were disappointed due to the missed expectations. While the 2021 EPS miss analysts’ expectations, the 2022 outlook further disappointed investors. The low growth expectations and lower outlook for the future added to the current missed earnings caused PYPL stock to fall.
