PayPal(US:PYPL)2025-10-28 21:10Financial Performance - Net revenues for the three months ended September 30, 2025, increased by $570 million, or 7%, driven primarily by an 8% growth in total payment volume (TPV) and an increase in interest and fee revenue[196]. - Operating income for the same period rose by $129 million, or 9%, with an operating margin consistent at 18%[198]. - Net income increased by $238 million, or 24%, due to the rise in operating income and an increase in other income[199]. - For the nine months ended September 30, 2025, net revenues increased by $1.1 billion, or 5%, primarily from a 6% growth in TPV[200]. - Operating income for the nine months rose by $670 million, or 17%, with an operating margin improving to 19%[202]. - Net income for the nine months increased by $770 million, or 25%, attributed to the increase in operating income and other income[204]. Revenue Sources - Approximately 44% of net revenues in the three months ended September 30, 2025, were generated from customers outside the U.S.[205]. - Revenues from other value-added services rose by $115 million, or 15%, and $340 million, or 16%, for the three and nine months ended September 30, 2025, primarily due to increased interest and fee revenue from loans receivable[229]. - Transaction revenues increased by $455 million, or 6%, and $725 million, or 3%, for the three and nine months ended September 30, 2025, compared to the same periods in the prior year[220]. Operating Expenses - Total operating expenses for the three months ended September 30, 2025, increased by $441 million, or 7%, primarily due to transaction expenses and credit losses[197]. - Operating expenses increased by 7% to $6.9 billion for the three months ended September 30, 2025, and by 2% to $19.9 billion for the nine months ended September 30, 2025[231]. - Customer support and operations expenses increased by $20 million, or 5%, in Q3 2025 compared to the same period in 2024[251]. - Sales and marketing expenses rose by $13 million, or 3%, in Q3 2025, driven by higher marketing spend, with a total increase of $217 million, or 16%, for the nine months ended September 30, 2025[254]. - Technology and development expenses increased by $55 million, or 7%, in Q3 2025, primarily due to contractor and consultant costs[258]. - General and administrative expenses decreased by $6 million, or 1%, in Q3 2025, attributed to lower employee-related costs[261]. Cash Flow and Investments - The company experienced a 22% increase in net cash provided by operating activities for the three months ended September 30, 2025, totaling $1,974 million[195]. - Net cash provided by operating activities declined by $1.0 billion to $4.032 billion for the nine months ended September 30, 2025[277]. - Cash, cash equivalents, and investments totaled $12.759 billion as of September 30, 2025, down from $13.947 billion at the end of 2024[274]. - As of September 30, 2025, approximately 70% of the total cash and investment portfolio was held in cash and cash equivalents[299]. - The company's strategic investments totaled $1.6 billion as of September 30, 2025, representing approximately 11% of the total cash and investment portfolio[312]. Debt and Shareholder Returns - As of September 30, 2025, the company had an aggregate principal amount of $10.9 billion in outstanding debt with varying maturity dates[282]. - The company issued fixed and floating rate notes totaling $1.5 billion in March 2025, with proceeds potentially used for debt repayment, share repurchases, and acquisitions[282]. - The company repurchased approximately $4.5 billion of its common stock during the nine months ended September 30, 2025, with $15.0 billion remaining available for future repurchases[293]. - A quarterly cash dividend of $0.14 per share was declared, totaling approximately $130 million, payable on December 10, 2025[294]. Risk Factors - A hypothetical 100 basis points increase in interest rates would have decreased the fair value of cash equivalents and available-for-sale debt securities by approximately $139 million as of September 30, 2025[300]. - A hypothetical adverse change of 10% in the carrying value of strategic investments would have resulted in a decrease of approximately $160 million[312].