In the early morning of July 27th, Beijing time, PayPal Holdings Inc, a payment service provider, announced its financial results for the second quarter of fiscal year 2017. According to the report, PayPal Holdings Inc's net income in the second quarter was $3.136 billion, up 18% from $2.65 billion in the same period last year, up 20% year-on-year, excluding exchange rate changes, and net profit was $411 million, up 27% from $323 million in the same period last year. PayPal Holdings Inc's second-quarter results and full-year performance outlook both beat Wall Street analysts' expectations, pushing its shares up more than 2 per cent in after-hours trading.
PayPal Holdings Inc's net profit for the quarter ended June 30 was $411 million, up 27% from $323 million a year earlier, and earnings per share were 34%, up 27% from $0.27 a year earlier. Excluding some one-time items (not in accordance with US GAAP), PayPal Holdings Inc's adjusted net income in the second quarter was $554 million, up 27% from $436 million in the same period last year; and adjusted earnings per share was $0.46, up 27% from $0.36 in the same period last year, exceeding analysts' expectations. Analysts on average expect PayPal Holdings Inc to earn 43 cents a share in the second quarter, according to a FactSet survey.
PayPal Holdings Inc's fourth-quarter net income was $3.136 billion, up 18 per cent from $2.65 billion a year earlier, and 20 per cent year-on-year, excluding exchange rate changes, which also exceeded analysts' expectations. Analysts on average expect PayPal Holdings Inc's second-quarter revenue to be $3.09 billion, according to a FactSet survey.
PayPal Holdings Inc's total payment (TPV) in the second quarter was $106.444 billion, up 23% from $86.208 billion in the same period last year, and 26% year-on-year, excluding the impact of exchange rate changes.
PayPal Holdings Inc's total operating expenses were $2.706 billion in the second quarter, up from $2.279 billion a year earlier. Of this total, transaction expenses were $1.064 billion, up from $810 million in the same period last year; transaction and loan losses were $308 million, up from $255 million in the same period last year; customer support and operating expenses were $335 million, up from $318 million in the same period last year; sales and marketing expenses were $284 million, up from $250 million in the same period last year Product development expenses were $232 million, up from $209 million in the same period last year; general and administrative expenses were $282 million, up from $261 million in the same period last year; and depreciation and amortization expenses were $201 million, up from $176 million in the same period last year.
PayPal Holdings Inc's second-quarter operating profit was $430 million, up from $371 million a year earlier, and its operating margin was 13.7%, down 30 basis points from 14.0% a year earlier. Not in accordance with US GAAP, PayPal Holdings Inc's operating profit margin in the second quarter was 21.0 per cent, up 110bp from 19.9 per cent a year earlier.
PayPal Holdings Inc's operating cash flow was $921 million in the second quarter, up 32% from $696 million in the same period last year, while free cash flow was $747 million, up 51% from $495 million in the same period last year. As of December 31, 2017, PayPal Holdings Inc's cash and cash equivalents and non-equity investments totaled US $6.6 billion. PayPal Holdings Inc's effective tax rate was 8.1% in the second quarter, down 690 basis points from 15.0% in the same period last year, while the effective tax rate not in accordance with US GAAP was 18.0%, down 80 basis points from 18.8% in the same period last year.
PayPal Holdings Inc added 6.5 million active user accounts in the second quarter, and the total number of active user accounts reached 210 million by the end of the quarter, including 17 million merchant accounts. In the second quarter, PayPal Holdings Inc handled 1.8 billion transactions, up 23% from a year earlier. In the past 12 months, PayPal Holdings Inc handled 32.3 transactions per active account, up 10 per cent from a year earlier.
PayPal Holdings Inc predicts that the company's net revenue in the third quarter of fiscal 2017 will be between $3.14 billion and $3.19 billion, an increase of 18% to 20% year-on-year, excluding exchange rate changes; earnings per share will be between $0.30 and $0.32 Earnings per share, which are not in accordance with GAAP, will be between 42 cents and 44 cents per share, reflecting an adjustment of between $200 million and $215 million. It mainly represents estimated equity incentive payments of $180 million to $190 million and related employer payroll taxes.
PayPal Holdings Inc also expects the company's full-year net revenue in fiscal year 2017 to be between $12.775 billion and $12.875 billion, an increase of 18% to 19% over the same period last year, excluding exchange rate changes, and between $1.32 and $1.36 per share. Earnings per share, which are not in accordance with GAAP, will be between $1.80 and $1.84, reflecting an adjustment of about $840 million to $880 million, which mainly represents estimated equity incentive payments of $690 million to $720 million and related employer payroll taxes. According to the FactSet survey, analysts on average expect PayPal Holdings Inc's full-year revenue to reach $12.7 billion and earnings per share to reach $1.79.
PayPal Holdings Inc shares rose 53 cents, or 0.53%, to close at $58.79 in regular trading on the Nasdaq. In after-hours trading as of 17:39 EDT (5:39 Beijing time on the 27th), PayPal Holdings Inc shares rose another $1.26, or 2.14%, to $60.050, breaking through a 52-week high. In the past 52 weeks, PayPal Holdings Inc's highest price is $59.38 and the lowest price is $36.28. (Tang Feng)