PayPal Holdings Inc., adjustment to net income

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income (as reported)	2,419)	4,169)	4,202)	2,459)	2,057)
Add: Unrealized gains (losses) on investments, net of tax	(384)	(76)	7)	10)	—)
Net income (adjusted)	2,035)	4,093)	4,209)	2,469)	2,057)

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PayPal Holdings Inc., adjusted profitability ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net Profit Margin
Reported net profit margin	8.79%	16.43%	19.59%	13.84%	13.31%
Adjusted net profit margin	7.40%	16.13%	19.62%	13.89%	13.31%
Return on Equity (ROE)
Reported ROE	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted ROE	10.04%	18.84%	21.03%	14.62%	13.37%
Return on Assets (ROA)
Reported ROA	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted ROA	2.59%	5.40%	5.98%	4.81%	4.75%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	PayPal Holdings Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	PayPal Holdings Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

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	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Profitability Ratio
Net profit margin¹	8.79%	16.43%	19.59%	13.84%	13.31%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	2,035)	4,093)	4,209)	2,469)	2,057)
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Profitability Ratio
Adjusted net profit margin²	7.40%	16.13%	19.62%	13.89%	13.31%

2022 Calculations

¹ Net profit margin = 100 × Net income ÷ Net revenues
= 100 × 2,419 ÷ 27,518 = 8.79%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenues
= 100 × 2,035 ÷ 27,518 = 7.40%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	PayPal Holdings Inc. adjusted net profit margin ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Profitability Ratio
ROE¹	11.93%	19.19%	20.99%	14.56%	13.37%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	2,035)	4,093)	4,209)	2,469)	2,057)
Total PayPal stockholders’ equity	20,274)	21,727)	20,019)	16,885)	15,386)
Profitability Ratio
Adjusted ROE²	10.04%	18.84%	21.03%	14.62%	13.37%

2022 Calculations

¹ ROE = 100 × Net income ÷ Total PayPal stockholders’ equity
= 100 × 2,419 ÷ 20,274 = 11.93%

² Adjusted ROE = 100 × Adjusted net income ÷ Total PayPal stockholders’ equity
= 100 × 2,035 ÷ 20,274 = 10.04%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	PayPal Holdings Inc. adjusted ROE deteriorated from 2020 to 2021 and from 2021 to 2022.

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Profitability Ratio
ROA¹	3.07%	5.50%	5.97%	4.79%	4.75%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	2,035)	4,093)	4,209)	2,469)	2,057)
Total assets	78,717)	75,803)	70,379)	51,333)	43,332)
Profitability Ratio
Adjusted ROA²	2.59%	5.40%	5.98%	4.81%	4.75%

2022 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 2,419 ÷ 78,717 = 3.07%

² Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 2,035 ÷ 78,717 = 2.59%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	PayPal Holdings Inc. adjusted ROA deteriorated from 2020 to 2021 and from 2021 to 2022.

PayPal Holdings Inc. (NASDAQ:PYPL)

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