Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

PayPal Holdings Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net revenues	27,518)	25,371)	21,454)	17,772)	15,451)
Transaction expense	(12,173)	(10,315)	(7,934)	(6,790)	(5,581)
Transaction and credit losses	(1,572)	(1,060)	(1,741)	(1,380)	(1,274)
Customer support and operations	(2,120)	(2,075)	(1,778)	(1,615)	(1,407)
Sales and marketing	(2,257)	(2,445)	(1,861)	(1,401)	(1,314)
Technology and development	(3,253)	(3,038)	(2,642)	(2,085)	(1,831)
General and administrative	(2,099)	(2,114)	(2,070)	(1,711)	(1,541)
Restructuring and other charges	(207)	(62)	(139)	(71)	(309)
Operating expenses	(23,681)	(21,109)	(18,165)	(15,053)	(13,257)
Operating income	3,837)	4,262)	3,289)	2,719)	2,194)
Interest income	174)	57)	88)	197)	168)
Interest expense	(304)	(232)	(209)	(115)	(77)
Net gains (losses) on strategic investments	(304)	46)	1,914)	208)	87)
Other	(37)	(34)	(17)	(11)	4)
Other income (expense), net	(471)	(163)	1,776)	279)	182)
Income before income taxes	3,366)	4,099)	5,065)	2,998)	2,376)
Income tax (expense) benefit	(947)	70)	(863)	(539)	(319)
Net income	2,419)	4,169)	4,202)	2,459)	2,057)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

Net Revenues: Net revenues showed a consistent upward trend from 2018 to 2022. Starting at $15.45 billion in 2018, revenues increased each year, reaching $27.52 billion by 2022. This reflects robust growth over the five-year period.
Transaction Expense: Transaction expenses also increased steadily, from $5.58 billion in 2018 to $12.17 billion in 2022. The rising expense aligns with growing revenues, indicating higher costs associated with transaction volumes or pricing pressures.
Transaction and Credit Losses: Transaction and credit losses varied, with an initial increase from $1.27 billion in 2018 to $1.74 billion in 2020, then a decrease to $1.06 billion in 2021, followed by an increase again to $1.57 billion in 2022. The fluctuations suggest variability in credit losses management or external factors affecting defaults.
Customer Support and Operations: Expenses related to customer support and operations increased gradually over the period, from $1.41 billion in 2018 to $2.12 billion in 2022, indicating expanding operational support consistent with business growth.
Sales and Marketing: Sales and marketing expense rose from $1.31 billion in 2018 to a peak of $2.45 billion in 2021, then decreased slightly to $2.26 billion in 2022. This suggests a strategic investment in marketing before a modest reduction.
Technology and Development: Investment in technology and development steadily increased from $1.83 billion in 2018 to $3.25 billion in 2022, reflecting ongoing commitments to innovation and platform enhancement.
General and Administrative: General and administrative expenses showed a moderate increase from $1.54 billion in 2018 to a peak of $2.11 billion in 2021, then a slight decline to $2.10 billion in 2022, indicating relatively stable overhead costs with minor fluctuations.
Restructuring and Other Charges: Restructuring and other charges decreased significantly after 2018, with a low of $62 million in 2021, but increased again to $207 million in 2022. This may indicate episodic costs related to organizational changes or one-time charges.
Operating Expenses: Operating expenses increased consistently from $13.26 billion in 2018 to $23.68 billion in 2022, reflecting broad increases across categories consistent with scaling operations.
Operating Income: Operating income rose from $2.19 billion in 2018 to a peak of $4.26 billion in 2021, followed by a decline to $3.84 billion in 2022. The peak in 2021 suggests strong operational profitability, with the decline in 2022 possibly signaling margin pressure or increased costs.
Interest Income and Expense: Interest income fluctuated, peaking at $197 million in 2019 and dipping to $57 million in 2021 before rising again to $174 million in 2022. Interest expense steadily increased, from $77 million in 2018 to $304 million in 2022, indicating higher borrowing costs or increased debt levels.
Net Gains on Strategic Investments and Other Income (Expense): Net gains on strategic investments spiked dramatically in 2020 to $1.91 billion but fell sharply to $46 million in 2021 and a loss of $304 million in 2022, indicating significant volatility in investment outcomes. Other income (expense), net, followed a similar pattern with a large gain in 2020 but moved to negative territory in subsequent years.
Income Before Taxes: Income before taxes grew from $2.38 billion in 2018 to $5.07 billion in 2020, then declined to $3.37 billion in 2022, reflecting the impact of fluctuating investment gains and operational profit trends.
Income Tax Expense (Benefit): Income tax expense increased in absolute terms over the period, with a notable tax benefit recorded in 2021. This irregularity may be due to tax adjustments or credits that temporarily reduced the effective tax burden.
Net Income: Net income rose significantly from $2.06 billion in 2018 to $4.20 billion in 2020, remained stable in 2021 at $4.17 billion, then decreased substantially to $2.42 billion in 2022. The decline in the latest year aligns with reduced operating income and investment losses.

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PayPal Holdings Inc. (NASDAQ:PYPL)

Income Statement