Return on Assets (ROA)
since 2015
Calculation
PayPal Holdings Inc., ROA, long-term trends, calculation
| ROA | = | 100 | × | Net income1 | ÷ | Total assets1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 3.07% | = | 100 | × | 2,419) | ÷ | 78,717) |
| Dec 31, 2021 | 5.50% | = | 100 | × | 4,169) | ÷ | 75,803) |
| Dec 31, 2020 | 5.97% | = | 100 | × | 4,202) | ÷ | 70,379) |
| Dec 31, 2019 | 4.79% | = | 100 | × | 2,459) | ÷ | 51,333) |
| Dec 31, 2018 | 4.75% | = | 100 | × | 2,057) | ÷ | 43,332) |
| Dec 31, 2017 | 4.40% | = | 100 | × | 1,795) | ÷ | 40,774) |
| Dec 31, 2016 | 4.23% | = | 100 | × | 1,401) | ÷ | 33,103) |
| Dec 31, 2015 | 4.25% | = | 100 | × | 1,228) | ÷ | 28,881) |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
1 US$ in millions
The financial performance from 2015 to 2022 is characterized by a period of sustained growth in both earnings and asset accumulation, culminating in a peak of operational efficiency in 2020 followed by a significant contraction in 2022.
- Return on Assets (ROA) Trend
- ROA exhibited a gradual upward trajectory from 4.25% in 2015 to 4.79% in 2019. A peak efficiency level of 5.97% was reached in 2020. However, this trend reversed sharply by 2022, with the ratio falling to 3.07%, representing the lowest efficiency level within the analyzed eight-year period.
- Net Income Dynamics
- Net income demonstrated consistent annual growth for six consecutive years, rising from US$ 1,228 million in 2015 to a peak of US$ 4,202 million in 2020. Following a plateau in 2021, a substantial decrease to US$ 2,419 million occurred in 2022, indicating a significant reduction in bottom-line profitability.
- Asset Expansion
- Total assets grew monotonically throughout the period, increasing from US$ 28,881 million in 2015 to US$ 78,717 million in 2022. A notable acceleration in asset growth is observed between 2019 and 2020, where total assets increased by approximately US$ 19 billion in a single fiscal year.
- Asset Utilization Efficiency
- A divergence between asset growth and profitability became evident in 2022. While total assets reached their maximum value of US$ 78,717 million, net income declined sharply. This inverse relationship resulted in the compression of the ROA, suggesting that the asset base expanded at a rate that outpaced earnings generation toward the end of the period.
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Comparison to Competitors
PayPal Holdings Inc., ROA, long-term trends, comparison to competitors
| PayPal Holdings Inc. | Accenture PLC | Adobe Inc. | AppLovin Corp. | Cadence Design Systems Inc. | Datadog Inc. | International Business Machines Corp. | Intuit Inc. | Microsoft Corp. | Oracle Corp. | Palantir Technologies Inc. | Palo Alto Networks Inc. | Salesforce Inc. | ServiceNow Inc. | Synopsys Inc. | Workday Inc. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 3.07% | 14.55% | 17.51% | -3.30% | 16.53% | -1.67% | 1.29% | 7.45% | 19.94% | 6.15% | -10.80% | -2.18% | 1.52% | 2.44% | 10.45% | 0.28% |
| Dec 31, 2021 | 5.50% | 13.68% | 17.70% | 0.58% | 15.87% | -0.87% | 4.35% | 13.29% | 18.36% | 10.48% | -16.02% | -4.87% | 6.14% | 2.13% | 8.66% | -3.24% |
| Dec 31, 2020 | 5.97% | 13.78% | 21.66% | — | 14.95% | -1.30% | 3.58% | 16.70% | 14.70% | 8.78% | -43.35% | -2.95% | 0.23% | 1.36% | 8.27% | -7.05% |
| Dec 31, 2019 | 4.79% | 16.04% | 14.22% | — | 29.46% | -1.61% | 6.20% | 24.78% | 13.69% | 10.20% | — | -1.24% | 3.61% | 10.41% | 8.31% | -7.58% |
| Dec 31, 2018 | 4.75% | 16.61% | 13.80% | — | 14.01% | — | 7.07% | 23.39% | 6.40% | 2.79% | — | -2.54% | 0.61% | -0.69% | 7.04% | -6.49% |
| Dec 31, 2017 | 4.40% | 15.18% | 11.65% | — | 8.44% | — | 4.59% | 23.87% | 8.80% | 6.92% | — | -6.30% | 1.02% | -4.39% | 2.53% | -12.89% |
| Dec 31, 2016 | 4.23% | 19.95% | 9.20% | — | 9.69% | — | 10.11% | 23.04% | 8.67% | 7.93% | — | -8.18% | -0.37% | -22.22% | 5.09% | -10.62% |
| Dec 31, 2015 | 4.25% | 16.72% | 5.37% | — | 10.74% | — | 11.94% | 7.35% | 6.92% | 8.96% | — | -8.40% | -2.46% | -10.98% | 4.48% | -10.51% |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Sector (Software & Services)
PayPal Holdings Inc., ROA, long-term trends, comparison to sector (software & services)
| PayPal Holdings Inc. | Software & Services | |
|---|---|---|
| Dec 31, 2022 | 3.07% | 11.32% |
| Dec 31, 2021 | 5.50% | 12.19% |
| Dec 31, 2020 | 5.97% | 9.68% |
| Dec 31, 2019 | 4.79% | 10.81% |
| Dec 31, 2018 | 4.75% | 6.11% |
| Dec 31, 2017 | 4.40% | 7.29% |
| Dec 31, 2016 | 4.23% | 8.86% |
| Dec 31, 2015 | 4.25% | 8.53% |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).
Comparison to Industry (Information Technology)
PayPal Holdings Inc., ROA, long-term trends, comparison to industry (information technology)
| PayPal Holdings Inc. | Information Technology | |
|---|---|---|
| Dec 31, 2022 | 3.07% | 14.33% |
| Dec 31, 2021 | 5.50% | 14.52% |
| Dec 31, 2020 | 5.97% | 11.46% |
| Dec 31, 2019 | 4.79% | 11.67% |
| Dec 31, 2018 | 4.75% | 10.94% |
| Dec 31, 2017 | 4.40% | 9.00% |
| Dec 31, 2016 | 4.23% | 9.68% |
| Dec 31, 2015 | 4.25% | 11.51% |
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), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).