Return on Equity (ROE)
since 2015
Calculation
PayPal Holdings Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income1 | ÷ | Total PayPal Stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 11.93% | = | 100 | × | 2,419) | ÷ | 20,274) |
| Dec 31, 2021 | 19.19% | = | 100 | × | 4,169) | ÷ | 21,727) |
| Dec 31, 2020 | 20.99% | = | 100 | × | 4,202) | ÷ | 20,019) |
| Dec 31, 2019 | 14.56% | = | 100 | × | 2,459) | ÷ | 16,885) |
| Dec 31, 2018 | 13.37% | = | 100 | × | 2,057) | ÷ | 15,386) |
| Dec 31, 2017 | 11.22% | = | 100 | × | 1,795) | ÷ | 15,994) |
| Dec 31, 2016 | 9.52% | = | 100 | × | 1,401) | ÷ | 14,712) |
| Dec 31, 2015 | 8.93% | = | 100 | × | 1,228) | ÷ | 13,759) |
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
Between 2015 and 2022, the return on equity (ROE) exhibited a period of sustained expansion followed by a significant contraction. The trajectory reflects a substantial increase in profitability relative to the equity base during the first six years of the period, reaching a peak in 2020 before experiencing a downward trend.
- Net Income Trends
- Net income showed consistent growth from 2015 to 2020, increasing from US$ 1,228 million to a peak of US$ 4,202 million. This growth phase was followed by a decline, with net income dropping to US$ 4,169 million in 2021 and further decreasing to US$ 2,419 million by December 31, 2022.
- Equity Base Evolution
- Total stockholders' equity grew steadily from US$ 13,759 million in 2015 to a peak of US$ 21,727 million in 2021. A moderate decrease was observed in 2022, with the equity base settling at US$ 20,274 million.
- ROE Analysis
- The ROE climbed steadily from 8.93% in 2015 to a maximum of 20.99% in 2020, driven by net income growth that outpaced the expansion of equity. The subsequent decline in ROE to 11.93% in 2022 was primarily precipitated by the sharp reduction in net income, as the equity base remained relatively stable compared to the volatility of the earnings.
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Comparison to Competitors
PayPal Holdings Inc., ROE, 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 | 11.93% | 31.11% | 33.85% | -10.13% | 30.93% | -3.56% | 7.47% | 12.57% | 43.68% | — | -14.57% | -127.14% | 2.48% | 6.46% | 17.85% | 0.65% |
| Dec 31, 2021 | 19.19% | 30.25% | 32.59% | 1.66% | 25.39% | -1.99% | 30.38% | 20.89% | 43.15% | 262.43% | -22.71% | -78.63% | 9.81% | 6.22% | 14.31% | -8.62% |
| Dec 31, 2020 | 20.99% | 30.05% | 39.66% | — | 23.69% | -2.56% | 27.14% | 35.76% | 37.43% | 83.94% | -76.61% | -24.23% | 0.37% | 4.18% | 13.54% | -19.33% |
| Dec 31, 2019 | 14.56% | 33.17% | 28.03% | — | 47.03% | -2.14% | 45.25% | 41.53% | 38.35% | 50.87% | — | -5.16% | 7.11% | 29.45% | 13.04% | -21.36% |
| Dec 31, 2018 | 13.37% | 39.17% | 27.67% | — | 26.84% | — | 51.96% | 51.44% | 20.03% | 8.37% | — | -15.30% | 1.36% | -2.40% | 12.43% | -20.33% |
| Dec 31, 2017 | 11.22% | 38.50% | 20.02% | — | 20.63% | — | 32.70% | 71.71% | 29.29% | 17.33% | — | -28.52% | 2.40% | -25.53% | 4.17% | -35.11% |
| Dec 31, 2016 | 9.52% | 54.42% | 15.74% | — | 27.38% | — | 65.07% | 84.32% | 23.33% | 18.82% | — | -28.60% | -0.95% | -116.76% | 8.35% | -25.52% |
| Dec 31, 2015 | 8.93% | 49.78% | 8.99% | — | 18.34% | — | 92.48% | 15.65% | 15.23% | 20.42% | — | -33.81% | -6.61% | -35.01% | 7.21% | -22.02% |
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., ROE, long-term trends, comparison to sector (software & services)
| PayPal Holdings Inc. | Software & Services | |
|---|---|---|
| Dec 31, 2022 | 11.93% | 30.78% |
| Dec 31, 2021 | 19.19% | 35.91% |
| Dec 31, 2020 | 20.99% | 30.34% |
| Dec 31, 2019 | 14.56% | 35.56% |
| Dec 31, 2018 | 13.37% | 20.20% |
| Dec 31, 2017 | 11.22% | 23.83% |
| Dec 31, 2016 | 9.52% | 26.25% |
| Dec 31, 2015 | 8.93% | 23.04% |
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., ROE, long-term trends, comparison to industry (information technology)
| PayPal Holdings Inc. | Information Technology | |
|---|---|---|
| Dec 31, 2022 | 11.93% | 38.03% |
| Dec 31, 2021 | 19.19% | 41.64% |
| Dec 31, 2020 | 20.99% | 35.38% |
| Dec 31, 2019 | 14.56% | 35.94% |
| Dec 31, 2018 | 13.37% | 30.23% |
| Dec 31, 2017 | 11.22% | 23.19% |
| Dec 31, 2016 | 9.52% | 23.00% |
| Dec 31, 2015 | 8.93% | 25.97% |
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).