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
- Net Income
- Net income exhibited a consistent upward trend from 2015 through 2020, increasing from 1,228 million US dollars in 2015 to a peak of 4,202 million US dollars in 2020. In 2021, net income remained relatively stable at 4,169 million US dollars, followed by a notable decline to 2,419 million US dollars in 2022, representing a significant reduction from the prior two years.
- Total PayPal Stockholders’ Equity
- Total stockholders’ equity generally trended upward from 13,759 million US dollars in 2015 to a peak of 21,727 million US dollars in 2021. There was a slight decrease noted in 2018 and 2022, with the latter year showing equity at 20,274 million US dollars, which is below the 2021 level but still above earlier years.
- Return on Equity (ROE)
- The return on equity showed improvement from 8.93% in 2015 to a high of 20.99% in 2020. Despite a minor decrease to 19.19% in 2021, ROE declined more substantially to 11.93% in 2022. This drop in ROE corresponds with the downturn in net income observed in the same period, indicating a reduction in profitability relative to shareholders' equity.
- Summary of Trends
- Over the analyzed period, profitability as measured by net income and ROE improved steadily up to 2020, suggesting effective capital utilization and earnings growth. The peak in 2020 suggests a particularly strong performance year. However, the decline in both net income and ROE in 2022 highlights a reduction in profitability, despite maintaining relatively high equity levels. The increase in stockholders' equity throughout most of the period reflects reinvestment and growth in company value. The data suggests that the company experienced a significant earnings contraction in 2022, warranting further investigation into underlying operational or market factors driving this change.
Comparison to Competitors
PayPal Holdings Inc., ROE, long-term trends, comparison to competitors
| PayPal Holdings Inc. | Accenture PLC | Adobe Inc. | Cadence Design Systems Inc. | CrowdStrike Holdings Inc. | Fair Isaac Corp. | 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% | 30.93% | -22.89% | — | 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% | 25.39% | -10.64% | — | 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% | -19.10% | 71.41% | 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% | — | 66.30% | 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% | — | 54.00% | 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% | — | 30.07% | 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% | — | 24.49% | 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% | — | 19.79% | 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% | 31.20% |
| Dec 31, 2021 | 19.19% | 36.34% |
| Dec 31, 2020 | 20.99% | 30.37% |
| Dec 31, 2019 | 14.56% | 35.75% |
| Dec 31, 2018 | 13.37% | 20.25% |
| Dec 31, 2017 | 11.22% | 23.84% |
| Dec 31, 2016 | 9.52% | 26.24% |
| Dec 31, 2015 | 8.93% | 23.03% |
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% | 39.15% |
| Dec 31, 2021 | 19.19% | 42.48% |
| Dec 31, 2020 | 20.99% | 35.75% |
| Dec 31, 2019 | 14.56% | 36.67% |
| Dec 31, 2018 | 13.37% | 30.39% |
| Dec 31, 2017 | 11.22% | 23.40% |
| Dec 31, 2016 | 9.52% | 23.36% |
| Dec 31, 2015 | 8.93% | 26.17% |
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).