PayPal Holdings Inc. (NASDAQ:PYPL)

Total Asset Turnover

The reported total asset turnover exhibited a declining trend from 0.36 in 2018 to 0.3 in 2020, followed by a recovery to 0.35 by 2022. Similarly, the adjusted total asset turnover remained stable at 0.35 between 2018 and 2019, decreased slightly in 2020 to 0.31, then increased steadily to 0.36 by 2022. This indicates a temporary dip in asset efficiency around 2020, with improvement in subsequent years.

Debt to Equity Ratio

Reported debt to equity ratio showed a consistent upward trend from 0.13 in 2018 to 0.53 in 2022, more than quadrupling over the period. Adjusted debt to equity followed the same pattern, rising from 0.17 to 0.61. The increase suggests a growing reliance on debt financing relative to shareholders' equity.

Debt to Capital Ratio

The reported debt to capital ratio increased from 0.11 in 2018 to 0.35 in 2022. Adjusted figures mirrored this rise, reaching 0.38 in 2022. The trend points to an increased proportion of debt in the company's capital structure over time, implying higher financial risk exposure.

Financial Leverage

Financial leverage, both reported and adjusted, showed a rising trend. Reported financial leverage increased from 2.82 in 2018 to 3.88 in 2022, while the adjusted leverage grew from 2.86 to 4.07. This escalation further supports the observation of increasing debt usage to finance assets.

Net Profit Margin

Reported net profit margin increased from 13.31% in 2018 to a peak of 19.59% in 2020, then declined sharply to 8.79% by 2022. Adjusted figures exhibited a similar pattern but showed a more pronounced drop in 2022 to 3.03%. This suggests profitability improved until 2020 but weakened considerably thereafter, possibly due to adverse market conditions or increased expenses.

Return on Equity (ROE)

Reported ROE increased steadily from 13.37% in 2018 to 20.99% in 2020, followed by a decline to 11.93% in 2022. Adjusted ROE demonstrated a similar trajectory, peaking at 20.46% in 2020 and declining more sharply to 4.39% by 2022. The fluctuations in ROE reflect changes in earnings performance relative to equity, with a notable decrease post-2020.

Return on Assets (ROA)

Resolved ROA rose modestly from 4.75% in 2018 to 5.97% in 2020 before declining to 3.07% in 2022. Adjusted ROA followed a similar pattern but dropped more significantly to 1.08% in 2022. This indicates a reduction in asset profitability after peaking in 2020.

Net Revenues

The net revenues exhibit a consistent upward trend over the five-year period. Starting from 15,451 million US dollars in 2018, revenues increased annually, reaching 27,518 million US dollars in 2022. This reflects steady growth, with the most notable increment occurring between 2019 and 2020, where revenues jumped by nearly 3,700 million US dollars.

Total Assets

Total assets also show a marked increase from 43,332 million US dollars in 2018 to 78,717 million US dollars in 2022. The growth trend is consistent year-over-year, though the rate of increase is somewhat higher in the initial years, especially from 2019 to 2020, indicating possible asset acquisition or expansion activities during that period.

Reported Total Asset Turnover

Reported total asset turnover experienced a slight decline from 0.36 in 2018 to a low of 0.30 in 2020, suggesting a temporary decrease in efficiency in generating revenue from assets. However, the ratio recovered in subsequent years, rising to 0.35 by 2022, indicating improved utilization of assets relative to revenues toward the end of the period under review.

Adjusted Total Assets

The adjusted total assets figure mirrors the trend of total assets, increasing from 43,694 million US dollars in 2018 to 77,407 million US dollars in 2022. The magnitude of growth and year-over-year increments closely align with those observed in total assets, demonstrating consistent asset growth after adjustment.

Adjusted Total Asset Turnover

The adjusted total asset turnover follows a pattern similar to the reported turnover. It decreased from 0.35 in 2018 to 0.31 in 2020, coinciding with the period of asset growth, and then increased again to 0.36 in 2022. This suggests that the company initially experienced some dilution in asset efficiency during its expansion phase but managed to regain and slightly improve efficiency in the most recent years.

Total Debt

The total debt of the company displays a consistent upward trend over the analyzed period. Starting from US$1,998 million in 2018, it more than quintupled by 2022, reaching US$10,835 million. This reflects a significant increase in the company's leverage and borrowing activities over the five-year span.

Total PayPal Stockholders’ Equity

Equity increased steadily from US$15,386 million in 2018 to a peak of US$21,727 million in 2021. However, in 2022, there was a decline to US$20,274 million. Overall, the equity base has expanded since 2018, despite the slight contraction observed in the final year.

Reported Debt to Equity Ratio

The reported debt to equity ratio rose from 0.13 in 2018 to 0.53 in 2022. The ratio shows an increasing leverage trend, indicating that the company's debt has been growing faster than its equity, which could suggest a higher risk profile in terms of financial structure.

Adjusted Total Debt

Adjusted total debt mirrors the trend seen in reported debt but at systematically higher levels. It grew from US$2,584 million in 2018 to US$11,555 million in 2022. This adjusted measure also highlights a significant increase in debt obligations during the reviewed years.

Adjusted Total Equity

Adjusted total equity increased from US$15,274 million in 2018 to US$21,371 million in 2021, followed by a decline to US$19,013 million in 2022. This pattern is slightly more pronounced compared to the reported equity figures, reinforcing the observation of a recent contraction in the equity base.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio increased from 0.17 in 2018 to 0.61 in 2022. This ratio confirms the growing leverage when considering adjusted figures, with a particularly notable rise in the last year. The company's leverage has moderately accelerated, which may impact its financial flexibility and risk.

Summary

Overall, the data reveals a clear trend of increasing debt levels over the five-year period, both in reported and adjusted terms. Equity has shown growth until 2021 but experienced a downturn in 2022. Consequently, leverage ratios have increased steadily, indicating that debt financing has expanded at a faster pace relative to equity. This increasing debt burden, especially in the most recent year, may require closer attention with respect to debt servicing capacity and financial risk management.

The financial data reveals a clear upward trend in the company's total debt over the observed five-year period. Total debt increased significantly from $1,998 million at the end of 2018 to $10,835 million by the end of 2022. This represents more than a fivefold increase, indicating a substantial rise in leverage.

Correspondingly, total capital also expanded, growing from $17,384 million in 2018 to $31,109 million in 2022. Although this is a notable increase, the growth rate of total capital is slower compared to the growth rate of total debt.

The reported debt to capital ratio highlights a trend of increasing leverage from 0.11 in 2018 to 0.35 in 2022. This implies that the proportion of debt financing relative to the company’s capital base has more than tripled in this time frame, suggesting a heavier reliance on debt.

When considering adjusted figures, a similar pattern emerges. Adjusted total debt increased from $2,584 million to $11,555 million, and adjusted total capital fluctuated but generally increased, peaking in 2021 at $31,181 million before slightly decreasing to $30,568 million in 2022. The adjusted debt to capital ratio rose from 0.14 to 0.38 over the period, mirroring the trend seen in reported figures and confirming increased leverage based on adjusted metrics.

In summary, the data indicates that the company has progressively increased its debt load relative to its overall capital. This rising leverage trend is present in both reported and adjusted measures, suggesting a strategic shift towards higher debt usage. While total capital has grown, it has not kept pace with debt expansion, leading to higher debt to capital ratios. This shift may have implications for the company’s financial risk profile and capital structure management going forward.

The analysis of the annual financial data reveals a consistent growth in total assets over the period from the end of 2018 to the end of 2022. Total assets increased from approximately 43.3 billion US dollars in 2018 to about 78.7 billion US dollars in 2022. This upward trend indicates an expansion in the asset base.

Total stockholders’ equity also experienced growth from 15.4 billion US dollars in 2018, peaking at 21.7 billion US dollars in 2021, followed by a decline to 20.3 billion US dollars in 2022. This slight reduction in equity during the last year could suggest possible distributions, losses, or other equity-reducing events.

The reported financial leverage ratio, which measures the proportion of assets financed by equity, showed a generally increasing trend, moving from 2.82 in 2018 to 3.88 in 2022. This increase implies a higher reliance on debt or liabilities relative to equity, potentially reflecting a more aggressive capital structure or increased borrowing.

Similar patterns are observable in the adjusted financial data. Adjusted total assets rose from 43.7 billion US dollars in 2018 to 77.4 billion US dollars in 2022. Adjusted total equity increased from 15.3 billion US dollars in 2018 to 21.4 billion US dollars by 2021, then decreased to 19.0 billion US dollars in 2022. The adjusted financial leverage ratio rose from 2.86 in 2018 to 4.07 in 2022, indicating an even more pronounced increase in leverage when adjustments are considered.

Overall, the financial data suggest that while the company expanded its asset base and generally increased equity over the observed period, there is an increasing tendency to finance growth with greater leverage. The decreasing equity figures in 2022, combined with rising leverage ratios, may warrant further investigation into capital structure strategy and risk.

Net Income

Net income exhibited a generally upward trend from 2018 through 2020, increasing from 2,057 million US dollars in 2018 to a peak of 4,202 million in 2020. This was followed by a slight decline to 4,169 million in 2021 and a more substantial decrease to 2,419 million in 2022.

Net Revenues

Net revenues demonstrated consistent growth throughout the entire period, rising steadily from 15,451 million US dollars in 2018 to 27,518 million in 2022. This indicates continuous topline expansion despite fluctuations in profitability.

Reported Net Profit Margin

The reported net profit margin increased from 13.31% in 2018 to a high of 19.59% in 2020, reflecting improved profitability relative to revenues during that period. However, it declined thereafter, dropping to 16.43% in 2021 and further to 8.79% in 2022, signaling reduced efficiency or increased costs impacting net profitability.

Adjusted Net Income

Adjusted net income followed a trajectory similar to net income initially, increasing from 2,109 million US dollars in 2018 to 4,102 million in 2020. It then slightly decreased to 3,985 million in 2021 but experienced a significant decline in 2022, dropping sharply to 835 million.

Adjusted Net Profit Margin

Adjusted net profit margin peaked at 19.12% in 2020, indicating strong profitability on an adjusted basis. There was a decline to 15.71% in 2021, followed by a pronounced fall to 3.03% in 2022, reflecting diminished adjusted profitability and potentially one-time items or adjustments affecting the fiscal outcome.

Summary Insights

The data reveal that the company experienced robust revenue growth over the five-year period, with revenues increasing steadily each year. Profitability, as evidenced by both reported and adjusted net income and margins, improved substantially up to 2020 but weakened noticeably in the last two years, particularly in 2022. This suggests challenges in maintaining profit levels despite rising revenues, possibly due to increased expenses, investments, or other factors negatively impacting net income. The stark reduction in adjusted net income and margin in 2022 indicates significant adjustments or non-recurring items affecting the adjusted earnings metric. Overall, the company’s ability to generate revenue has remained strong, but profitability pressures have intensified recently.

Net Income

The net income showed an overall upward trend from 2018 to 2020, increasing from $2,057 million in 2018 to a peak of $4,202 million in 2020. However, it slightly declined in 2021 to $4,169 million and then dropped significantly to $2,419 million in 2022.

Total PayPal Stockholders' Equity

Stockholders' equity increased steadily from $15,386 million in 2018 to a high of $21,727 million in 2021, followed by a modest decrease to $20,274 million in 2022.

Reported Return on Equity (ROE)

The reported ROE improved from 13.37% in 2018 to a peak of 20.99% in 2020, then declined to 19.19% in 2021 and further reduced to 11.93% in 2022, reflecting diminished profitability relative to equity in the latest period.

Adjusted Net Income

Adjusted net income demonstrated a similar pattern to the net income, initially rising from $2,109 million in 2018 to $4,102 million in 2020, then slightly decreasing to $3,985 million in 2021 before sharply dropping to $835 million in 2022, indicating notable adjustments impacting profitability in that year.

Adjusted Total Equity

Adjusted equity increased consistently from $15,274 million in 2018 to $21,371 million in 2021 but decreased to $19,013 million in 2022, echoing the trend seen in total stockholders' equity.

Adjusted Return on Equity (ROE)

The adjusted ROE followed an upward trajectory from 13.81% in 2018 to 20.46% in 2020, then declined slightly to 18.65% in 2021 and sharply dropped to 4.39% in 2022, indicating a significant reduction in adjusted profitability relative to equity in the most recent year.

Net Income Trends

Net income exhibited an overall increasing trend from 2018 through 2020, rising from $2,057 million to a peak of $4,202 million. However, in 2021 and 2022, net income declined, with a notable drop in 2022 to $2,419 million, which is just slightly above the 2018 level.

Total Assets

Total assets demonstrated a consistent upward trend across the analyzed years. Starting at $43,332 million in 2018, assets increased steadily each year to reach $78,717 million by the end of 2022, nearly doubling over the five-year period.

Reported Return on Assets (ROA)

The reported ROA initially showed slight growth from 4.75% in 2018 to a peak of 5.97% in 2020. Thereafter, it declined to 5.5% in 2021 and dropped significantly to 3.07% in 2022, reflecting reduced profitability relative to the asset base in the most recent year.

Adjusted Net Income

Adjusted net income followed a pattern similar to net income, with growth from $2,109 million in 2018 to a high of $4,102 million in 2020. Subsequently, it decreased to $3,985 million in 2021 and sharply fell to $835 million in 2022, indicating significant one-time adjustments or extraordinary items impacting profitability in 2022.

Adjusted Total Assets

Adjusted total assets closely mirrored the trend of total assets, increasing from $43,694 million in 2018 to $77,407 million in 2022. This steady increase demonstrates continued asset growth even after adjustments are made.

Adjusted Return on Assets (ROA)

Adjusted ROA experienced an initial decrease from 4.83% in 2018 to 3.82% in 2019, followed by a recovery to 5.84% in 2020. Subsequent years saw a decline to 5.3% in 2021, and a sharp fall to 1.08% in 2022. This steep decline in 2022 highlights a significant deterioration in profitability on an adjusted basis, contrasting with historical performance.