The Fly

PayPal CEO sees results ‘slightly ahead’ of EPS guidance

Asked at the UBS Global TMT conference about having sounded a bit cautious around overall e-commerce growth and expectations for the holiday season on the company’s third quarter earnings call, PayPal CEO Daniel Schulman responded: "When I look at global e-commerce, and what the reports are on there, it’s kind of negative to maybe flat overall. That’s in line with kind of our expectations and our branded TPV is greater than that and pretty meaningfully so. So I feel like when I look Q3 to date, I look at our TPV and I look at all the reports that have come in. Through Q3, we, as best we can tell, held or slightly grew share I think as I look at November, I would posit the same thing on that. We didn’t put out any flashy headline during in the Black Friday. We could have put out some flashy headlines. But I think flashy headlines are misleading. And what I will say is that we said we were going to grow our revenues approximately 9%, we’re right on track for that. I think our cost controls are probably slightly better than I thought. So I think we’ll be slightly ahead on the EPS guidance that we gave. And so I feel like the business is performing as we expected. And Q4 is an important inflection point for us. Our operating margins will grow for sure. Our OpEx growth will be negative growth for the quarter. So we had said we’d be kind of flattish, will be negative. As I look into next year, our OpEx will be negative year-over-year. We said it was going to be probably flat, maybe slightly up. It will be negative next year for sure. We see a lot of opportunity to continue to hone our cost structure. And next year, we said we grew our operating margins by at least 100 basis points. Clear on track to go do that and that our EPS will go up by 15%, that’s still 2 off of what I think will be a more elevated end of year EPS. And I think we have a lot of room to continue to be more efficient, more productive. And our expectation as we go into next year is that it’s a more muted e-commerce environment than what we’re experiencing right now. That may not be true. Maybe it will be better, and then we’ll be in great shape if that’s the case. But I think it’s prudent to plan for a more difficult economic environment."

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