PayPal Holdings Inc (NASDAQ:PYPL) announced an 8% increase in revenue for the fiscal second quarter, reaching $7.89 billion, which surpassed the analyst consensus estimate of $7.81 billion. Additionally, total payment volumes rose by 11% year-over-year, totaling $416.8 billion for the quarter.
In reference to their lending products, they have decreased in the amount of loans and advances they have purchased. Paypal “offers access to merchant finance products for certain small and medium-sized businesses through our PayPal Working Capital (“PPWC”) and PayPal Business Loan (“PPBL”) products, which we collectively refer to as our merchant finance offerings.”
From their 10-Q filing, "During the six months ended June 30, 2024 and 2023, we purchased approximately $774 million and $975 million in merchant receivables, respectively. As of June 30, 2024 and December 31, 2023, the total outstanding balance in our pool of merchant loans, advances, and interest and fees receivable was $1.2 billion, net of the participation interest sold to the partner institution of $43 million and $44 million, respectively."
That's a staggering $200 million decrease in receivables from the same period last year!
Other interesting notes:
A key performance indicator of how its portfolio is doing would be looking at its Charge-off rate. The report says, "The decrease in charge-offs for the six months ended June 30, 2024 compared to the same period of the prior year was due to the decrease in originations in the second half of 2023 and improvement in credit quality of the PPBL portfolio.
"Qualitative adjustments were made due to uncertainty around the financial health of our borrowers, including the effectiveness of loan modification programs made available to merchants."
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