PayPal’s Fourth-Quarter and Full-Year 2017 Results
A few hours ago, we announced our financial and operating results for our Q4 and 2017 financial year. It’s clear that 2017 was a transformative year for PayPal. We brought a record number of net new active customers to PayPal and increased customer engagement on our platform. We launched innovative products and services and extended our leadership in mobile. We strengthened our competitive positioning and expanded our market opportunity with strategic partnerships including a long-term partnership with Synchrony Financial. And we delivered consistently strong financial results throughout the year.
In many ways, 2017 was a defining year for PayPal. Many observers were watching to see if the ambitious strategy we outlined three years ago would come to fruition. Could a company transform itself from an online checkout button to a full-fledged digital payments platform in real time? Would our partnership strategy help us grow? Could we navigate between having an inspiring social mission and still deliver strong returns to our shareholders?
The short answer to each of these is yes. We have more to do and prove, but we are on our way. PayPal had a strong Q4 and a landmark year in 2017 because we were able to achieve the following:
Increase Customer Acquisition and Engagement
- We drove a record 8.7 million net new active accounts in Q4, up 61% over Q4 of 2016. For the full year, we added 29 million net new actives, bringing our total customer base to 227 million active accounts, including 18 million merchants.
- Engagement continues to increase, growing by 8% in Q4 to 33.6 transactions per active account. One of the most notable achievements in 2017 is the fact that we’ve been able to grow our net new actives at a record-breaking pace while also growing engagement.
Strengthen our Strategic Position in the Market
- We announced a ground-breaking strategic partnership with Synchrony Financial that accomplishes every goal we set out for our asset light strategy. The transaction substantially reduces our overall risk profile. It provides us the opportunity to double down on our innovative credit experiences for our merchants and consumers, while sharing in the profit growth. And it will free up approximately $1 billion in annual cash and $6 billion in cash proceeds.
- We continue to evolve the ecosystem and strengthen our market position by partnering with some of the world’s largest financial and technology brands. We are now working closely with over 20 of the largest credit card issuers in the world, the majority of which have kicked off campaigns to encourage and, in many cases, incent customers to engage with PayPal.
- In Q4, we also announced the launch of our domestic operations in India, opening another substantial market for PayPal. We also expanded our partnership with Facebook Messenger.
Create Innovative Products and Extend Our Mobile Leadership
- In Q4, PayPal processed approximately $48 billion in mobile payment volume, representing 53% growth year over year. For the full year, mobile represented approximately 34% of overall payment volume on our platform with total mobile payment volume growing 52% to approximately $155 billion for the year.
- Venmo processed $10.4 billion in payment volume in Q4, an increase of 86% over last year and the first time we’ve surpassed $10 billion in a single quarter. For the full year, Venmo’s volume increased 97% with almost $35 billion in payment volume processed.
- We ended the year with 80 million consumers opted in to One Touch, up from 40 million a year ago and the number of merchants offering One Touch now totals more than 8 million, compared with 5 million a year ago.
Deliver Strong and Consistent Financial Results
- In Q4, payment volume grew 29% on a currency neutral basis to $131 billion, generating revenue of $3.71 billion. This was up 24%, and represents our third consecutive quarter of accelerating revenue growth.
- This strong revenue performance combined with disciplined Opex management, drove Q4 GAAP EPS of $0.50, up 57% year over year, and non-GAAP EPS of $0.55, up 30% year over year.
In addition to all of that, we will continue our close partnership with eBay on our branded services. We still have much more work to do. We have bigger goals yet to accomplish. And we have to keep pushing forward if we are going to achieve our ultimate mission of democratizing financial services and commerce capabilities. The story of PayPal is still being written, but 2017 was a transformative year in our company’s history.
Our path forward is clear and our opportunity to democratize financial services and create inclusive economic opportunity for people and businesses around the world remains our goal. We are delivering on our promises, realizing the benefits of our scale, and creating a company that can drive results, relevance and social impact. I am looking forward to the exciting opportunities ahead of us.
On behalf of the entire PayPal team, thanks to all of the people and businesses around the world that trusted us with your finances and financial lives in 2017. We will work harder and do more in 2018. We are confident that the best is yet to come for PayPal.
Note: All growth rates represent year-over-year comparisons, except as otherwise noted.
Dan Schulman, President and CEO, PayPal