PayPal's solid results & why it's one of the strongest cos in the digital money space 💸; Monzo's license-less US expansion. Smart move or foolish? 🧐; Bakkt reminds us again why FinTech is hard 😳
FinTech is Eating the World, 15 February
Hey Everyone,
After a really hot Valentine’s Day special (received a ton of positive feedback 🙏 ), I needed to recharge a bit… 😬 But now I’m back and this is the best issue of the week as we’re looking at PayPal's solid results (how they are crushing it, what’s the strategy & why PayPal is one of the strongest companies in the digital money space), Monzo's license-less US expansion (smart or foolish move? I go deeper), and Bakkt that reminds us again why FinTech is hard (+ a bonus on Goldman’s FinTech failures). Let’s jump straight into the really spicy stuff 🌶
P.S. We’re also going to look at The Monzo Pivot, or how challenger bank transformed itself in just 2 years; how PhonePhe is building India’s dominant Super App & how India is disrupting the payment space globally, and more. You can’t miss this!
PayPal's solid results and why it's one of the strongest companies in the digital money space 💸
Earnings call 📞 Digital payments pioneer PayPal PYPL 0.00%↑ recently reported Q4 and full-year results for 2022. They came in solid, beat analysts’ estimates, and provided some fascinating insights, so let’s take a closer look.
More on this 👉 Here are the key numbers for the whole of 2022:
Total payment volume (TPV) was $1.36 trillion. That’s a growth of 9% spot and 13% on FX neutral (FXN) basis year-over-year (YoY).
PayPal brought revenue of $27.5 billion. That’s an 8% spot and 10% FXN growth YoY.
It currently has 435M active accounts which include 35M active merchant accounts. This is a 2% increase YoY.
The company counts 51.4 payment transactions per active account (TPA). Very solid 👏 This is a 13% increase YoY, driven primarily by Braintree transaction growth.
PayPal’s free cash flow (FCF) came at $5.1B. That’s a 4% increase YoY and equals 19% of revenue. Super solid 👏
Zooming out 🔎 The results become even more impressive when you take a big-picture view. The fact that PayPal continues growing fast at such a massive scale is beyond impressive. Just look at those CAGRs:
More importantly, we tend to focus on Apple Pay/Google Pay or Klarna, but PayPal’s ubiquity is second to none.
This is something that will be very hard to challenge, even for giants like Apple.
But there’s someone I’d pay close attention to. Reread: Cash App (NOT Revolut) could become the New PayPal 🚀
With that in mind, let us go deeper and uncover the key drivers that led to PayPal’s solid year, look at its strategy, see why it's one of the strongest companies in the digital money space, and think about the future of the payments behemoth.