PayPal chief executive Dan Schulman will retire and leave the global payments company at the end of 2023 as the company reported a 15 per cent annual increase in its fourth-quarter profit.
The company’s net profit in three-month period to the end of December climbed to $921 million, driven by a surge in total payment volumes as more people opted for online payment in the post-pandemic era.
Revenue during the period increased 7 per cent annually to about $7.4 billion. Its earnings for each share rose 19 per cent yearly to $0.81 in the last quarter.
The company’s total payment volumes processed during the quarter jumped 5 per cent annually to more than $357.3 billion.
PayPal's shares closed about 2 per cent lower at $78.42 at the end of trading on Thursday. The company's stock has gained more than 5 per cent since the start of this year after declining more than 34 per cent over the past twelve months.
“It has been a huge privilege to have the opportunity to lead this great company for the past eight and a half years,” said Mr Schulman, who joined PayPal in 2014 following its separation from eBay.
“However, I'm at a point in my life where I want to devote more time to my passions outside the workplace,” he said in a statement.
“I remain 100 per cent committed to working closely with the Board and my eventual successor for a smooth transition and to ensure we keep our positive momentum on track.”
PayPal said under Mr Schulman's leadership, its market cap growth outpaced the S&P 500 with revenue increasing to $27.5 billion in 2022 from $9.2 billion in 2015.
During Mr Schulman's time, total active accounts more than doubled to over 430 million in 200 markets, while total payment volume grew five times to $1.36 trillion in 2022 from $288 billion in 2015.
“I’m proud of what we have accomplished at PayPal and of the incredibly talented and committed people I work with every day,” Mr Schulman said.
“Together, we have reimagined financial services and e-commerce, and worked to improve the financial health of our customers.”
Mr Schulman said 2022 was a “transformative year” for PayPal as it focused on streamlining its business.
Last week, PayPal announced it will lay off 2,000 employees, about 7 per cent of its workforce, as the technology industry continues to cut back on a hiring surge that began after the onset of the Covid-19 pandemic.
“We will continue this work throughout 2023, and I am confident that we are well-positioned to utilise our unique assets to remain a market leader in digital payments,” Mr Schulman.
Operating income for the company increased 18 per cent on an annualised basis to $1.2 billion in the December quarter.
For the full 2022 fiscal year, PayPal’s net profit dropped about 42 per cent annually to more than $2.4 billion, while revenue increased 8.4 per cent to more than $27.5 billion.
“Our 2022 results demonstrate the ongoing progress we are making to optimise our cost structure while continuing to invest in our high-conviction initiatives,” said Gabrielle Rabinovitch, PayPal’s acting chief financial officer and senior vice president.
“We believe PayPal’s combination of scale, profitability and stability is a strategic advantage as we navigate this dynamic environment.”
The company’s total payment transactions surged 13 per cent year on year to 6 billion during the last quarter.
It added 2.9 million net new active accounts in the previous quarter, with total active accounts reaching 435 million, an annual jump of 2 per cent.
PayPal said it expected its revenue to grow 7.5 cent and earnings per share to hover in the range of $0.62 to $0.64 in the first quarter of the 2023 financial year.
Mr Schulman said the company had worked over the past year to adapt to “the challenging macroeconomic environment”.
Despite reducing its costs and recalibrating resources to focus on core strategic priorities, it still needs to cut staff numbers, he said in a memo to staff last month.
PayPal’s total cash, cash equivalents, and investments totalled $15.9 billion, while its debt stood at $10.8 billion as of December 31.