PayPal Holdings, Inc. (NASDAQ:PYPL) Q1 2019 Earnings Conference Call Transcript

Apr 24, 2019 • 05:00 pm ET

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PayPal Holdings, Inc. (NASDAQ:PYPL) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to PayPal's First Quarter 2019 Earnings Conference Call. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's call, Ms. Gabrielle Rabinovitch, Head of Investor Relations. Please go ahead.

Executive
Gabrielle Rabinovitch

Thank you, Andrew. Good afternoon and thank you for joining us. Welcome to PayPal Holdings Earnings Conference Call for the first quarter 2019. Joining me today on the call, are Dan Schulman, our President and CEO; Bill Ready, our EVP, Chief Operating Officer; and John Rainey, our Chief Financial Officer and EVP Global Customer Operations.

We're providing a slide presentation to accompany our commentary. This conference call is also being webcast, and both the presentation and call are available to the Investor Relations section of our website. We will discuss some non-GAAP measures in talking about our company's performance. You can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in the presentation accompanying this conference call.

In addition, please note that beginning with the first quarter of 2019, we reclassified certain operating expenses within our consolidated statements of income. These changes have no impact on the company's previously reported consolidated net income for prior periods. On April 9, 2019 we furnished an 8-K to the SEC, the details of these reclassifications.

In addition, management will make forward-looking statements that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include our guidance for second quarter and full year 2019, and the impact and timing of our acquisitions. Our actual results may differ materially from these statements. You can find more information about risks, uncertainties and other factors that could affect our results in our most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q filed with the SEC and available on the Investor Relations section of our website. You should not rely on any forward-looking statements. All information in this presentation is as of today's date, April 24, 2019. We expressly disclaim any obligation to update the information.

With that, let me turn the call over to Dan.

Executive
Dan Schulman

Thank you, Gabrielle, and thanks everyone for joining us on today's call. I'm pleased to report that PayPal had a strong start to the year. In the first quarter, we generated $4.13 billion in revenue, in line with our expectations. This represents year-over-year growth of 12% on an FX-neutral basis, or approximately 19% revenue growth, normalized for the sale of our US consumer credit receivables.

For the first quarter, we delivered $0.78 of non-GAAP EPS, $0.08 of which came as a result of our recent MercadoLibre investment. Excluding that gain, we delivered $0.70 in Q1, up 23% year-over-year, outperforming our expectations. Once again, a highlight of the quarter was our growth in both net new actives and engagement. We added 9.3 million net new actives in the quarter, up 15% year-over-year. We now have 277 million active accounts on our platform,