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PayPal vs Sq(Block)? Does paypal's latest earnings change anything for the battle of the fintech's

Updated: Apr 26, 2023



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Do you want to know who is our #fintech king after PayPal's recent earnings? #Paypal was one of the first companies to start the peer-to-peer payment revolution!


As of today though, PayPal has slowed down on monopolizing its sector, because of its rivals in Sq(Block) and Apple.


Will Paypal recent earnings set them apart from the competition, as the real question investors are asking is, "Does Paypal exceed their rivals?"

Who wins in eps?

With PayPal's new earnings coming out on Feb. 9th after hours, let's dive into the 3 main financial categories!


First off, BIG eps beat this qtr, ($1.24) per share with a 3.4% increase from the market's estimates of $1.20 per share.


The surprise beat from market estimates shows a bit of growth this year, from 1.08 eps last quarter and .93 eps the quarter before.


Showing a .27 cent increase in eps over the past two quarters.


However, how does that compare to Sq inc? Sq's most recent eps shows one recent massive quarter of growth, with 82% growth in eps, but the two quarters prior, didn't show amazing strength.


Sq's eps from q1 of 2022 missed by .3 cents, coming in at .18 cents per share, instead of estimates of .21 cents. It stayed the same during Q2 of 2022 barely beating estimates of .17 per share.


But, Sq then showed massive growth beating eps by 14 cents coming in at .42 cents a share! WOW!!!


Big comeback for Sq. For Eps, I would rather take the steady growth from PayPal than the inconsistency from Sq. Paypal-1, Sq-0.

Who wins in revenue, net income, and profit margin?

Now, let's dive deep into the raw financials! This quarter, PayPal's revenue stayed about the same going from $6.7 billion to $6.69 billion this quarter, while 2 other stats for PayPal's financials grew immensely.


First, their net income BLEW UP the last qtr with an abysmal -$341 million net income. JEEZ, PayPal must've bought something to lose that much income.


Yes, this appears to be the case, with this quarter, earning $1.33 billion in net income!


As well, going from -5% profit margins last qtr which is ATROCIOUS, Paypal regained strength with a healthy 19.88% profit margin.


Now let's dive into the Annual report, last year PayPal came in at $21.43 billion in revenue, while this year they jumped to $25.56 billion in revenue which is a very healthy 4.13 billion dollar increase!


That's mainly where the growth stops because last year's net income went from $4.2 billion to $4.17 billion on a .03 billion dollar decrease! As well, the decrease continues at their profit margins coming in last year at 19.60a % profit margin, while this year decreasing 3.29% to a 16.31% profit margin.


This isn't too terrible, considering the war on inflation going on in the united states.

Since we've gone over PayPal earnings, let's start comparing them to Sq! These past two earnings for Sq haven't been too amazing, showing little revenue growth4.4 billion dollars, while trying to dig out of their net negative income problem.


Last qtr, Sq had around 4.4 billion dollars in revenue compared to PayPal's $6.69 Billion, but the problems for Sq come in for their net income. While PayPal had a healthy $1.33 Billion in net income this quarter, Sq had an abysmal -14.71 million dollar negative in income.


Let's look and see if this negative income from Sq is a trend, Q2 of 2022 was negative 208.01 million in net income, which seems like it killed their growth coming into this quarter.


I believe their roi needs to grow as Sq's annual reports for 2021 were $4.5 B in revenue with only $166.26 million in net income.


Compared to PayPal's 2021 report of $25.5 B in revenue followed by $4.17 B in net income, this shows tremendous more strength than Sq. I'm giving PayPal the 2-0 lead over Sq so far.



Who's the king of free cash flow?

Last but not least, let's dig into the free cash flows of both companies. Paypal reported 2021 net cash flow comes in at 9.31 billion, which is VERY IMPRESSIVE, as it made only 6.69 billion IN REVENUE this qtr.


If we compared the free cash flow compared to PayPal's debt, which is about $10.6b of debt, they'd come up with only about $1.31 b in net debt. This is very healthy as PayPal's net free cash can almost buy all of its debt!


SQ on the other hand has $713.51 million in free cash flow, which is very impressive, considering Sq has $0 debt.


Even though PayPal almost has enough cash on hand to buy off all of its debt, they don't compete with Sq for this, considering Sq doesn't own any debt!


Now, let's crown the #fintechking!

As well as beating Sq in all 3 main financial categories, there's some more bullish news for PayPal, as Venmo, comes in up 6% in revenue annually from $61.4 B last year, to $63.6 billion this year.


The assets of PayPal make this company a very healthy fintech company.


Being down 33% over the past year, investors are given more opportunities to dive into a healthy company at fraction of their costs. I'm crowning paypal the #fintechking.



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