Q1’20: Solid results as the economy rapidly changed

• 20.2 million net new active accounts added, including a one-time addition of 10.2 million in January from the acquisition of Honey; 10 million net new actives added–a Q1 record

• 18% TPV growth (19% FX-neutral); 12% revenue growth (13% FX-neutral)

• GAAP EPS of $0.07 and non-GAAP EPS of $0.66; includes $0.17 negative impact from increasing credit loss reserves due to revised macroeconomic projections

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• $1.5 billion in cash flow from operations with $1.3 billion in free cash flow

Q2’20: Accelerating April business trends driving strong Q2 outlook

• 7.4 million net new active accounts added in April ’20 growing 135%; ~250,000 daily net new active accounts added, on average

• April ’20 revenue grew ~17% (~20% FX-neutral growth); expect ~15% FX-neutral revenue growth for Q2’20

• Expect GAAP EPS to decline by 28%–34% and non-GAAP EPS to grow by 15%–20%

 Q1’20 Results

PayPal delivered revenue growth of 12% (13% on a foreign- currency neutral basis or FX-neutral or FXN); 17% (18% FXN) growth through February with 3% (5% FXN) growth in March; April revenue growth of ~17% (~20% FXN)

• On February 27, PayPal updated its Q1’20 revenue outlook indicating an

~1% reduction in revenue growth, relative to the guidance provided on January 29, based primarily on COVID-19’s impact on international cross- border e-commerce.

• In March, the deteriorating environment resulting from COVID-19 further impacted PayPal’s business, affecting both volumes and revenue generated from travel and events verticals as well as impacting credit income.

• GAAP and non-GAAP operating income was reduced by a $237 million increase in credit loss reserves due to revised macroeconomic projections.

• On a diluted EPS basis, the increase in credit loss reserves negatively affected GAAP and non-GAAP EPS by $0.17.

• GAAP EPS was also negatively impacted by approximately $0.22 per diluted share from taxes primarily related to the acquisition of Honey, and $0.07 per diluted share of net unrealized losses (versus $0.12 of unrealized gains in Q1’19), driven primarily by PayPal’s strategic investment in MercadoLibre.

Q1 2020 Results 2

	GAAP		Non-GAAP
	USD $	YoY Change	USD $	YoY Change
Net Revenues	$4.62B	12%	$4.62B	12%

Operating Income	$0.4B	(23%)	$0.9B	(3%)
EPS	$0.07	(87%)	$0.66	—%

Key Financial and Operating Metrics

Q1’20 Financial Highlights

Solid performance across financial metrics

• Revenue of $4.62 billion, growing 12% on a spot basis and 13% FXN.

• GAAP operating margin of 8.6% with non-GAAP operating margin of 19.7%. Credit loss reserves increased by $237 million due to revised macroeconomic projections.

• GAAP EPS of $0.07, decreasing 87%; non-GAAP EPS of $0.66, flat to last year.

  • GAAP and non-GAAP EPS include $0.17 of negative impact from increased credit loss reserves due to macroeconomic projections.

  • GAAP EPS also includes a net unrealized loss of $0.07 on strategic investments, driven primarily by MercadoLibre (NASDAQ: MELI).

  • GAAP EPS also includes an approximate $0.22 of negative impact from taxes primarily related to the acquisition of Honey.

• Repurchased approximately 7.5 million shares of common stock, returning $800 million to stockholders.

Q1’20 Operating Highlights

Double-digit customer growth driving increased engagement

• 20.2 million net new active accounts, bringing total active accounts to 325 million accounts, up 17%.

  • A Q1 record of 10 million net new active accounts added with a one-time addition of 10.2 million net new active accounts in January from the acquisition of Honey.

• 3.3 billion payment transactions, up 15%. ~1.2 billion payment transactions in April, up 20%.

• $191 billion in total payment volume (TPV), up 18% and 19% FXN.

  • 26% growth through February with 7% growth in March; April at ~22% growth FXN.

  • Merchant Services volume grew 20% and 21% FXN.

  • Venmo processed more than $31 billion of TPV, growing 48%.

• 39.4 payment transactions per active account on a trailing twelve months basis, up 4%.

  • Excluding the net new active accounts related to Honey, 40.7 payment transactions per active account on a trailing twelve months basis, up 7%.

Balance Sheet and Liquidity

Strong balance sheet and cash-flow generation

• PayPal’s cash, cash equivalents, and investments totaled $12.6 billion as of March 31, 2020. PayPal closed the acquisition of Honey in January using approximately $3.6 billion in cash to fund the purchase.

• PayPal’s long-term debt totaled $8.0 billion as of March 31, 2020.

  • PayPal drew down $3.0 billion from its revolving credit facilities in March 2020.

• In the first quarter, PayPal generated cash flow from operations of $1.5 billion and free cash flow of $1.3 billion.

April ‘20 Results

Accelerating April business trends

• 7.4 million net new active accounts, growing 135%; ~250,000 daily net new active accounts added, on average.

• ~1.2 billion payment transactions, up 20%.

• ~$68 billion in TPV, up ~20% on a spot basis and ~22% on an FX-neutral basis.

• ~17% revenue growth or ~20% on an FX-neutral basis. Strength in PayPal and Venmo checkout experiences were partially offset by lower revenue from travel and events verticals and credit.

Supporting Customers Impacted by COVID-19

PayPal is helping its customers affected by COVID-19

• Participating in the U.S. Small Business Administration’s Paycheck Protection Program to provide access to funding to small businesses.

• Enabling customers to receive U.S. Department of the Treasury stimulus payments through PayPal and Venmo.

• Granting deferral of repayments on business loans and cash advances at no additional cost.

• Waiving certain fees for merchants through at least May 31, 2020.

• Increasing the dispute resolution window to give merchants more time to respond to customer disputes.

• In partnership with Mastercard, doubled the instant cash back reward on all PayPal Business Debit Mastercard purchases for the month of April.

Q1 2020 Results 5

Q1’20 Financial and Operating Highlights

Presented in millions, except per share data and percentages	FX-Neutral Q1 2020 Q1 2019 YoY Growth YoY Growth
Total Payment Volume (TPV)	$190,567	$161,492	$29,075	18%	19%
GAAP
Net revenues	$4,618	$4,128	$490	12%	13%
Operating margin	8.6%	12.5%	**	(393bps)	N/A
Effective tax rate	68.1%	7.0%	**	61.1pts	N/A
Net income	$84	$667	($583)	(87%)	N/A
Earnings per diluted share	$0.07	$0.56	($0.49)	(87%)	N/A
Net cash provided by operating activities	$1,504	$1,027	$477	46%	N/A
Non-GAAP
Net revenues	$4,618	$4,128	$490	12%	13%
Operating margin	19.7%	22.6%	**	(296bps)	N/A
Effective tax rate	12.4%	17.5%	**	(5.1pts)	N/A
Net income	$786	$786	—	—%	N/A
Earnings per diluted share	$0.66	$0.66	—	—%	N/A
Free cash flow	$1,298	$809	$489	60%	N/A

** Not meaningful

Q1 2020 Results 6

Financial Guidance

Full Year 2020 Revenue and Earnings Guidance

• PayPal is withdrawing its full year 2020 revenue and earnings guidance.

Second Quarter 2020 Revenue and Earnings Guidance

• PayPal expects revenue to grow ~13% at current spot rates and ~15% FXN.

• PayPal expects GAAP EPS to decline by 28%–34% and non-GAAP EPS to grow by 15%–20%.

  • GAAP and non-GAAP earnings per diluted share exclude the impact of incremental credit loss reserves due to macroeconomic projections.

  • GAAP earnings per diluted share guidance does not include any expectation of unrealized gains or losses from PayPal’s strategic investment portfolio in the second quarter of 2020.

  • In the second quarter of 2019, GAAP earnings per diluted share included approximately $0.14 of net unrealized gains from PayPal’s strategic investment portfolio.

  • Estimated non-GAAP amounts for the three months ending June 30, 2020, reflect adjustments of approximately

$465–$525 million, including estimated stock-based compensation expense and related payroll taxes in the range of

$310–$330 million.

• • The dilutive impact of the acquisitions of Honey and GoPay is estimated to be in the range of $0.10–$0.12 on GAAP earnings per diluted share, and an estimated $0.02–$0.04 on non-GAAP earnings per diluted share.

Please see “Non-GAAP Financial Measures” and “Non-GAAP Measures of Financial Performance” for important additional information.

1. On an FX-neutral basis

2. Non-GAAP EPS and Free Cash Flow are non-GAAP financial measures. Please refer to the “Reconciliation of Operating Cash Flow to Free Cash Flow and Adjusted Free Cash Flow” for a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure.