|
|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
|
47-2989869
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
|
(I.R.S. Employer
Identification No.)
|
2211 North First Street
|
San Jose
|
California
|
95131
|
(Address of Principal Executive Offices)
|
|
|
(Zip Code)
|
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common stock, $0.0001 par value per share
|
PYPL
|
NASDAQ Global Select Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
|
|
|
|
|
Page Number
|
|
|||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|||
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
|
(In millions, except par value)
|
||||||
|
(Unaudited)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,877
|
|
|
$
|
7,575
|
|
Short-term investments
|
3,585
|
|
|
1,534
|
|
||
Accounts receivable, net
|
417
|
|
|
313
|
|
||
Loans and interest receivable, net of allowances of $243 and $172 as of September 30, 2019 and December 31, 2018, respectively
|
3,477
|
|
|
2,532
|
|
||
Funds receivable and customer accounts
|
22,511
|
|
|
20,062
|
|
||
Prepaid expenses and other current assets
|
881
|
|
|
947
|
|
||
Total current assets
|
37,748
|
|
|
32,963
|
|
||
Long-term investments
|
2,771
|
|
|
971
|
|
||
Property and equipment, net
|
1,701
|
|
|
1,724
|
|
||
Goodwill
|
6,178
|
|
|
6,284
|
|
||
Intangible assets, net
|
629
|
|
|
825
|
|
||
Other assets
|
1,196
|
|
|
565
|
|
||
Total assets
|
$
|
50,223
|
|
|
$
|
43,332
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
193
|
|
|
$
|
281
|
|
Short-term debt
|
—
|
|
|
1,998
|
|
||
Funds payable and amounts due to customers
|
24,011
|
|
|
21,562
|
|
||
Accrued expenses and other current liabilities
|
2,038
|
|
|
2,002
|
|
||
Income taxes payable
|
98
|
|
|
61
|
|
||
Total current liabilities
|
26,340
|
|
|
25,904
|
|
||
Deferred tax liability and other long-term liabilities
|
2,436
|
|
|
2,042
|
|
||
Long-term debt
|
4,964
|
|
|
—
|
|
||
Total liabilities
|
33,740
|
|
|
27,946
|
|
||
Commitments and Contingencies (Note 13)
|
|
|
|
|
|||
Equity:
|
|
|
|
||||
Common stock, $0.0001 par value; 4,000 shares authorized; 1,174 shares outstanding as of both September 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Preferred stock, $0.0001 par value; 100 shares authorized, unissued
|
—
|
|
|
—
|
|
||
Treasury stock at cost, 102 and 91 shares as of September 30, 2019 and December 31, 2018, respectively
|
(6,566
|
)
|
|
(5,511
|
)
|
||
Additional paid-in-capital
|
15,266
|
|
|
14,939
|
|
||
Retained earnings
|
7,835
|
|
|
5,880
|
|
||
Accumulated other comprehensive income (loss)
|
(52
|
)
|
|
78
|
|
||
Total equity
|
16,483
|
|
|
15,386
|
|
||
Total liabilities and equity
|
$
|
50,223
|
|
|
$
|
43,332
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except per share data)
|
||||||||||||||
|
(Unaudited)
|
||||||||||||||
Net revenues
|
$
|
4,378
|
|
|
$
|
3,683
|
|
|
$
|
12,811
|
|
|
$
|
11,225
|
|
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Transaction expense
|
1,701
|
|
|
1,366
|
|
|
4,877
|
|
|
4,003
|
|
||||
Transaction and loan losses
|
340
|
|
|
295
|
|
|
999
|
|
|
934
|
|
||||
Customer support and operations
|
390
|
|
|
350
|
|
|
1,177
|
|
|
1,030
|
|
||||
Sales and marketing
|
316
|
|
|
325
|
|
|
1,001
|
|
|
913
|
|
||||
Technology and development
|
533
|
|
|
452
|
|
|
1,527
|
|
|
1,341
|
|
||||
General and administrative
|
401
|
|
|
377
|
|
|
1,239
|
|
|
1,111
|
|
||||
Restructuring and other charges
|
—
|
|
|
28
|
|
|
71
|
|
|
297
|
|
||||
Total operating expenses
|
3,681
|
|
|
3,193
|
|
|
10,891
|
|
|
9,629
|
|
||||
Operating income
|
697
|
|
|
490
|
|
|
1,920
|
|
|
1,596
|
|
||||
Other income (expense), net
|
(213
|
)
|
|
43
|
|
|
224
|
|
|
94
|
|
||||
Income before income taxes
|
484
|
|
|
533
|
|
|
2,144
|
|
|
1,690
|
|
||||
Income tax expense
|
22
|
|
|
97
|
|
|
192
|
|
|
217
|
|
||||
Net income
|
$
|
462
|
|
|
$
|
436
|
|
|
$
|
1,952
|
|
|
$
|
1,473
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
1.66
|
|
|
$
|
1.24
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
$
|
1.64
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,175
|
|
|
1,181
|
|
|
1,174
|
|
|
1,187
|
|
||||
Diluted
|
1,188
|
|
|
1,199
|
|
|
1,188
|
|
|
1,206
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
|
(Unaudited)
|
||||||||||||||
Net income
|
$
|
462
|
|
|
$
|
436
|
|
|
$
|
1,952
|
|
|
$
|
1,473
|
|
Other comprehensive income (loss), net of reclassification adjustments:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation
|
(90
|
)
|
|
(6
|
)
|
|
(148
|
)
|
|
(33
|
)
|
||||
Unrealized (losses) gains on investments, net
|
(5
|
)
|
|
4
|
|
|
16
|
|
|
(6
|
)
|
||||
Tax benefit (expense) on unrealized (losses) gains on investments, net
|
1
|
|
|
(1
|
)
|
|
(5
|
)
|
|
2
|
|
||||
Unrealized gains on hedging activities, net
|
71
|
|
|
34
|
|
|
7
|
|
|
249
|
|
||||
Tax expense on unrealized gains on hedging activities, net
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
||||
Other comprehensive income (loss), net of tax
|
(24
|
)
|
|
30
|
|
|
(130
|
)
|
|
208
|
|
||||
Comprehensive income
|
$
|
438
|
|
|
$
|
466
|
|
|
$
|
1,822
|
|
|
$
|
1,681
|
|
|
Common Stock Shares
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other
Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
|||||||||||
|
||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||
Balances at December 31, 2018
|
1,174
|
|
|
$
|
(5,511
|
)
|
|
$
|
14,939
|
|
|
$
|
78
|
|
|
$
|
5,880
|
|
|
$
|
15,386
|
|
Adoption of lease accounting standard
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
667
|
|
|
667
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
(67
|
)
|
|||||
Unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
|
|||||
Tax expense on unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||||
Unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
—
|
|
|
(46
|
)
|
|||||
Tax benefit on unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
6
|
|
|
—
|
|
|
(302
|
)
|
|
—
|
|
|
—
|
|
|
(302
|
)
|
|||||
Common stock repurchased
|
(8
|
)
|
|
(705
|
)
|
|
(45
|
)
|
|
—
|
|
|
—
|
|
|
(750
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
—
|
|
|
256
|
|
|||||
Balances at March 31, 2019
|
1,172
|
|
|
$
|
(6,216
|
)
|
|
$
|
14,848
|
|
|
$
|
(25
|
)
|
|
$
|
6,550
|
|
|
$
|
15,157
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
823
|
|
|
823
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||
Unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Tax expense on unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Tax benefit on unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
5
|
|
|
—
|
|
|
(73
|
)
|
|
—
|
|
|
—
|
|
|
(73
|
)
|
|||||
Common stock repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
235
|
|
|
—
|
|
|
—
|
|
|
235
|
|
|||||
Balances at June 30, 2019
|
1,177
|
|
|
$
|
(6,216
|
)
|
|
$
|
15,010
|
|
|
$
|
(28
|
)
|
|
$
|
7,373
|
|
|
$
|
16,139
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
462
|
|
|
462
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(90
|
)
|
|
—
|
|
|
(90
|
)
|
|||||
Unrealized losses on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Tax benefit on unrealized losses on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Unrealized gains on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|||||
Tax expense on unrealized gains on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||
Common stock repurchased
|
(3
|
)
|
|
(350
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(350
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
275
|
|
|
—
|
|
|
—
|
|
|
275
|
|
|||||
Balances at September 30, 2019
|
1,174
|
|
|
$
|
(6,566
|
)
|
|
$
|
15,266
|
|
|
$
|
(52
|
)
|
|
$
|
7,835
|
|
|
$
|
16,483
|
|
|
Common Stock Shares
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other
Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Total
Equity
|
|||||||||||
|
||||||||||||||||||||||
|
(In millions)
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||
Balances at December 31, 2017
|
1,200
|
|
|
$
|
(2,001
|
)
|
|
$
|
14,314
|
|
|
$
|
(142
|
)
|
|
$
|
3,823
|
|
|
$
|
15,994
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
511
|
|
|
511
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|||||
Unrealized losses on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Tax benefit on unrealized losses on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Tax benefit on unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
7
|
|
|
—
|
|
|
(226
|
)
|
|
—
|
|
|
—
|
|
|
(226
|
)
|
|||||
Common stock repurchased
|
(24
|
)
|
|
(1,810
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
(1,825
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Balances at March 31, 2018
|
1,183
|
|
|
$
|
(3,811
|
)
|
|
$
|
14,287
|
|
|
$
|
(169
|
)
|
|
$
|
4,334
|
|
|
$
|
14,641
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
526
|
|
|
526
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Tax expense on unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Unrealized gains on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|
—
|
|
|
233
|
|
|||||
Tax expense on unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
7
|
|
|
—
|
|
|
(67
|
)
|
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||||
Common stock repurchased
|
(6
|
)
|
|
(500
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|||||
Balances at June 30, 2018
|
1,184
|
|
|
$
|
(4,311
|
)
|
|
$
|
14,434
|
|
|
$
|
36
|
|
|
$
|
4,860
|
|
|
$
|
15,019
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
436
|
|
|
436
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|||||
Tax expense on unrealized gains on investments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Unrealized gains on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
|||||
Tax expense on unrealized losses on hedging activities, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||||
Common stock and stock-based awards issued and assumed, net of shares withheld for employee taxes
|
1
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Common stock repurchased
|
(7
|
)
|
|
(600
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(600
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
Balances at September 30, 2018
|
1,178
|
|
|
$
|
(4,911
|
)
|
|
$
|
14,664
|
|
|
$
|
66
|
|
|
$
|
5,296
|
|
|
$
|
15,115
|
|
|
Nine Months Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(In millions)
|
||||||
|
(Unaudited)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
1,952
|
|
|
$
|
1,473
|
|
Adjustments:
|
|
|
|
||||
Transaction and loan losses
|
999
|
|
|
934
|
|
||
Depreciation and amortization
|
685
|
|
|
553
|
|
||
Stock-based compensation
|
736
|
|
|
623
|
|
||
Deferred income taxes
|
(122
|
)
|
|
(34
|
)
|
||
Cost basis adjustments to loans and interest receivable held for sale
|
—
|
|
|
244
|
|
||
Unrealized gains on strategic investments
|
(170
|
)
|
|
(31
|
)
|
||
Other
|
(130
|
)
|
|
(48
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(103
|
)
|
|
(133
|
)
|
||
Changes in loans and interest receivable held for sale, net
|
4
|
|
|
1,407
|
|
||
Accounts payable
|
(51
|
)
|
|
5
|
|
||
Income taxes payable
|
(33
|
)
|
|
(21
|
)
|
||
Other assets and liabilities
|
(470
|
)
|
|
(623
|
)
|
||
Net cash provided by operating activities
|
3,297
|
|
|
4,349
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(530
|
)
|
|
(599
|
)
|
||
Proceeds from sales of property and equipment
|
17
|
|
|
—
|
|
||
Changes in principal loans receivable, net
|
(1,111
|
)
|
|
3,573
|
|
||
Purchases of investments
|
(19,808
|
)
|
|
(15,641
|
)
|
||
Maturities and sales of investments
|
17,390
|
|
|
15,947
|
|
||
Acquisitions, net of cash and restricted cash acquired
|
—
|
|
|
(2,136
|
)
|
||
Funds receivable
|
(1,292
|
)
|
|
(427
|
)
|
||
Net cash (used in) provided by investing activities
|
(5,334
|
)
|
|
717
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
78
|
|
|
83
|
|
||
Purchases of treasury stock
|
(1,106
|
)
|
|
(2,925
|
)
|
||
Tax withholdings related to net share settlements of equity awards
|
(473
|
)
|
|
(392
|
)
|
||
Borrowings under financing arrangements
|
5,471
|
|
|
2,075
|
|
||
Repayments under financing arrangements
|
(2,509
|
)
|
|
(1,101
|
)
|
||
Funds payable and amounts due to customers
|
2,376
|
|
|
2,767
|
|
||
Net cash provided by financing activities
|
3,837
|
|
|
507
|
|
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
|
(49
|
)
|
|
(89
|
)
|
||
Net change in cash, cash equivalents, and restricted cash
|
1,751
|
|
|
5,484
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period
|
13,233
|
|
|
8,285
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
14,984
|
|
|
$
|
13,769
|
|
|
|
|
|
||||
Supplemental cash flow disclosures:
|
|
|
|
||||
Cash paid for interest
|
$
|
76
|
|
|
$
|
47
|
|
Cash paid for income taxes, net
|
$
|
220
|
|
|
$
|
228
|
|
|
|
|
|
||||
The below table reconciles cash, cash equivalents, and restricted cash as reported in the condensed consolidated balance sheet to the total of the same amounts shown in the condensed consolidated statement of cash flows:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,877
|
|
|
$
|
8,147
|
|
Short term investments
|
10
|
|
|
16
|
|
||
Funds receivable and customer accounts
|
8,097
|
|
|
5,606
|
|
||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows
|
$
|
14,984
|
|
|
$
|
13,769
|
|
|
Three Months Ended September 30, 2018
|
||||||||||
|
(In millions)
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
|
|
|
|
|
|
||||||
Transaction expense
|
$
|
1,366
|
|
|
$
|
—
|
|
|
$
|
1,366
|
|
Transaction and loan losses
|
295
|
|
|
—
|
|
|
295
|
|
|||
Customer support and operations
|
367
|
|
|
(17
|
)
|
|
350
|
|
|||
Sales and marketing
|
326
|
|
|
(1
|
)
|
|
325
|
|
|||
Product development
|
269
|
|
|
(269
|
)
|
|
—
|
|
|||
Technology and development
|
—
|
|
|
452
|
|
|
452
|
|
|||
General and administrative
|
354
|
|
|
23
|
|
|
377
|
|
|||
Depreciation and amortization
|
188
|
|
|
(188
|
)
|
|
—
|
|
|||
Restructuring and other charges
|
28
|
|
|
—
|
|
|
28
|
|
|||
Total operating expenses
|
$
|
3,193
|
|
|
$
|
—
|
|
|
$
|
3,193
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
|
(In millions)
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
Revised
|
||||||
|
|
|
|
|
|
||||||
Transaction expense
|
$
|
4,003
|
|
|
$
|
—
|
|
|
$
|
4,003
|
|
Transaction and loan losses
|
934
|
|
|
—
|
|
|
934
|
|
|||
Customer support and operations
|
1,075
|
|
|
(45
|
)
|
|
1,030
|
|
|||
Sales and marketing
|
924
|
|
|
(11
|
)
|
|
913
|
|
|||
Product development
|
782
|
|
|
(782
|
)
|
|
—
|
|
|||
Technology and development
|
—
|
|
|
1,341
|
|
|
1,341
|
|
|||
General and administrative
|
1,061
|
|
|
50
|
|
|
1,111
|
|
|||
Depreciation and amortization
|
553
|
|
|
(553
|
)
|
|
—
|
|
|||
Restructuring and other charges
|
297
|
|
|
—
|
|
|
297
|
|
|||
Total operating expenses
|
$
|
9,629
|
|
|
$
|
—
|
|
|
$
|
9,629
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions)
|
||||||||||||||
Primary geographical markets
|
|
|
|
|
|
|
|
||||||||
United States (“U.S.”)
|
$
|
2,327
|
|
|
$
|
1,962
|
|
|
$
|
6,811
|
|
|
$
|
6,135
|
|
United Kingdom (“U.K.”)
|
455
|
|
|
397
|
|
|
1,342
|
|
|
1,191
|
|
||||
Other countries(1)
|
1,596
|
|
|
1,324
|
|
|
4,658
|
|
|
3,899
|
|
||||
Total revenues(2)
|
$
|
4,378
|
|
|
$
|
3,683
|
|
|
$
|
12,811
|
|
|
$
|
11,225
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue category
|
|
|
|
|
|
|
|
||||||||
Transaction revenues
|
$
|
3,955
|
|
|
$
|
3,343
|
|
|
$
|
11,564
|
|
|
$
|
9,858
|
|
Other value added services
|
423
|
|
|
340
|
|
|
1,247
|
|
|
1,367
|
|
||||
Total revenues(2)
|
$
|
4,378
|
|
|
$
|
3,683
|
|
|
$
|
12,811
|
|
|
$
|
11,225
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
462
|
|
|
$
|
436
|
|
|
$
|
1,952
|
|
|
$
|
1,473
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock - basic
|
1,175
|
|
|
1,181
|
|
|
1,174
|
|
|
1,187
|
|
||||
Dilutive effect of equity incentive awards
|
13
|
|
|
18
|
|
|
14
|
|
|
19
|
|
||||
Weighted average shares of common stock - diluted
|
1,188
|
|
|
1,199
|
|
|
1,188
|
|
|
1,206
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.39
|
|
|
$
|
0.37
|
|
|
$
|
1.66
|
|
|
$
|
1.24
|
|
Diluted
|
$
|
0.39
|
|
|
$
|
0.36
|
|
|
$
|
1.64
|
|
|
$
|
1.22
|
|
Common stock equivalents excluded from income per diluted share because their effect would have been anti-dilutive
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
December 31,
2018 |
|
Goodwill
Acquired
|
|
Adjustments
|
|
September 30,
2019 |
||||||||
|
(In millions)
|
||||||||||||||
Total goodwill
|
$
|
6,284
|
|
|
$
|
—
|
|
|
$
|
(106
|
)
|
|
$
|
6,178
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (Years)
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Weighted Average Useful Life (Years)
|
||||||||||||
|
(In millions, except years)
|
||||||||||||||||||||||||||
Intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer lists and user base
|
$
|
1,106
|
|
|
$
|
(680
|
)
|
|
$
|
426
|
|
|
7
|
|
$
|
1,134
|
|
|
$
|
(623
|
)
|
|
$
|
511
|
|
|
7
|
Marketing related
|
293
|
|
|
(230
|
)
|
|
63
|
|
|
3
|
|
301
|
|
|
(207
|
)
|
|
94
|
|
|
3
|
||||||
Developed technology
|
443
|
|
|
(324
|
)
|
|
119
|
|
|
3
|
|
453
|
|
|
(269
|
)
|
|
184
|
|
|
3
|
||||||
All other
|
245
|
|
|
(224
|
)
|
|
21
|
|
|
5
|
|
245
|
|
|
(209
|
)
|
|
36
|
|
|
5
|
||||||
Intangible assets, net
|
$
|
2,087
|
|
|
$
|
(1,458
|
)
|
|
$
|
629
|
|
|
|
|
$
|
2,133
|
|
|
$
|
(1,308
|
)
|
|
$
|
825
|
|
|
|
Fiscal years:
|
|
||
Remaining 2019
|
$
|
49
|
|
2020
|
184
|
|
|
2021
|
132
|
|
|
2022
|
70
|
|
|
2023
|
70
|
|
|
Thereafter
|
124
|
|
|
Total
|
$
|
629
|
|
|
Three Months Ended
September 30, 2019 |
|
Nine Months Ended
September 30, 2019 |
||||
|
(In millions, except weighted-average figures)
|
||||||
Lease expense
|
|
|
|
||||
Operating lease expense
|
$
|
33
|
|
|
$
|
99
|
|
Sublease income
|
(5
|
)
|
|
(9
|
)
|
||
Total lease expense cost
|
$
|
28
|
|
|
$
|
90
|
|
|
|
|
|
||||
Other information:
|
|
|
|
||||
Cash paid for amounts included in the measurement of lease liabilities
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
31
|
|
|
$
|
93
|
|
Right-of-use assets obtained in exchange for new operating lease liabilities
|
$
|
32
|
|
|
$
|
100
|
|
Weighted-average remaining lease term—operating leases
|
6.0 years
|
|
|
6.0 years
|
|
||
Weighted-average discount rate—operating leases
|
5
|
%
|
|
5
|
%
|
|
Operating Leases
|
||
Fiscal years:
|
(In millions)
|
||
Remaining 2019
|
$
|
32
|
|
2020
|
120
|
|
|
2021
|
97
|
|
|
2022
|
77
|
|
|
2023
|
58
|
|
|
Thereafter
|
216
|
|
|
Total
|
$
|
600
|
|
Less: present value discount
|
(87
|
)
|
|
Lease liability
|
$
|
513
|
|
|
Operating Leases
|
||
Fiscal years:
|
(In millions)
|
||
2019
|
$
|
124
|
|
2020
|
111
|
|
|
2021
|
96
|
|
|
2022
|
81
|
|
|
2023
|
63
|
|
|
Thereafter
|
189
|
|
|
Total minimum lease payments
|
$
|
664
|
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Investments
|
|
Foreign
Currency
Translation
|
|
Estimated Tax Benefit (Expense)
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning balance
|
$
|
118
|
|
|
$
|
8
|
|
|
$
|
(151
|
)
|
|
$
|
(3
|
)
|
|
$
|
(28
|
)
|
Other comprehensive income (loss) before reclassifications
|
141
|
|
|
(6
|
)
|
|
(90
|
)
|
|
—
|
|
|
45
|
|
|||||
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income
|
70
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Net current period other comprehensive income (loss)
|
71
|
|
|
(5
|
)
|
|
(90
|
)
|
|
—
|
|
|
(24
|
)
|
|||||
Ending balance
|
$
|
189
|
|
|
$
|
3
|
|
|
$
|
(241
|
)
|
|
$
|
(3
|
)
|
|
$
|
(52
|
)
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Investments
|
|
Foreign
Currency Translation |
|
Estimated Tax Benefit (Expense)
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning balance
|
$
|
104
|
|
|
$
|
(22
|
)
|
|
$
|
(52
|
)
|
|
$
|
6
|
|
|
$
|
36
|
|
Other comprehensive income (loss) before reclassifications
|
41
|
|
|
5
|
|
|
(6
|
)
|
|
(2
|
)
|
|
38
|
|
|||||
Less: Amount of gain reclassified from accumulated other comprehensive income
|
7
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Net current period other comprehensive income (loss)
|
34
|
|
|
4
|
|
|
(6
|
)
|
|
(2
|
)
|
|
30
|
|
|||||
Ending balance
|
$
|
138
|
|
|
$
|
(18
|
)
|
|
$
|
(58
|
)
|
|
$
|
4
|
|
|
$
|
66
|
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Investments
|
|
Foreign
Currency
Translation
|
|
Estimated Tax Benefit (Expense)
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning balance
|
$
|
182
|
|
|
$
|
(13
|
)
|
|
$
|
(93
|
)
|
|
$
|
2
|
|
|
$
|
78
|
|
Other comprehensive income (loss) before reclassifications
|
187
|
|
|
15
|
|
|
(148
|
)
|
|
(5
|
)
|
|
49
|
|
|||||
Less: Amount of gain (loss) reclassified from accumulated other comprehensive income
|
180
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
179
|
|
|||||
Net current period other comprehensive income (loss)
|
7
|
|
|
16
|
|
|
(148
|
)
|
|
(5
|
)
|
|
(130
|
)
|
|||||
Ending balance
|
$
|
189
|
|
|
$
|
3
|
|
|
$
|
(241
|
)
|
|
$
|
(3
|
)
|
|
$
|
(52
|
)
|
|
Unrealized Gains (Losses) on Cash Flow Hedges
|
|
Unrealized Gains (Losses) on Investments
|
|
Foreign
Currency Translation |
|
Estimated Tax Benefit (Expense)
|
|
Total
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Beginning balance
|
$
|
(111
|
)
|
|
$
|
(12
|
)
|
|
$
|
(25
|
)
|
|
$
|
6
|
|
|
$
|
(142
|
)
|
Other comprehensive income (loss) before reclassifications
|
183
|
|
|
(6
|
)
|
|
(33
|
)
|
|
(2
|
)
|
|
142
|
|
|||||
Less: Amount of loss reclassified from accumulated other comprehensive income
|
(66
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(66
|
)
|
|||||
Net current period other comprehensive income (loss)
|
249
|
|
|
(6
|
)
|
|
(33
|
)
|
|
(2
|
)
|
|
208
|
|
|||||
Ending balance
|
$
|
138
|
|
|
$
|
(18
|
)
|
|
$
|
(58
|
)
|
|
$
|
4
|
|
|
$
|
66
|
|
Details of Accumulated Other Comprehensive
Income (Loss) Components |
|
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Statement of Income
|
||||||
|
|
Three Months Ended September 30,
|
|
|
||||||
|
|
2019
|
|
2018
|
|
|
||||
|
|
(In millions)
|
|
|
||||||
Gains on cash flow hedges—foreign exchange contracts
|
|
$
|
70
|
|
|
$
|
7
|
|
|
Net revenues
|
Unrealized (losses) gains on investments
|
|
(1
|
)
|
|
1
|
|
|
Other income (expense), net
|
||
|
|
$
|
69
|
|
|
$
|
8
|
|
|
Income before income taxes
|
|
|
—
|
|
|
—
|
|
|
Income tax expense
|
||
Total reclassifications for the period
|
|
$
|
69
|
|
|
$
|
8
|
|
|
Net income
|
Details of Accumulated Other Comprehensive
Income (Loss) Components |
|
Amount of Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss)
|
|
Affected Line Item in the Statement of Income
|
||||||
|
|
Nine Months Ended September 30,
|
|
|
||||||
|
|
2019
|
|
2018
|
|
|
||||
|
|
(In millions)
|
|