Fintech company PayPal Holdings (NASDAQ:PYPL) released its fourth-quarter numbers on Thursday. For the last three months of 2022, the company's net revenue totaled $7.4 billion and rose 7% year over year. Earnings per share of $0.81 was up 19% from the prior-year period. However, when looking at the full fiscal year, the per-share profit was down 41% in what the company called a "transformative year" for its business.
A big reason for the worsening bottom line was that in 2021, the company had an income tax benefit of $70 million that helped boost its bottom line whereas in 2022, it incurred an income tax expense of $947 million. Plus, the company's operating expenses of $23.7 million also rose 12% as PayPal saw costs increase across the board.
For the first quarter of 2023, PayPal expects its revenue to grow at a rate of around 7.5%. The company has been taking on growth initiatives to expand its operations in recent years, including the launch of a Buy Now Pay Later service, which has already issued 200 million-plus loans to customers. Its Venmo service is also available for U.S. Amazon (NASDAQ:AMZN) customers, so the company still has runway for more growth ahead, even despite the current macroeconomic headwinds.
Over the past 12 months, shares of PayPal have declined around 35% as growth stocks have fallen out of favor with investors. But if you're in it for the long haul, this can be an excellent stock to own as PayPal's business isn't doing all that badly and should be able to recover as the economy strengthens over time.
