Help Wanted: Formerly fast-growing fintech seeks enterprising exec to slim down and shape up a large, bloated corporation. Must be able to weather comparisons to long-serving and beloved retiring predecessor. Experience with layoffs a plus. Any takers?
On Feb. 9, the same day it reported its fourth quarter results, PayPal announced CEO Dan Schulman would retire at the end of 2023, in December. PayPal’s new CEO has some big shoes to fill. Under CEO Schulman, a 65-year-old former American Express executive who joined the company in 2014 (just before it spun off from eBay), PayPal’s revenue nearly tripled to $27.5 billion in 2022 while its market cap growth has outpaced the S&P 500. Total payment volume during Schulman’s tenure grew fivefold from $288 billion in 2015 to $1.36 trillion in 2022.
The good times continued into 2020, but as the pandemic began to wane in 2021 so did PayPal’s results; net income was nearly flat in 2021 compared to the year before, while revenue grew just 18%. But in 2022, PayPal’s results slowed even more. Revenue rose 8.4% while profit plunged nearly 42%. Though other fintechs have also seen their fortunes reverse, PayPal is trading at just 10 times enterprise value to EBITDA, versus 23 times for Block (the company formerly known as Square), and 34 for Adyen. “[PayPal] was growing really fast and now they’re not. A lot of companies have pandemic hangovers,” said Christopher Brendler, senior research analyst at D.A. Davidson & Co. Brendler pointed to the devastating loss of eBay as one big blow—the former parent company switched to Adyen as its primary payments processor in mid-2020.
