PayPal earnings poised to rise in Q4, but how will 2023 outlook shape up?
Justin Sullivan

PayPal Holdings (NASDAQ:PYPL) Q4 earnings, set to be released after the close on Thursday, will depend on payment volume and the number of net new accounts in the quarter.
Total payment volume is expected to rise 6.5% Y/Y in Q4 to $361B, according to the Visible Alpha consensus, while net new active accounts are expected to be 3.7M, down 63% Y/Y.
Look for changes to PayPal's (PYPL) 2023 guidance. In November, the payment tech company said it expected in non-GAAP operating margin to improve by at least 100 basis points and non-GAAP EPS growth of at least 15%.
Its operating margin outlook could rise more as the company said late last month that it will reduce its global workforce by ~7%, or ~2,000 employees, to counter the challenging macroeconomic environment.
The company is also likely to provide Q1 2023 adjusted EPS guidance. The consensus now stands at $1.07.
Mizuho Securities USA analyst Dan Dolev is keeping a close eye on PayPal's (PYPL) market share vs. Apple Pay. The firm's analysis shows trends in traffic sent to PayPal from key ecommerce checkout partners has worsened in January. That "may be due to a broader deceleration in e-comm growth," rather than a "material step-down in market share at checkout," he said. 
As a result, Dolev lowered his 2023 revenue growth outlook to +10% from his prior estimate of +14%. With the recent round of layoffs announced, he increased Mizuho's estimate for its 2023 margin to 22.2% vs. 21.4% prior. His 2023 EPS growth estimate slipped to +17% from +18% prior.
For Q4 2022, PayPal (PYPL) is expected to post adjusted EPS of $1.20 per share, according to the average estimate of 38 analysts, vs. $1.08 in Q3 and $1.11 in Q4 2021. At a conference in December, PayPal President and CEO Dan Schulman said Q4 earnings could come in slightly ahead of guidance ($1.18-$1.20) it issued in November. At that time, the consensus estimate was $1.19.
Q4 revenue is expected to increase to $7.39B, according to the consensus estimate, from $6.85B in the prior quarter and from $6.92B in Q4 2021.
Earlier this week, Raymond James analyst John Davis downgraded his recommendation on PayPal (PYPL) to Market Perform from Outperform, as he sees 2023 revenue guidance likely imply negative growth for its branded checkout products, which carry higher profit margins than its unbranded offerings.
SA contributor The Asian Investor, who is bullish on PYPL, said he'll be looking at three key metrics in Q4 results: new accounts, free cash flow, and FY2023 outlook.