PayPal Holdings Inc
For the period ended Sep 30, 2024. Filed Oct 29, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 29, 2024
PYPL$59.24+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-30.
0001633917-24-000098
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-29.
0001633917-24-000110
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 162 previous paragraphs and 169 current paragraphs.
95 unchanged; 63 reworded; 8 added; 4 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023
Current report
As a result of ongoing negotiations with merchants, we expect lower volume and transaction revenue growth in the fourth quarter of 2024 and into 2025 from our Braintree products and services.
Current report
(1)Cross-border TPV occurs primarily between two PayPal accounts in different countries and includes transactions initiated through our Xoom product.
Current report
Transaction expense increased by $238 million, or 7%, and $1.3 billion, or 12%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year due primarily to the increase in TPV of 9% and 11% for the three and nine months ended September 30, 2024, respectively, as well as unfavorable changes in product mix.
Current report
(3)Includes the reversal of allowance associated with reclassification of certain loans to held for sale.
Current report
Customer support and operations expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Current report
Sales and marketing expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Current report
Sales and marketing expenses increased by $66 million, or 15%, and $32 million, or 2%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year primarily attributable to higher spend on marketing and brand advertising, including the launch of our PayPal Everywhere advertising campaign, partially offset by a decline in employee-related costs. The increase in the nine months ended September 30, 2024 was also attributable to higher revenue share to our partners.
Removed paragraphs (4)
Previous report
SIX MONTHS ENDED JUNE 30, 2024 AND 2023
Previous report
Customer support and operations expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Previous report
Sales and marketing expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Previous report
Sales and marketing expenses decreased by $19 million, or 4%, and $34 million, or 4%, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year. The decline in the three months ended June 30, 2024 was due primarily to lower employee-related costs associated with lower commissions. The decline in sales and marketing expenses in the six months ended June 30, 2024 was primarily attributable to lower spending on marketing campaigns and user incentives, partially offset by higher revenue share to our partners.
Reworded paragraphs (63)
Previous wording
The broader implications of the macroeconomic environment, including uncertainty around recent international conflicts such as the Russia and Ukraine conflict, supply chain shortages, a recession globally or in markets in which we operate, higher inflation rates, higher interest rates, and other related global economic conditions, remain unknown. A deterioration in macroeconomic conditions could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, foreign currency exchange fluctuations, or other business interruption, which may adversely impact our business. If these conditions continue or worsen, they could adversely impact our future financial and operating results.
Current wording
The broader implications of the macroeconomic environment, including uncertainty around international conflicts such as the Russia and Ukraine conflict, supply chain shortages, a recession globally or in markets in which we operate, higher inflation rates, higher interest rates, and other related global economic conditions, remain unknown. A deterioration in macroeconomic conditions could continue to increase the risk of lower consumer spending, merchant and consumer bankruptcy, insolvency, business failure, higher credit losses, foreign currency exchange fluctuations, or other business interruption, which may adversely impact our business. If these conditions continue or worsen, they could adversely impact our future financial and operating results.
Previous wording
The following table provides a summary of our condensed consolidated financial results for the three and six months ended June 30, 2024 and 2023:
Current wording
The following table provides a summary of our condensed consolidated financial results for the three and nine months ended September 30, 2024 and 2023:
Previous wording
Net revenues increased $598 million, or 8%, in the three months ended June 30, 2024 compared to the same period of the prior year driven primarily by growth in total payment volume (“TPV”, as defined below under “Key Metrics”) of 11%.
Current wording
Net revenues increased $429 million, or 6%, in the three months ended September 30, 2024 compared to the same period of the prior year driven primarily by growth in total payment volume (“TPV”, as defined below under “Key Metrics”) of 9%.
Previous wording
Total operating expenses increased $406 million, or 7%, in the three months ended June 30, 2024 compared to the same period of the prior year due primarily to higher transaction expense.
Current wording
Total operating expenses increased $206 million, or 3%, in the three months ended September 30, 2024 compared to the same period of the prior year due primarily to higher transaction expense partially offset by a reduction in transaction and credit losses.
Previous wording
Operating income increased $192 million, or 17%, in the three months ended June 30, 2024 compared to the same period of the prior year due to net revenues growing more than operating expenses. Our operating margin was 17% and 16% in the three months ended June 30, 2024 and 2023, respectively, reflecting the positive impact of operating efficiencies in our business, partially offset by the negative impact of higher transaction expense.
Current wording
Operating income increased $223 million, or 19%, in the three months ended September 30, 2024 compared to the same period of the prior year due to net revenues growing more than operating expenses. Our operating margin was 18% and 16% in the three months ended September 30, 2024 and 2023, respectively, reflecting the positive impact of lower transaction and credit losses.
Previous wording
Net income increased $99 million, or 10%, in the three months ended June 30, 2024 compared to the same period of the prior year due to the previously discussed increase in operating income of $192 million, partially offset by a decrease in other income (expense), net of $96 million driven by net losses on strategic investments in the current period compared to net gains in the prior period.
Current wording
Net income decreased $10 million, or 1%, in the three months ended September 30, 2024 compared to the same period of the prior year due to the previously discussed increase in operating income of $223 million, partially offset by a decrease in other income (expense), net of $153 million driven primarily by net losses on strategic investments in the current period compared to net gains in the prior period and an increase in income tax expense of $80 million due primarily to higher income before taxes, changes in jurisdictional mix of income, and U.S. income taxed at different rates.
Previous wording
Net revenues increased $1.3 billion, or 9%, in the six months ended June 30, 2024 compared to the same period of the prior year driven primarily by growth in TPV of 12%.
Current wording
Net revenues increased $1.7 billion, or 8%, in the nine months ended September 30, 2024 compared to the same period of the prior year driven primarily by growth in TPV of 11%.
Previous wording
Total operating expenses increased $896 million, or 7%, in the six months ended June 30, 2024 compared to the same period of the prior year due primarily to an increase in transaction expense and, to a lesser extent, restructuring and other, partially offset by a reduction in transaction and credit losses.
Current wording
Total operating expenses increased $1.1 billion, or 6%, in the nine months ended September 30, 2024 compared to the same period of the prior year due primarily to an increase in transaction expense and, to a lesser extent, restructuring and other partially offset by a reduction in transaction and credit losses and customer support and operations expenses.
Previous wording
Operating income increased $361 million, or 17%, in the six months ended June 30, 2024 compared to the same period of the prior year due to net revenues growing more than operating expenses. Our operating margin was 16% and 15% in the six months ended June 30, 2024 and 2023, respectively, reflecting the positive impact of operating efficiencies in our business, partially offset by the negative impact of an increase in transaction expense.
Current wording
Operating income increased $584 million, or 18%, in the nine months ended September 30, 2024 compared to the same period of the prior year due to net revenues growing more than operating expenses. Our operating margin was 17% and 15% in the nine months ended September 30, 2024 and 2023, respectively, reflecting the positive impact of operating efficiencies in our business and lower transaction and credit losses, partially offset by the negative impact of an increase in transaction expense.
Previous wording
Net income increased $192 million, or 11%, in the six months ended June 30, 2024 compared to the same period of the prior year due to the previously discussed increase in operating income of $361 million partially offset by a decrease of $130 million in other income (expense), net driven primarily by net losses on strategic investments in the current period compared to net gains in the prior period.
Current wording
Net income increased $182 million, or 6%, in the nine months ended September 30, 2024 compared to the same period of the prior year due to the previously discussed increase in operating income of $584 million partially offset by a decrease of $283 million in other income (expense), net driven primarily by net losses on strategic investments in the current period compared to net gains in the prior period and an increase in income tax expense of $119 million due primarily to higher income before taxes, changes in jurisdictional mix of income, and U.S. income taxed at different rates.
Previous wording
We have significant international operations that are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, and Canadian dollar, subjecting us to foreign currency exchange risk which may adversely impact our financial results. The strengthening or weakening of the United States (“U.S.”) dollar versus foreign currencies in which we conduct our international operations impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar. We generated approximately 42% of our net revenues from customers domiciled outside of the U.S. in each of the periods presented. Because we generate substantial net revenues internationally, we are subject to the risks of doing business outside of the U.S. See Part I, Item 1A, Risk Factors in our 2023 Form 10-K, as supplemented and, to the extent inconsistent, superseded (if applicable) below in Part II, Item 1A, Risk Factors of this Form 10-Q.
Current wording
We have significant international operations that are denominated in foreign currencies, primarily the British pound, Euro, Australian dollar, and Canadian dollar, subjecting us to foreign currency exchange risk which may adversely impact our financial results. The strengthening or weakening of the United States (“U.S.”) dollar versus foreign currencies in which we conduct our international operations impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar. We generated approximately 42% of our net revenues from customers domiciled outside of the U.S. in both the three and nine months ended September 30, 2024 compared to 43% and 42% in the three and nine months ended September 30, 2023, respectively. Because we generate substantial net revenues internationally, we are subject to the risks of doing business outside of the U.S. See Part I, Item 1A, Risk Factors in our 2023 Form 10-K, as supplemented and, to the extent inconsistent, superseded (if applicable) below in Part II, Item 1A, Risk Factors of this Form 10-Q.
Previous wording
In the three and six months ended June 30, 2024, year-over-year foreign currency exchange rate movements relative to the U.S. dollar had the following impact on our reported results:
Current wording
In the three and nine months ended September 30, 2024, year-over-year foreign currency exchange rate movements relative to the U.S. dollar had the following impact on our reported results:
Previous wording
Additionally, in connection with transactions occurring in multiple currencies on our payments platform, we generally set our foreign currency exchange rates daily and may face financial exposure if we incorrectly set our foreign currency exchange rates or as a result of fluctuations in foreign currency exchange rates between the times that we set our foreign currency exchange rates and when transactions occur.
Current wording
Additionally, in connection with transactions occurring in multiple currencies on our payments platform, we generally set our foreign currency exchange rates daily and may face financial exposure if we incorrectly set our foreign currency exchange rates or as a result of fluctuations in foreign currency exchange rates between the times that we set our foreign currency exchange rates and when transactions occur. While we have processes in place to mitigate these risks, it is impossible to eliminate the total effects of any possible exposure associated with setting rates on our platform.
Previous wording
The components of our net revenues for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
The components of our net revenues for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
Transaction revenues grew by $597 million, or 9%, and $1.3 billion, or 10%, in the three and six months ended June 30, 2024 compared to the same periods of the prior year driven primarily by growth in TPV and the number of payment transactions from our Braintree products and services and, to a lesser extent, growth in our core PayPal and Venmo products and services. Transaction revenues for the six months ended June 30, 2024 were also impacted unfavorably by lower net gains due to hedging activities as compared to the same period of the prior year.
Current wording
Transaction revenues grew by $413 million, or 6%, and $1.7 billion, or 9%, in the three and nine months ended September 30, 2024 compared to the same periods of the prior year driven primarily by growth in TPV and the number of payment transactions from our Braintree products and services and, to a lesser extent, from our core PayPal and Venmo products and services. Transaction revenues for the nine months ended September 30, 2024 were also impacted unfavorably by lower net gains from hedging activities as compared to the same period of the prior year.
Previous wording
The graphs below present the respective key metrics (in millions) for the three and six months ended June 30, 2024 and 2023:
Current wording
The graphs below present the respective key metrics (in millions) for the three and nine months ended September 30, 2024 and 2023:
Previous wording
We had active accounts of 429 million and 431 million as of June 30, 2024 and 2023, respectively. Our total number of payment transactions was 6.6 billion and 6.1 billion for the three months ended June 30, 2024 and 2023, respectively, an increase of 8%. Our total number of payment transactions was 13.1 billion for the six months ended June 30, 2024, compared to 11.9 billion in the six months ended June 30, 2023, an increase of 10%. TPV was $417 billion and $377 billion for the three months ended June 30, 2024 and 2023, respectively, an increase of 11%. TPV was $821 billion for the six months ended June 30, 2024 compared to $731 billion in the six months ended June 30, 2023, an increase of 12%.
Current wording
We had active accounts of 432 million and 428 million as of September 30, 2024 and 2023, respectively. Our total number of payment transactions was 6.6 billion and 6.3 billion for the three months ended September 30, 2024 and 2023, respectively, an increase of 6%. Our total number of payment transactions was 19.7 billion for the nine months ended September 30, 2024, compared to 18.2 billion in the nine months ended September 30, 2023, an increase of 8%. TPV was $423 billion and $388 billion for the three months ended September 30, 2024 and 2023, respectively, an increase of 9%. TPV was $1.2 trillion for the nine months ended September 30, 2024 compared to $1.1 trillion in the nine months ended September 30, 2023, an increase of 11%.
Previous wording
Transaction revenues growth was lower than the growth in TPV in the three and six months ended June 30, 2024 compared to the same periods in the prior year due primarily to unfavorable changes in mix from core PayPal products and services and unfavorable impact from foreign exchange fees, partially offset by favorable impact from Braintree products and services.
Current wording
Transaction revenues growth was lower than the growth in TPV in the three and nine months ended September 30, 2024 compared to the same periods in the prior year due primarily to unfavorable changes in mix from core PayPal products and services and unfavorable impact from foreign exchange fees. For the nine months ended September 30, 2024, these unfavorable impacts to transaction revenues growth were partially offset by favorable impact from Braintree products and services.
Previous wording
Revenues from other value added services remained consistent in the three and six months ended June 30, 2024, compared to the same periods in the prior year due primarily to a decline in the revenue share earned from an independent chartered financial institution and interest and fee revenue on our loans receivable portfolio driven by a decrease in receivables related to PayPal Business Loan (“PPBL”) products and consumer long-term interest-bearing installment products, offset by an increase in interest earned on certain assets underlying customer account balances resulting primarily from higher interest rates.
Current wording
Revenues from other value added services increased $16 million and $6 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods in the prior year due primarily to an increase in interest earned on certain assets underlying customer account balances resulting primarily from higher interest rates and higher customer balances, partially offset by a decline in the revenue share earned from an independent chartered financial institution. Revenues from other value added services for the nine months ended September 30, 2024 were also impacted by lower interest and fee revenue on our loans receivable portfolio driven by a decrease in receivables related to PayPal Business Loan (“PPBL”) products.
Previous wording
Transaction expense for the three and six months ended June 30, 2024 and 2023 was as follows (in millions):
Current wording
Transaction expense for the three and nine months ended September 30, 2024 and 2023 was as follows (in millions):
Previous wording
Transaction expense increased by $401 million, or 11%, and $1.0 billion, or 15%, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year due primarily to the increase in TPV of 11% and 12% for the three and six months ended June 30, 2024, respectively, as well as unfavorable changes in product mix. The increase in the transaction expense rate for the three and six months ended June 30, 2024 compared to the same periods of the prior year was also attributable to unfavorable changes in product mix with a higher proportion of TPV from unbranded card processing volume, which generally has higher expense rates than our other products and services, partially offset by favorable changes in regional mix, product mix, and certain third-party pricing incentives within our core PayPal products and services. For both the three and six months ended June 30, 2024, approximately 36% of TPV was generated outside of the U.S. For the three and six months ended June 30, 2023, approximately 37% and 36% of TPV, respectively, was generated outside of the U.S.
Current wording
The decrease in the transaction expense rate for the three months ended September 30, 2024 compared to the same period of the prior year was primarily attributable to favorable changes in regional mix, product mix, and certain third-party pricing incentives within our core PayPal products and services as well as favorable changes in merchant mix associated with our unbranded card processing volume.
Previous wording
The components of our transaction and credit losses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
The components of our transaction and credit losses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
Transaction and credit losses decreased by $63 million, or 16%, and $184 million, or 22%, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year.
Current wording
Transaction and credit losses decreased by $94 million, or 21%, and $278 million, or 22%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year.
Previous wording
Transaction losses were $259 million in the three months ended June 30, 2024 compared to $286 million in the three months ended June 30, 2023, a decrease of $27 million, or 9%. Transaction losses were $519 million in the six months ended June 30, 2024 compared to $586 million in the six months ended June 30, 2023, a decrease of $67 million, or 11%. Transaction loss rate (transaction losses divided by TPV) was 0.06% for the three and six months ended June 30, 2024, compared to 0.08% for the three and six months ended June 30, 2023. The decrease in transaction losses and the associated transaction loss rate in the three and six months ended June 30, 2024 compared to the same periods of the prior year was primarily due to recoveries and lower losses from our Venmo products and services resulting from fewer fraud events in the current period.
Current wording
Transaction losses were $264 million in the three months ended September 30, 2024 compared to $329 million in the three months ended September 30, 2023, a decrease of $65 million, or 20%. Transaction losses were $783 million in the nine months ended September 30, 2024 compared to $915 million in the nine months ended September 30, 2023, a decrease of $132 million, or 14%. Transaction loss rate (transaction losses divided by TPV) was 0.06% for the three and nine months ended September 30, 2024, compared to 0.08% for the three and nine months ended September 30, 2023. The decrease in transaction losses and the associated transaction loss rate in the three and nine months ended September 30, 2024 compared to the same periods of the prior year was primarily due to higher recoveries and lower losses resulting from fewer fraud events in the current period.
Previous wording
Credit losses decreased by $36 million and $117 million in the three and six months ended June 30, 2024 compared to the same periods of the prior year. The components of credit losses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
Credit losses decreased by $29 million and $146 million in the three and nine months ended September 30, 2024 compared to the same periods of the prior year. The components of credit losses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
The provision in the three and six months ended June 30, 2024 was attributable to loan originations partially offset by improvement in credit quality of loans outstanding. The provision in the three and six months ended June 30, 2023 was attributable to loan originations during the period and a deterioration in the credit quality of loans outstanding, partially offset by the reversal of reserve associated with the reclassification of certain receivables to held for sale at that point in time. During the periods presented, allowances for our merchant and consumer portfolios included qualitative adjustments due to uncertain macroeconomic conditions, financial health of our borrowers, and effectiveness of loan modification programs made available to merchants.
Current wording
The provision in the three and nine months ended September 30, 2024 was attributable to loan originations during the period partially offset by improvement in credit quality of loans outstanding. The provision in the three and nine months ended September 30, 2023 was attributable to loan originations during the period and a deterioration in the credit quality of loans outstanding.
Previous wording
In June 2023, we entered into a multi-year agreement with a global investment firm to sell up to €40 billion of United Kingdom (“U.K.”) and other European buy now, pay later loan receivables, consisting of eligible loans and interest receivables, including a forward-flow arrangement for the sale of future originations of eligible loans over a 24-month commitment period (collectively, “eligible consumer installment receivables”). As of June 30, 2024 and 2023, loans and interest receivable, held for sale was $369 million and $1.9 billion, respectively, representing the portion of our installment consumer receivables that we intend to sell.
Current wording
In June 2023, we entered into a multi-year agreement with a global investment firm to sell up to €40 billion of United Kingdom (“U.K.”) and other European buy now, pay later loan receivables, consisting of eligible loans and interest receivables, including a forward-flow arrangement for the sale of future originations of eligible loans over a 24-month commitment period (collectively, “eligible consumer installment receivables”). As of September 30, 2024 and 2023, loans and interest receivable, held for sale was $471 million and $2.2 billion, respectively, representing the portion of our installment consumer receivables that we intend to sell.
Previous wording
The consumer loans and interest receivable balance as of June 30, 2024 and 2023 was $4.6 billion and $4.5 billion, respectively, net of participation interest sold, representing an increase of 2%. The increase was driven primarily by growth in our installment credit products in Japan and our revolving credit product in the U.K., partially offset by a decline in our installment credit products in Germany due to the forward flow arrangement with the global investment firm as well as a decrease in our interest-bearing installment credit product in the U.S.
Current wording
The consumer loans and interest receivable balance as of September 30, 2024 and 2023 was $5.1 billion and $4.2 billion, respectively, net of participation interest sold, representing an increase of 21%. The increase was driven primarily by growth in our installment credit products in Japan and our revolving credit product in the U.K., partially offset by a decline in our installment credit products in Germany due to the forward flow arrangement with the global investment firm as well as a decrease in our interest-bearing installment credit product in the U.S.
Previous wording
In response to declining performance, a number of risk mitigation strategies were implemented in the third quarter of 2023, which reduced originations for our U.S. interest-bearing installment product. In response to changing portfolio performance, we continue to evaluate and modify our acceptable risk parameters. Such changes in the second quarter of 2024, combined with enhanced risk monitoring, have resulted in increased U.S. interest-bearing installment loan originations over the three months ended June 30, 2024.
Current wording
In response to declining performance, a number of risk mitigation strategies were implemented in the third quarter of 2023, which reduced originations for our U.S. interest-bearing installment product. In response to changing portfolio performance, we continue to evaluate and modify our acceptable risk parameters. Changes to such parameters in the second quarter of 2024, combined with enhanced risk monitoring, have resulted in an increase of U.S. interest-bearing installment loan originations back to historical levels.
Previous wording
We offer access to merchant finance products for certain small and medium-sized businesses, which we refer to as our merchant finance offerings. Total merchant loans, advances, interest, and fees receivable outstanding, net of participation interest sold, as of June 30, 2024 and 2023 was $1.2 billion and $1.7 billion, respectively, reflecting a decline of 29% attributable to a decrease in originations related to our PPBL product in the U.S.
Current wording
We offer access to merchant finance products for certain small and medium-sized businesses, which we refer to as our merchant finance offerings. Total merchant loans, advances, interest, and fees receivable outstanding, net of participation interest sold, as of September 30, 2024 and 2023 was $1.4 billion, reflecting a slight decline of 4% attributable to slowed originations related to our PPBL product in the U.S. mostly offset by an increase in our PayPal Working Capital product portfolio across countries.
Previous wording
In response to declining performance, a number of risk mitigation strategies were implemented throughout 2023, which reduced originations for our PPBL product. In response to changing portfolio performance, we continue to evaluate and modify our acceptable risk parameters. Such changes in 2024, combined with enhanced risk monitoring, have resulted in an increase in PPBL originations over the six months ended June 30, 2024.
Current wording
In response to declining performance, a number of risk mitigation strategies were implemented throughout 2023, which reduced originations for our PPBL product. In response to changing portfolio performance, we continue to evaluate and modify our acceptable risk parameters. Changes to such parameters, combined with enhanced risk monitoring, have resulted in an increase in PPBL originations in 2024.
Previous wording
Customer support and operations expenses decreased by $56 million, or 11%, and $90 million, or 9%, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year due primarily to a decline in employee-related costs associated with headcount reduction. The decline in customer support and operations expenses in the six months ended June 30, 2024 was also impacted by a decline in other costs incurred related to delivery of our products, including payment devices, warehouses, and shipping, and a decline in contractors and consulting costs, partially offset by an increase in customer onboarding and compliance costs.
Current wording
Customer support and operations expenses decreased by $47 million, or 10%, and $137 million, or 9%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year due primarily to a decline in employee-related costs associated with headcount reduction. The decline in customer support and operations expenses in the nine months ended September 30, 2024 was also impacted by a reduction in other costs incurred related to delivery of our products, including warehouses, shipping, and payment devices and a decrease in contractors and consulting costs, partially offset by an increase in card issuance costs and customer onboarding and compliance costs.
Previous wording
We expect sales and marketing expenses to increase in the second half of 2024 as we invest in brand advertising and marketing campaigns.
Current wording
We expect sales and marketing expenses to increase in the fourth quarter of 2024 as we continue to invest in brand advertising and marketing campaigns.
Previous wording
Technology and development expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
Technology and development expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
Technology and development expenses decreased by $25 million, or 3%, and $4 million, or relatively flat, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year due primarily to a decline in employee-related costs associated with headcount reduction. The decline in technology and development expenses in the six months ended June 30, 2024 was offset by increases in cloud computing services utilized in delivering our products and services, amortization expense associated with internally developed software, and software maintenance costs.
Current wording
Technology and development expenses remained consistent in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year. The slight increase in technology and development expenses in the three months ended September 30, 2024 was primarily due to an increase in contractor and consultant costs offset by a decline in employee-related costs associated with headcount reduction. The slight increase in technology and development expenses in the nine months ended September 30, 2024 was driven by increases in cloud computing services utilized in delivering our products and services, amortization expense associated with internally developed software, and software maintenance costs offset by a decline in employee-related costs associated with headcount reduction.
Previous wording
General and administrative expenses for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
General and administrative expenses for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
General and administrative expenses increased by $79 million, or 16%, and $36 million, or 4%, in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year due primarily to an increase in indirect tax expense, a contingency reserve, and professional services expense. The increase in general and administrative expenses in the six months ended June 30, 2024 was partially offset by declines in facilities expense and depreciation expense.
Current wording
General and administrative expenses increased by $12 million, or 2%, and $48 million, or 3%, in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year due primarily to an increase in indirect tax expense and professional services expense. The increase in general and administrative expenses in the nine months ended September 30, 2024 was also attributable to a contingency reserve, partially offset by declines in facilities expense and depreciation expense.
Previous wording
Restructuring and other for the three and six months ended June 30, 2024 and 2023 were as follows (in millions):
Current wording
Restructuring and other for the three and nine months ended September 30, 2024 and 2023 were as follows (in millions):
Previous wording
Restructuring and other increased by $89 million and $137 million in the three and six months ended June 30, 2024, respectively, compared to the same periods of the prior year.
Current wording
Restructuring and other increased by $24 million and $161 million in the three and nine months ended September 30, 2024, respectively, compared to the same periods of the prior year.
Previous wording
During the first quarter of 2024, management initiated a global workforce reduction intended to streamline operations, focus resources on core strategic priorities, and improve our cost structure. The associated restructuring charges during the three and six months ended June 30, 2024 were $83 million and $258 million, respectively, and included employee severance and benefits costs and stock-based compensation expense, substantially all of which were accrued for as of June 30, 2024. The estimated reduction in annualized employee-related costs associated with the impacted workforce is approximately $565 million, including approximately $150 million in stock-based compensation. We expect to reinvest a portion of the reduction in annual costs associated with the impacted workforce to drive business priorities.
Current wording
During the first quarter of 2024, management initiated a global workforce reduction intended to streamline operations, focus resources on core strategic priorities, and improve our cost structure. The associated restructuring charges during the three and nine months ended September 30, 2024 were $36 million and $294 million, respectively, and included employee severance and benefits costs and stock-based compensation expense, substantially all of which were accrued for as of September 30, 2024. The estimated reduction in annualized employee-related costs associated with the impacted workforce is approximately $575 million, including approximately $155 million in stock-based compensation. We expect to reinvest a portion of the reduction in annual costs associated with the impacted workforce to drive business priorities.
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Current report — wording carried from elsewhere
The slight increase in the transaction expense rate for the nine months ended September 30, 2024 compared to the same period of the prior year was attributable to unfavorable changes in product mix with a higher proportion of TPV from unbranded card processing volume, which generally has higher expense rates than our other products and services, largely offset by favorable changes in regional mix, product mix, and certain third-party pricing incentives within our core PayPal products and services.
Current report — wording carried from elsewhere
For both the three months ended September 30, 2024 and 2023, approximately 37% of TPV was generated outside of the U.S. For both the nine months ended September 30, 2024 and 2023, approximately 36% of TPV was generated outside of the U.S.
Current report — wording carried from elsewhere
The decline in net charge-off rate for consumer receivables at September 30, 2024 as compared to September 30, 2023 was due primarily to the improvement in credit quality of the U.S. interest-bearing installment products.