CEO of PayPal set to retire

PayPal Holdings recently announced that CEO Dan Schulman will be retiring at the end of 2023, after leading the company since its spinoff from eBay in 2015. Schulman cited the desire to spend more time outside of work as a reason for his decision. The company has already begun searching for a successor with the help of a search firm, and Schulman is committed to ensuring a smooth transition.

The news came alongside PayPal’s Q4 earnings results, which were mixed. Although the payment volume was less than what analysts had hoped for, the company did meet expectations for earnings per share. Additionally, PayPal has grown to be an absolute cash machine, generating $5.1 billion in free cash flow on $27.5 billion in revenue.

PayPal has grown its payment volume by more than 370% during Schulman’s tenure, but the number of active accounts was only 2% higher than the previous year. The decline in person-to-person payment volume by 2% year over year in the fourth quarter makes sense, as it is easier for people to pay each other in person than it was in late 2021 due to fewer COVID-19 restrictions.

Schulman has made some moves that didn’t sit well with shareholders in recent years, such as considering acquiring Pinterest for over $40 billion at the height of the market, although where it would fit in PayPal’s ecosystem was unclear. A stock falling by as much as 80% from its highs can erode confidence in any leader. However, he has also delivered impressive results as PayPal’s CEO, with PayPal now accepted at 79% of the 1,500 largest retailers in North America and Europe, roughly three times the acceptance rate of its closest competitor.

While Schulman’s decision to retire may seem disappointing, it could be a great move for investors if the right successor is put in place. With an estimated $185 trillion in global payment volume, there’s still plenty of room for PayPal to grow in the payments market, and a new visionary leader could be just what the company needs.

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