PayPal Holdings (PYPL) 10-K risk factor changes: FY2023 vs FY2022

Numerous and evolving cybersecurity threats, including advanced and persisting cyberattacks, cyberextortion, distributed denial-of-service attacks, ransomware, spear phishing and social engineering schemes, the introduction of computer viruses or other malware, and the physical destruction of all or portions of our information technology and infrastructure and those of third parties with whom we [removed: partner,] [added: partner or that] are [added: part of our information technology supply chain, are] becoming increasingly sophisticated and complex, may be difficult to detect, and could compromise the confidentiality, availability, and integrity of the data in our systems, as well as the systems themselves.

We believe that [removed: cybercriminals] [added: hostile actors, who] may [added: comprise individuals, coordinated groups, sophisticated organizations, or nation state supported entities may] target PayPal due to our name, brand recognition, types of data (including sensitive payments- and identity-related data) that customers provide to us, and the widespread adoption and use of our products and services.

We have experienced from time to time, and may experience in the future, [added: cybersecurity incidents, including] breaches of our security [removed: measures] [added: measures, network breaches, and compromise of personally identifiable customer information] due to human error, deception, malfeasance, insider threats, system errors, defects, vulnerabilities, or other [removed: irregularities.][added: issues.]

Any [added: cybersecurity incidents, including] cyberattacks or data security breaches affecting the information technology or infrastructure of companies we acquire or of our customers, partners, or vendors (including data center and cloud computing providers) could have similar negative effects.

Our systems and operations and those of our service providers and partners have experienced from time to time, and may experience in the future, business interruptions or degradation of service because of distributed denial-of-service and other [added: cyberattacks, insider threats, hardware and software defects or malfunctions, human error, earthquakes, hurricanes, floods, fires,]

| [removed: ] [added: ] | | | | | | | | | [removed: 17] [added: 16] | | |

[removed: cyberattacks, insider threats, hardware] and [removed: software defects or malfunctions, human error, earthquakes, hurricanes, floods, fires, and] other natural disasters, public health crises (including pandemics), power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, or other events.

We have experienced, and expect to continue to experience, system failures, cyberattacks, unplanned outages, and other events or conditions from time to time that have and may interrupt the availability, or reduce or adversely affect the speed or functionality, of our products and [removed: services and result in loss of revenue.][added: services.]

We cannot predict the effects of technological changes on our business, which technological developments or innovations will become widely adopted, and how [added: those technologies may be regulated.]

| [removed: ] [added: ] | | | | | | | | | [removed: 18] [added: 17] | | |

[removed: We rely in part on] third parties, including some of our competitors, for the development of and access to new or evolving technologies.

Our business is subject to complex and changing laws, rules, regulations, policies, and legal interpretations in the markets in which we offer services directly or through partners, [removed: including] [added: including, but not limited to,] those governing: banking, credit, deposit taking, cross-border and domestic money transmission, prepaid access, foreign currency exchange, privacy, data protection, data governance, cybersecurity, banking secrecy, digital payments, cryptocurrency, payment services (including payment processing and settlement services), [added: lending,] fraud detection, consumer protection, antitrust and competition, economic and trade sanctions, anti-money laundering, and counter-terrorist financing.

Regulators [added: and legislators] globally [removed: are increasingly exercising] [added: have been establishing, evolving, and increasing their] regulatory authority, oversight, and enforcement in a manner that impacts our business.

[removed: Further, as] [added: As] we introduce new products and services and expand into new [removed: markets (including] [added: markets, including] through [removed: acquisitions) and expand and localize our international activities,] [added: acquisitions,] we expect to become subject to additional regulations, restrictions, and licensing requirements.

Any failure or [removed: alleged] [added: perceived] failure to comply with existing or new laws, regulations, or orders of any government authority (including changes to [added: or expansion of] their interpretation) may subject us to significant [removed: fines and] [added: fines,] penalties, criminal and civil lawsuits, forfeiture of significant assets, and enforcement [removed: actions;] [added: actions in one or more jurisdictions;] result in additional compliance and licensure requirements; cause us to lose existing licenses or prevent or delay us from obtaining additional licenses that may be required for our business; increase regulatory scrutiny of our business; [added: divert management’s time and attention from our business;] restrict [removed: or cease] our operations; [added: lead to increased friction for customers;] force us to make changes to our business practices, [removed: products] [added: products,] or operations; [removed: lead to increased friction for customers;] require us to engage in remediation activities; [added: or] delay planned transactions, product [removed: launches or other activities,] [added: launches,] or [removed: divert management’s time and attention from our business.][added: improvements.]

The complexity of [removed: United States (“U.S.”)] [added: U.S.] federal and state and international regulatory and enforcement regimes, coupled with the global scope of our operations and the evolving global regulatory environment, could result in [removed: one or more events] [added: a single event] prompting a large number of overlapping investigations and legal and regulatory proceedings by multiple government authorities in different jurisdictions.

Outside of the U.S., we principally provide our services to customers in the European Economic Area (“EEA”) [removed: and the United Kingdom (“U.K.”)] through PayPal [removed: (Europe), our wholly-owned subsidiary that is licensed and subject to regulation as a credit][added: (Europe) S.à.r.l.]

| [removed: ] [added: ] | | | | | | | | | [removed: 19] [added: 18] | | |

PayPal (Europe) [added: or PayPal U.K.] may be subject to enforcement actions and significant fines if [removed: it] [added: either] violates applicable requirements.

[removed: Additionally, compliance] [added: Compliance] with applicable laws and regulations could become more costly and operationally difficult to manage due to [added: additional supervision,] potentially inconsistent [removed: interpretations] [added: interpretations,] and domestic regulations by various countries in the region.

Applicable regulation relating to payments, anti-money [removed: laundering] [added: laundering,] and digital services, which are key focus areas of regulators and subject to extensive new regulation, could subject us to additional and complex obligations, [removed: risks] [added: risks,] and associated [removed: costs.][added: costs, and impact our ability to expand our business in Europe.]

If the business activities of PayPal (Europe) exceed certain thresholds, or if the European Central Bank (“ECB”) so determines, PayPal (Europe) may be deemed a significant supervised entity and certain activities of PayPal (Europe) would become directly supervised by the ECB, rather than by the Luxembourg Commission de Surveillance du Secteur [removed: Financier, which could subject us to additional requirements and would likely increase compliance costs.][added: Financier.]

PayPal (Europe) is also subject to regulation by the ECB under the oversight framework for electronic payment instruments, schemes and arrangements [removed: (PISA), which may also lead to increased compliance obligations and costs.][added: (PISA).]

[added: As of July 1, 2023,] PayPal Pte.

[removed: Ltd. obtaining] [added: In order to maintain] this [removed: license,] [added: license and certain other licenses or registrations] we [removed: will be] [added: hold in certain markets, we are] required to comply with [removed: new] [added: applicable] regulatory requirements, which will result in increased operational complexity and costs for our Singapore and international operations.

Our [removed: current and planned] customer cryptocurrency offerings could subject us to additional regulations, licensing requirements, or other [removed: obligations.][added: obligations or liabilities.]

For example, if the [removed: SEC] [added: Securities and Exchange Commission (“SEC”)] were to assert that any of the cryptocurrencies we support are securities, the SEC could assert that our activities involving that cryptocurrency require securities broker-dealer registration or other obligations under the federal securities laws.

The rapidly evolving regulatory landscape with respect to cryptocurrency may subject us to additional licensing and regulatory obligations or to [added: additional] inquiries or investigations from the [removed: SEC,] [added: SEC or] other regulators and governmental authorities, and require us to make product changes, restrict or discontinue product [removed: offerings,] [added: offerings in certain markets,] implement additional and potentially costly controls, or take other actions.

If we [added: or the PYUSD Issuer] fail to comply with regulations, requirements, prohibitions or other obligations applicable to us, we could face regulatory or other enforcement actions, potential fines, and other consequences.

We hold our customers’ cryptocurrency assets through [removed: a] [added: one or more] third-party [removed: custodian.][added: custodians.]

Financial and third-party risks related to our customer cryptocurrency offerings, such as inappropriate access to, theft, or destruction of cryptocurrency assets held by our [removed: custodian,] [added: custodians,] insufficient insurance coverage by [removed: the] [added: a] custodian to reimburse us for all such losses, [removed: the] [added: a] custodian’s failure to maintain effective controls over the custody and settlement services provided to us, [removed: the] [added: a] custodian’s inability to purchase or liquidate cryptocurrency holdings, [added: the failure of the PYUSD Issuer to maintain sufficient reserve assets backing PYUSD] and defaults on financial or performance obligations by [removed: the] [added: a] custodian, [added: banks with which the PYUSD Issuer maintains reserve assets] or counterparty financial institutions, could expose our customers and us to loss, and therefore significantly harm our business, financial performance, and reputation.

| [removed: ] [added: ] | | | | | | | | | [removed: 20] [added: 19] | | |

We have selected [removed: a] custodian [removed: partner,] [added: partners] and [added: the PYUSD Issuer, and] may in the future select additional custodian [removed: partners,] [added: partners and stablecoin issuing entities,] that are subject to regulatory oversight, capital requirements, maintenance of audit and compliance industry certifications, and cybersecurity procedures and policies.

Nevertheless, operational disruptions at any such [removed: custodian,] [added: custodian] or [added: issuer, or] such [removed: custodian’s] [added: custodians’ or issuer’s] failure to safeguard cryptocurrency holdings [added: (or reserve assets)] could result in losses of customer assets, expose us to customer claims, reduce consumer confidence and materially impact our operating results and our cryptocurrency product offerings.

Custodial arrangements to safeguard cryptocurrency assets involve unique risks and uncertainties in the event of [removed: the] [added: a] custodian’s bankruptcy.

In the event of [removed: our] [added: a] custodian’s bankruptcy, the lack of precedent and the highly fact-dependent nature of the determination could delay or preclude the return of custodied cryptocurrency assets to us or to our customers.

[removed: Although,] [added: Although] we contractually require our [removed: custodian] [added: custodians] to segregate our customer assets and not commingle them with proprietary or other assets, we cannot be certain that these contractual obligations, even if duly observed by [removed: the] [added: a] custodian, will be effective in preventing such assets from being treated as part of the custodian’s estate under bankruptcy or other insolvency law.

In that event, our claim on behalf of such customers against [removed: the] [added: a] custodian’s estate for our customers’ cryptocurrency assets could be treated as a general unsecured claim against the custodian, in which case our customers could seek to hold us liable for any resulting losses.

Increased global regulatory focus on short-term installment products and consumer credit more broadly could result in laws or regulations requiring changes to our policies, procedures, operations, and product offerings, and restrict or limit our ability to offer credit [removed: products, and we could be subject to enforcement action, fines, and litigation if we are found to violate any aspects of applicable law or regulations.][added: products.]

In addition, the CFPB, pursuant to its market-monitoring authority, may require us to provide extensive information on our products and [removed: offerings from time to time.][added: offerings.]

We rely in part on

As we expand and localize our international activities, we expect that our obligations in the markets in which we operate will continue to increase.

et Cie, S.C.A. (“PayPal (Europe)”), our wholly-owned subsidiary that is licensed and subject to regulation as a credit institution in Luxembourg and PayPal U.K. Limited (“PayPal U.K.”), a wholly-owned subsidiary that is subject to

regulation as an electronic money institution in the United Kingdom (“U.K.”) by the Financial Conduct Authority (“FCA”).

Ltd. has been issued a Major Payment Institution license by the MAS under the Payment Services Act 2019 to continue providing payments services.

In August 2023, a third-party issuer with which we have partnered commercially (the “PYUSD Issuer”) launched a U.S. dollar-denominated stablecoin named PayPal USD (“PYUSD”), which was initially available to PayPal U.S. customers and subsequently made available to Venmo customers in September 2023.

These PayPal and Venmo customers may, if provisioned for external transfers and subject to our sanctions and anti-money laundering controls, send PYUSD to external wallets not controlled by PayPal.

The PYUSD Issuer may also allow institutional users to directly purchase PYUSD from the PYUSD Issuer (as per the PYUSD Issuer’s stablecoin terms and conditions).

The regulatory treatment of stablecoins is evolving and has drawn significant attention from legislative and regulatory bodies around the world, including the SEC.

There are uncertainties on how ongoing changes to federal, state, and international laws and regulations would apply to stablecoins in practice, and we and the PYUSD Issuer may face substantial costs to operationalize and comply with any additional or changed requirement.

In addition, we could face

reputational harm through our relationship with the PYUSD Issuer if the PYUSD Issuer were to face regulatory scrutiny, PYUSD is deemed to be a security, or PYUSD is alleged to be used for transactions in connection with illicit or illegal activities.

Following the departure of the U.K. from the European Union (“EU”) and the EEA on January 31, 2020 (commonly referred to as “Brexit”), effective November 1, 2023, PayPal’s wholly-owned U.K. subsidiary received authorizations from the FCA as an electronic money institution and consumer credit firm, and registration as a cryptoasset business, subject to certain conditions that will require further implementation action by us.

If we are unable to meet these requirements, our U.K. business and operations may be impacted and we may be subject to enforcement actions.

Additionally, in July 2023, the EU-U.S. Data Privacy Framework, the U.K. Extension to the EU-U.S. Data Privacy Framework, and the Swiss-U.S. Data Privacy Framework became effective as additional mechanisms to enable transfers of personal data to the U.S. from the EU/EEA, the U.K., and Switzerland, respectively.

The new Data Protection Framework (DPF) replaces prior transatlantic personal data transfer regimes that were invalidated by the Court of Justice of the European Union.

As such, there are risks in solely relying on the DPF for internal transfers of personal data to the U.S. While PayPal intends to continue to rely on Binding Corporate Rule and SCCs and will evaluate the circumstances under which the DPF may be leveraged for transfers of personal data to the U.S., we may be subject to regulatory enforcement actions if our approach is deemed to be noncompliant.

partnerships, commercial agreements and business practices.

Any failure to adequately protect or enforce our

credit products.

Any deterioration in the performance of loans facilitated through our platform or unexpected losses on such loans may increase the risk of potential charge-offs, increase our allowance for loans and interest receivable, negatively impact our revenue share arrangement with an independent chartered financial institution with respect to our U.S. consumer credit products, and materially and adversely affect our financial condition and results of operations.

subsidiaries.

In June 2023, we entered into a multi-year agreement to sell up to €40 billion of U.K. and European buy now, pay later (“BNPL”) loan receivables originated by PayPal (Europe) and PayPal U.K., consisting of the sale of a substantial majority of the U.K. and European BNPL loan portfolio held on PayPal (Europe)’s balance sheet at the closing of the transaction and a forward-flow arrangement for the sale of future originations of eligible loans, and in October 2023, we began selling those receivables.

The sale of future eligible receivables is subject to certain conditions.

If these conditions are not satisfied or waived or if the parties are unable to fulfill their obligations under these arrangements, the sale of these receivables could be delayed and we may not realize the expected benefits of this arrangement.

From time to time, we may consider other third-party sources of funding (including asset sales, warehouse facilities, forward-flow arrangements, securitizations, partnerships or other funding structures) for our credit portfolio or other receivables.

The availability of such third-party funding is subject to a number of factors, including economic conditions and interest rates, and there can be no assurance that any such funding arrangements can be obtained on favorable terms or at all.

Measures to detect and reduce the risk of fraud and abusive

While we actively seek to recover transaction losses where possible, such recoveries may be insufficient to compensate us for such losses.

If our ESG-related data, processes and reporting are incomplete or inaccurate, or if we fail to achieve progress with respect to ESG-related goals on a timely basis, or at all, our reputation, business, financial performance and growth could be adversely affected.

For example, California, where our headquarters are located, has

If we are unable, or perceived as unable, to effectively manage customer funds, our business could be harmed.

We hold a substantial amount of funds belonging to our customers, including balances in customer accounts and funds being remitted to sellers of goods and services or recipients of person-to-person transactions.

In certain jurisdictions where we operate, we are required to comply with applicable regulatory requirements with respect to customer balances.

Our success is reliant on public confidence in our ability to effectively manage our customers’ balances and handle substantial transaction volumes and amounts of customer funds.

Any failure to manage customer funds in compliance with applicable regulatory requirements, or any public loss of confidence in us or our ability to effectively manage customer balances, could lead customers to discontinue or reduce their use of our products or reduce customer balances held with us, which could significantly harm our business.

For example, various countries have proposed or enacted digital services taxes and global minimum tax provisions under the Pillar Two OECD model rules.

For example, in November 2017, we suspended the operations of TIO Networks (“TIO”) (acquired in July 2017) as part of an investigation of security vulnerabilities of the TIO platform, and in December 2017, we announced that we had identified evidence of unauthorized access to TIO’s network and the potential compromise of personally identifiable information for approximately 1.6 million TIO customers.

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

those technologies may be regulated.

institution in Luxembourg.

The Payment Services Act came into effect in Singapore in January 2020.

Ltd. has submitted an application for a Major Payment Institution license to the MAS to continue to provide payments services, and is operating under an exemption from holding a license within a statutory transition period while the application is pending.

Upon PayPal Pte.

PayPal principally offers its services in the EEA countries through a “passport” notification process through PayPal (Europe)’s Luxembourg regulator to regulators in other EEA member states in accordance with European Union (“EU”) regulations, as well as in the U.K. through the Temporary Permissions Regime.

Regulators in these countries could notify us of and seek to enforce local consumer protection laws that apply to our business, in addition to Luxembourg consumer protection laws, or seek to persuade the local regulator to order PayPal to conduct its activities in the local country directly or through a branch office.

These or similar actions by these regulators could impose additional obligations and costs and impact our ability to expand our business in Europe and the U.K.

verify the identity of our customers and to monitor international and domestic transactions.

In June 2021, the European Commission imposed new SCC requirements which impose certain contract and operational requirements on PayPal, its merchants, and vendors to adhere to certain affirmative duties, including requirements related to government access transparency, enhanced data subject rights, and broader third-party assessments to ensure safeguards necessary to protect personal data exported from PayPal’s EEA customers and/or employees to countries outside the EEA.

To the extent we rely on SCCs, we will potentially need to enter into new contractual arrangements reflecting the updated SCC requirements to avoid limitations on PayPal’s ability to process EEA data in countries outside of the EEA.

We are regularly subject to claims, individual and class action lawsuits, arbitration proceedings, government and regulatory investigations, inquiries, actions or requests, and other proceedings alleging violations of laws, rules, and regulations with

services that we do not offer.

Our ability to receive the benefit of U.S. merchant financing offerings and certain U.S. installment loan products may be subject to challenge.

The final rule reaffirms and

meet their obligations to us, or we experience substantial disruptions in these relationships, our operations, results of operations, and financial results could be adversely impacted.

payment cards used by customers to fund their purchase.

Our international operations subject us to significant challenges, uncertainties, and risks, including local regulatory, licensing, reporting, and legal obligations; costs and challenges associated with operating in markets in which we may have limited or no experience, including effectively localizing our products and services and adapting them to local preferences; difficulties in developing, staffing, and simultaneously managing

Brexit: The U.K.’s departure from the EU could harm our business, financial condition, and results of operations.

Following the departure of the U.K. from the EU and the EEA on January 31, 2020 (commonly referred to as “Brexit”) and the expiration of the transition period on December 31, 2020, there continues to be uncertainty over the practical consequences of Brexit, including the potential for greater restrictions on the supply and availability of goods and services between the U.K. and EEA region, and a general deterioration in consumer sentiment and credit conditions leading to overall negative economic growth and increased risk of merchant default.

The consequences of Brexit have brought legal uncertainty and increased complexity for financial services firms, which could continue as national laws and regulations in the U.K. differ from EU laws and regulations and additional authorization requirements come into effect.

These developments have led and could lead in the future to additional regulatory costs and challenges for us.

Specifically, PayPal (Europe) currently operates in the U.K. within the scope of its passport permissions (as they existed at the end of the transition period) pursuant to the Temporary Permissions Regime pending the grant of new authorizations by the U.K. financial regulators.

If we are unable to obtain the required authorizations before the expiry of the longstop dates set by the U.K. regulators under the Temporary Permissions Regime, our European operations could lose their ability to offer services within the U.K. market, or into the U.K. market on a cross-border basis.

Our European operations may

also be required to comply with legal and regulatory requirements in the U.K. that may be in addition to, or inconsistent with, those of the EEA, in each case, leading to increased complexity and costs.

In addition, current and emerging legal and regulatory requirements with respect to climate change (e.g., carbon pricing) and other aspects of ESG (e.g., disclosure requirements) may result in increased compliance requirements on our business and supply chain, which may increase our operating costs and cause disruptions in our operations.

For example, various countries have proposed or enacted digital services taxes.

Unless otherwise expressly stated or the context otherwise requires, references to “we,” “our,” “us,” “the Company,” and “PayPal” refer to PayPal Holdings, Inc. and its consolidated [removed: subsidiaries.*][added: subsidiaries.]

This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of [removed: 2022] [added: 2023] results as compared to [removed: 2021] [added: 2022] results.

For a discussion of [removed: 2021] [added: 2022] results as compared to [removed: 2020] [added: 2021] results, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Form 10-K for the year ended December 31, [removed: 2021] [added: 2022] filed with the SEC on February [removed: 3, 2022.][added: 10, 2023.]

[removed: |  | | | | | | | | | 33 | | |][added: ]

[removed: Information] [added: Cybersecurity and information] security

[removed: Information] [added: Cybersecurity and information] security risks for global payments and technology companies like us have increased significantly in recent years.

Although we have developed systems and processes designed to protect the data we manage, prevent data loss and other security incidents, and [added: enable us to] effectively respond to known and potential risks, and expect to continue to expend significant resources to bolster these protections, we remain subject to these risks and there can be no assurance that our security measures will provide sufficient security or prevent breaches or attacks.

For additional information regarding our [added: cybersecurity and] information security risks, see “Item 1A.

Risk Factors—*Cyberattacks and security vulnerabilities could result in serious harm to our reputation, business, and financial [removed: condition.*”][added: condition*” and “Item 1C.]

[removed: In] [added: The components of our net revenues for] the years ended December 31, [removed: 2022 and 2021, our total net revenues related to Russia] [added: 2023, 2022,] and [removed: Ukraine] [added: 2021] were [removed: not material.][added: as follows (in millions):]

| | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | | | | | [removed: 2020] [added: 2023] | | | [added: | | | 2022 | | |]

| | | | [removed: December 31, 2022] [added: 2023] | | | | | | [removed: December 31, 2021] [added: 2022] | | | [added: | | | 2021 | | | | | | 2023 | | | | | | 2022 | | |]

[removed: | Gross] [added: (3) Includes changes in the allowance due to the reclassification of] loans and interest receivable [removed: due] [added: to or] from [removed: customers in the U.K. | | | 29 | | % | | | | 40 | | % |][added: held for sale.]

The broader implications of the macroeconomic environment, including uncertainty around [removed: the duration and severity of the coronavirus pandemic (“COVID-19”),] [added: recent international conflicts including] 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 [added: 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 [added: financial and] operating results.

[removed: |  | | | | | | | | | 34 | | |][added: ]

The following table provides a summary of our consolidated financial results for the years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020:][added: 2021:]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Net revenues | | | $ | [removed: 27,518] [added: 29,771] | | | | | $ | [removed: 25,371] [added: 27,518] | | | | | $ | [removed: 21,454] [added: 25,371] | | | | | 8 | | % | | | | [removed: 18] [added: 8] | | % |

| Operating expenses | | | [removed: 23,681] [added: 24,743] | | | | | | [removed: 21,109] [added: 23,681] | | | | | | [removed: 18,165] [added: 21,109] | | | | | | [removed: 12] [added: 4] | | % | | | | [removed: 16] [added: 12] | | % |

| Operating income | | | [removed: 3,837] [added: 5,028] | | | | | | [removed: 4,262] [added: 3,837] | | | | | | [removed: 3,289] [added: 4,262] | | | | | | [removed: (10)] [added: 31] | | % | | | | [removed: 30] [added: (10)] | | % |

| Operating margin | | | [removed: 14] [added: 17] | | % | | | | [removed: 17] [added: 14] | | % | | | | [removed: 15] [added: 17] | | % | | | | | | | | | | | | |

| Other income (expense), net | | | [removed: (471)] [added: 383] | | | | | | [removed: (163)] [added: (471)] | | | | | | [removed: 1,776] [added: (163)] | | | | | | [removed: 189] [added: 181] | | % | | | | [removed: (109)] [added: 189] | | % |

| Income tax expense (benefit) | | | [removed: 947] [added: 1,165] | | | | | | [removed: (70)] [added: 947] | | | | | | [removed: 863] [added: (70)] | | | | | | [added: 23] | | [added: %] | | | | [removed: (108)] | | [removed: %] |

| Effective tax rate | | | [removed: 28] [added: 22] | | % | | | | [removed: (2)] [added: 28] | | % | | | | [removed: 17] [added: (2)] | | % | | | | | | | | | | | | |

| Net income (loss) | | | $ | [removed: 2,419] [added: 4,246] | | | | | $ | [removed: 4,169] [added: 2,419] | | | | | $ | [removed: 4,202] [added: 4,169] | | | | | [removed: (42)] [added: 76] | | % | | | | [removed: (1)] [added: (42)] | | % |

| Net income (loss) per diluted share | | | $ | [removed: 2.09] [added: 3.84] | | | | | $ | [removed: 3.52] [added: 2.09] | | | | | $ | [removed: 3.54] [added: 3.52] | | | | | [removed: (41)] [added: 84] | | % | | | | [removed: (1)] [added: (41)] | | % |

| Net cash provided by operating [removed: activities(1)] [added: activities] | | | $ | [removed: 5,813] [added: 4,843] | | | | | $ | [removed: 5,797] [added: 5,813] | | | | | $ | [removed: 6,219] [added: 5,797] | | | | | [removed: —] [added: (17)] | | % | | | | [removed: (7)] [added: —] | | % |

[removed: Refer to] [added: For additional information, see] “Note 1—Overview and Summary of Significant Accounting Policies” to our consolidated financial statements included in this Form [removed: 10-K for additional information.][added: 10-K.]

Net revenues increased [removed: $2.1] [added: $2.3] billion, or 8%, in [removed: 2022] [added: 2023] compared to [removed: 2021] [added: 2022] driven primarily by growth in total payment volume (“TPV”, as defined below under “Key Metrics”) of [removed: 9%.][added: 13%.]

Total operating expenses increased [removed: $2.6] [added: $1.1] billion, or [removed: 12%,] [added: 4%,] in [removed: 2022] [added: 2023] compared to [removed: 2021] [added: 2022] due primarily to an increase in transaction expense, [removed: and to a lesser extent, increases in transaction and credit losses, technology and development expenses, and restructuring and other charges,] partially offset by [removed: a decline] [added: reductions] in sales and marketing [removed: expenses.][added: expense, restructuring and other, and technology and development expense.]

The strengthening or weakening of the United States (“U.S.”) dollar versus [removed: the British pound, Euro, Australian dollar, and Canadian dollar, as well as other] [added: foreign] currencies in which we conduct our international [removed: operations,] [added: operations] impacts the translation of our net revenues and expenses generated in these foreign currencies into the U.S. dollar.

In [added: 2023,] 2022, [removed: 2021,] and [removed: 2020,] [added: 2021,] we generated approximately [added: 42%,] 43%, [removed: 46%,] and [removed: 49%] [added: 46%] of our net revenues from customers domiciled outside of the U.S., respectively.

Gains and losses from these foreign currency exchange contracts are recognized as a component of transaction revenues [added: or operating expenses (as applicable)] in the same period the forecasted transactions impact earnings.

[removed: |  | | | | | | | | | 35 | | |][added: ]

In the years ended December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the year-over-year foreign currency exchange rate movements relative to the U.S. dollar had the following impact on our reported results:

| | | | [added: 2023(3) | | | | | |] 2022 | | | | | | 2021 | | |

| [removed: (Unfavorable) favorable] [added: Favorable (unfavorable)] impact to net revenues (exclusive of hedging impact) | | | $ | [removed: (949)] [added: 128] | | | | | $ | [removed: 440] [added: (949)] | |

Cybersecurity.”

Operating income increased $1.2 billion, or 31%, in 2023 compared to 2022 due to net revenues growing more than operating expenses.

Our operating margin was 17% and 14% in 2023 and 2022, respectively, reflecting the positive impact of operating efficiencies in our business and gain on sale of a divested business, partially offset by the negative impact of an increase in transaction expense.

Net income increased by $1.8 billion, or 76%, in 2023 compared to 2022 due to the previously discussed increase in operating income of $1.2 billion and an increase of $854 million in other income (expense), net, driven primarily by net gains on strategic investments in the current period as compared to net losses and impairments on strategic investments in the prior period as well as higher interest income from an increase in interest rates, partially offset by an increase in income tax expense of $218 million primarily related to higher pre-tax income, inclusive of tax expense associated with net gains on strategic investments and the sale of a divested business.

| | | | 2023 | | | | | | 2022 | | |

Transaction revenues grew by $1.7 billion, or 7%, in 2023 compared to 2022 driven primarily by growth in TPV and the number of payment transactions from our Braintree products and services, partially offset by a decline in revenues from our core PayPal products and services, including declines in contractual compensation of $190 million from sellers that violated our contractual terms predominantly in international markets.

Transaction revenues for the year ended December 31, 2023 were also impacted unfavorably by lower net gains due to hedging activities as compared to the same period of the prior year.

(1) Cross-border TPV occurs primarily between two PayPal accounts in different countries and includes transactions initiated through our Xoom product.

These drivers positively impacting revenues from other value added services were partially offset by a decline in revenue earned from our PayPal Honey product and a lower revenue share earned from an independent chartered financial institution (“partner institution”).

The increase in transaction losses in 2023 was primarily attributable to lower recoveries compared to 2022 and higher losses related to fraud schemes, partially offset by a $39 million loss related to an ongoing merchant insolvency proceeding in 2022 with no activity of comparable individual magnitude in the current period.

*Consumer loan portfolio*

As of December 31, 2023, loans and interest receivable, held for sale was $563 million.

Loans and interest receivable, held for sale, represents the portion of our installment consumer receivables that we intend to sell.

This portfolio includes the substantial majority of our United Kingdom (“U.K.”) and other European buy now, pay later loan receivables.

In June 2023, we entered into a multi-year agreement with a global investment firm to sell up to €40 billion of 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”).

For additional information, see “Note 1—Overview and Summary of Significant Accounting Policies” in the notes to the consolidated financial statements included in this Form 10-K.

| | | | 2023 | | | | | | 2022 | | |

(1) Amounts as of December 31, 2023 exclude loans and interest receivable, held for sale.

The increase in net charge-off rate for consumer loans and interest receivable at December 31, 2023 as compared to December 31, 2022 was primarily due to the sale of eligible consumer installment receivables, as discussed above, and deterioration in the credit quality of the U.S. interest-bearing installment product.

In response to declining performance, a number of risk mitigation strategies were implemented in the third quarter of 2023, which resulted in reduced originations for our U.S. interest-bearing installment product.

*Merchant loan portfolio*

| | | | 2023 | | | | | | 2022 | | |

The decrease in the percent of current merchant receivables, increase in percent of merchant receivables greater than 90 days outstanding, and increase in the net charge-off rate for merchant receivables at December 31, 2023 as compared to December 31, 2022 were primarily due to the expansion of acceptable risk parameters in 2022, which resulted in a decline in the overall credit quality of loans outstanding related to our PPBL product.

The significant decline in the merchant receivable portfolio year-over-year due to repayments and reduced originations also resulted in higher delinquency and charge-off rates as a percentage of outstanding loan balance as of December 31, 2023.

We continue to evaluate and modify our acceptable risk parameters related to our merchant loan portfolio in response to the changing macroeconomic environment.

In response to declining performance, a number of risk mitigation strategies were implemented throughout 2023, which resulted in reduced originations for our PPBL product.

Customer support and operations costs decreased $201 million, or 9%, in 2023 compared to 2022 due primarily to a decline in employee-related costs, contractors and consulting costs, and customer onboarding and compliance costs.

Sales and marketing expenses decreased $448 million, or 20%, in 2023 compared to 2022 due primarily to lower spending on targeted user incentives and marketing campaigns, and to a lesser extent, a decline in amortization of acquired intangibles.

General and administrative expenses decreased $40 million, or 2%, in 2023 compared to 2022 due primarily to a decline in depreciation expense and facilities costs.

Restructuring and other decreased by $291 million in 2023 compared to 2022 primarily resulting from gain on sale of a divested business, partially offset by restructuring charges, asset impairment charges, and fair value adjustments on loans and interest receivable, held for sale.

In the fourth quarter of 2023, we completed the sale of Happy Returns and recorded a pre-tax gain of $339 million, net of transaction costs.

For additional information on the divestiture, see “Note 4—Business Combinations and Divestitures” in the notes to the consolidated financial statements included in this Form 10-K.

During the first quarter of 2023, management initiated a global workforce reduction intended to focus resources on core strategic priorities, and improve our cost structure and operating efficiency.

In the year ended December 31, 2023, we recognized a gain of $17 million due to the sale of an owned property.

We also incurred a loss of $14 million related to another owned property, which was previously held for sale, in the year ended December 31, 2023.

During the year ended December 31, 2023, approximately $74 million of losses were recorded in restructuring and other, which included net loss on sale of loans and interest receivable previously held for sale (inclusive of transaction costs) and fair value adjustments in order to measure loans and interest receivable, held for sale, at the lower of cost or fair value.

| | | | 2023 | | | | | | 2022 | | |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | |

Cash flows from operating activities was also impacted by proceeds from repayments and sales of loans receivable, originally classified as held for sale, of $10.8 billion and changes in other assets of $203 million.

These changes, which favorably impacted cash generated from operations, were offset by originations of loans receivable, held for sale of $11.5 billion, actual cash transaction losses incurred during the period of $1.2 billion, changes in deferred income taxes of $668 million, gain on divestiture of business, excluding transaction costs, of $356 million, net accretion of investments purchased at a discount of $367 million, and changes in liabilities of $222 million.

*This Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements that involve expectations, plans, or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, mergers or acquisitions, or management strategies).

These forward-looking statements can be identified by words such as “may,” “will,” “would,” “should,” “could,” “expect,” “anticipate,” “believe,” “estimate,” “intend,” "continue," “strategy,” “future,” “opportunity,” “plan,” “project,” “forecast,” and other similar expressions.

These forward-looking statements involve risks and uncertainties that could cause our actual results and financial condition to differ materially from those expressed or implied in our forward-looking statements.

Such risks and uncertainties include, among others, those discussed in “Item 1A.

Risk Factors” of this Form 10-K, as well as in our consolidated financial statements, related notes, and the other information appearing in this report and our other filings with the Securities and Exchange Commission (“SEC”).

We do not intend, and undertake no obligation except as required by law, to update any of our forward-looking statements after the date of this report to reflect actual results, new information, or future events or circumstances.

Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

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RUSSIA AND UKRAINE CONFLICT

With respect to the military hostilities commenced by Russia in Ukraine in February 2022, our priority is the safety and well-being of our PayPal employee community impacted by these events.

We continue to take actions to comply with all applicable restrictions and sanctions that may impact our operations.

In March 2022, we suspended our transactional services in Russia.

We are unable to reasonably estimate the total potential financial impact that may ultimately result from this situation.

BREXIT

The United Kingdom (“U.K.”) formally exited the European Union (“EU”) and the European Economic Area (“EEA”) on January 31, 2020 (commonly referred to as “Brexit”) with the expiration of the transition period on December 31, 2020.

PayPal (Europe) S.à.r.l.

et Cie, SCA (“PayPal (Europe)”) operates in the U.K. within the scope of its passport permissions (as they stood at the end of the transition period) under the Temporary Permissions Regime pending the grant of new U.K. authorizations by the U.K. financial regulators.

We are currently unable to determine the longer-term impact that Brexit will have on our business, which will depend, in part, on the implications of new tariff, trade, and regulatory frameworks that now govern the provision of cross-border goods and services between the U.K. and the EEA, as well as the financial and operational consequences of the requirement for PayPal (Europe) to obtain new U.K. authorizations to operate its business longer-term within the U.K. market.

For additional information on how Brexit could affect our business, see “Item 1A.

Risk Factors—*Brexit: The U.K.'s departure from the EU could harm our business, financial condition, and results of operations*.”

Brexit may contribute to instability in financial, stock, and foreign currency exchange markets, including volatility in the value of the British Pound and Euro.

We have foreign currency exchange exposure management programs designed to help reduce the impact from foreign currency exchange rate movements.

The tables below provide the percentage of our total net revenues and gross loans and interest receivable from the U.K. and EU for the periods presented:

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Year Ended December 31, | | | | | | | | | | | | | | |

| Net revenues generated from the U.K. | | | 8 | | % | | | | 9 | | % | | | | 11 | | % |

| Net revenues generated from the EU | | | 17 | | % | | | | 19 | | % | | | | 19 | | % |

| Gross loans and interest receivable due from customers in the EU | | | 28 | | % | | | | 21 | | % |

The change in the percentage of gross loans and interest receivable due from customers in the U.K. and EU year over year was primarily attributable to expansion of our installment credit products in the EU, particularly in Germany where we have increased our product offerings.

(1) Prior period amounts have been revised to conform to the current period presentation.

Operating income decreased $425 million, or 10%, in 2022 compared to 2021 due to growth in operating expenses exceeding growth in net revenues.

Our operating margin was 14% and 17% in 2022 and 2021, respectively.

Operating margin for 2022 was negatively impacted primarily by increases in transaction expense and transaction and credit losses.

Net income decreased by $1.8 billion, or 42%, in 2022 as compared to 2021 due to the previously discussed decrease in operating income of $425 million, higher expense of $308 million in other income (expense), net, driven primarily by losses on strategic investments, and an increase in income tax expense of $1.0 billion primarily related to lower benefits associated with stock-based compensation deductions, and higher expense related to intra-group transfers of intellectual property.

Transaction revenues grew by $1.8 billion, or 8%, in 2022 compared to 2021 driven primarily by growth in our unbranded card processing volume, which consists primarily of our Braintree products and services, and to a lesser extent, Venmo products and services, in each case driven by growth in TPV and the number of payment transactions on our payments platform.

Additionally, for the year ended December 31, 2022, transaction revenues included $190 million in contractual compensation from sellers that violated our contractual terms, compared to $82 million in the year ended December 31, 2021.

This contractual compensation and the year-over-year increase are predominantly attributable to activity in international markets.

| [removed: ] [added: ] | | | | | | | | | 53 | | |

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] approximately [removed: 57%] [added: 59%] and [removed: 40%,] [added: 57%,] respectively, of our total cash, cash equivalents, and investment portfolio (excluding restricted cash and strategic investments) was held in cash and cash equivalents.

A hypothetical 100 basis points increase in interest rates would have resulted in a decrease in the fair value of our cash equivalents and available-for-sale debt securities investment by approximately [removed: $161] [added: $122] million and [removed: $272] [added: $161] million at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] we had [removed: $10.4] [added: $10.6] billion and [removed: $9.0] [added: $10.4] billion, respectively, in fixed rate debt with varying maturity dates.

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] we also had revolving credit facilities of approximately [removed: $5.7] [added: $5.6] billion and [removed: $5.2] [added: $5.7] billion, respectively, available to us.

As a result, we are exposed to the risk related to fluctuations in interest [removed: rate] [added: rates] to the extent of our borrowings.

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021, we had ¥64.3] [added: 2022, ¥50.0] billion (approximately [removed: $491] [added: $355] million) and [removed: ¥11.3] [added: ¥64.3] billion (approximately [removed: $98] [added: $491] million), respectively, [added: was] outstanding under these [removed: credit] facilities.

We transact in various foreign currencies and have significant international revenues and [removed: costs.][added: expenses.]

| [removed: ] [added: ] | | | | | | | | | 54 | | |

We designate these contracts as cash flow hedges of forecasted revenues [added: and expenses] denominated in [added: certain] foreign currencies and net investment hedges for accounting purposes.

Cash flow hedges are subsequently reclassified into revenue [added: or expense] in the same period the forecasted transaction affects earnings.

If the U.S. dollar weakened by a hypothetical 10% at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the amount recorded in AOCI related to our foreign currency exchange forward contracts, before taxes, would have been approximately [removed: $710] [added: $622] million and [removed: $512] [added: $710] million lower, respectively, before considering the offsetting impact of the underlying hedged item.

We have an additional foreign currency exchange management program in which we use foreign currency exchange contracts to [added: help] offset the foreign currency exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries.

Adverse changes in exchange rates of a hypothetical 10% for all foreign currencies would have resulted in a negative impact on income before income taxes of approximately [removed: $173] [added: $417] million and [removed: $196] [added: $173] million at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively, without considering the offsetting effect of foreign currency exchange contracts.

Foreign currency exchange contracts in place as of December 31, [removed: 2021] [added: 2023] would have positively impacted income before income taxes by approximately [removed: $203] [added: $400] million, resulting in a net [removed: positive] [added: negative] impact of approximately [removed: $7] [added: $17] million.

As of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] our strategic investments totaled [removed: $2.1] [added: $1.8] billion and [removed: $3.2] [added: $2.1] billion which represented approximately [removed: 14%] [added: 11%] and [removed: 20%] [added: 14%] of our total cash, cash equivalents, and short-term and long-term investment portfolio at each of those respective dates.

As such, we expect volatility to our net income (loss) in future periods due to changes in [removed: fair value related to our investments in marketable equity securities and changes in] observable prices [added: and impairment] related to our non-marketable equity securities accounted for under the Measurement Alternative.

A hypothetical adverse change of 10% in the carrying value of our strategic investments as of December 31, [removed: 2022,] [added: 2023,] which could be experienced in the near term, would have resulted in [removed: an incremental] [added: a] decrease of approximately [removed: $215] [added: $184] million to the carrying value of the portfolio.

Our analysis includes a review of recent operating results and trends, recent purchases and sales of securities, and other publicly available data, for which we assess factors such as the investees’ financial condition and business outlook, industry performance, regulatory, economic, or technological environment, and other relevant events and factors affecting the [removed: investee.][added: investees.]

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We [added: also] believe that our core values help stimulate the creativity and engagement of our global workforce to deliver products and services designed to meet the diverse needs of our customers.

We [removed: also] believe that effective management of [added: non-financial risks and opportunities, including] environmental, social, and governance (“ESG”) [removed: risks and opportunities is essential] [added: topics, helps] to [added: create value for our stakeholders and] deliver on our mission and strategy.

| [removed: ] [added: ] | | | | | | | | | 4 | | |

[removed: ][added: ]

We operate a global, two-sided network at scale that connects merchants and consumers with [removed: 435] [added: 426] million active accounts (consisting of [removed: 400] [added: 391] million consumer active accounts and 35 million merchant active accounts) across [removed: more than] [added: approximately] 200 markets as of December 31, [removed: 2022.][added: 2023.]

We offer our customers the flexibility to use their PayPal or Venmo accounts to [removed: purchase] [added: send] and receive payments for goods and services, as well as the ability to transfer and withdraw funds.

Our [removed: PayPal, Venmo,] [added: PayPal] and [removed: Xoom] [added: Venmo] products also make it safer and simpler for friends and family to transfer funds to each other.

We [removed: also] help merchants connect with their customers, [removed: process exchanges] and [removed: returns,] [added: offer tools] and [added: insights to help increase sales, power omnichannel experiences, and] manage risk.

We [added: also] help reduce the friction typically involved in cross-border commerce by offering consumers a simple payment experience and by enabling merchants to extend their reach to consumers in the global markets in which our services are available.

We also generate revenue from customers [removed: on fees charged] for [removed: foreign] currency conversion, for instant transfers from their PayPal or Venmo account to their bank account or debit card, and to facilitate the purchase and sale of cryptocurrencies; however, we generally do not charge customers to fund or draw from their accounts.

We also earn revenue by providing other [removed: value added] [added: value-added] services, which [removed: are comprised] primarily [removed: of] [added: comprise] revenue earned through partnerships, interest and fees from our merchant and consumer credit products, interest earned on certain assets underlying customer balances, referral fees, subscription fees, and gateway services.

| [removed: ] [added: ] | | | | | | | | | 5 | | |

[removed: ][added: ]

- *Two-sided network—*our payments platform connecting merchants and consumers enables PayPal to offer unique end-to-end product experiences [added: designed to remove friction for consumers and drive sales conversion for merchants] while gaining valuable insights into how our customers use our platform.

| [removed: ] [added: ] | | | | | | | | | 6 | | |

As of December 31, [removed: 2022,] [added: 2023,] we had [removed: 435] [added: 426] million active accounts, consisting of [removed: 400] [added: 391] million consumer active accounts and 35 million merchant active accounts in [removed: more than] [added: approximately] 200 markets around the world.

In [removed: 2022,] [added: 2023,] we processed [removed: $1.36] [added: $1.53] trillion of TPV.

- *Trusted brands—*we have built and strengthened well-recognized and trusted brands, including PayPal, Braintree, [removed: Venmo, Xoom, Hyperwallet, PayPal Zettle, PayPal Honey,] and [removed: Paidy.][added: Venmo.]

- *Risk and compliance management—*our enterprise risk and compliance management program is designed to help [removed: secure] [added: keep] customer information [added: secure] and [removed: to help] ensure we process legitimate transactions around the world, while identifying and minimizing illegal, high-risk, or fraudulent transactions.

We offer alternative payment methods [removed: (including] [added: including] access to credit [removed: solutions),] [added: solutions,] provide fraud prevention and risk management solutions, reduce merchant losses through proprietary protection programs, and offer tools and insights for utilizing data analytics to [added: help merchants] attract and engage customers and improve sales conversion.

We employ a technology and platform agnostic approach intended to enable merchants of all sizes to quickly and easily provide digital checkout online, including through PayPal-branded checkout and unbranded card processing (primarily consisting of Braintree), as well as [removed: in-store] [added: in person] at the point of sale, across all platforms and devices, and to securely and simply receive payments from their customers.

| [removed: ] [added: ] | | | | | | | | | 7 | | |

PayPal’s payments platform enables merchants to accept all types of online and [removed: offline] [added: in person] payments, including those made with the PayPal and Venmo digital wallets, our consumer credit products, credit cards and debit cards, and competing digital wallets, as well as other popular local payment methods.

We [removed: aim to] offer a seamless, [removed: omni-channel] [added: omnichannel] solution that helps merchants manage and grow their business.

We offer access to merchant [removed: finance] [added: financing] products for [removed: certain] [added: eligible] small and medium-sized businesses through the PayPal Working Capital and PayPal Business Loan products, which we collectively refer to as our merchant [removed: finance offerings.][added: financing solutions.]

The PayPal Working Capital product allows businesses to access a loan or cash advance for a fixed [removed: fee and] [added: fee,] based on their annual payment volume processed by PayPal.

The PayPal Business Loan product provides businesses with [added: access to] short-term financing for a fixed fee [added: or interest] based on an evaluation of both the applying business as well as the business owner.

We believe that our merchant [removed: finance offerings] [added: financing solutions] enable us to deepen our engagement with our existing small and medium-sized merchants and expand services to new merchants by providing access to capital that may not be available from traditional banks or other [removed: lending providers.][added: lenders.]

We focus on providing affordable, convenient, and secure consumer financial products and services intended to [removed: democratize] [added: facilitate] the management and movement of money.

We also offer consumers P2P payment solutions [added: for domestic and international transfers] through our PayPal, Venmo, and Xoom products and services.

We also focus on simplifying and personalizing shopping experiences for our consumers by offering tools for product discovery, price tracking, [added: saving through deals and] offers, convenient [removed: tracking] [added: package tracking,] and redemption [removed: options for their] [added: of] shopping rewards, [removed: and easier exchanges and returns,] which help our merchants to increase consumer engagement and sales conversion.

We offer credit products to [added: eligible] consumers in certain markets as a funding source at [removed: checkout, subject to approval of credit for the account holder.][added: checkout.]

Our consumer credit offerings include our buy now, pay later products in the U.S., United Kingdom (“U.K.”), France, and Germany, among [removed: others,] [added: other markets,] and in Japan through [removed: Paidy.][added: our Paidy brand.]

Further, we offer [removed: consumer] interest-bearing installment products for consumers in the [removed: U.S., issued] [added: U.S. (issued] by an independent chartered financial [removed: institution,] [added: institution)] and in Germany.

We offer a PayPal-issued PayPal Credit product in the U.K. We believe that our consumer credit products help [removed: enable] us to increase engagement with consumers and merchants on our two-sided network.

We have expanded our consumer value proposition through enhancements to the PayPal and Venmo digital wallets, which provide functionality to enable consumers to more easily [removed: checkout,] [added: check out,] explore deals and offers, track and redeem rewards, and to transact with [added: certain] cryptocurrencies, including buying, holding, selling, sending, and receiving them in certain markets.

Our goal is to drive increased consumer engagement by providing consumers with a [removed: comprehensive set] [added: wide range] of services to manage their finances and enhance their ability to shop online and in person.

| [removed: ] [added: ] | | | | | | | | | 8 | | |

We generate revenue from consumers [removed: on: fees charged for] [added: from:] foreign currency [removed: conversion,] [added: conversions,] instant transfers from their PayPal or Venmo account to their bank account or debit card, and [removed: to facilitate] [added: facilitating] the purchase and sale of cryptocurrencies; interest, fees, or other revenue from our credit products; and other miscellaneous fees.

Protecting merchants and consumers on our payments platform from financial and fraud loss is important to successfully [removed: competing] [added: compete] and sustainably [removed: growing] [added: grow] our business.


In late 2023, we reorganized our operations to be more closely aligned to the customers we serve—consumers, small businesses, and large enterprises—and to help enable our teams to deliver more seamless and differentiated end-to-end experiences.

By offering simplified and personalized shopping experiences for consumers, we help merchants drive increased engagement and sales conversion.

Our protection programs help protect both merchants and consumers from financial loss resulting from, among other things, counterparty non-performance.

Our products and services also face competition from paper-based payments (primarily cash and checks).

*Financial Services supervision*.

We serve our customers in the U.K. through PayPal U.K. Limited (“PayPal U.K.”), a wholly-owned subsidiary that is subject to regulation as an electronic money institution in the U.K. by the FCA.

*Interchange fees.* Interchange fees (the transaction fees for processing credit and debit card transactions) are subject to regulation in certain jurisdictions.

A year after launch, 78% of employees responding to a global survey reported that the leadership principles are now part of their day-to-day work.

This year, our 2023 annual employee survey was conducted in September, between the announcement of the appointment of Alex Chriss as PayPal’s new CEO and his assumption of the role.

We promote employee financial wellness, including by offering individual employee financial coaching.

In 2023, we continued our support for underrepresented communities and employees, including through activities such as inclusion-focused employee learning modules and our enterprise-wide sponsorship program.

Our core values of Inclusion, Innovation, Collaboration, and Wellness, reflected in our leadership principles, are the driving forces behind our mission and form the foundation of our operating philosophy.

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During 2022, we reorganized our product organization to better align with merchants and consumers to help simplify decision making and enable our teams to innovate and launch new products and features more quickly and efficiently.

We have expanded our merchant value proposition to enable payment acceptance at the point of sale through our PayPal and Venmo digital wallets and our PayPal Zettle point of sale solutions.

Through our consumer-focused offerings, we provide simplified and personalized shopping experiences for consumers, including easier exchanges and returns, to help merchants drive increased conversion through higher consumer engagement.

We enable both domestic and international P2P transfers across our payments platform.

We compete with a wide range of businesses.

Some of our current and potential competitors are or may be larger than we are, have larger customer bases, greater brand recognition, longer operating histories, a dominant or more secure position, broader geographic scope, volume, scale, resources, and market share than we do, or offer products and services that we do not offer.

Other competitors are or may be smaller or younger companies that may be more agile in responding to regulatory and technological changes and customer preferences.

Our products and services face competition from all forms of payments, which include paper-based payments (primarily cash and checks), credit cards, debit cards, electronic bank transfers, account-to-account payments, credit, installment methods, digital wallets and mobile payment solutions, contactless payments (including contactless cards, tokenized cards, Near Field Communication (NFC) based solutions, and Quick Response (QR) code-based solutions), and virtual currencies, such as cryptocurrencies and stablecoins.

*Banking agency supervision*.

PayPal holds multiple state licenses as the lender of this product.


Additionally, we observed improvements in employee scores regarding collaboration and manager support.

In 2022, we enhanced our survey to incorporate viewpoints on the employee experience, diversity, inclusion, equity, and belonging (“DIE&B”) efforts, and our leadership principles, including specific questions on working style and strategic direction.

The detailed scores are shared across the organization and analyzed to understand differences by geography, demographics, business function, and job level, and to help identify opportunities for further improvement.

We also continued our efforts to strengthen employee financial wellness, including offering individual employee financial coaching, promoting the prioritization of employee financial health across the private sector through the Worker Financial Wellness Initiative, and improving our internal measurement and evaluation approaches to identify targeted opportunities for further enhancements.

Through the leadership of our Global Head of DIE&B and dedicated DIE&B team, along with functional collaboration and accountability, we are focused on strengthening existing efforts and piloting new initiatives to promote an inclusive culture.

In 2022, we continued our support for underrepresented communities and employees through activities such as enhanced strategic partnerships, new learning modules to promote effective sponsorship and inclusive performance management, and new tools and resources to incorporate DIE&B considerations across the business.

These groups drive ongoing employee engagement around the world for all employees, regardless of background, to support and champion their peers and related causes.

As part of our annual ESG reporting, we provide additional information on our global talent strategy, including detailed representation metrics, in our Global Impact Report.

|  | | | | | | | | | 16 | | |

The information set forth under “Note 13—Commitments and [removed: Contingencies—Litigation] [added: Contingencies—*Litigation] and Regulatory [removed: Matters”] [added: Matters*”] to the consolidated financial statements included in Part IV, Item 15 of this Form 10-K is incorporated herein by reference.

For the fiscal year ended December 31, [removed: 2022.][added: 2023.]

[removed: ][added: ]

As of June 30, [removed: 2022,] [added: 2023,] the aggregate market value of the registrant’s common stock held by non-affiliates of the registrant was approximately [removed: $80.7] [added: $73.4] billion based on the closing sale price as reported on the NASDAQ Global Select Market.

As of February [removed: 3, 2023,] [added: 1, 2024,] there were [removed: 1,131,373,298] [added: 1,071,741,864] shares of common stock outstanding.

Portions of the registrant’s definitive proxy statement for its [removed: 2023] [added: 2024] Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein.

Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, [removed: 2022.][added: 2023.]

| Item 1. | | | [removed: [Business](#i9e4dafd0cefd4f3ca6a7b3807735d972_16)] [added: [Business](#i1f56b845cf89409c91714e0acd7818b5_16)] | | | [removed: [4](#i9e4dafd0cefd4f3ca6a7b3807735d972_16)] [added: [4](#i1f56b845cf89409c91714e0acd7818b5_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i9e4dafd0cefd4f3ca6a7b3807735d972_19)] [added: Factors](#i1f56b845cf89409c91714e0acd7818b5_19)] | | | [removed: [17](#i9e4dafd0cefd4f3ca6a7b3807735d972_19)] [added: [16](#i1f56b845cf89409c91714e0acd7818b5_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i9e4dafd0cefd4f3ca6a7b3807735d972_22)] [added: Comments](#i1f56b845cf89409c91714e0acd7818b5_22)] | | | [removed: [31](#i9e4dafd0cefd4f3ca6a7b3807735d972_22)] [added: [30](#i1f56b845cf89409c91714e0acd7818b5_22)] | | |

| Item 2. | | | [removed: [Properties](#i9e4dafd0cefd4f3ca6a7b3807735d972_25)] [added: [Properties](#i1f56b845cf89409c91714e0acd7818b5_25)] | | | [removed: [31](#i9e4dafd0cefd4f3ca6a7b3807735d972_25)] [added: [32](#i1f56b845cf89409c91714e0acd7818b5_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i9e4dafd0cefd4f3ca6a7b3807735d972_28)] [added: Proceedings](#i1f56b845cf89409c91714e0acd7818b5_28)] | | | [removed: [32](#i9e4dafd0cefd4f3ca6a7b3807735d972_28)] [added: [33](#i1f56b845cf89409c91714e0acd7818b5_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i9e4dafd0cefd4f3ca6a7b3807735d972_31)] [added: Disclosures](#i1f56b845cf89409c91714e0acd7818b5_31)] | | | [removed: [32](#i9e4dafd0cefd4f3ca6a7b3807735d972_31)] [added: [33](#i1f56b845cf89409c91714e0acd7818b5_31)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity [removed: Securities](#i9e4dafd0cefd4f3ca6a7b3807735d972_37)] [added: Securities](#i1f56b845cf89409c91714e0acd7818b5_37)] | | | [removed: [32](#i9e4dafd0cefd4f3ca6a7b3807735d972_37)] [added: [33](#i1f56b845cf89409c91714e0acd7818b5_37)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i9e4dafd0cefd4f3ca6a7b3807735d972_46)] [added: Operations](#i1f56b845cf89409c91714e0acd7818b5_46)] | | | [removed: [33](#i9e4dafd0cefd4f3ca6a7b3807735d972_46)] [added: [34](#i1f56b845cf89409c91714e0acd7818b5_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i9e4dafd0cefd4f3ca6a7b3807735d972_61)] [added: Risk](#i1f56b845cf89409c91714e0acd7818b5_64)] | | | [removed: [53](#i9e4dafd0cefd4f3ca6a7b3807735d972_61)] [added: [53](#i1f56b845cf89409c91714e0acd7818b5_64)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i9e4dafd0cefd4f3ca6a7b3807735d972_64)] [added: Data](#i1f56b845cf89409c91714e0acd7818b5_67)] | | | [removed: [55](#i9e4dafd0cefd4f3ca6a7b3807735d972_64)] [added: [55](#i1f56b845cf89409c91714e0acd7818b5_67)] | | |

| Item 9. | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i9e4dafd0cefd4f3ca6a7b3807735d972_67)] [added: Disclosure](#i1f56b845cf89409c91714e0acd7818b5_70)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_67)] [added: [55](#i1f56b845cf89409c91714e0acd7818b5_70)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i9e4dafd0cefd4f3ca6a7b3807735d972_70)] [added: Procedures](#i1f56b845cf89409c91714e0acd7818b5_73)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_70)] [added: [55](#i1f56b845cf89409c91714e0acd7818b5_73)] | | |

| Item 9B. | | | [Other [removed: Information](#i9e4dafd0cefd4f3ca6a7b3807735d972_73)] [added: Information](#i1f56b845cf89409c91714e0acd7818b5_76)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_73)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_76)] | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i9e4dafd0cefd4f3ca6a7b3807735d972_76)] [added: Inspections](#i1f56b845cf89409c91714e0acd7818b5_79)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_76)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_79)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i9e4dafd0cefd4f3ca6a7b3807735d972_82)] [added: Governance](#i1f56b845cf89409c91714e0acd7818b5_85)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_82)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_85)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i9e4dafd0cefd4f3ca6a7b3807735d972_85)] [added: Compensation](#i1f56b845cf89409c91714e0acd7818b5_88)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_85)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_88)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i9e4dafd0cefd4f3ca6a7b3807735d972_88)] [added: Matters](#i1f56b845cf89409c91714e0acd7818b5_91)] | | | [removed: [56](#i9e4dafd0cefd4f3ca6a7b3807735d972_88)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_91)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i9e4dafd0cefd4f3ca6a7b3807735d972_91)] [added: Independence](#i1f56b845cf89409c91714e0acd7818b5_94)] | | | [removed: [57](#i9e4dafd0cefd4f3ca6a7b3807735d972_91)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_94)] | | |

| Item 14. | | | [Principal [removed: Accounting Fees] [added: Account](#i1f56b845cf89409c91714e0acd7818b5_97)[a](#i1f56b845cf89409c91714e0acd7818b5_97)[nt](#i1f56b845cf89409c91714e0acd7818b5_97) [Fees] and [removed: Services](#i9e4dafd0cefd4f3ca6a7b3807735d972_94)] [added: Services](#i1f56b845cf89409c91714e0acd7818b5_97)] | | | [removed: [57](#i9e4dafd0cefd4f3ca6a7b3807735d972_94)] [added: [56](#i1f56b845cf89409c91714e0acd7818b5_97)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i9e4dafd0cefd4f3ca6a7b3807735d972_100)] [added: Schedules](#i1f56b845cf89409c91714e0acd7818b5_103)] | | | [removed: [58](#i9e4dafd0cefd4f3ca6a7b3807735d972_100)] [added: [57](#i1f56b845cf89409c91714e0acd7818b5_103)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i9e4dafd0cefd4f3ca6a7b3807735d972_187)] [added: Summary](#i1f56b845cf89409c91714e0acd7818b5_193)] | | | [removed: [126](#i9e4dafd0cefd4f3ca6a7b3807735d972_187)] [added: [123](#i1f56b845cf89409c91714e0acd7818b5_193)] | | |

This report [removed: contains] [added: may contain] additional trade names and trademarks of other companies.

| Item 1C. | | | [C](#i1f56b845cf89409c91714e0acd7818b5_1666)[y](#i1f56b845cf89409c91714e0acd7818b5_1666)[b](#i1f56b845cf89409c91714e0acd7818b5_1666)[er](#i1f56b845cf89409c91714e0acd7818b5_1666)[secu](#i1f56b845cf89409c91714e0acd7818b5_1666)[rity](#i1f56b845cf89409c91714e0acd7818b5_1666) | | | [31](#i1f56b845cf89409c91714e0acd7818b5_1666) | | |

| Item 6. | | | [\[Reserved\]](#i1f56b845cf89409c91714e0acd7818b5_40) | | | [34](#i1f56b845cf89409c91714e0acd7818b5_40) | | |

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

| Item 6. | | | [Removed and Reserved](#i9e4dafd0cefd4f3ca6a7b3807735d972_40) | | | [33](#i9e4dafd0cefd4f3ca6a7b3807735d972_40) | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

|  | | | | | | | | | 30 | | |

CYBERSECURITY RISK MANAGEMENT AND STRATEGY

Our Information Security Program is designed to support the Company in identifying, protecting, detecting, responding to, and recovering from cybersecurity threats and incidents (collectively, “cybersecurity risks”) with the intention to protect the confidentiality, integrity, and availability of our critical systems and information.

We design and regularly assess our Information Security Program guided by National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and ISO standards (including ISO 27001), proprietary controls and industry best practices.

Our Information Security Program is built on a three lines of defense model integrated into our overall Enterprise Risk and Compliance Management Program (“ERCM Program”).

It shares common methodologies, reporting channels, and governance processes that apply across the ERCM Program to other legal, compliance, strategic, operational, and financial risk areas.

The Program is governed by the Technology, Information Security, and Privacy Risk Management Committee and overseen by our Board of Directors (“Board”) and its Audit, Risk and Compliance Committee (“ARC Committee”).

The three lines of defense model is designed to provide a structure for risk accountability in the first line of defense (“FLOD”), effective challenge by the second line of defense (“SLOD”), and independent risk assurance by the third line of defense (“TLOD”).

Our Office of the Chief Information Security Officer serves as FLOD and provides operational and technical controls and capabilities to protect against cybersecurity risks.

The Technology and Information Security team serves as SLOD and provides independent oversight of our technology and cybersecurity risk mitigation practices and capabilities.

As TLOD, Internal Audit independently assesses the effectiveness of our first and second line of defense organizations in managing cybersecurity risk and independently reports the results of audits to our ARC Committee to assist it in its oversight duties.

Our Information Security Program includes:

- Risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise Information Technology (“IT”) environment;

- Regular testing of our systems to identify and address potential vulnerabilities;

- Integrated planning and preparedness activities supporting business continuity and operational resiliency;

- Security teams principally responsible for managing (1) our annual cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

- A cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents;

- 24/7 monitoring and measurement of cybersecurity threats through our PayPal Cyber Defense Center (“CDC”);

- The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security controls;

- An information training and awareness program for our employees, contractors, incident response personnel, and senior management; and

- A third-party risk management framework designed to monitor and address risks from cybersecurity incidents of service providers, suppliers, and vendors that includes due diligence over third-party’s information security and technology control environment at onboarding and periodically throughout the lifecycle of the relationship.

In addition, our standard contractual terms require notification and communication from third parties in the event of a cybersecurity incident.

We maintain procedures to respond to, manage and mitigate third-party cybersecurity events and vulnerabilities when identified.

For a description of risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition, see “Item 1A.

Risk Factors” under the captions “*Cyberattacks and security vulnerabilities could result in serious harm to our reputation, business, and financial condition*” and “*Business interruptions or systems failures may impair the availability of our websites, applications, products or services, or otherwise harm our business.*”

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

|  | | | | | | | | | 31 | | |

CYBERSECURITY GOVERNANCE

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to our ARC Committee oversight of cybersecurity and other information technology risks.

The ARC Committee oversees PayPal’s overall risk framework, including management’s implementation of our cybersecurity risk management program, and reports to the full Board of Directors on a regular basis on cybersecurity and information technology risk management.

The ARC Committee receives periodic reports from the Chief Information Security Officer (“CISO”) on our cybersecurity risks.

Our CISO has numerous years of experience at PayPal and other organizations building security products, managing security infrastructure, providing a variety of security services, and overseeing incident response and management, escalation of security events, vulnerability scanning, and security defect management.

Management also updates the ARC Committee, as necessary, regarding cybersecurity incidents.

The ARC Committee reports to the Board regarding its activities, including those related to cybersecurity risk oversight.

The Board also receives briefings at least annually from management on our Information Security Program.

Board members receive presentations on cybersecurity topics from our CISO and external experts from time to time as part of our continuing education to Board on topics relevant to their service as a member of our Board.

Our cybersecurity teams, overseen by our CISO, are responsible for assessing and managing our risks from cybersecurity threats, including defining security policy and board reporting of security risk.

The CISO approves all security policies and oversees the identification, assessment, and management of cybersecurity risks, which provides a proactive and comprehensive approach to safeguarding our information assets.

The teams have primary responsibility for our overall Information Security Program and supervise both our internal cybersecurity personnel and our external cybersecurity consultants.

Our cybersecurity teams’ experience includes cybersecurity incident response, in-depth security assessments and security emulation exercises to evaluate security profile, security research, education and outreach, and security tool development.

We use these properties for executive and administrative offices, customer services and operations centers, product development offices, [removed: warehouses,] and data centers.

As of December 31, [removed: 2022,] [added: 2023,] our owned and leased properties provided us with aggregate square footage as follows:

We own a total of approximately [removed: 106] [added: 70] acres of land, with approximately [removed: 85] [added: 49] acres in the U.S. Our corporate headquarters are located in San Jose, California and occupy approximately 0.7 million of owned square feet.

| [removed: ] [added: ] | | | | | | | | | [removed: 31] [added: 32] | | |

| Owned facilities | | | 0.7 | | | | | | 0.2 | | | | | | 0.9 | | |

| Leased facilities | | | 1.3 | | | | | | 1.6 | | | | | | 2.9 | | |

| Total facilities | | | 2.0 | | | | | | 1.8 | | | | | | 3.8 | | |

| Owned facilities | | | 1.0 | | | | | | 0.1 | | | | | | 1.1 | | |

| Leased facilities | | | 2.2 | | | | | | 2.0 | | | | | | 4.2 | | |

| Total facilities | | | 3.2 | | | | | | 2.1 | | | | | | 5.3 | | |

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

As of February [removed: 3, 2023,] [added: 1, 2024,] there were [removed: 4,123] [added: 3,942] holders of record of our common stock.

In [removed: July 2018,] [added: June 2022,] our Board of Directors authorized a stock repurchase program that provides for the repurchase of up to [removed: $10] [added: $15] billion of our common stock, with no expiration from the date of authorization.

Our stock repurchase [removed: programs are] [added: program is] intended to offset the impact of dilution from our equity compensation programs and, subject to market conditions and other factors, may also be used to make opportunistic repurchases of our common stock to reduce outstanding share count.

Any share repurchases under our stock repurchase [removed: programs] [added: program] may be made through open market transactions, block trades, privately negotiated [removed: transactions] [added: transactions,] including accelerated share repurchase agreements or other means at times and in such amounts as management deems appropriate, and will be funded from our working capital or other financing alternatives.

We may terminate our stock repurchase [removed: programs] [added: program] at any time without prior notice.

The stock repurchase activity under our stock repurchase [removed: programs] [added: program] during the three months ended December 31, [removed: 2022] [added: 2023] is summarized as follows:

(1) Average price paid per share for open market purchases includes broker [removed: commissions.][added: commissions, but excludes excise tax.]

| [removed: ] [added: ] | | | | | | | | | [removed: 32] [added: 33] | | |

| Balance as of September 30, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 11,466 | |

| October 1, 2023 through October 31, 2023 | | | 1.8 | | | | | | $ | 58.13 | | | | | 1.8 | | | | | | | | | | | | 11,359 | | |

| November 1, 2023 through November 30, 2023 | | | 1.9 | | | | | | $ | 57.45 | | | | | 1.9 | | | | | | | | | | | | 11,247 | | |

| December 1, 2023 through December 31, 2023 | | | 6.4 | | | | | | $ | 60.37 | | | | | 6.4 | | | | | | | | | | | | 10,859 | | |

| Balance as of December 31, 2023 | | | 10.1 | | | | | | | | | | | | 10.1 | | | | | | | | | | | | $ | 10,859 | |

In June 2022, our Board of Directors authorized an additional stock repurchase program that provides for the repurchase of up to $15 billion of our common stock, with no expiration from the date of authorization.

| Balance as of September 30, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | 16,871 | |

| October 1, 2022 through October 31, 2022 | | | 8.2 | | | | | | $ | 85.81 | | | | | 8.2 | | | | | | | | | | | | 16,167 | | |

| November 1, 2022 through November 30, 2022 | | | 3.6 | | | | | | $ | 85.42 | | | | | 3.6 | | | | | | | | | | | | 15,861 | | |

| December 1, 2022 through December 31, 2022 | | | — | | | | | | $ | — | | | | | — | | | | | | | | | | | | 15,861 | | |

| Balance as of December 31, 2022 | | | 11.8 | | | | | | | | | | | | 11.8 | | | | | | | | | | | | $ | 15,861 | |

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

The audited consolidated financial statements covering the years ended December 31, [added: 2023,] 2022, [removed: 2021,] and [removed: 2020] [added: 2021] and accompanying notes listed in Part IV, Item 15(a)(1) of this Form 10‑K are included in this report.

*Evaluation of disclosure controls and procedures.* Based on the evaluation of our disclosure controls and procedures (as defined in the Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), our principal executive officer and our principal financial officer have concluded that as of December 31, [removed: 2022,] [added: 2023,] the end of the period covered by this report, our disclosure controls and procedures were effective.

Based on its evaluation under the framework in *Internal Control - Integrated Framework*, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2022.][added: 2023.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in Item 15(a) of this Form 10-K.

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|  | | | | | | | | | 55 | | |

RULE 10B5-1 TRADING PLANS

An equity trading plan is a written document that preestablishes the amounts, prices and dates (or formula for determining the amounts, prices and dates) of future purchases or sales of the Company’s stock, including sales of shares acquired under the Company’s employee and director equity plans.

On December 7, 2023, Jonathan Auerbach entered into an equity trading plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act.

Mr. Auerbach was serving as an executive officer of the Company at the time the trading plan was adopted.

The trading plan has a duration of March 7, 2024 to September 10, 2024 with approximately 85,839 shares (vested and net shares expected to vest over the duration of the trading plan) subject to sale under the plan.

None.

Incorporated by reference from our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, [removed: 2022.][added: 2023.]

Incorporated by reference from our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, [removed: 2022.][added: 2023 (excluding the information under the subheading “Pay Versus Performance”).]

Incorporated by reference from our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, [removed: 2022.][added: 2023.]

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

|  | | | | | | | | | 56 | | |

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

Incorporated by reference from our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, [removed: 2022.][added: 2023.]

Incorporated by reference from our Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders to be filed with the SEC within 120 days after December 31, [removed: 2022.][added: 2023.]

| [removed: ] [added: ] | | | | | | | | | [removed: 57] [added: 56] | | |

[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

| [Report of Independent Registered Public Accounting [removed: Firm](#i9e4dafd0cefd4f3ca6a7b3807735d972_103)] [added: Firm](#i1f56b845cf89409c91714e0acd7818b5_106)] (PCAOB ID 238) | | | [removed: [59](#i9e4dafd0cefd4f3ca6a7b3807735d972_103)] [added: [58](#i1f56b845cf89409c91714e0acd7818b5_106)] | | |

| [Consolidated Balance [removed: Sheets](#i9e4dafd0cefd4f3ca6a7b3807735d972_106)] [added: Sheets](#i1f56b845cf89409c91714e0acd7818b5_109)] | | | [removed: [61](#i9e4dafd0cefd4f3ca6a7b3807735d972_106)] [added: [60](#i1f56b845cf89409c91714e0acd7818b5_109)] | | |

| [Consolidated Statements of Income [removed: (Loss)](#i9e4dafd0cefd4f3ca6a7b3807735d972_109)] [added: (Loss)](#i1f56b845cf89409c91714e0acd7818b5_112)] | | | [removed: [62](#i9e4dafd0cefd4f3ca6a7b3807735d972_109)] [added: [61](#i1f56b845cf89409c91714e0acd7818b5_112)] | | |

| [Consolidated Statements of Comprehensive Income [removed: (Loss)](#i9e4dafd0cefd4f3ca6a7b3807735d972_112)] [added: (Loss)](#i1f56b845cf89409c91714e0acd7818b5_115)] | | | [removed: [63](#i9e4dafd0cefd4f3ca6a7b3807735d972_112)] [added: [62](#i1f56b845cf89409c91714e0acd7818b5_115)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#i9e4dafd0cefd4f3ca6a7b3807735d972_115)] [added: Equity](#i1f56b845cf89409c91714e0acd7818b5_118)] | | | [removed: [64](#i9e4dafd0cefd4f3ca6a7b3807735d972_115)] [added: [63](#i1f56b845cf89409c91714e0acd7818b5_118)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i9e4dafd0cefd4f3ca6a7b3807735d972_118)] [added: Flows](#i1f56b845cf89409c91714e0acd7818b5_121)] | | | [removed: [65](#i9e4dafd0cefd4f3ca6a7b3807735d972_118)] [added: [64](#i1f56b845cf89409c91714e0acd7818b5_121)] | | |

[removed: | [Notes to Consolidated Financial Statements](#i9e4dafd0cefd4f3ca6a7b3807735d972_121) | | | [67](#i9e4dafd0cefd4f3ca6a7b3807735d972_121) | | |][added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)]

| [Schedule II—Valuation and Qualifying [removed: Accounts](#i9e4dafd0cefd4f3ca6a7b3807735d972_181)] [added: Accounts](#i1f56b845cf89409c91714e0acd7818b5_187)] | | | [removed: [121](#i9e4dafd0cefd4f3ca6a7b3807735d972_181)] [added: [122](#i1f56b845cf89409c91714e0acd7818b5_187)] | | |

| [3. Exhibits Required by Item 601 of Regulation [removed: S-K](#i9e4dafd0cefd4f3ca6a7b3807735d972_184)] [added: S-K](#i1f56b845cf89409c91714e0acd7818b5_190)] | | | [removed: [122](#i9e4dafd0cefd4f3ca6a7b3807735d972_184)] [added: [123](#i1f56b845cf89409c91714e0acd7818b5_190)] | | |

| [removed: ] [added: ] | | | | | | | | | [removed: 58] [added: 57] | | |

We have audited the accompanying consolidated balance sheets of PayPal Holdings, Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of income (loss), of comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] including the related notes and [added: financial statement] schedule [removed: of valuation and qualifying accounts for each of the three years in the period ended December 31, 2022] listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

| [removed: ] [added: ] | | | | | | | | | [removed: 59] [added: 58] | | |

As described in Notes 1 and 11 to the consolidated financial statements, as of December 31, [removed: 2022,] [added: 2023,] the Company recorded total loans and interest receivable of [removed: $7,431] [added: $5,433] million, net of an allowance of [removed: $598] [added: $540] million.

The principal considerations for our determination that performing procedures relating to the allowance for loans receivable is a critical audit matter are (i) the high degree of auditor subjectivity and effort in performing procedures and evaluating audit evidence relating to certain models which apply macroeconomic forecasts to estimate expected credit losses; and (ii) the audit effort involved [removed: in] the use of professionals with specialized skill and knowledge.

| [removed: ] [added: ] | | | | | | | | | [removed: 60] [added: 59] | | |

| | | | [added: 2023 | | | | | |] 2022 | | | | | | 2021 | | |

| Cash and cash equivalents | | | $ | [added: 9,081 | | | | | $ |] 7,776 | | | | | $ | 5,197 | |

| Short-term investments | | | [removed: 3,092] [added: 4,979] | | | | | | [removed: 4,303] [added: 3,092] | | |

| Accounts receivable, net | | | [removed: 963] [added: 1,069] | | | | | | [removed: 800] [added: 963] | | |

| Loans and interest receivable, net of allowances of [removed: $598] [added: $540] and [removed: $491] [added: $598] as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | [removed: 7,431] [added: 5,433] | | | | | | [removed: 4,846] [added: 7,431] | | |

| Funds receivable and customer [removed: accounts] [added: accounts(3):] | | | [removed: 36,357] | | | | | | [removed: 36,141] | | | [added: | | | | | | | | |]

| Prepaid expenses and other current assets | | | [removed: 1,898] [added: 2,509] | | | | | | [removed: 1,287] [added: 1,898] | | |

| Total current assets | | | [removed: 57,517] [added: 62,569] | | | | | | [removed: 52,574] [added: 57,424] | | |

| Long-term investments | | | [removed: 5,018] [added: 3,273] | | | | | | [removed: 6,797] [added: 5,018] | | |

| Property and equipment, net | | | [removed: 1,730] [added: 1,488] | | | | | | [removed: 1,909] [added: 1,730] | | |

| Goodwill | | | [removed: 11,209] [added: 11,026] | | | | | | [removed: 11,454] [added: 11,209] | | |

| Intangible assets, net | | | [removed: 788] [added: 537] | | | | | | [removed: 1,332] [added: 788] | | |

| Other assets | | | [removed: 2,455] [added: 3,273] | | | | | | [removed: 1,737] [added: 2,455] | | |

| Accounts payable | | | $ | [removed: 126] [added: 139] | | | | | $ | [removed: 197] [added: 126] | |

| Funds payable and amounts due to customers | | | [removed: 40,107] [added: 41,935] | | | | | | [removed: 38,841] [added: 40,014] | | |

| Accrued expenses and other current liabilities | | | [removed: 4,055] [added: 6,392] | | | | | | [removed: 3,755] [added: 4,868] | | |

| Total current liabilities | | | [removed: 45,101] [added: 48,466] | | | | | | [removed: 43,029] [added: 45,008] | | |

| [removed: Deferred tax liability and other] [added: Other] long-term liabilities | | | [removed: 2,925] [added: 2,973] | | | | | | [removed: 2,998] [added: 2,925] | | |

| Long-term debt | | | [removed: 10,417] [added: 9,676] | | | | | | [removed: 8,049] [added: 10,417] | | |

| Common stock, $0.0001 par value; 4,000 shares authorized; [removed: 1,136] [added: 1,072] and [removed: 1,168] [added: 1,136] shares outstanding as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | — | | | | | | — | | |

| Treasury stock at cost, [removed: 173] [added: 245] and [removed: 132] [added: 173] shares as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively | | | [removed: (16,079)] [added: (21,045)] | | | | | | [removed: (11,880)] [added: (16,079)] | | |

| Additional paid-in-capital | | | [removed: 18,327] [added: 19,642] | | | | | | [removed: 17,208] [added: 18,327] | | |

| [Notes to Consolidated Financial Statements](#i1f56b845cf89409c91714e0acd7818b5_124) | | | [66](#i1f56b845cf89409c91714e0acd7818b5_124) | | |

February 7, 2024

| | | | 2023 | | | | | | 2022 | | |

| Loans and interest receivable, held for sale | | | 563 | | | | | | — | | |

| Total assets | | | $ | 82,166 | | | | | $ | 78,624 | |

| Total liabilities | | | 61,115 | | | | | | 58,350 | | |

| Net income (loss) | | | $ | 4,246 | | | | | $ | 2,419 | | | | | $ | 4,169 | |

| Unrealized gains (losses) on available-for-sale debt securities, net | | | 457 | | | | | | (504) | | | | | | (98) | | |

| Unrealized losses on available-for-sale debt securities, net | | | — | | | | | | — | | | | | | — | | | | | | (98) | | | | | | — | | | | | | — | | | | | | (98) | | |

| Unrealized gains on available-for-sale debt securities, net | | | — | | | | | | — | | | | | | — | | | | | | 457 | | | | | | — | | | | | | — | | | | | | 457 | | |

| Tax expense on unrealized gains on available-for-sale debt securities, net | | | — | | | | | | — | | | | | | — | | | | | | (108) | | | | | | — | | | | | | — | | | | | | (108) | | |

| Treasury stock reissuance | | | 1 | | | | | | 80 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 80 | | |

| Balances at December 31, 2023 | | | 1,072 | | | | | | $ | (21,045) | | | | | $ | 19,642 | | | | | $ | (746) | | | | | $ | 23,200 | | | | | $ | — | | | | | $ | 21,051 | |

| Net income (loss) | | | $ | 4,246 | | | | | $ | 2,419 | | | | | $ | 4,169 | |

| Transaction and credit losses | | | 1,682 | | | | | | 1,572 | | | | | | 1,060 | | |

| Gain on divestiture of business, excluding transaction costs | | | (356) | | | | | | — | | | | | | — | | |

| Accretion of discounts on investments, net of amortization of premiums | | | (367) | | | | | | (70) | | | | | | 73 | | |

| Adjustments to loans and interest receivable, held for sale | | | 53 | | | | | | — | | | | | | — | | |

| Other | | | (104) | | | | | | 275 | | | | | | 27 | | |

| Originations of loans receivable, held for sale | | | (11,470) | | | | | | — | | | | | | — | | |

| Proceeds from repayments and sales of loans receivable, originally classified as held for sale | | | 10,795 | | | | | | — | | | | | | — | | |

| Proceeds from repayments and sales of loans receivable, originally classified as held for investment | | | 26,660 | | | | | | 24,903 | | | | | | 11,826 | | |

| Proceeds from divestiture of business, net of cash divested | | | 466 | | | | | | — | | | | | | — | | |

As of December 31, 2023 and December 31, 2022, no VIEs qualified for consolidation as the structures of these entities do not provide us with the ability to direct activities that would significantly impact their economic performance.

Accounts receivable is primarily related to revenue earned from customers and is reduced by an allowance for credit losses.

For the years ended December 31, 2023 and 2022, the allowance for credit losses was not significant.

Accounts receivable deemed uncollectible are charged against the allowance for credit losses when identified.

Loans and interest receivable, held for sale

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 receivable and a forward-flow arrangement for the sale of future originations of eligible loans over a 24-month commitment period (together, “eligible consumer installment receivables”).

Following the sale, the global investment firm becomes the owner of the eligible consumer installment receivables sold and we no longer hold an ownership interest in these receivables.

These sales of eligible consumer installment receivables to the global investment firm are accounted for as a true sale based on our determination that these receivables met all the necessary criteria for such accounting including legal isolation for transferred assets, ability of the transferee to pledge or exchange the transferred assets without constraint, and the transfer of control, and thus, we no longer record these receivables on our consolidated financial statements.

We also concluded that our continuing involvement in the arrangement does not invalidate this determination.

We maintain the servicing rights for the entire pool of the consumer installment receivables sold and receive a market-based service fee for servicing the assets sold.

Prior to the decision to sell, this portfolio was reported at outstanding principal balances, including unamortized deferred origination costs and estimated collectible interest and fees, net of allowances for credit losses.

At the time of reclassification of eligible consumer installment receivables to loans and interest receivable, held for sale in May 2023, any previously recorded allowance for credit losses for loans and interest receivable outstanding was reversed, resulting in a decrease in transaction and credit losses on our consolidated statements of income (loss) for the year ended December 31, 2023.

Loans and interest receivable, held for sale as of December 31, 2023 represents installment consumer receivables that we originated and intend to sell to the global investment firm.

Loans and interest receivable, held for sale are recorded at the lower of cost or fair value, determined on an aggregate basis, with valuation changes and any associated charge-offs recorded in restructuring and other on our consolidated statements of income (loss).

Interest income on interest bearing held-for-sale loans is accrued and recognized based on the contractual rate of interest.

If PayPal no longer has intent to sell loans and interest receivable, held for sale, such loans would be reclassified to loans and interest receivable, held for investment.

When a loan is reclassified to held for investment, any amounts previously recorded in order to measure the loan at the lower of cost or fair value are reversed on our consolidated statements of income (loss) (recognized within restructuring and other) and the loan is recorded consistent with loans originated as held for investment.

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[Table of](#i9e4dafd0cefd4f3ca6a7b3807735d972_7) [](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)[Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

*Changes in Accounting Principles*

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for credit losses on financial instruments in 2020.

February 9, 2023

| Total assets | | | $ | 78,717 | | | | | $ | 75,803 | |

| Income taxes payable | | | 813 | | | | | | 236 | | |

| Total liabilities | | | 58,443 | | | | | | 54,076 | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balances at December 31, 2019 | | | 1,173 | | | | | | $ | (6,872) | | | | | $ | 15,588 | | | | | $ | (173) | | | | | $ | 8,342 | | | | | $ | 44 | | | | | $ | 16,929 | |

| Adoption of current expected credit loss standard | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (178) | | | | | | — | | | | | | (178) | | |

| Other | | | 205 | | | | | | 100 | | | | | | 47 | | |

| Income taxes payable | | | 373 | | | | | | 73 | | | | | | (230) | | |

| Principal repayment of loans receivable | | | 24,903 | | | | | | 11,826 | | | | | | 6,392 | | |

The noncontrolling interest reported in a prior period was a component of equity on our consolidated balance sheets and represented the equity interests not owned by PayPal, and was recorded for consolidated entities we controlled and of which we owned less than 100%.

Noncontrolling interest was not presented separately on our consolidated statements of income (loss) as the amount was de minimis.

As of December 31, 2021, we had consolidated two VIEs that provided financing for and held loans receivable of Paidy, Inc. (“Paidy”).

We were the primary beneficiary of the VIEs as we performed the servicing and collection for the loans receivable, which were the activities that most significantly impacted the VIE’s economic performance, and we had the obligation to absorb the losses and/or the right to receive the benefits of the VIE that could potentially be significant to these entities.

The financial results of these VIEs were included in our consolidated financial statements.

As of December 31, 2021, the carrying value of the assets and liabilities of our consolidated VIEs was included as short-term investments of $87 million, loans and interest receivable, net of $21 million, and long-term debt of $98 million.

Cash of $87 million, included in short-term investments, was restricted to settle the debt obligations.

In the first quarter of 2022, we terminated Paidy’s legacy debt structure and replaced it with a new credit agreement executed in February 2022.

As a result, we no longer have any consolidated VIEs as of December 31, 2022.

[Table of Contents](#i9e4dafd0cefd4f3ca6a7b3807735d972_7)

In the opinion of management, these consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair presentation of the consolidated financial statements for all periods presented.

Reclassifications

Beginning with the fourth quarter of 2022, we reclassified certain cash flows related to our collateral security arrangements for derivative instruments from cash flows from operating activities to cash flows from investing activities and cash flows from financing activities within the consolidated statements of cash flows.

Prior period amounts have been reclassified to conform to the current period presentation.

The current period presentation classifies all changes in collateral posted and collateral received related to derivative instruments on our consolidated statements of cash flows as cash flows from investing activities and cash flows from financing activities, respectively.

We believe that the current period presentation provides a more meaningful representation of the nature of the cash flows and allows for greater transparency as the cash flows related to the derivatives impact operating cash flows upon settlement exclusive of the offsetting cash flows from collateral.

The following tables present the effects of the changes on the presentation of these cash flows to the previously reported consolidated statements of cash flows:

| | | | As Previously Reported (1) | | | | | | Adjustments | | | | | | Reclassified | | |

| Net cash provided by (used in): | | | | | | | | | | | | | | | | | |

| Operating activities(2) | | | $ | 6,340 | | | | | $ | (543) | | | | | $ | 5,797 | |

| Investing activities(3) | | | (5,485) | | | | | | 336 | | | | | | (5,149) | | |

| Financing activities(4) | | | (764) | | | | | | 207 | | | | | | (557) | | |

| Effect of exchange rates on cash, cash equivalents, and restricted cash | | | (102) | | | | | | — | | | | | | (102) | | |

(1) As reported in our 2021 Form 10-K filed with the SEC on February 3, 2022.

| [removed: ] [added: ] | | | | | | | | | [removed: 126] [added: 123] | | |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February [removed: 9, 2023.][added: 7, 2024.]

| | | | | | | | | | Name: Title: | | | [removed: Daniel H. Schulman] [added: Alex Chriss] President, Chief Executive Officer and Director | | |

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints [removed: Daniel H.][added: Alex Chriss, Jamie Miller, Bimal Patel, Brian Y.]

[removed: Karbowski,] [added: Yamasaki] and [added: Hasitha Verma, and] each or any one of them, each with the power of substitution, his or her attorney-in-fact, to sign any amendments to this report, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his or her substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February [removed: 9, 2023.][added: 7, 2024.]

| Principal Executive Officer: | | | | | | | | | Principal Financial [added: Officer and Principal Accounting] Officer: | | | | | |

| | | | President, Chief Executive Officer and Director | | | | | | | | | [removed: Acting Chief Financial Officer and Senior] [added: Executive] Vice President, [removed: Investor Relations and Treasurer] [added: Chief Financial Officer] | | |

INDEX OF EXHIBITS

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | Incorporated by Reference | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | Filed with this Form 10-K | | | Form | | | Date Filed | | |

| [2.01](http://www.sec.gov/Archives/edgar/data/1633917/000119312515237232/d877527dex21.htm) | | | | | | Separation and Distribution Agreement by and between eBay Inc. and PayPal Holdings, Inc. | | | | | | 10-12B/A | | | 6/26/2015 | | |

| [3.01](http://www.sec.gov/Archives/edgar/data/1633917/000163391717000136/exhibit301pphirestatedcert.htm) | | | | | | PayPal Holdings, Inc. Restated Certificate of Incorporation | | | | | | 10-Q | | | 7/27/2017 | | |

| [3.02](https://www.sec.gov/Archives/edgar/data/1633917/000163391723000143/exhibit_31.htm) | | | | | | PayPal Holdings, Inc. Amended and Restated Bylaws effective September 27, 2023 | | | | | | 8-K | | | 10/2/2023 | | |

| [4.01](http://www.sec.gov/Archives/edgar/data/1633917/000163391720000028/exhibit4descriptionofs.htm) | | | | | | Description of Securities | | | | | | 10-K | | | 2/6/2020 | | |

| [4.02](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex41.htm) | | | | | | Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee | | | | | | 8-K | | | 9/26/2019 | | |

| [4.03](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex42.htm) | | | | | | Officer’s Certificate, dated as of September 26, 2019, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee | | | | | | 8-K | | | 9/26/2019 | | |

| [4.04](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex42.htm) | | | | | | Form of 2022 Note (included in Exhibit 4.03) | | | | | | 8-K | | | 9/26/2019 | | |

| [4.05](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex42.htm) | | | | | | Form of 2024 Note (included in Exhibit 4.03) | | | | | | 8-K | | | 9/26/2019 | | |

| [4.06](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex42.htm) | | | | | | Form of 2026 Note (included in Exhibit 4.03) | | | | | | 8-K | | | 9/26/2019 | | |

| [4.07](http://www.sec.gov/Archives/edgar/data/1633917/000119312519255466/d810419dex42.htm) | | | | | | Form of 2029 Note (included in Exhibit 4.03) | | | | | | 8-K | | | 9/26/2019 | | |

| [4.08](http://www.sec.gov/Archives/edgar/data/1633917/000119312520145106/d912137dex42.htm) | | | | | | Officer’s Certificate, dated as of May 18, 2020, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee | | | | | | 8-K | | | 5/18/2020 | | |

| [4.0](http://www.sec.gov/Archives/edgar/data/1633917/000119312520145106/d912137dex42.htm)[9](http://www.sec.gov/Archives/edgar/data/1633917/000119312520145106/d912137dex42.htm) | | | | | | Form of 2025 Note (included in Exhibit 4.08) | | | | | | 8-K | | | 5/18/2020 | | |

| [4.10](http://www.sec.gov/Archives/edgar/data/1633917/000119312520145106/d912137dex42.htm) | | | | | | Form of 2030 Note (included in Exhibit 4.08) | | | | | | 8-K | | | 5/18/2020 | | |

| [4.11](http://www.sec.gov/Archives/edgar/data/1633917/000119312520145106/d912137dex42.htm) | | | | | | Form of 2050 Note (included in Exhibit 4.08) | | | | | | 8-K | | | 5/18/2020 | | |

| [4.12](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm) | | | | | | Officer’s Certificate, dated as of May 23, 2022, pursuant to the Indenture, dated as of September 26, 2019, by and between PayPal Holdings, Inc. and Wells Fargo Bank, National Association, as Trustee | | | | | | 8-K | | | 5/23/2022 | | |

| [4.1](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm)[3](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm) | | | | | | Form of 2027 Note (included in Exhibit 4.2) | | | | | | 8-K | | | 5/23/2022 | | |

| [4.14](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm) | | | | | | Form of 2032 Note (included in Exhibit 4.2) | | | | | | 8-K | | | 5/23/2022 | | |

| [4.15](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm) | | | | | | Form of 2052 Note (included in Exhibit 4.2) | | | | | | 8-K | | | 5/23/2022 | | |

| [4.16](http://www.sec.gov/Archives/edgar/data/1633917/000119312522157463/d307111dex42.htm) | | | | | | Form of 2062 Note (included in Exhibit 4.2) | | | | | | 8-K | | | 5/23/2022 | | |

| [4.17](https://www.sec.gov/Archives/edgar/data/1633917/000119312523163898/d495603dex42.htm) | | | | | | Officer's Certificate pursuant to the Indenture, dated as of June 9, 2023 | | | | | | 8-K | | | 6/9/2023 | | |

| [4.18](https://www.sec.gov/Archives/edgar/data/1633917/000119312523163898/d495603dex42.htm) | | | | | | Form of Note for 0.813% Notes due 2025 (included in Exhibit 4.17) | | | | | | 8-K | | | 6/9/2023 | | |

| [4.19](https://www.sec.gov/Archives/edgar/data/1633917/000119312523163898/d495603dex42.htm) | | | | | | Form of Note for 0.972% Notes due 2026 (included in Exhibit 4.18) | | | | | | 8-K | | | 6/9/2023 | | |

| [4.2](https://www.sec.gov/Archives/edgar/data/1633917/000119312523163898/d495603dex42.htm)[0](https://www.sec.gov/Archives/edgar/data/1633917/000119312523163898/d495603dex42.htm) | | | | | | Form of Note for 1.240% Notes due 2026 (included in Exhibit 4.18) | | | | | | 8-K | | | 6/9/2023 | | |

| [10.01](http://www.sec.gov/Archives/edgar/data/1633917/000119312515257108/d31081dex103.htm) | | | | | | Tax Matters Agreement by and between eBay Inc. and PayPal Holdings, Inc. dated July 17, 2015 | | | | | | 8-K | | | 7/20/2015 | | |

| [10.0](http://www.sec.gov/Archives/edgar/data/1633917/000120677416005430/paypal_def14a.htm#d296012a044)[2](http://www.sec.gov/Archives/edgar/data/1633917/000120677416005430/paypal_def14a.htm#d296012a044)[+](http://www.sec.gov/Archives/edgar/data/1633917/000120677416005430/paypal_def14a.htm#d296012a044) | | | | | | PayPal Employee Incentive Plan, as amended and restated | | | | | | DEF 14A | | | 4/14/2016 | | |

| [10.0](https://www.sec.gov/Archives/edgar/data/1633917/000163391723000099/final_2023restatementpaypa.htm)[3](https://www.sec.gov/Archives/edgar/data/1633917/000163391723000099/final_2023restatementpaypa.htm)[+](https://www.sec.gov/Archives/edgar/data/1633917/000163391723000099/final_2023restatementpaypa.htm) | | | | | | PayPal Holdings, Inc. Amended and Restated 2015 Equity Incentive Award Plan | | | | | | 8-K | | | 5/31/2023 | | |

| [10.0](http://www.sec.gov/Archives/edgar/data/1633917/000163391719000043/amendedandrestateddcp1-10.htm)[4](http://www.sec.gov/Archives/edgar/data/1633917/000163391719000043/amendedandrestateddcp1-10.htm)[+](http://www.sec.gov/Archives/edgar/data/1633917/000163391719000043/amendedandrestateddcp1-10.htm) | | | | | | PayPal Holdings, Inc. Amended and Restated Deferred Compensation Plan effective November 6, 2018 | | | | | | 10-K | | | 2/7/2019 | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | Incorporated by Reference | | | | | |

| Exhibit Number | | | | | | Exhibit Description | | | Filed with this Form 10-K | | | Form | | | Date Filed | | |

| [10.0](http://www.sec.gov/Archives/edgar/data/0001633917/000163391721000169/executivecicandseverancepl.htm)[5](http://www.sec.gov/Archives/edgar/data/0001633917/000163391721000169/executivecicandseverancepl.htm)[+](http://www.sec.gov/Archives/edgar/data/0001633917/000163391721000169/executivecicandseverancepl.htm) | | | | | | PayPal Holdings, Inc. Executive Change in Control and Severance Plan, as amended and restated, effective as of September 27, 2021 | | | | | | 10-Q | | | 11/9/2021 | | |

| [10.0](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex107.htm)[6](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex107.htm)[+](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex107.htm) | | | | | | Form of Indemnity Agreement between PayPal Holdings, Inc. and individual directors and officers | | | | | | 10-12B/A | | | 5/14/2015 | | |

| [10.0](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex1010.htm)[7](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex1010.htm)[+](http://www.sec.gov/Archives/edgar/data/1633917/000119312515188285/d877527dex1010.htm) | | | | | | Form of Global Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan | | | | | | 10-12B/A | | | 5/14/2015 | | |

| [10.](http://www.sec.gov/Archives/edgar/data/1633917/000163391717000075/exhibit1001-formofpbrsuagr.htm)[08](http://www.sec.gov/Archives/edgar/data/1633917/000163391717000075/exhibit1001-formofpbrsuagr.htm)[+](http://www.sec.gov/Archives/edgar/data/1633917/000163391717000075/exhibit1001-formofpbrsuagr.htm) | | | | | | Form of Global Performance Based Restricted Stock Unit Award Grant Notice and Performance Based Restricted Stock Unit Award Agreement under the PayPal Holdings, Inc. 2015 Equity Incentive Award Plan, as amended and restated | | | | | | 10-Q | | | 4/27/2017 | | |

| | | | | | | | | | | | | | | |

| | | | By: | | | | | | */s/ Daniel H. Schulman* | | | | | |

Schulman, Gabrielle Rabinovitch, Bimal Patel, Brian Y.

Yamasaki and Jeffrey W.

| By: | | | */s/ Daniel H. Schulman* | | | | | | By: | | | */s/ Gabrielle Rabinovitch* | | |

| | | | Daniel H. Schulman | | | | | | | | | Gabrielle Rabinovitch | | |

| | | | | | | | | | Principal Accounting Officer: | | | | | |

| | | | | | | | | | By: | | | */s/ Jeffrey W. Karbowski* | | |

| | | | | | | | | | | | | Jeffrey W. Karbowski | | |

| | | | | | | | | | | | | Vice President, Chief Accounting Officer | | |