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PayPal Returns $600 Million to Shareholders in Q3 2018

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Aug. 25 2019, Updated 9:46 a.m. ET

$12 billion remaining in PayPal’s repurchase program

In May, PayPal (PYPL) announced a commitment to return up to 50.0% of its free cash flow to shareholders over the next five years. PayPal’s free cash flow reached $4.4 billion in the third quarter, up sharply from $841.0 million in the third quarter of 2017.

PayPal returned $600.0 million to its shareholders in the third quarter, primarily through its share buyback program. PayPal has $12.0 billion more to spend on its share repurchase program. This program comprises ~$2.0 billion remaining under a previous repurchase authorization at the end of September and $10.0 billion in a fresh repurchase authorization announced in July.

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Companies line up generous repurchase programs

eBay (EBAY), Facebook (FB), Alphabet (GOOGL), and Qualcomm (QCOM) are other companies that have lined up substantial share repurchase programs for their shareholders.

At the end of June, eBay had $5.7 billion remaining under its current repurchase program. Facebook boosted its share repurchase program by $9.0 billion in April. Alphabet and Qualcomm are planning to return $8.6 billion and $30.0 billion to their respective shareholders through share repurchases.

PayPal holding nearly $11 billion in cash

PayPal is balancing its capital allocation between returning cash to shareholders and reinvesting in the business to drive more growth. The company’s cash holdings stood at $10.5 billion at the end of the third quarter, up from $6.3 billion at the end of the second quarter.

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