PayPal faces risks from cybersecurity attacks, evolving regulations (privacy, AML/CTF), macroeconomic downturns (recession, inflation, higher interest rates), potential credit losses (consumer and merchant defaults), legal proceedings (securities class action, regulatory investigations), and foreign currency exchange rate fluctuations. The company's investments in non-consolidated VIEs and indemnification provisions also pose potential risks.
Financial Upside
PayPal's net revenues and operating income increased in the periods reviewed, driven by growth in payment volume. Higher interest rates and customer balances positively impacted revenues from other value-added services. The company repurchased shares, and has available credit and debt to fund operations, acquisitions, and strategic investments. The sale of loans and interest receivable also represents a source of liquidity.
