PayPal Holdings, Inc. Reconciliation of GAAP Operating Income to Non-GAAP Operating Income and GAAP Operating Margin to Non-GAAP Operating Margin Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 (In millions, except percentages) (unaudited) GAAP net revenues $ 7,383 $ 6,918 $ 27,518 $ 25,371 GAAP operating income 1,244 1,050 3,837 4,262 Stock-based compensation expense and related employer 308 339 1,355 1,539 payroll taxes Amortization of acquired intangible assets 116 116 471 441 Restructuring 8 — 122 27 (1),(2) Other 17 2 85 35 Total non-GAAP operating income adjustments 449 457 2,033 2,042 Non-GAAP operating income $ 1,693 $ 1,507 $ 5,870 $ 6,304 GAAP operating margin 17 % 15 % 14 % 17 % Non-GAAP operating margin 23 % 22 % 21 % 25 % (1) The three months and year ended December 31, 2022 include $17 million and $81 million, respectively in asset impairment charges for right-of-use lease assets and related leasehold improvements in conjunction with exiting certain leased properties. Additionally, the year ended December 31, 2022 includes a $4 million charge associated with an early lease termination. (2) The three months and year ended December 31, 2021 include charges of $2 million and $9 million, respectively, associated with early lease terminations. Additionally, the year ended December 31, 2021 includes $26 million in asset impairment charges for right-of-use lease assets and related leasehold improvements in conjunction with exiting certain leased properties. Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income, GAAP Diluted EPS to Non-GAAP Diluted EPS, and GAAP Effective Tax Rate to Non-GAAP Effective Tax Rate Three Months Ended December 31, Year Ended December 31, 2022 2021 2022 2021 (In millions, except per share data and percentages) (unaudited) GAAP income before income taxes $ 1,110 $ 706 $ 3,366 $ 4,099 GAAP income tax expense (benefit) 189 (95) 947 (70) GAAP net income (loss) 921 801 2,419 4,169 Non-GAAP adjustments to net income (loss): Non-GAAP operating income adjustments (see table above) 449 457 2,033 2,042 Net (gains) losses on strategic investments 141 290 304 (46) (1),(2) Other (21) — 410 36 Tax effect of non-GAAP adjustments (73) (229) (384) (746) Non-GAAP net income $ 1,417 $ 1,319 $ 4,782 $ 5,455 Diluted net income (loss) per share: GAAP $ 0.81 $ 0.68 $ 2.09 $ 3.52 Non-GAAP $ 1.24 $ 1.11 $ 4.13 $ 4.60 Shares used in GAAP diluted share calculation 1,144 1,183 1,158 1,186 Shares used in non-GAAP diluted share calculation 1,144 1,183 1,158 1,186 GAAP effective tax rate 17 % (13) % 28 % (2) % Tax effect of non-GAAP adjustments to net income (loss) — % 22 % (12) % 13 % Non-GAAP effective tax rate 17 % 9 % 16 % 11 % (1) The three months and year ended December 31, 2022 consist primarily of tax (benefit) expense related to the intra-group transfer of intellectual property. (2) The year ended December 31, 2021 consists primarily of $43 million in tax expense related to intra-group transfer of intellectual property and $11 million in tax benefit related to the write-off of deferred tax liabilities on strategic investments as a result of acquiring the remaining interest in the investments during the period. Q4 & FY 2022 Results 16