PayPal (PYPL) 24 Oct 192019 Q3 Earnings call transcript

Good day, ladies and gentlemen, and welcome to PayPal’s Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to introduce your host for today’s call, Ms. Investor of Head Rabinovitch, Relations. Gabrielle Please go ahead.

Andrew. us. Welcome you, third XXXX. Good conference afternoon joining for quarter you thank to for and call Thank PayPal earnings Holdings

President the Financial Chief and EVP Dan Joining Rainey, Operations. Officer call Customer today and John on Schulman, me our and Global CEO our are

through accompany our a and and presentation both to This the Relations call of our available section Investor providing We’re presentation is conference website. the call commentary. slide also webcast are being

measures non-GAAP some We talking about discuss will performance. company’s in our

the can to You accompanying in these the most reconciliation call. find of the non-GAAP directly this measures measures comparable GAAP presentation

for will management fourth year full our and addition, our risks impact quarter current preliminary that forecasts XXXX, XXXX, our acquisitions. our outlook make the In guidance are and involve based statements on medium-term the forward-looking statements of These outlook and and assumptions and uncertainties. for expectations, our include

materially statements. results these may actual differ Our from

risks, can that about You XX-K other our available website. XX-Q on reports report recent and more Relations affect filed in Form quarterly factors Investor SEC of on section could find our on and the annual our Form most information uncertainties with and the results

rely this today’s expressly not forward-looking should information to as XX, disclaim date, update XXXX. any obligation in You All any presentation statements. October on of is We the information.

let that, Dan. call turn me to With over the

joining on Revenues a to call. on today’s metrics. billion. us for FX-neutral XX% I’m report everyone our thanks quarter strong spot very had an and across that by basis to Gabrielle PayPal you, all $X.XX Thank grew and key pleased of

and transaction strong by volumes. driven was growth revenue Our TPV

FX-neutral up TPV year-over-year month to processed quarter $XXX XX over points growth to was from on in ever, billion. X.X time the billion X first an transactions. XX% we transactions up the and basis basis last accelerated billion per XX% quarter, For

approximately XXX eBay our QX from now basis and EBay down excluding X% total year. declined represents of just up from XXX points QX XXXX. last by basis by TPV, grew XX%, TPV TPV X% points

our of at July As end eBay the that of of total TPV estimate approximately X% in best our the agreement now, is XXXX. will be operating

MercadoLibre compared similar Excluding with very as guidance unrealized losses Uber, to on investments EPS strong discretely we of a our of $X.XX $X.XX non-GAAP to a and our delivered basis $X.XX. associated in

mark-to-market the our our our changes non-GAAP XXX basis grew of XX.X%. portfolio, than a in driven EPS year-over-year Excluding by non-GAAP investment strategic to operating more in points margin XX% expansion

I’m our EPS model increased drove margins. very our pleased compounded of expectations the EPS continued versus our growth operating leverage and expansion medium-term our annually. provides over operating performance and us This quarterly XX% guidance ever with largest leverage of in with of the our confidence

million platform, stated XXX ending number very on I’m in added approximately merchants. year-over-year our both We at any our record We of to million active above in pleased now also have the XXX We million actives anticipate up the for strong quarter, engagement. active new accounts a new QX. actives accounts net XX% million million. XX previous X.X including XXX over growth net report and target year

of almost major merchants. XX.X with to active transactions X% by a XX account. growing increase, consistently to Mobile and million our at continues Touch is driver consumers million Engagement per XXX One growth

look their everyday focused proposition of life. checkout part our use on beyond as reasons consumers quite are growing We to as value our more PayPal financial for

by the of of I’m PayPal business encouraged fundamentals. this strength quarter team and the I’m quite our pleased by the efforts

our as well priorities. We our as pricing against are product strategic driving now focused significant Paymentus by our on made and in we integration with integration full year-end. initiatives progress stack anticipate executing forward live We’ve

The day than engaging XX%. consumers. per in That’s and quarter, $XX powerful million almost We credit billion. processed volume incredibly an signed team a in $XXX use Venmo be growing for that strides $XXX to Venmo with provide a continues cases deal billion including for made rate recently to enhancing now tremendous card. of more an Synchrony has exceeds the payments Venmo in Venmo annual platform run the

strong Venmo million very annual producing just We results. is a this rate. QX $XXX of with monetization shy ended revenue of All run

Last quarter, announced year, tool report our a look retailers gaining customers. later, strong pleased knowing insurance leading as that In now interact new and fueling for among receive we PayPal. engagement Hyperwallet are claim One customers marketplaces year payments are traction can acquired capabilities payouts Travelers I’m payouts that Insurance to brands. their the for ways powerful to via with

expedite using for the network Venmo’s Venmo powered to with of Lime, now payouts PepsiCo global launched we Epic players by freelancers. scooter program their base. its loyalty selected competitive added back and platform capabilities to Venmo Games powerful And ever merchants payout rental month This PayPal. facilitate PayPal way its first option cash Fortnite as providing reach prize highly user a to process. another payout engaged to our is

platform. to driver our engagement of continues strong be another on Credit

launched States PayPal’s installment consumer we in agreement the our and consumer This Citi capability in to credit merchants. we strategic And monthly incremental purchases Australia. for Germany, quarter, a understand This to payments. already for with products with sales is long-term United customers signed PayPal allow Australia to to easy new partnership develop customers for which their plans pay leading

relationship multiple this our We is split a its American Express, as In better among spend customers. experiences the for categories. continue made With In to card Amex government’s in expanded we can Mexico. for merchants members solution the strides launching PayPal PayPal or in app Japan, for to sole quarter the Walmart, we’ve feature create strong where Amex of initiative launched online official the a the Japanese around our grocery business adoption promote shared throughout further cashless the to payments Venmo. payment in PayPal daily with purchase one the via We with gain strategic partners partners country. quarter, world significant Checkout

with I’m to Capital with increasing States. mobile and bank who partnership are a with One for pleased devices And our rewards date, with as enabled launched consumers the linking rewards to engagement Discover. are with a of purchase. in we Chase JPMorgan are accounts programs cashback and are and eligible customers nearly points through that the We those of Venmo customers transfer our using their on to PNC use initiative. to we launched do To results traction for currency see beginning now XX% the time and six pay and both we’ve United instant Bank offer increased account result. seeing pay Chase We so million spend rewards currently

a interest in announced of the equity payment GoPay, China we of September, acquisition license services. provider has a Bank that People’s In of online approved our XX%

our upon and with and expand to like China We to partnerships significant set our prospects. licensed are online it This payments Union and payment us for to globally. become and long-term provide China’s AliExpress consumers services company allowing potential enables a a very the financial honored the non-Chinese has to solutions to relationships technology China. partners comprehensive license us market institutions Pay in and and expand us growth is development new platforms, first of existing dramatically businesses to and The our to addressable China payment in be with forge differentiated total provide

expected consumers, conditions. Our China’s merchants XXXX initial quarter solutions to closing to two-sided in ecosystem and focus customary and is to cross-border China’s of commerce fourth will be close linking providing payment to transaction subject network. vast PayPal’s the on is The

We next our we will sufficed about are landmark but result share year, to very our about more as opportunities much agreement. plans a early excited say, this growth of

strength demonstrate for important and an quarter the results was us of our network. QX expanding two-sided our

creating ability our more We never leading More five excited united, us importantly, defining focused it shape services the our about the as financial and the I’ve the and I’ve for five. I’m and opportunities optimistic and about landscape. front team the to as be past in years next the will past PayPal five seen future. think of been years value

And turn John. call the with that, me over let to

Dan. Thanks, results deliver start execution team quarter. the strong helping long-term deliver want a our of partners reporting off sustainable today I our great global The are continued us we to by strategy for and growth. customers, thanking to demonstrate

Our accelerated XX%. volume to growth

revenue Our non-transaction leverage across expenses. non-GAAP related our than we a realized And and points delivered expansion basis. on XXX operating both more grew each of basis operating margin We XX%. GAAP of a

Excluding the our portfolio, investment EPS I non-GAAP later, strategic losses discuss effect will grew from unrealized XX%. which of

business. Our our growth the QX on both scalability grew XX%. basis performance a shows of currency-neutral to quarter and the Revenue the XXXX, of grew versus spot XX% on increased XX% XX%, to the Revenue quarter grew basis, year. grew consistent revenue strength of in revenue year of a in basis. point On value-added $X.XX international Hyperwallet the platform revenue X.X U.S. iZettle our and from points other from spot services and currency-neutral contributed last this third approximately quarter billion. third and transaction XX% a the accelerating second revenue

was In and basis X.XX% total was of basis was take the XX points compared X.XX% points This decline third to QX and respectively. a rate XX XXXX. quarter, transaction take rate

both the half reduction business in quarter transaction PXP and take rate. Marketplaces contributed decline and the for Continued of transaction strength in from performance X approximately expenses million increased points. benefited to take and basis in billion. the take in total from $X both hedge gains third to the contributed eBay's headwinds total approximately by also $XX The take to of stronger XX% revenue rate rate. Volume-based rate the dollar

a point rate in management basis continued points from XX from this realized improvement achieved we basis accelerating was XXXX. was X of rate quarter. by to of ever points a points transaction basis This a TPV basis QX and XXXX expense capabilities. driven lowest of growth. loss loss This Transaction loss of risk maxed improving and result our transaction we've the in level flat as last XX X TPV, rate improvements as while Transaction TPV, of reduction an TPV was as QX

Transaction was and consumer of portfolios. an merchant a primarily were points third versus year. XX% of XX.X%, XXXX. last from was basis X $X.X basis international as X decline to increase losses Transaction the QX rate in a a growth which in dollars quarter. This our of both margin increase represents XXX QX Loan points basis rate to due loan grew billion TPV, approximately points margin as

to the grew for $X.XX for expenses related billion ability every marginal to our increase discipline model, or revenue. highlights time. a for at grew XX% and of XXXX these operating grew performance On and This our exceeded grow the versus the in third X% our income quarter Normalizing expenses Non-transaction X.X% last a acquisitions, cost basis, our cost. non-GAAP operating year. in first low scalability dollar $X related

XXX addition, In points margin QX each expanded We delivered expenses. more of related leverage our from operating across basis non-transaction than our XXXX.

primarily margin income by by net due to income the quarter our approximately in unrealized points XX% acquisitions, basis XXX Other basis, strategic $XXX operating Adjusting portfolio. after-tax. XXXX, for losses declined to XXXX million these our quarter. relative negatively investment on grew the $X.XX expanded million On our loss $XXX affected results and share a QX unrealized operating in per

QX EPS benefit included of round have to we guided to a in weeks $X.XX non-GAAP closed an company held When we expected, July, EPS. funding GAAP investment. few we Toss, XXXX which benefit recognized an we later a equity as privately A a this $X.XX related funding share in round for and and expected per

In unrealized strategic in loss share. equity MercadoLibre $X.XX an addition, of quarter, the in approximately resulted and our Uber investments per in

on more to periods. January in we call, created investments on unrealized in results a performance are we Starting a believe and losses losses MercadoLibre and minor on new investments we our this provide released Uber quarter results effect quarter and third XXXX. meaningful update plans impact to price exclude our these our for have revalued the of This on the will This in earnings these disclosed observable standard our strategic net earnings of non-GAAP our on year, methodology will more better with understanding impact a XXXX, our however, based comparison Since the equity between operating our strategic our discussed gains as of October volatility. investments in had movements. of be required the relatively certain first in X-K XXXX, Consistent expected X. April we

tax the In rate our was versus XX.X% non-GAAP year. quarter, effective last third XX.X%

Excluding strategic investment the unrealized from tax impact rate portfolio, our would of have XX.X%. losses our been

also benefited geographic rate Our pretax of tax non-GAAP favorable mix a income. from effective

of quarter. $X.XX losses $XX.X EPS the non-GAAP third cash this equivalents for Non-GAAP Adjusting investments quarter for cash, to X% the year, $X.XX. in quarter XX% grew of the unrealized ended with EPS We grew billion. and

free consumer In our flow addition, U.S. proceeds, free Normalizing million approximately $XXX last of or every dollar generated flow selling from flow $X.XX cash of portfolio we free we received year, credit cash receivables of for for cash XX%. revenue. the grew

the to quarter, million we $XXX share During through returned shareholders repurchases.

the billion the life also in terms. first in average XX QX, markets and proceeds. time, five, In X.XX%. weighted senior The The three, $X with for rate addition a is year gross years this of public notes trenched fixed raising we seven debt are interest debt X.X in average of rate access

portion proceeds a day the allocation borrowings consistent outstanding on of capital use the proceeds repay We use priorities. to and plan credit our our of facility remainder our the to with XXX

like discuss now to guidance the as XXXX. fourth XXXX I’d quarter the our well thoughts as year, for and preliminary full our of for

and the first For to Hyperwallet. In on fourth $X.XX XX% time, of range a the for lapping billion acquisitions currency fourth in billion neutral to basis. we’re the we XX% iZettle quarter, expect $X.XX of revenue quarter the the both or growth

Relative these acquisitions approximately when provided U.S. we dollar X.X the growth. this we guidance approximately results, million in headwind in as of we fourth strengthened. estimate contributed Last be quarter. when to year, points July, reported We the QX $XX to XXXX disclosed

integration pricing initiatives expect are and Paymentus on year. of our to we quarter Both that part next be the with substantially discussed by early and complete the we track last

QX, be to $X.XX share per of we in range For $X.XX, to XX% representing the non-GAAP earnings XX% to expect growth.

expectation of includes guidance no on Our strategic our portfolio. losses gains any or investment

be the growth approximately billion result, revenue XX% in implied full be for consumer we revenue portfolio, U.S. neutral expect rate to for the the billion for basis. currency would the on range credit Normalizing a approximately the a $XX.X full of As of to receivables growth year. XX.X% now sale year, $XX.XX or the

XX% earnings $X.XX non-GAAP gains of from range of XX% unrealized portfolio. implies EPS our representing in share growth represents our strategic We in to per This $X.XX year-to-date outlook. raise earnings which year, growth, our XX% now to to the non-GAAP the expect be the guidance $X.XX, investment XX% to net of a for excluding

we for In addition, given expect billion. year now cash approximately flow be cash strong free the free flow generated full $X.X we to year-to-date, the

I’d framework how now about for like XXXX. initial to an provide thinking we’re

our of from average reminder, approximately each annually, acquisitions. outlook on neutral XX% on compounded X.X currency medium-term revenue a which revenue for a As growth includes growth calls year to XX% basis points

business We’re with our core and very pleased the to our expect strength of continue. trends

Our on XXXX the to grow is discuss. two next effect that has of current any dynamics, currency acquisitions. year, without revenue expectation organically XX% like a will also neutral basis I’d

in First, we revenue July our this growth next will operating estimate impact agreement by with that eBay point expires X and approximately transition year.

we contributions be of Second, iZettle, our we acquisitions will lapping from the an which headwind. to revenue in and additional of XXXX to be expect point Hyperwallet

the Together, these to the in business this, our Even in approximately us strength the with medium-term factors points guidance. pressure our with revenue core contemplated XXXX. growth X ability revenue range provides of in grow by

at initial least Our framework calls margin XXXX for of XX points also basis operating expansion.

natural on growth allow expansion. accelerating drive strengthen us operating we’re our efficiency to sustainably our long-term same focus year, time, and ongoing and to deliver key platform. Next margin investment opportunities leverage initiatives our At the several will in

operating corporate of offset income leverage portion additional issuance earned the interest including this cash. to below lower line a debt and be a by recent on interest items, expect expense We on

diversification medium-term, As is consistent medium-term over will EPS on a to It confident XX% our to our we outlook. XX% previous XX% by us annually result, that in strength, approximately EPS are the in for and non-GAAP our business we The compounded of is non-GAAP initial our growth approximately important guidance. outlook confidence grow give note, XXXX. with durability

and generate while to flow, priorities. our our deliver In free conclusion, significant earnings strong third quarter and strategic advancing our growth ability revenue results demonstrate cash

us leverage affords continued opportunities. Our scale

position creating world’s payments as digital We’re the for shareholders and value customers and strengthening leading platform. focused our our on

to it for you. With turn that, the I’ll operator Thank questions. over

Thank [Operator from Our Instructions] JPMorgan. of comes first you. question line Huang with the Tien-Tsin

now Your line open. is

up the Thanks fourth that’s some revenue U.S. so the here you coming know nice so up curious, looks you A much. pricing acceleration eBay in I just in have especially here, like that have It XX%, quarter. drag,

unpack and overall puts we’re XX% the with acceleration, quarter can given sustainable Thanks. maybe drivers us that is just of takes the this for help expecting the here? curious this all So or some you how the

off So over turn maybe I’ll it to that then and start with John.

had quarter with into fourth third pleased and revenue the the quarter we we and quite in expect really We’re in going growth XXXX. what that

before a right, things, couple are as initiatives really there play So are of these full pricing you’re integration come and to with as our Paymentus. well

start We in net records to are drive our quarter, kick new engagement beginning to for Our growth XX in actives and revenues. and had net in the almost new million. actives our incremental really

a again going engagement another times X% year. to got up You’ve by XX

starting couple more to to we’ve book coming what of more see right had sales into lot a really strong that front more in. acceleration much back those things are beginning in And than book now into before. put is of the we’re are Just and sales and our ever

We’re just now. winning more business right

of a bit going on. is There network a effect

XXX We the do of million to now. now active see have. start scale platform a we not selling the just beginnings product. be Merchants have a We provider of as and capabilities want to most They that. part our understand accounts of a right

So I earnings script, payouts with that take we’re hold. start in as seeing really mentioned to my

more full We’re take really hold. starting start see stack a to processing to lot

a sales including product presented. PayPal as book both of as button just back like more And presentment incremental book lot in the it’s in well we’re basic so the where having the things front

more Given have at us merchants scale positions now, we putting prime are more and the into presentment.

XX% at nine working they XX now with $XXX now. marketplaces eBay, in billion over The banks kick beginning right us. of top out are have outside with TPV us. growing Partnerships have of We now right U.S. to of the

And in rapidly growing its PayPal growth that and Venmo to monetization of see course, in really yes, we’re us. bend right And the our really organic efforts curve encouraging for now. is a then so core beginning

We’re of runway with equally is front as And really with see we’re good we I Venmo that. well. a think of pleased pleased what as in lot

would add. just I

As of suggested, many our Dan trends we’re across aspects seeing business. good

I had with first like some more first this the think it’s least difficult things with the remember year, currency important part that. and things of we’ve at to three effects some quarters cross-border comps for like

of improved of environment of the much getting impacts we that, sort the some I not And currency so think lapping was. that it be seems where to are from beginning

pricing, a alluded and of to things There to respect you each of ramp on metered we the is them. that with But those. Paymentus both with couple are around live of

So pricing countries some questions we’ve And I given in that about there. three And we’re on our because pricing make we’ve not last know were launched excited there to on call. progress that, previously. about we’re making that fixate all the the time, initiative to but referred the we overly that changes Paymentus,

We’re early as I the up each next in remarks, my to quarter. expect fourth the with part those be And ramping noted year. of by of in complete we

Thank of you. And the line with Bryan from next Deutsche our Bank. Keane question comes

Your line is now open.

Hi guys.

I Solid I stock Could more Asia more September. debt see wanted ask back and in or additional buybacks GoPay M&A? aggressive about the see acquisition Thanks. results we or to if in more we’ll the issuance acquisitions the of here. also purpose elsewhere? see wondering I’m

of was the it good less with time us was debt a into debt markets. One, than was the Opportunistic say various Brian. you. just it tranches to gives perhaps debt at XX-year our and I Good two, the to debt tap literally in talked we it sense about Thanks, issuance the flexibility. speak secure I’d more opportunistic. it’s X%. that And two-fold.

opportunities capital is read flexibility that how our that’s for give we’ve initiatives. us a us so there not rate that that into and more But we’re does allocate capital. – about and there a it and thinking very got allocation. And change attractive is don’t given strategic ample to And

over stock as billion that expect of would XX% M&A a buy and activity. when we guidance and in our provided $X to back we we So medium-term cash XX% our flow that frame approximately $X reminder, time to said of we that years spend billion that free between we five would spend

that to over necessarily Now do that’s time. that. This that’s us of average allows year, but the flexibility on period not each

And will free year. cash generating cash throughout of $X.X importantly, the ability comes you about we sort as our think ratably that but business, billion the of year, generate flow of this

that opportunity Going timing point and access year. we’re to cash tapping markets into the us at the throughout our that time gives the in versus this on cash debt when earning

tap We that we’ve no effective capital to into us that contributes to plans. still markets debt some supports more as optimal capital get a more structure was gives to an suggested for change our just believe and flexibility. long-term really to this allocation and value So to creation time the opportunity

can a answer great Maybe, just quick add to I on John’s there.

a $X.X $XX John front, free I this we generating billion quite now right some M&A of and think the strong balance obviously of on sheet year. as cash cash have flow about billion mentioned,

that XXX we be XXX look have every stated acquisitive. We some companies at We to will quarter.

and We mentioned, John last acquisitions, year, on acquisitive. year will average, spend time us and was $X as be expect you to over somewhere on anticipate billion should We but billion. $X a between light

acquisitions to revenues additive XXXX obviously would Those from that would plans. be come our any

XX% capabilities at at things with and would We think continuing expansion of be would good would – scope top we’d examples like And look a look that that be GoPay engagement. example geographic opportunities. different would improve organic. We’re that. MELI consumer And good partners; Uber on we of would and of be that. do at scale we’re to I

sheet us us no in to seize And and development complement areas our in growth should capital internal allow allocation, to so that opportunities, change we them. balance use our but to our expect where would see you efforts continue

the our America And comes of line with from Thank Bank Lynch. next question Jason Kupferberg Merrill of you.

Your line open. now is

a just I question eBay front. here. is clarification question a guys. on had Hey, The good the afternoon on XXXX. and Good numbers

the certainly investment revenue a year, X% only community less So, feared. had headwind next for than

XXXX which timing that to just unbranded growth the then of down of just the how is pace year volume on terms gains? a or roll wondering, specifically as the at XXX off? XX%. this base a is for well much off And So, in of $X.XX the as XXXX mark-to-market XXX largely to next number you in EPS Is quick I’m at to comes is excluding the XXX XXX eBay expect issue rate a year-to-date XX% in new the clarification to take

Hey, Jason.

expectation a couple now there’s managed eBay, is U.S. going eBay there. two each XX% ramped doing on is allowed of right the our fully to about on – that that the dynamics So, which that The where are payments, entities of and Germany they’re the in they’re

So, next appreciably going the would ramp in markets. year, of more half into back we those would expect much already that they’re live those as

There is what anyway that more geographies, which is or they a ramp with in these geographies, first seen is is metered of more launched. other of our the where two consistent expectation there when a in some we’ve they’ve launch kind for

our expectations that of around about in And said we seen retain. in January of consistent back based we related both what also think to what share to expectation XXXX it’s upon is our and what there. we’ve the I checkout Germany U.S.,

let but those each does. So, eBay, and certainly at obviously, an and know will that in change, this if expectation that’s estimate of can we elements our something time around you influences point

to John, eBay. expand little just bit let me that before part, on a maybe, you get

overall the a Yes, terms of to think negative we our they’ve us to row, TPV had in negative in our I on around And end X%, it, there strategic TPV, like be shrinking but we TPV. quarters when where about is XX% important and if in dropped their volumes it’s it’s be of X%. split outside at volumes. to at long for you from obviously they’re our now down impacts Jason, an growing they’re a we’re of and going obviously, to about financials. growth. OA, time partner TPV to It’s been think eBay, TPV its overall its going XX%, of percentage come, three that. initially was about X% So of down think the And with

look dropped you revenues, at their a percent overall. the revenues If as half in have

our that’s worth revenues XX% during of been And that been on growing so have it’s while think it I average, that happening, all noting timeframe. to really call XX%

up. margins Our been have going

And the smaller about part of we of to revenue a end the at OA. were of they’re of growth an we the pretty impact, impact be than transition so thinking manageable first probably much going and much think And less we more much is expected when obviously the a reasonable PayPal therefore that OA X% is expectation.

activation intermediated Right is for payouts. the tail now, opposite. a incremental in regulatory nothing they’re roll be and say the interesting long me obviously into. approvals Merchants to it Touch any I They using gives that in concern. is to. China to going PayPal maybe, cause There mean their to be on of that’s I’d multiple going on even to get be hard platforms to item going that beginning to an sell increasingly going need countries now discussion do One that. to are they’re right that. all out

so are rising share of the on payments PayPal. And intermediated we significantly. checkout seeing tight into they’re quite And PayPal

work and you to we ability growth all in with And other along so to work that. through is the to to hope put place into that transition our weren’t that we’re with with this marketplaces manageable seeing we marketplaces partners some of those our we be close going we be a and think with And to as very able start go before. eBay

Jason XXXX. similar second these a we’ve we of in have XX% should the address But in adjustments. talked XX% that is of I growth anticipated in that on earnings some probably XXXX had to mark-to-market base about and your noise question, given which to the

in the XXXX. mark-to-market excludes it So, adjustments

answer Yes. that Presumed question? so. your Does

Thank of from you. And comes question next Darrin line the our Peller Research. with Wolfe

line Your now is open.

guys. thanks Hey,

our And better and I G&A, allowing I think leverage thoughts of like and a operating what’s it are estimate, What in John, partial guys. you on in if just on kind how guess the mentioned, and we’re pronounced. came looks on margin you I more that above Your lot materially marketing your know, sales of offset losses eBay? the looked XXXX have the considering mid-year versus just would not eBay maybe, I now bps changes, integrations, when can for pricing expected before? margin XX Thanks uptick guess touch sustainability and

Darrin. Sure,

at So, around expected. that higher we couple of one, and outperformance revenue range we the provide in as we of in look of quarter, that end estimates we a and range at the earnings, things; a the came

So, side. performed one we the we noted, of But drivers how perform. the is revenue as the very outperformance on quarter expense the within bigger also you well for

is it’s you different as think that our quarter. I number to a I’ll and rate a level that of are that There on initiatives of – marketing about that market going run go assuming a affected there in we basis. sales have caution way

a couple operating kind side sustainable initiative there, this a that’s do margin what we years And And just started about very leverage around or general is for some us. this, point. But and ago was this when were there in can question cost one-time a was remember, point so take this this you’ll of we the first work Darrin, sustainable. really area, out of a the

hope a of of able re-plumbing maybe are were to aspect cost. it’s we you a these to will our that. related we’re but give any the about. give beginning – I that quarter, low literally organic at you example as ever of you And just rewiring that And This non-transaction grow concerns particular very is is in best business our allay our cost, X.X%. business, flavor every seen remember, growing how really to that really sustainability I coming be marginal time people if at in at business we’ve the described or the it around the costs about the this perhaps performance well, I’ll one

phone, on December, XXX that customers calls perfect. So month. to in the last in the have in those of million not wait here I to address looked that not I aspire if be over go a per have or had in before to on to have of you our a the on And issues wait calls. today with each we center, obviously and number come call XX be phone but that five October each have back we’re and month them minutes. of have right customer to calls our we had able And came significant to XX,XXX we we month average

about problem. is things but around being into IVR, that. address noteworthy better at enables time the someone efficiency, us that lower same customer issues provide that we were experience, Those like schedule routing what’s better a that without our to to cost. just that’s goes a achieved Now improvement, adding dramatic It when all single a but human the

And that the lot, impacts scheme maybe month, of they a experience each the use future. churn million calls an five whether but and is XX,XXX in of those not again, has whether customers us in a they

do for customer drive also both experience things as it’s improvements on So it that but the cost our that like the can dramatic in well. line, what business

are a had to that really I of add, Darrin think important. things couple I

doing all, of First more developer see platform, productive. our engineers us are to important sets, things like don’t that tool that makes our we you what so much with are things are really which development

bigger improve losses larger, that two we those to that have we hire continues of times the people probably even an transaction like acquisition a losses we just that level and combined that efficiency larger. before. much we now machine ability our get did volume grow lower sets more we their on we now Before would get couldn’t with and and may and have as our Simility, as to had think that maybe code the tool as well lot are efficient, of Things through we at becomes is learning a environment do

it to instead a and used is each that and to go now, continue Venmo. margin I our would to forward just And that expect would on finally, we as structure as to happen. say help a I Venmo of structure, money have into margin year our drain more more put we would on group and Venmo have

leverage I model the the around pretty confidence we why think feel strong we it’s have such that good about number. of all-in, annually and so compounding And XX% EPS

Thank you.

Our question Evercore. from line next of David comes Togut with the

now is open. line Your

on Thanks the quarter be have XXXX so are of that on in much. second Thanks deeper you new some of partners or sort delayed any out us integrations initiatives the would earnings embedded with And It so update you impacts those the call. give dive insight? the of guidance. pricing a much. called to Could status extent and helpful new product to

is This John. I’ll David. Sure, that. address

a of are that the as to year I they of at full each the a announced as the of that initiatives, conservatism they rate those. pace initiatives of performing of at those. that and we are half the about do the both – on for are fair side the get as the have rolled in than have full say each year we integration vast call, point the the of those of Paymentus in erred think get in to we we last delay both, what beginning well initially of of on time year of specifically the initiative and probably the it’s benefit – And benefit when as we majority price better thought in those terms the as expect next the So back we run moderately expected we

pricing, we so also respect be and at expand line expanded those have you countries with into rolled will as we if we create we’ll is as expected. as to changes, But variable to as that to to practice process this forth, pricing with are three but QX live performing for the that’s out and customer to of been we’ll well. in look and respect the always and we merchants base XXXX, merchants them looking are price want to that line and the we with And experiences further year. practice, additional as our offer fees in With to able that in in go price for we but additional a with are and that capabilities next to excluded value and have price retaining charge pricing negotiated piece reminder, industry refund refunds, certain fixed we don’t industry

David performance the I team. fully into things those for want we’re our these us. reasons in one on late with those. certain into is why They and out. these happy ongoing really the of and really transparent had we of make late We that just are Paymentus plans baked I’m on so on process were in laser-focused implemented the way way. on would we many certain integration people those. the expectations were sure pricing an say, It’s that PayPal especially And to the we we complicated roll right getting on and integrations We were had things

team so pretty and the And addressed the I’m with up stepped pleased way all of that.

the full on a the roll to we’ll John we pay X,XXX and will almost year. in, completed, into by bill all app Paymentus want the the by the year. Braintree our start PayPal stack app happen I end then will right we side, And billers, mentioned, As to those billers on have we of and first take on Paymentus of has integration second the live in that to that platform roll but before of stack integration into full the quarter the end have think

Pricing, just pricing what is ongoing an to reiterate John for process us. said,

take look We’re the our price now, depends provide. of corridors, John hard sometimes it. considered pleased We this going year yes, year where up, based regions factors. and And We I the And right it things. in the then degree down, some of at latitude pretty on look We initiatives of are dynamics. market world, on the product, and And take that. on try very think those all continually it to competitors. we prices depends year, depends appropriately we at pricing I value those we have then do practices both a we to about it assess next have I but year, after we sometimes are. after we’re price on all we evolving the mean in

our comes MoffettNathanson. line the Ellis from And Lisa next Thank you. of with question

Your line now open. is

it quarter. value-added about the Hey, I'm pretty year-on-year good up afternoon and looks guys. like growth XX% sequentially. handily Looks like loan in other beat also was it, services looking at

we're that of Synchrony give in the give us transition, kind credit of can you're strategy you the update an your you thinking – like forward going on how just now about growth well on versus clear Thank can of So role how and sheet of above is specifically, sheet can growth much like OVAS this you. forward? and OVAS continue well, balance to going revenue this TPV grow and off-balance going

Lisa. you. Sure, good speak with It's to

with because portfolio when light. obviously strategy, billion about it's That's sold think credit our with we strategy did have we that as you're what $X very we familiar with a we U.S. very partnership we consumer much like a and now going Synchrony that So forward. loan portfolio the asset

as when can't where international like and payment when that we particularly opportunities on the the credit growth look look we business provide side the their well consumer, are at way merchant's to that's our loans, merchant they in we proposition seasonality think of our with a the When capital opportunities. of both others some at for significant the access as we merchant shines a working lending, value cyclicality in flows. understanding that can business And

want to don't and with where have. continue again to intensive that. And away capital we this so our opportunities we too to past want from it we takes that become But don't want what grow other demonstrated to credit experience, we we've

that higher revenue TPV PayPal. rate grow a OVAS think specifically than And so do I overall and can to at credit revenue continue for

credit both consumer U.S. if the $X.X and there half much what those well. far today, roughly definitely that's look billion at But sold you or So us think merchant when receivables about are total a then true. and less of company international smaller for I were consumer, receivables of we we our as credit inclusive were

of so seemingly portfolios the go to And as front those of asset we with where will of opportunity on will or that's point a get both we given in some light well. us credit likely one

shareholders, the good drive for very for how our capital also but allocate that's both provide road, we credit I be mindful customers. around want value down offerings further we like but business our in this to think to

Thank for one time you. line And have last question we from the of...

think. going actually more two We're I questions do to

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line Heath of from Our the comes next Goldman with question Sachs. Terry

open. now line Your is

through realized to yet, was do you closed I offering bit those of of currently would you about of the a GoPay there? a that could little and Alipay lot offer the of that sense, history imagine material services but the be how to the map what give Dan, to its Thanks. maybe rollout PayPal it chosen like there to then can hasn't could Great. able China it a and compare integration we And a road was would for relationship? how of see when see what you're in the deal, want I cross-border first a came kind? then look competition, that to us And particularly

all Yes. think I Heath. after end extent questions, probably given we'll And of Those question, are the good that this. actually, Heath,

to online meaningful So event payments tangible non-Chinese China first opening a process market. its in license it's payments domestic all, be incredibly the China. company of of to financial obviously a obtain first It's example

this. quite management and ability happen. closely working globe around more compliance to work been think say a day for single closely literally all the and with and we've mean the by working ecosystem was been partners When worked be have financial with innovative, had appreciated We're And much what with I authorities financial this have heavily demonstrated with a risk than go I financial every the ecosystem with calls We We're other we to administration quite inside to think worked collaborator We the China. We've almost diligent, And partners but I and the we're and invested structure. this I here across the we've years. diligently within China existing disruptor. with we're with then PBOC, the entities our is enable ecosystem. in of regulators. strong various

years of And obviously a world's It's China event to that e-commerce think the It obviously market very many relationship of quite pretty working and so market. total addressable good our combined for is this that in I all largest significant enabled increases us. substantially. happen.

And differentiated inside of network than retail. of and million online year, think by our marketplace, consumers is and Chinese of China. believe of something consumers various their merchants outside ecosystem China Chinese shoppers and proposition XXX merchants to sort commerce of that quite XX% is drive obviously $X sophisticated we we like a is trillion both advanced tech more vast with platforms this closely and to sort online like offer global vast digital with which connect can financial of an online of something sales China institutions, but going working I there value to they're

what substantially can And do more so actually is now. – than a this substantial right we

to instance, think financial start and/or to merchants with with for allow again that, consumers PayPal from in we Chinese Chinese partnership work we before working outside cannot of facilitate platforms companies purchase can and now Chinese So and tech institutions. China of

on We there. enable into and that across other that can Chinese able platform can be through digital to merchants do are want take cross-border, may who use Multinationals enable their payouts to sell back may and our transactions platforms payments coming in want platform. be for us to our through to – we'll doing those China China business process

a is So, our we inside amount a consumer which significantly obviously opportunities in significant there at are and China, strength there's medium vast of is of ecosystem leverage, to tremendous that the opportunities domestic but the there of China, part we lot people on kind just digital the with least the over inside of that some focusing long-term. commerce affords of us China, working pretty strength the of network connection think partners and

transaction as excited we'll continue make everybody So the lot year about we we're a as give to and opportunity. details we go next closes into sure quite more that this. the We'll update on

and we to the want thank with today. Operator Heath, appreciate time I again, to you. question. you speaking of We Thank So, for everybody you last be soon. thank that question. forward that will joining all us your for look

have for in and question-and-answer you great you today’s disconnect. afternoon. gentlemen, may Everyone concludes This participating and thank a call. session. concludes conference Ladies the now This today’s program,