PayPal (PYPL) 4 Nov 222022 Q3 Earnings call transcript

Good evening. My name is Briana, and I will be your conference operator for today. At this time, I would like to welcome everyone to PayPal Holdings' Earnings Conference Call for the Third Quarter 2022. [Operator Instructions]. Thank you. to call like your and now Ms. host, would turn over the introduce I Vice Acting President Senior Rabinovitch, Gabrielle and CFO. Please go ahead.

Thank earnings the and Welcome you, thank you for afternoon Briana. joining to conference quarter third PayPal's for call of XXXX. Good us.

Relations is is the CEO. a and In and will the also website. to being today presentation our commentary. our call providing Schulman, on presentation call webcast, me non-GAAP company's President Dan are our our Joining This performance, slide to accompany refer on and measures. We're conference Investor available discussing call both we some

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

and include related We uncertainties. cost our risks forward-looking margin will are year guidance and XXXX our based and make comments to that and forecasts These assumptions and statements statements expectations, the framework for XXXX, on and full activity. anticipated fourth for preliminary share quarter repurchase operating involve current savings, our

actual these may statements. differ Our materially from results

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

not me that, this Dan. expressly should disclaim With obligation call statements. presentation undue any date, information. forward-looking place X, the in You let We XXXX. reliance update over is information today's All any on November as of turn to to this

that in marking quarter on pleased the guidance. quarter our our in consecutive thanks and third announced of to us. everyone August, guidance share the non-GAAP Gabrielle, for that third delivering I'm Thanks, joining the exceeded results we

share developments progress, will results I we Before strategic long-term want operational believe reviewing position. two and exciting to enhance our that our

we the will merchant wallets functionality, without or Venmo merchants an This iPhone sale opportunity pay able that with and process for or app. including Apple to soon a the the customers that of as to in and to accept Apple's using allow working First, to our consumers. easily offerings or payment our their continue the world physical need PayPal U.S. our mobile this credit and our a merchant announce base to terminals. Pay We seamlessly point accelerate other on dongle mobile will merchants. are Apple initiatives iPhone use and PayPal with other along Venmo for in-store contactless to debit enhance pleased Leveraging payments in believe will for to I'm very cap iPhone be iOS PayPal's cards

We in are Pay Commerce checkout a including unbranded option Platform. as merchant also flows Apple on adding platforms, our payment our PayPal our

This available several platforms U.S. And coming are add We them to will able and of year, Pay the ecommerce we is Apple in-store in to for in new and cards capabilities relationship Apple to We bring with be to a the opportunity our consumers their half accepted. to already to next beta and in-store. anticipate these to debit rollout wallet months. Venmo them and mutual expanding step with XXXX this closely our merchants our be the online customers. wherever transact PayPal excited broader their use anticipate is work and in significant Apple forward a in are first and with credit and customers network-branded

more And technology, holiday relationships drive pay we we to partnership time working across superior a major to shopping. we to for ramp and our Amazon excited younger I'm and with peak scale is experiences fully collaboratively be share the on to practice with continue ramped on customers. Second, our reflection are in new This provide forward Amazon of These to particularly Venmo of and that plan offering mutual in with ubiquity, Venmo aligned demographics. look to and this closely to choice financial players working services results. with

We us to are strategic shared unique to many regarded choice customers. create while we initiatives for value position, that the due scale our continue And enabling focused by ubiquity, as we of to quarter. and operational on enhance our a our last remain we partner

And year, efforts across strong over least drive cost and reduce cost remain next billion our in QX areas to operating that us. we cost $X.X continuing our expenses priority operating Our drive savings yielding We operating in year. a We track This productivity approximately expansion. now are basis XXX is of and to growth grow high points million on savings invest will while to year-over-year deliver structure in to further we at gains and XX.X%. XXXX, $XXX in expect transaction results. on for our non-GAAP least this to focus efficiency, key in at margin margin anticipate

me now our Let to turn results.

and of will year-over-year discussed of midpoint similar in $X.XX our exceeding are billion was to in FX payments, have to eBay's revenues slowed QX X%. neutral I'm us we say pleased our manage expenses to which quarter. an in revenues to will XX% grew We negative third to related were levels expenses our related expect EPS is containment year-over-year. fourth spot, the inconsequential for last our non-transaction Non-GAAP migration guidance be manage on Normalizing to FX be payments $X.XX Our we call QX cost migration results the guidance. up approximately an flat on And exceeded basis. XX% for that planning now that slightly operating by XXXX. XX% behind our quarter actions and eBay's The quarter's non-transaction growth the the $X.XX.

spend we to cash reinvestment our and QX particularly up on areas to with NNAs pleased quarter, an expect are added enhance record growth we for year-over-year to million this our us NNAs to XXX basis. like X in million I'm With our very in are a add another per active accounts million moments that discussing key to We on transactions an our We accounts. continue the XX.Xx per and pleased XX% the million as record few active flow consumer driving billion, position. XX% $X.X active strategic In execution nearly was account a all-time organic and grew also in by X.X free and XX million checkout. year. X quarter merchant QX. report in progress I'd to

scale by in Our competitive business the substantial that others in few network is and like is a represents a world driven advantage effects.

of customers marks to for addition, trust a have high we our transactions. preference drive level branded our use that In significant with built online

competitive PayPal platform. branded Within overall of diversification or United up its gained we checkout up and believe global our TPV have to with we volumes in share than total XX% year-over-year. our business, checkup our ecommerce PayPal States, QX We branded grow continued X% demonstrating faster the the with FXN held in differentiation

X% While volume there and highlights standard data, do credit growth continue which our America's in growth. full debit branded for will ecommerce expect a of rate or below QX, is ecommerce the ecommerce not we at to X% I'd proxy card points We XXX the rate. of growth Bank growth. to U.S. checkout above point basis grow

there for substantial know are opportunities pursue. we us to However, still

three major of checkout. for focus have We areas

the consumer experience. optimizing and elevating First,

a and third checkout Second, integration innovating merchants experience for providing new a stop payments, one solutions. seamless with shop and

leaving enhancements mobile point on check possible. customers we include out are without interaction. simplest original towards of consumers the to checkout As move focused allowing creating the shopping, merchant These mobile experience

Mobile recently our checkout SDK example, app provide merchants seamless experience. For allows in to updated a

We user speed, latest on standard simplicity, are our secure keys conversion. drive for the enabling to also and all deploying devices authentication pass consumers iOS

experience need enables provide experiences password. options seamless will which checkout, vaulted approve accelerated the purchases or click is account achieved customer network removing is one authenticate a credentials enables and with our guest simplified innovation consumer latest This This within without sessions. Our abandon to currently robust leveraging obstacles, cause solution which for checkout by by a and checkout.

platforms. several And as currently this are to XXXX look move we expanding piloting we this initiative We beyond. forward with and partner through key

segment Merchant legacy to our processes, detailed we migration each measure implementing of integrations. plans For from KPIs our base, and go-to-market are

be will assure execution. it process multi-year base opportunity a This latest And most more a of merchant place to but integrations initiative, discipline Moving our for advanced time. resources, represents putting are our will in to take we our clearly and and us. significant

payment approval our our Braintree retention invest to in quarter. increased is to XX% growth us, help and multiple machine platform. We rates. continue the PSPs in merchants and grew for area good continue and leveraging will with traffic We well-positioned key believe the insights Braintree to orchestrate TPV are payments, a resulting platforms. further to we unbranded we enhance momentum learning between see to route

includes asset an Live an their and checkout which since proposition processor up When Buy the to largely and festivals. In in recently launch. continues Our services to consumers marketing merchant Buy recent Venmo the with quarter, establishes States Later using processed card ranked partnership the XXX Braintree later experience. was agreement nearly PayPal we expansions. $X largest as value Street some pay momentum by By as XX best Now, wallet Pay of in globe Journal. just Pay the Now, XXX% billion expanded a share And across Nation's the be and of driven at primary signed Live Nation, with is Braintree PayPal major extended wins million times Later our third by overall over Wall our United million we year-over-year, volume approximately with now

Pay we believe Later become network. the in we the a of competitive world Buy result growth, As unique providers from a advantage largest Now, this with have our two-sided derived robust

of grow transaction us merchants, displaying have on their data size The advantage Now, presentment base years customers an Pay our on over product the additional our an Our of perspective. continues to and with from pages. active account upstream Later underwriting XXX,XXX Buy with provides competitive our we

the a potential. industry portfolio to-date. our to with loss asset much Venmo the lowest continues observable deterioration significant remain end untapped of rates the of be As among in with in no QX, our

volumes Venmo including we volume encourage Venmo active season. have million while X%, grew accounts. Total expect began we to monthly will active charities which the Venmo holiday more XX We We of commerce XX in this payment almost enter onboard quarter, grew Venmo QX. million as to XXX% giving accounts

with we merchant cashback team. our enthusiastic PayPal rewards with which their earlier, October, PayPal about our In the partnership shared of can redeem app. launch rewards, to programs. and save PayPal and customers and unifies rewards Amazon, look track, Honey I in we offers now their working And earn, are As forward and obviously announced

I'd addition, robust And confident their save underscore and them customers the in ramping even closing, rewards In offers, enhance a program throughout and we of XXXX. holiday our In to peak in like that have PayPal have roadmap the turned for transformation. a corner can is we existing we to time more. benefits are extend rewards card our also shopping. allowing to combine

our differentiate continue proposition, will value commitments. share We to to our savings improve our streamline processes while and productivity, cost on deliver drive drive to market investing and

raising given macro the revenue Given a time, ecommerce appropriately growth being environment, continued driving EPS deliver our on focus than prudent to in next X% we guide. our operational expect EPS year were less and plan unpredictable leverage, efficiency and trends, to same slowing X%. QX we At EPS are challenging our year. both season, an no we outlook commitment, holiday to QX shopping full and be and growth XX% earnings QX positive non-GAAP And in and

implication While environment, we there and control a its macro earnings regarding of our growth. on number can the unknowns are spend, largely

for also investment drive to efficient with on future investing growth. top-line course, continued are we're spend focused And growth. we balancing Of

PayPal new John and support We in for enhancements our the every started day from to are operational the technical to results. Product do and excited that they the driven strategic consumers, scale. customer overseeing product recently pleased live I And focused merchants at position has our thank a want partnerships substantially I'm and drive engineering product and year. our operational the with stronger joined innovation by team PayPal He extensive we teams as values work and Kim deep us position expertise that and when initiatives, also Chief has experience has Officer.

over call drive to chapter this have to that, in Gabrielle. turn PayPal with We chance next story. the are with work him to to I'll And the fortunate

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

business. our focused also Our execution key proving growth on in a dynamic ability core environment, navigate with operating teams demonstrated our while again and once We staying our are combining focus priorities. results, to our

the our reflect power resilience. results The of is Our operating and scale diversification our PayPal discipline, global franchise. of

from and of our delivered. financial shared quarter a also we fourth We're basis. year-over-year earnings and growing uncertainty quarter positioning opportunities. in confident network track build investments I pay on performance execute non-GAAP in stronger. of in the the relationship are the to believe deliver on and our reinforce scale payments. that Our in for operating with leadership by emerge delivered commitment growth operating early with period proud And of rollout us And quarter with this Venmo see are excited across revenue in on share Amazon. unparalleled innovation what enthusiasm extend our to third economic making stronger. expansion will We We're in growth. us Apple QX a we're both on August our to our upon of acceleration you our sequential targets Dan's as competitive sequential our and we against two-sided surpassed we margin continue we We will allow we with to our the and we margin

XX% growth profitable Our operational rigor massive same in our the nearly immune priorities. year, continues to scale. XXXX. billion increase have bringing running macroeconomic time, by a an an we of we investing focused on energized the $X.X trillion from for and rate $XXX managing business compound trillion we This last year, the And increased at to be from taking $X.XX process volume and not are appropriately scale, teams headwinds. complex payment growth we're this approach At progress At business annual are prudent backdrop we're our to macro will our by made. and in the to

ongoing the intensely on we're focused close year earnings mitigate robust within risks to our growth. out prepare ahead, and control doing everything and for and we macro XXXX drive anticipate As

Given profile. to non-GAAP remain flow meaningful an strong XXXX, We in the cycle. expansion and well our cash stronger two operating our non-GAAP to breadth navigate significantly generation, believe and we available sided successfully and levers of free platform, growth sheet are balance have we positioned a and committed economic margin the earnings

the outlook to year, performance. the for third of highlight remainder our discussing quarter Before I'd our like

to revenue mentioned, international fees. we persist revenue each than Dan while excluding been basis, and year this in to store increasing third million. we performance balances, grew Transaction we exceeding value-added to $X.XX and services This fourth increased guidance. revenue revenue quarter and grew move billion. year, X.X% As through and increased To In normal on loan the headwind driven expect by X.X% XX.X% Venmo. higher Braintree neutral dollar strengthening credit spot XX.X%. revenue at servicing from condition the $X.XX an the at grew to interest primarily dramatically currency $XXX has lower as U.S. billion, offset revenue spot. quarter. customer Other increased income last X% [levied] currency relative a XX.X% With International eBay these metrics XX.X% our revenue by on to a On resulted basis XX.X%, as of [ph] higher neutral

total X% revenue. revenue eBay $XXX Additionally, our marketplaces million XX% represented and declined to of

well relative total with as transaction rate gains take volume. very and TPV X.XX% result of revenue benefited largely was the are basis at Braintree last lesser rate income from our transaction performance expense four approximately funded X card the also benefited card strong basis Transaction at total came international our rate points rate recorded foreign XX rate To take rate a in basis loss as to of This payment rate. the to at year. of monetization. to which increase expenses points rate Venmo also currency normalized basis versus mix take points both points take was total last as improving was Transaction take in QX Both XXXX. XX extent mix a of Transaction was funding relative take higher hedges Our transaction was year. contributed TPV as overall Interest volume, more X contribution total basis from X.XX%. rate points. in transaction usage and a from predominantly by driven debit to and

were as basis of addition, X points or In a TPV. rate credit losses million $XXX

third margin in margin credit We in mix later operating quarter second declines duration global X.X% we sequential of of in period $X.X in coverage and billion receivables XX.X% origination. in million benefited basis of the with and XXXX. from a last compared X.X% reminder, reversal in loan largest pay reserves, by XXX originations the and year. of reflecting year-over-year quarter shorter The the was from growth later transaction our ended a last performance of products released loan X%, gross the receivables which QX in of As our The pay portfolio of third first to Transaction strong points. XXXX, quarter X%. quarter, growth receivables, of was and margin dollars reserve ratio $XX resulted prior performance a driver

X%. Excluding the reserve year benefit last dollars from increased released transaction margin the

This our quarter, network transaction the expense leveraging seeing we our benefits began to from scale across ecosystem.

QX We in expect into continue and this XXXX. trend to

In addition, to X% related operating operating income year-over-year grew basis, in last we're on non-transaction expense X% expenses growth progress growth. basis these In the relative XXX quarter non-GAAP points Non-GAAP XX% a driving year, year-over-year $X.XX also making to leverage. grew of third billion. rationalizing

this income which since Importantly, 'XX, the we first operating is in growth. QX quarter delivered

points XX.X% better Our earnings. approximately operating at outlook was than margin provided QX our was which two

particularly by as outperformance on building and track we and to look margin this prudence pleased forward record this operating beyond. enter We of are XXXX cost

our $X.XX a For share growth. was third XX% to QX outlook. stronger benefits the Pre-tax EPS per of $X.XX EPS 'XX created than in nearly quarter non-GAAP approximately headwind

and equivalents predominantly to cash, transaction efficiencies within We driven with improved operating investments billion. of performance. ended related took non-transaction the relative we increase by expenses our to loss and was outperformance quarter cash expectations $XX.X Our actions the

which in we flow We QX grew have bringing cash to additional billion. we $X.X generated repurchases. shareholders the with free million creation. flow have Year-to-date, for quarter, XX%. representing in the we and be last to differentiators, an flow provide our balance consider Relative us competitive now free cash free quarter to year-to-date $X.X value the cash share generated. flow sheet billion flow, billion third $X.X cash free cash significant completed During In to optionality $XXX XX% we of returned year,

for Given taken share long-term our believe and deliver its year. and that relative to competitive to this approach we in today, advantages program continue in to repurchase remains capital now creation, in business repurchases business. aggressive to its opportunistically have return $X our our flexibility our retain quarter. investing sustainable while billion to valuation an our share We a us use expect the of to capital an more optimal value allowing ability fourth We shareholders, in complete the conviction additional

our discussed assessing quarter, externalization. opportunities earnings during been call I As we've additional credit last for

secure and later We have made portfolio a this to progress an year. on funding global of next are committed sheet for our portion pay initiative off-balance

believe investors for quarter Before I outlook disclosure to We our that TPV. now trends. preliminary for detail like discuss cover disaggregate the to to helpful better this our guidance, remainder our mix, how our sharing has and discuss like time. the incremental to we our we're are is and XXXX. this thoughts providing our additional understand information I'd volume over for sharing In business would I the evolved investor update, year, related it to of our

are on how seeing context trends outlook. these some shaping First, our the and we're

well of to third holiday party Dan quarter. deceleration as the persisted XXXX. saw U.S. in into in As we online This digits platform the ecommerce that October with in close we QX single saw overall, trend the have start data, on as season growing mentioned, seen our we not the low early the in U.S. in

and November. recent expectations guidance the are holiday in Adobe, Salesforce digits. ramping our the from holiday single through Our spending ecommerce low forecasts with growth with Overall, for consistent contemplates MasterCard ecommerce

largest as mix also and in with incorporated between good combined well outlook. performance of a been monitoring are to the revised outperform trends We factors international the into seeing our are mix the a channel online in-store services market. and U.S. These perspective U.K., continues we have weaker spending. and broader macro our From closely second as market

at $X.XX. our We midpoint are neutral raising our X-point EPS the lowering expectations non-GAAP and expectations revenue by currency by full year

we've resilience demonstrating our current the outlook. prudent to our this franchise. That EPS control reflects operating over and to power is believe of guidance this uncertainty our again, we business QX. of environment and raising our public macro is global environment, We relative and the our especially from model. earnings in ability believe our Given earnings operating distinguishing appropriately to sensible we're guidance guidance for the the the seen expenses, our diversification to that revenue approach outlook said, raise other our an In benefits in scale company our

full approximately at year, X.X% grow now revenue we spots. the approximately XX% on basis, For currency neutral to expect a and

currency QX expect spot. given and year guidance For believe and backdrop. revenue strong and approximately on scale the neutral macro full a fourth we at approximately growth our X% is quarter, of basis, the revenue our growth X% We

at this We year. also non-GAAP of XX% to expect deliver operating least margin

first the For our three operating margin has quarters of year-over-year. declined XXXX,

we this Importantly trend in and expansion. quarter, margin inflect to non-GAAP to the expect fourth operating deliver

operating guidance Our contemplates approximately of XX.X%. margin QX

$X.XX to the EPS non-GAAP raising we're addition, year. to $X.XX In for

margin tax quarter, As discrete and last we noted aggregate $X.XX this XXXX to and by Based in approximately and the releases to entering expect year profile our non-GAAP benefited $X.XX. for our the reserve headwind operating expectations $X.XX EPS fourth year. the EPS non-GAAP a revenue are of year, growth we EPS on approximately in benefits

stronger our confident XXXX focus. we finish discipline there'll position than pleased improvement. greater expect and I for We we're be and started improving Dan it, to execution in and operating with continued room with a are

planning too with holiday ahead However, macroeconomic is the season said, to we well ahead, for following it a for ongoing this outlook detailed as provide our includes the framework currently XXXX uncertainty, as assumptions. in weeks as early on call. we're year our important most us, the That believe of

discretionary alongside continue in which XXXX. across faster to could to our the be continue volumes market pressured to At First, share. grow overall our core that than spending, inflationary that global and we pressures, markets, slowing expect on time, will to take weigh same ecommerce will continue growth ecommerce we

an XXX last solid from will of deliver earnings our non-GAAP And next quarter. operating basis improvement drive to report and commitment point points when least year that expansion results commitment XX-basis our Second, growth per margin we our share. at we third,

Taken earnings together, next us We year. will growth at of rates enable deliver cost benefits revenue of believe this that savings believe contemplate and from least for year a to sufficiently next outlook higher wide our we initiatives interest non-GAAP XX% range outcome.

are framework. operational executing committed discussed deliver are on that quarter we firmly XXXX highly on the We initiatives our to last we will and confident

from capital as to that Finally, share the take repurchases environment, In we're the plan road executing allocation XXXX we a many people in to standpoint, of navigate closing, in priorities against. a more despite similarly believe we cannot aggressive are the our have in and We this ahead. challenges approach year. have to well today's we confidence we positioned

experiences just ecosystem. scale and of our important newer partners beginning several to and work strategic are merchant We several with consumer in the

generation earnings And the For of us that strong allow and position. share our to repurchases. business returning to leadership in we're while cash significant in invest flow our shareholders, our and growth our extend confident to capital we continue form will power free achieve continue

focused our for I'd forward on completely the our to questions. of and ahead. all delivering to turn Brianna, go updating call please that the like are progress. to operator for on look you With We back stakeholders

Instructions]. [Operator

with Fossett the line question Morgan comes James of Stanley. first from Your

line open. Your is

Great, for thanks. cetera. Apple, sure et announcements Exciting with

next confident around little modeled. deliver approaching more we the especially as of big scenarios, to ability wondering, revenue, had than range Gabrielle, but of a how margin little which that your though, in you on about year, margins, there's talk potential -- basis can obviously, points Just you there's you indicated, seem you're a expansion, XXX a fairly is bit

levers make sure Thanks. into you that like, pull going to EPS deliver about, what can into like, you So XX% talk how can that, can translates and what's that you that growth.

can Dan. will the then start edges Hey, maybe around James. Gabs off and here. fill in Its I

we year. growth, are could feel the about ability prudent happen our wide that from very structure, plan to by growth. gets everybody EPS first being being step there to robust XX%, with which a at in on then that, of EPS you taken for EPS this cycle First that and our for and we least total, is generated be $X.XX range what higher And opinion. all, in us line driven think on difficult raise top do so perspective, to prudent really But economic next year. of as confident And an to approach have can macroeconomic a it's next that, of our for deliver has a scenarios we year, quite a cost

well several quarters. anticipating productivity cost had action a team's environment, are across we've related underway. execution last We've difficult the Our and I'm non-transaction the pleased really lot with of a that over been initiatives economic so the taken OpEx.

reason you off to expect to negative. slightly being levels slightly in we our the going and we come will then why of fourth flat, no As said, of we into XXXX, that's quarter, flat, in as remarks, see be look it we probably negative, as those look and ahead,

think been up XX% XXXX. time, you OpEx about during a long XXXX, the digits If traditionally XX% jumped in about and non-transaction for in in has our the it, that mid-single pandemic to

from our headcount, end at year going are headcount of this the we down have at we of be where beginning. the plenty to So started

better. lot a efficiencies, have of better as processes our We get and

We of it points expenses. of good and digital By leveraging very take think we're We on growth, a high advantage partners, the this are that leaders network in. way, areas, is market high time, same about whether XXX basis operating we environment or suppliers clearly related improvement in this our where wallets feel well time want And year. checkout scale our next our the at with conviction delivering investing get Braintree. to transaction share at be stronger. We our margin least as others as

for and rate operate And this We're us We a already interest we're and and take headwind making think opportunities our many rising invest we just and of the market forward. real on our is ability us environment, that's effectively us satisfy dividends think to tailwind we competitors, to to for opportunity share. our going areas, for more pay some customers. to an there's a and for take continue are those investments share in seeing of a it's efficiently in

So real side the as progress really the focus do from the and the commitment next the on cost year. productivity we team into with pleased so go And and we'll making continue to front.

Next question operator.

Yes.

question America. with Kupferberg Bank next from Your Jason of comes

is line Your open. now

looking you, about XX%, top-line you last thinking just the that Thank currency bridge? quarter, walk to We're you. revenue you wanted now the QX software context outlook talk I macro? QX, know we us the more perhaps TPV were X% for given quarter I outlook. thinking for guys. linked Can versus to last What like the obviously thought through growth. software neutral. Thank of what pieces that of you're at

Yes.

You bet, Jason.

we addition, the But to at the see we start in some seen took about point had of the obviously, that the see So at quarter, end. by time, the we that in In revenue end didn't started you're and very all midpoint the raised of EPS $X.XX. down a year delivered We right we've guidance right. of and the season to course, on slowing early at at at the same full and our came commitments. holiday XXXX. our We our October, strong by QX,

U.S. we so ecommerce for with forecast brought And commensurately internal down that. growth, our

thinking in guidance. And third singles. parties. from pretty see the that's of about that now the of driver with quarter And were predominant is down we digits, consistent so, and change really middle our ecommerce what growth for fourth That's year, mid-single the other low in come to we the the the U.S.

this with earlier environment, Now, down with same. in we've growth expectations some the conjunction similar a in our when around conjunction that initiatives of we lower done year, to took

QX. neutral of But And about quarter, that's expectation expect of FX the And to margin deliver XX X% basis to on expansion. raising we course, contributing EPS also overall. in we're the so Op point

So continue on efficiencies, we slower environment. our deliver to the growth despite

levels the their spend, low-end costs spending are high report food, the those I that the still still also and not seeing the is on beginning by our out so market, that end U.K., the The going seeing like winter, market, rent. second more reaching you'll into on think really largest you're seeing to cut inflation quite to time much conservative, any spending in are up. countries And great. which they're market. freely. is that on on of income comes And impact the environment, macroeconomic on on we're And our back report so rate, levels the energy, which be in we're way, The see energy beginning that And of to inflation a going is Zone go XX% middle-income gas, results. was view segments Euro is in And we're suffering. high. discretionary Netherlands, our all also

that a The other growth being quite is, quarter, we of thing fourth full a live pushed almost implementations number next of did Braintree are expect to point on the in year. site into

this that quarter. won't So just it we'll capture we revenue, capture

we there's an certain out So around doing at certain think excellent job. control, firm And our macro Gab least environment things I how be control. you, conviction areas. margin I that's the And laying like continued for scenarios. investments. we're those expenses, need investment wide and team there's as operating growth, And ready said, a can't our we in investing, in high things commitment that that doing where XX%, high EPS in range we is what is and can the growth we're But of think there, we're to expansion

guys. sense. All makes Thanks,

Yep.

Colin comes Your with from Baird. Sebastian next question

line Your open. is

thinking overall and environment you. to growth Obviously, you're think Thank the those about XXXX much. be impacts the it's get year. to know up revenue environment. fluid the it'd very ecommerce But framework targets. underlying maybe you How have last question, to including that into the Thanks how volume, the for assumptions that following next I helpful a context,

and me in. off start let come can Gabs So

all have about the going all, right season. with I reports, the very a still based in bit holiday six-week, that's based not conversations what now, And it, we're their ahead strong ecommerce But down But player pretty players saw, or visibility revenues on visibility the the a large you're fourth first quarter, that's into five- ecommerce you fourth pretty are look what's quarter, And we reason, now, of that not you good seeing that on way what going other that happen based as of what planning think in soon little right is any for our XXXX. the quarter the in we it's So muted think quarter. It's a to too Colin, we comes us. into ecommerce really in another take that the XXXX fourth on of be external quarter. Typically back in to will third look like. happens to case. through have into period, when in

will merchants number But quite expect We've large think fully to will up. subdued. with I growth site outpace ecommerce a live that be very baseline Braintree got we of it. coming I

I'm initiatives. we'll meaningful Apple at digital Amazon, with Our that. improvements now. have a quite the see deal of those that right And will lot medium term with are hope our the checkout happens on for certainly and we indications least And what Obviously, with really strong but be wallet over pleased that. from

to but we're early on build to our model. we're our So a into still top-line ton call, assumptions, very going too be going of conservative to resilience

We numbers preparing can to OpEx margin year we to these anticipating dramatically, EPS macro picture And growth gets demonstrated that if operating same controlled. and can improve potential a economic very that difficult deliver but time. and for now we're our the invest at better, robust continue we environments, will cycle enable can growth the keep will lower We've next expansion that so. adjust and well so

very you Thank much.

Yep.

question Peller next with comes Research. Wolfe from Darrin Your

now is line open. Your

PayPal said it'll the with Hey, growth. expecting volume that more, thanks, by PayPal breakdown you're I you have Look, said X% the think core it's be I to And you're saying guys. really market. know in you line helpful Braintree

assumptions on and partnership and making you core If you're there. looks you could obviously do drivers the engagement like the Amazon or of Venmo, initiatives can PayPal It growth passkey touch what just progress like around All and what have much can color there mean. that experience I more or improve the that but on room maybe help some experience, to assume Apple. can on is how we that obviously checkout should

Yes, sure.

into So, seeing both on bit we're checkout and on I will dive what digital little a wallet. really quickly

we're you the our online when leader rate] across closest traditional approve of as in availability online in XXX and six up by see wallet. we to we've So here many largest our talked I can the to transactions, above they But XX%. is U.S. about for the a last PayPal nines obviously, X% uptime we improved customer [half branded of card from but Again, early [ph] our than improvement SDK, that with the have that going basis retailers and availability. And already indications that doing significant and five the Xx do Europe, gone PayPal right except the next has as times, checkout, nine, points of in now another lot months, it's is app XXX Mobile retail how conversion networks. is likely in increase button, every one, we've more digital us we're spend market are days approaching when latency like -- average XX% twice more on XX%. the In imagine mean, early in Consumers are is. perceived the we rates footprint Dan, as the by between know, XX XXXX

frustration passkeys a enables credentials. be it of Apple, weak are passkeys. or just our online is deal. one basically side, also through password Passkeys like consumers due we're Not password. authentication authentication through And initially. abandoned to Google a XX% purchase On And passkeys Microsoft fully enabling of have recent accepted. It eliminates like But into having the to are on going big for biometrics the of very issue. integrating to that with reused iOS the remember, need surveys, like the and an OS, removes embedded

in course, seeing [ph] now on that more checkout. into we're seeing transactions, up us. I've conversion of plus And card, churn accelerated months our previous a got we're that's the [voting] early, the mean, XX% the accounts an using greater X% more we're gained year-over-year, mentioned our because XX very ARPA But come our XX% our uplift a is a we're our that offer. savings for it's incredibly cards wallet stats, six even for wallets off XX% passkey is months And those I lot that did already than of So wallet base and to lot on it's that's ARPU, in part program, of XX% XX% strong our a moving of digital APY. lift up important first with And our launch, things in piece just digital strategy, this over could start. cashback but be are into meaningful of like like three-two products then of XX% to reduced new much checkout acquired a of XX%, new X% in We've our checkout. XX% traction. seeing we savings lift in

with why performance margin our things to in as and initiatives. of investing to So operating investors. them, returning a EPS we're excited lot that's about terms do performance we And of be what can our well in as heavily

Dan. Thanks, Understood.

Yep.

You bet.

Lisa question next from MoffettNathanson. Ellis Your with comes

Your now open. line is

any then wanted go? dynamic highlighted of or just made progress Hey, think better Can serving both there good unlocks of aspects about the a that with what there. good your call, you Apple-related to consumers? perhaps Dan, could to on voices. you Thank more I also you for that merchants talk Are some relationship over collaborative could this bit guys. hear more you up about And could relationship that in your How little Good your afternoon, like is terms be impactful follow announcements PayPal that a where it how and certainly time, this on the Apple? talk could you. relationship is? think bit

together been strategically, two all, our is have of important, that quite companies on first and Well, I think the Yes. time. for some agreement working quite

that and helps world. terminal they sale any has that given our iPhone without if incremental offline is on to in aggressively that are their this need unlock. of I can their mobile around their or merchants Venmo, the they're to and tax areas And payment there allow others of plus up in an use information, really and enabling think that's I then point of to rate pieces our they number profiles that security is set Venmo social or or in do really mean, rate really payments the $X.XX, the three market. be X.XX% omnichannel compete of their profile all millions this PayPal phone birth significant to versus us receive first think world. dongle either customers business for a three And competitive number, ID, to we a date, especially have their have us there it, all, business

think And that. so there's unlock I on a big

Second, unbranded flows. adding to Apple our

in already on unbranded Apple's As Braintree you more competitive. just us our know, well going flows, make that's to but

into Pay it merchants, enables branded we've more which been time. instance, very we've some Pay when Google smaller for we And Venmo buttons. PayPal businesses. and PayPal We've in transactions. PayPal out U.S., commerce been PayPal the into a they us years completely offer Pay the also credentials more platform and there's finally, to debit checkout this accepted, for probably platform And doing the that is enables and add best than users is in quite Apple there, something focused their their deal of PayPal to ability branded down bigger And their then, card add Google market most integration anywhere for XX% choice in checkout enables middle us Germany, a sell to It seen, and it the sell with go and for to years increase on and our people Apple branded now. realize. consumers Venmo As further commerce our credit use is that Pay our for

us have branded checkout from Now, that to our can Later allow consumer create bring ability even temporary they everywhere so And Pay digital also online, shops. to Buy the cards to

create of proposition for put mutual they're closely unlocks. and to I've and working our excited dedicate resources value Apple on market, into just that a both the nice this. PayPal. a lot there's customers. these We're ensuring think better I been successful, to and So really

Terrific, thank you.

Yep.

question comes with Your JPMorgan. next Tien-Tsin from Huang

Your is open. now line

Gabs. and Dan Thanks,

quickly any can Just or clarity if that's X.X the is, likely on cost investing? I'm How on to also, more year least the efficiency in from next to come levers cutting deliver cost you XX%? the maybe of part less curious the billion -- just Thanks. at more pull

bet. you Yes,

I next about on driving in transaction quarter So to when of OpEx. point. I'd can thinking of cost $X.X related addition say the more non-transaction more, TE half least billion does balance coming in other OpEx expense we side favor this with that savings it non-transactional than the weighs do half think year, the coming was at nearly in from we related talked last at

And a slightly environment. the with that fact based that's some of lower on growth

would the a on TE derive we more driving related That side to I lot that expectations And benefits those the really we there. room of bit, go come be in of nature. side. on see we in Some said, non-transactional are a OpEx think based our volume volume terms in the of initiatives

on related XXXX, a of by growth year, XXXX. over our grew about was so XX%. back. Last just XX% in step sort non-transactional of And That taking OpEx top

we're we $X.X XXXX. an and in about more year, more see productive opportunity a be related did And to this than non-transaction so savings we buckets there. lot billion in And OpEx spending drive more our

in marketing that, this down QX. came dollars And more X%, in after so down considerably than coming you'll see coming that down QX some year about again

to I’m to year-on-year. closer not up year better We OpEx will non-transactional low be year with and next the single-digit, do growth related flat, if I'd decline end expecting than that. expect it will a

are you expansion scale even the a about we're to drive think using continue us. the savings productivity it's know looking growth And we're finding lower in a to benefit sustainable. for So can really opportunities our And we to operating that we lot environment. and more margin

emerge think we we're of stronger much we doing. from the result environment work as this so, that a And

Understood.

in useful you including Slide I'll to thanks, that's jump and six, that disclosure. terms one all got off? timer That's a and CAGR Now for you great thank stuff. the have. Thanks, Is to say of

understanding it's the it doing I We TPV know the a will quarterly basis, we'll on to to updates. our of provide We'll question. continue the update performance next to as that but take business. important to of the we're continue mix don't quite on committed

for Evercore ISI. Togut time We have one last question with David from

now is line Your open.

squeezing much in. for so Thanks me

might with of from cost whether are broadly, about for be time what expansion And Zettle so PayPal and You've omnichannel reduction up Can it today. what associated costs BNPL talked omnichannel all about announced a initiatives of the Apple the course think much. us recently continue in with of initiatives. freeing initiatives You've over of announcements omnichannel? The products. help your to mean terminal the rollout U.S. number expanding dollars of sort then, revenue? new your the investment Thanks you

on David. Yes. that, I'll start

from Buy that checkout approaching as puts And spend upstream what players And halo presentment. We share of We're greater we're didn't integral bounds. merchants. over, to Later, if than script by any one loans. you XXX,XXX, as an market leaps different million checkout their two years we in top product me, check XX%. it strategy. presentment, know after upfront I million heard, and BNPL is to you us. out go say my in the our X.X it's And as XXX incremental by a of launch plus us is, At And unique of the Now, drives Pay up quite XX and into So dramatically. on pages, opposed that goes is saw, of part growing of our somebody way

have Buy we advantage history on. XX% people customers, And use in real a a the Pay Later, of so not value proposition, do but we only competitive knowing have, great we have our that Now,

stable. And markets. And we're so our in loss rates live and low today remain X

or somebody Apple Now, stores, Later Buy of linking Now, provision in we for are can going a Pay. one We Pay ability PayPal, is the a our to Buy her can that As in important take or being pay debit solutions. Now, put that in-store. Pay Buy to evolution I part be mentioned, think also Later, branded very really Pay strategy, digital, debit store, shop, when a a or part into want we online our exciting as Buy Venmo to which card using you question, card, Now, of whether of of Lisa they And branded Pay anywhere now card Later, asked is part, the Later, in-store credit able also our

something heavy split four fiat payment more with paying paid in We deciding to doing or But moving from QR imagine with I pay now I away that cards. that. app for installments and But into coming much are and okay, want PayPal for then back in into rewards currency. or going store for that your and

imagine will And for And really Now, fully Pay quite think forward. to unlock being we so omni look capability. we're a we as Buy a as bit trying as that us Later

you. Thank

soon. that. And thank And again, and everybody of for think want time. for for for great you, to thanks I speaking David Take questions. your I bye-bye. to look care your thank with time, all forward the We you

conference This call. today's concludes

now may You disconnect.