PayPal (PYPL) 9 Feb 232022 Q4 Earnings call transcript

Good afternoon. My name is Julianne and I will be your conference operator today. At this time, I would like to welcome everyone to PayPal Holdings' Earnings Conference Call for the Fourth Quarter 2022. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator

like Senior host CFO. Vice ahead. now Ms. today's Please introduce Rabinovitch, Gabrielle President to would for your call. go I and acting

you, fourth quarter for full year thank PayPal's Thank conference and afternoon. Welcome earnings the us. to you for call XXXX. Good Julianne. joining And

and our both is presentation are me our to call Joining Schulman commentary. on the also We're Investor CEO. This call the and today call being accompany and webcast, providing presentation Dan conference our website. on is president a available slide Relations

non-GAAP discussing performance, In company's will our refer to some measures.

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

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

differ results actual these statements. materially Our from may

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

update of to should date, obligation February on undue information We information. any as disclaim reliance presentation not any is today's place in X, You forward-looking statements. this All expressly XXXX. this

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

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we the overall with XX% volumes XX% to we of trillion $XX.X And We e-commerce macroeconomic platform. our processed difficult our e-commerce to grow to grew on billion. branded growth global FXN, slow, of growing by our FXN a in-line volume revenues our over with TPV XXXX $X.XX checkout In by environment growth. still managed continuing with

from negative non-GAAP Our X,XXX non-transaction-related XXXX. EPS QX. of of last OpEx in drove to grew as year of by XX% And over in down growth QX flow, our the in we operationalized which to $X.X points non-transaction rate form both reduction We in than our from of representing XX% repurchases, and shareholders X.X% XX% $X.X we the in year, share the million positive of billion basis throughout in costs capital $XXX improvement XX% growth billion more in free our year, transaction expense OpEx. for totaled cash the returned

In the growth. expansion quarter, positive several we earnings margin milestones, returned new we and operating set and to

$X.X first For exceeded meeting $X quarter, of in growth time the with guidance FXN billion. history, the the of revenues X% revenue of our we billion our in

for time X account XX% addition, In a transactions in XX.X the year-over-year. quarter, billion exceeded ever, resulting per in active growing we first transactions

focus and We point delivered a and $X.XX growing of profitable a growth. our The and of cost EPS, mentioned, the pursuit I clearly discipline our is direct as intense guidance, above was quarter midpoint non-GAAP XX%. positive of in at result inflection the $X.XX

particularly pleased structure. I'm team's our rightsize progress with cost the to

XX.X%, our year-over-year our non-GAAP For and the a points in grew run margin from We and up up billion a our year exiting year X%, XXXX. basis OpEx the planned the quarter in with ahead are by ago XXX savings non-transaction-related row. we for rate quarter, a of sequentially of operating second declined to $X.X

our to thinking want As year lay out towards XXXX, about I ahead. the look we

of processes difficult cost This savings as to continue count we top our our our by includes identified $X.X an reduce First, incremental on very to identified. X% million focus. the $XXX improve of the of head have we cost decision savings previously and billion sharpen

vendor year-over-year, external year our approximately single reduce that digits to footprint. continue growth. decline high XXX and the non-transaction will for real spend full the now also estate driving margin related in and non-GAAP EPS will expect basis OpEx We We of XX% expansion points

I on in second we mid-single-digit have and be EPS point that planning cost want assumption very EPS. believe to make to our to we growth ability deliver targets give order what designed rate growth structure conservative a high is The revenue FXN our to of based confidence in our

planning and assumption. And our actual are than higher revenue is point that the final third expectations well that

QX EPS As to growth guide our FXN $X.XX. QX with $X.XX you grow to anticipated of X% XX% XX% to can see non-GAAP by from to

is to fully and initiatives. emphasize XXXX high us want our conviction our in cost I that point, structure to enables invest we that confident are continue another to growth

checkout of We in-app capabilities. significant towards and using grow modernization checkout defend the the of deploying our native resources and putting This branded advanced experience next as as AI to order includes data in experiences behind our our drive checkout passwordless, click generation our market in business. share one well a are

the be will our this our extremely time given last multiyear scale of a will pleased Although made and we am year. and I progress with initiative the base integrations, legacy take

for sales We last resulted from continue existing modernizing a of number These significant Braintree. incremental in capabilities. will substantial architecture our to we and in made progress improvements accounts. new deliver And year, and scaled growth volume

unbranded higher our of meaningfully PayPal expand by Complete margins drive our billion, Payments, The enables $XXX partners. businesses, market will for Enterprise have we XXXX. channel much to half of this In as impressive total intend unbranded through small than share pipeline directly to to Braintree year, either we as our ramp or fully addressable opportunity us and or In the and offering addition, an service. launch of first midsized PPCP, incremental with

side, digital proposition. our wallet the On continue enhance value consumer we'll to

of customer cycle, We consumer experience, on choices. to onboarding the of entirety drive consumer the from end-to-end are AI due utilizing to forms focused the more advanced life optimal

the significant of number have a and years, two we past In products introduced services.

services TPV, XXX,XXX the merchants Buy product and checkout With world. in now it's of with Now, popular million XXX consumers over upstream incremental approximately almost Pay Buy million XX the our and Later loans Pay putting driving Now, lifts is instance, our since launching their significant most For XXXX Later service pages. one Pay to in Now, on Later and in Buy

We deals of new and now send PayPal more rewards have services will into of offers, what introduced and both single and debit and we these customize the user are to usage. driving forms across credit ways remittances, cards, giving, seamless international all savings, integrating bill pay, ultimate and new a within app, daily disparate we experience is Venmo be customized that with goal hope a

and driver core We economics. to store more overall meaningfully consumer Venmo. including balance more more and value-added their reestablish balance, establishes the revamping the and onboarding to a for experience, It the of PayPal amount of individual enhance the often in in PXP the their people capabilities. use better PXP usage our anchor wallet. need checkout as holds experience, and an introducing We a is key reducing they plan overall The declines

I'm have out software platform we payment proud a latest of innovate. ago, software retiring the XX,XXX had a strides a done will legacy infrastructure our the By architecture our all C++ approximately responsibly were we made technical upgrading we the availability has and primarily to methods. QX, record full releases. put leveraging We've of engineering We stack. in replatforming, debt. and monolithic stack XXXX, team end completed in significant Eight years modern and

to end efforts every significant latest in most XXXX, focused of checkout third top enabling Our of increased share that base in one our our are were despite to make core upgrading targeting in latest of the quarter our an in XXXX, flows. And checkout approximately our And are to our across advanced markets. XXX top approximately experiences. XXX total, continue environment, merchant At increasingly and us checkout are In merchants competitive be integration. XX%. XXXX, XX% we progress we productivity our we to were hold our on confident

our built ahead year, last this initiatives. our we ahead. must to staffing in know have just we of assure not mindset years proper of As not continuous But key look productivity, but we year, plan to just XXXX, the that also a we've

in of assess ahead growth. Still difficult year play e-commerce out terms the accurately to will how

ask get opinions. If XX XX experts, you you different

growth signs versus we baseline that spend is and that under beginning cool, spend to expect global year-over-year. will Our increase. be will begin That assumption seeing is to non-discretionary e-commerce will and spend discretionary inflation pressure, positive logical said, are that it's discretionary remain slightly to

revenue any with secular growth capitalize QX. Longer economic into To confident shift positive benefited double-digit changed. turn I rates, increased not more extremely have our news off built well and margins. not And is volumes to recent that grow we nicely positioned tailwinds be than will a when forecasts. But we accelerating as be growth mentioned, much business have that we higher stronger the to clear, from historical at to branded checkout even term, have we drive our our QX on that starts and are with start anticipated e-commerce

my address succession. to CEO like I'd plans Finally, around

As plan noted, serving board end month, some retire a a PayPal CEO And that year. at of I XX. I I you turned XX the multiple to The CEO informed this of that have will and succession albeit as of times year. the young very say, and discussed board last I the from President

there were in two felt timing. I considerations important of terms

that solid be to I performance. and had year positive a in sure was of to PayPal position deliver First, a wanted momentum

have company was And in important me can search be position. leaving the I Board conduct have So to it period. enough time reasonable transition to wasn't the a that sure thorough a and I a second, difficult

leader of as a important to customers, and relationships for need across that the the I next that gives orderly transition. CEOs an PayPal the officials business with board of and thoughtfully feel of a our to world, CEOs be there our runway PayPal, complex as the the time with partners and In transitioned. enough regulators are find government global year with will

years to flexible of and Of on PayPal ideal to board. frame eager potential we in on the to time next the ahead maintaining I'm see of our our next us. fully have order onboard assure on CEO course, and will plan. and we the look in forward leader will immense the build seamlessly eight I accomplished I be to and last the seize serve half continuing in remain focused my I the meantime, PayPal, executing momentum In all on

have TPV, that all stock flow you our as XXX. see And price investor and has our free period. S&P PayPal's size the Since outpaced revenues, same can tripled IPO, during deck, in time cash our earnings in

confident a our inflection multiple I business that has is points. now time where positive hit feel However,

to to in customer end we drive experiences we profitable growth. we continued more so growth structure deliver importantly, appropriate healthy digital and have of are confident payments. have that in we the leader road map the consistent that EPS our year, a global place we will in non-GAAP right And the By cost this improvements ensure with remain

competitors our economic of to make of In money, downturn this a see struggling in many current environment emerge to path strength. this we from with so a position increased

We we beyond. encouraged are look as at out and quite XXXX

all the transformational year we our I day. want to have the every for XXXX passion and thank be accomplish, shareholders. and at finally display of a work outstanding they a employees to can where but We our point lot our still for customers are

the Thank you. I'll that, with over turn Gab. call And to

by to our us helping Dan. solid start Thanks, business. off results our for The and like customers, thanking of and I'd partners the diversification reporting strength, quarter. deliver today to resilience demonstrate a we're global team

e-commerce a year-over-year and earnings ongoing despite our sequential pressure We core both markets. on on accelerated basis growth throughout

renewed navigate discipline and continue strong with a key dynamic to this operating priorities. focus environment on our We

opportunity challenging, remains backdrop environment a where customers. serve us significant leadership this in of have make and an our get payments ecosystem. scale, strong macroeconomic payments competitor stability to and in partner our where will formidable We the advance energized we're is better stronger choice by the and a profitability our the and believe While we the

results our to greater expansion. reflect with operating Our and business deliver margin efforts our manage discipline

our resulting are Our for efforts ongoing efficiencies business. savings in sustainable

addition, investing emerge that high-conviction to initiatives our we're growth period in stronger of In economic from this we ensure uncertainty.

we quarter outperformed, in you November, revenue and the quarter EPS in Relative was to shared we of our proud delivered. non-GAAP targets line. with our We're the fourth

point for fourth time The quarter expanded marking the improvement margin as the an a to earnings return quarter of operating XXXX, first inflection the in sequential was first our continued. our Importantly, since profitable non-GAAP growth growth.

foundation significantly and margin to non-GAAP results. solid We XXXX, in now a operating plan a established to deliver non-GAAP these And we on stronger earnings expansion meaningful build profile. have

to I'd performance. quarter discussing outlook, our XXXX like Before fourth our highlight

to spot As represents a mentioned, X% revenue $X.XX basis at XX% Dan CAGR revenue on and excluding currency-neutral increased of XX%, X% eBay. a This billion. and three-year

performance $XXX products. to million. Transaction contributions primarily income resulted revenue revenue by our year, from and on from Other billion, and grew XX% merchant X% store Relative to both last $X.X consumer value-added higher grew credit customer this and to services Venmo. Braintree driven positive balances interest

XX% revenue fourth We improved take and revenue last quarter, grew spot. was to revenue take take grew to a U.S. X% the X.XX%. On grew rate performance. international neutral Transaction In X%. X.XX%, solid X flat international rate basis, total points year, basis rate currency at and had

points relative primarily of year. eBay QX rest TPV, expense higher driven payment X-basis Marketplaces and by other to XXXX. The rate by rate decreased XX%, of volume. in processing transaction rate in point a as last basis the increase as to to increase of contributors volume our rate to mix. these the X.XX% was revenue on relative offset on XX unbranded our basis expense volumes growth a in in came from a X.XX% declined XX take the This was Transaction points at volumes

loss basis last year. TPV basis rate of improved a versus points Transaction to X as X points

Our related from portion performance. benefited proceeding. reserve a merchant from loss insolvency and a of quarter's XXXX originally on drag second transaction of recoveries loss the was This in of was to the quarter quarter that in release the rate a reserves taken

performance loss improved fourth the year. quarter last Venmo addition, to In relative

with this X Credit points as Buy QX rate growth. largest the and basis Pay net externalize driver plan of $XXX $X.X we funding loan sheet million, Later TPV. our reflecting long-term origination. Now, We losses in was meaningful of sequential Pay a XXXX, securing growth receivables The of reducing partner business. or a billion receivables, for were our receivables of part Later XX% our portion in ended balance sustainable In exposure portfolio, to a

year. duration of in originations basis shorter than X.X%, lower products resulted mix last Pay fourth of the solid a coverage ratio The from sequentially Later portfolio performance and our of quarter our and reserve points flat overall XXX

performance This non-transaction-related a was gains to In the major in contributed more decline aggregate, savings XX%. X% by volume-based increased increase Cost this offset expenses efficiency all than expense categories. and expenses. our initiatives across

margin As non-GAAP of discipline, $X.XX a from fourth billion, this XX.X%, XXX quarter income to XXXX. expanding reached operating of non-GAAP result XX% grew operating basis points the and

first per for growing the In on 'XX and non-GAAP fourth from marking was quarter quarter, QX earnings basis. XX% XXXX grew addition, EPS a $X.XX, share in the year-over-year that

We ended equivalents cash, investments $XX.X the and with of quarter cash billion.

$X.X the billion flow free quarter, During in $X.X which cash $X.X XXXX. which the billion, an million resulted $X In cash in of cash representing completed quarter, in free we flow share flow, generated fourth we in capital we generated. brings repurchase, billion XX% return generation the free to of additional our in XXXX

summer, As program capital noted last the over more we've approach several return to quarters. our aggressive taken past a

believe capital to use remains repurchase share excellent continue of shareholders. We our an that for

like discuss to now would our for outlook I XXXX.

we X.X% billion. X% expect currency grow first approximately the $X.XX neutral and For as quarter, mentioned, approximately revenue basis Dan spot on to to a at

XX%. non-GAAP be $X.XX, range EPS expect approximately to the of growth We also to of representing in $X.XX

a to for up ahead. well the year start off and quarter is first great us The sets

as remain through for potential continues seeing, to we move variability XXXX. encouraged as are but by what there vigilant We we're be

spending Since and And have pandemic, behind core impact the growth rate the quarters has ahead us, pressures the of is affected consumer the are has decelerated. post-COVID been while now macroeconomic challenging. and environment forecasting discretionary largely still direct our patterns e-commerce four Inflationary in geopolitical from markets remains COVID spending uncertain. of The evolving. beginning especially

guidance this revenue growth not we're providing year result, a As for time. at full

We believe will is quarter a responsible the and approach. guide this ahead

Pay several plan, a benefits share-based of our portion expectations the XX%. now increase increased, externalization in XX% cash Later rate to for are reported shift of dilution. cents when part EPS we Dan the of for year, higher expect our Offsetting portfolio of increasing of forecasted from our the from This savings, cost income, prior full interest incentive stock compensation. quarter for we to our indicated, expect non-GAAP additional an to receivables to tax discussed year, from results. and headwinds growth and annual result now is Relative a we compensation third from As grow the these we outlook

guiding this on deliver even commitment. to can said, we in this earnings efficient We architecture planning prudent ahead mid-single growth with for our putting growth, have assumptions the believe the our year performance deliver financial digits in revenue establishing non-GAAP currency-neutral cost structure that growth In is on to basis. That EPS been for XX% together about an us enables we objective revenue our grow revenue and and a baseline. XX% our of

revenue correlated is markets. discretionary Our growth highly e-commerce spending core our to in

fare when will We e-commerce we reaccelerates, that are than optimistic most. better growth

in as year-over-year addition, a a decline much single-digit expenses high In framework as contemplates on non-transaction-related basis. our

Over year, discipline run we significantly allocation. on business. with focus We've with the increased to and respect our strengthened operational strategic priorities, our rigor which increased the process our our past capital we planning sharpened

also We've to from benefits initiatives. realize begun savings cost

are continuing We non-transaction-related on We trajectory are organization. our our our pre-pandemic streamlining resetting our ourselves with essentially back with within expense track our a respect complexity to work putting base believe removing and we relative cost and on growth. profile to

believe more positioned profitably foreign on we our to going well share exchange. more sustainably scale like forward. and I'd expectations we're to Accordingly, also for

XXX first basis guidance FX. revenue an for the point headwind contemplates Our quarter approximate from

X-point revenue Foreign year growth. an to headwind exchange we rates, expect full approximate

In we're addition, we prioritizing discussed, have as engagement.

our these our daily users, more greatest and approximately platform We level monthly converting today. of XXX have engagement million opportunities. unique activity is driving ones active new and Increasing use on users the one of

quarter, report we accounts. track guide on longer active we While our net each to and accounts active new will no continue will

stable unique active we focus, active Given confidence in said, That our be grow not that accounts growing. XXXX. strategic user have to base total monthly expect to do will our we

in capital our cash posture return plan share our XXXX. flow. XX% approximately to XXXX, Finally, repurchase billion of to We and aggressive flow to we free $X towards cash allocate generate expect in in approximately continue free

our In closing, making pleased many the momentum. we're with across and with we're progress fronts

shareholders. tirelessly gives of is differentiator to discipline. competitive We business and structure. Whatever for a The degree to long advance flexibility Our invest we our long-term with priorities our is to deepen we customers, and growth strategic cash our and of competitive in serve in team allocate will our our face, term our our we sustainably delivering creating advantages. cost conditions profitable value innovation for high working a flow generating forward us improve as people continue power capital our macroeconomic look focus, strengthen and the

it to begin to give host call, operator back the year. for pass update portion we I year, to Before our an Q&A I'd the targeting meeting on to a the part Later like plans the share more on of the as the an for we'll this more QX, We're and closer. our strategic of update provide map we get leadership road investment our and team. will you to community introduce of latter

turn call the will back to Julianne, ahead. I With please that, the operator. go

go Thank from you. first from comes Lisa Instructions] SVB question Our [Operator Ellis ahead. MoffettNathanson. Please

line Your open. is

you. already, also profile to your say, retire last would ideal the the about wow, year on, your in and Thank for choosing CEO you. year next leaving of another now? And then or around such a a not just bit perhaps more decision ago from sort thought PayPal? of what view, sad process, make Thank has now comments Can little I'm year. over journey eight you you're It years. been Dan, a your news. big a talk versus,

you too. Yeah. I'm here. said, we've a year as got of But going us Thanks, miss ahead you, Lisa, to for that.

I gotten talented to politics with I academia. range outside workplace people to I time working at So love love a it's that all a moment. a realize well. travel. bittersweet to time spend These we've of want more passions But the frankly, lot a older, I want here. because good as I'm all a look, I always as also I of to have incredibly love. with do PayPal. I people the working lot I've of accomplished. there's here proud never retire to non-profits from And lot the

of footing be two at we had I I was as we we I mean kind that timing a when bright one was. But look for in wanted And PayPal with right to was at as absolutely future. that look first on QX, QX of sure solid criteria quarter the the a delivered a right is we happening anticipated coming in we across And stronger variety real as year. strong 'XX wide is go have which now, XXXX than shaping what's we path into fronts, as think we a well. be that nice we much up feel in glide to

so And good a the leaving to company place that. good like of seemed a time be that for in kind

the CEO. find thing had a wanted thorough transition sure enough time search other the to that I we the be is an board to orderly that right do And after and

I it's business. complex As mentioned, a

but the also a We scale services on both on have company. tech massive We're BXB we're consumer the side, a side. company, financial

across for the number a And We're working the we board look a that with a what landscape sure leadership bright to best and will There to think really that transition. across sets heavily and very work traits PayPal, they'll the that possible for. to and an I are person experience world. doing entire be future to of with regulated the looking forward be orderly firm find look person seize I is search

it day, that be sure And be I'm well, that on that takes sure And person. longer, the frame. board I'm the to focused then, longer fully every until we be you right I've going If single going to time slightly happens sooner, my I'm great. execution. in to get on of just to If be stay told course, can flexible as willing

that, that same my we team making have. thing, we the momentum ask and Just they'll the you continue sure that tell

that hopefully, a little And bit, so Lisa. helps

Thank you.

Yeah.

next from Please ahead. Our from comes Peller question Wolfe Research. go Darrin

is line Your open.

want what to also Lisa I said. reiterate Thanks, guys. Dan,

but to be you try can that we mid-XXs concur only Sorry are go, young very that you like. person to see I all

that you on ask just to be I more mind. or Gabrielle. -- mean and me sure the if don't expectations, Let you

off should better. in higher the the just we how cadence expectation than You guys rate the considering guide, touched digits or achieve mid-single be should your How much growth on, think per better embedding starting to that guess, in with I guidance? QX your about maybe

us And then around Braintree any if or branded, be great. on can else could core OVAS that guys. anything transaction expectations be color and provided would you give revenue or Thanks

Yeah.

conflated, So that afraid things two want might I I which to linked. Darrin, aren't separate was out be

our an EPS The to don't worst-case structure deliver be growth case We high, XX% okay, a that make chasing conviction first to to would digits at want our inflation revenue is, our stays at looking got and what's sure we we one mid-single into cost when We into do what discretionary growth. cost areas. we would U.S. muted. structure because Europe fully the for, spend we like, assumption, could FXN that to staffed remains growth we going wanted were That look thought be were happen. recession, you've to worst going high mean recession, going

imagine. can any our And deliver what and pretty that confidence guiding to in is we we scenario we cost to give something much XX% that built around that we're us give structure could economic to that's high the you that

assumption So that's the was kind revenue number one of and around cost it. structure set around our

clearly Number our we we globally. structure. is think expectations. assuming, that that place two are hold the We're share year for different expecting the than we very have our we our worst-case grow about slightly cost though, scenario something in or as And ahead revenue

accurate revenues. we pretty And quarter that there's a can we're remarks, last in said year in and saw from want guidance Gab for darn quarter-to-quarter, her but that when responsible of we parts moving we to move could here, ahead. lot our happen the guide in revenue be As

is and quite We're put We're us. And in in it a Pay so acceleration checkout, guide to in in Now, off a strong it Buy Darrin, Braintree up nicely Later QX both well. services frankly, January which seeing stepped seeing revenue widespread accelerate QX. we seeing as to our out February. branded for QX. has very us. from We're X% And continues for start

our wouldn't expected. midpoint as the we say at X% if number, guide. stronger as EPS that in on much So the didn't than we confident feel We XX% well

we very year and five-six as ahead of have really how first to the thinking lot year. want the about it's look We're get QX right? didn't earnings, of we the quarter, a want that out we as we to we responsible be into clearly will But also, full start, ourselves. a into And still of QX There's give. us, more report off in but weeks we're may we inform the strong ahead guidance to just that

to to that, you had Anything Gab? add

maybe of not to just the year, and on on. just more add to a At to think I'd little so great set Yeah, of point, definitely we're on do Dan's the the delivering ahead ourselves kind up detail that. year. we're early a trajectory time, same we've focused to ourselves say we going get of

relates standpoint I to last make detail merchants. we growth over the the Braintree and great exceptional dynamics back to of little expectation Braintree point That half. than though, will some deceleration. new of a we half. out as have had XXXX revenue half additional would to which has relative we're this growing do really the of a XXXX, an growth we probably existing with first that get ramp on in the coming year the growth, merchants expect stronger year, given from into of bit had time, expect we as At year same well just volumes exceptional the merchant volumes back from a

half expect of environment in more we'd higher we given the I'd lap first say, some incremental our than in the the as from and last benefits rate back from us benefit book, environment benefit positioned also those interest to how we're year. half currently the interest the rate

would loaded. And we in that some detail front-half pricing create of a so were made XXXX changes there bit that as that little were well. And finally, then predominantly

well. as to those lap start we so And

the half. little move bit just So of the into in would back I terms of a as the of year, expect detail shape we

Gabrielle. That's and Dan helpful. very Thanks

Yeah, you. you bet, Darrin. Thank

Stanley. go from next from Morgan ahead. Our question Faucette James Please comes

Your line is open.

that's growing I'll you you thinking perhaps thanks, share, the see are like of sounds more of my the with accurate consistent branded on seeing improvements Thank much. maybe final point. about add to importantly, can I what when of ask of year? you're the fun. and more kind customer looking you're impact, to some a quickly so Dan, base. and checkout And last in very man, in feel the start forward to you Great. Thanks. terms but kind market, early if with cetera, year, wanted It should what like et engagement, we the be it importantly,

Yeah.

question. incredibly an that's think I

XXXX. saw shape You our XXXX And X% and investor the lapping the grew volumes of in in really that's James, that deck, branded probably our XX% year, following e-commerce. for checkout the in XX% is by that

Part reason of desktop source obviously, for country, it's small this share. by data and at X% look why And whether And commentary we enterprise same you XXXX merchant the world. that look around and Share by varies some there's the XXXX maybe the that midsize. at digits, that probably is By mid-single in everything can roughly whether look mobile, for we the the way, U.S. at -- well. lower the world. e-commerce we growth as possibly growth that look mix or it e-commerce at by mobile was us, than around and large across channel, perfect there's or web, size, market questions no is

market. since it's market commentary points share important Manual say, It's card digital but in to be I ago, XXX We a years share interesting at have XX% of manual been there, But grew we lot we, is taken trends. of entry global the the wallets, PayPal, it that is share like from a wallets. share entry. basis the from still think by feel about XX% pandemic. during one we And minimum, card some out overall, to We've realize three today. over like continue the that growing held take of And there. held so to things there's of share including And overall. digital to general, there's

a as share objective the are Later Later $X addition, from one In Later Now, growth number -- their at of our Pay results, And we're lot quite as grew Buy you Now, they billion XXX% objective. TPV. Pay is money Buy move number of slow look Now, in Buy that, gaining if clearly at it Pay meaningfully to to wallets their as making their starting growth one

share taking there. from we're So

U.S., U.S. at across we at think at can we we're year, look this, that you growing if look first which Cyber looks the X%. And And January we which our it's the the we look X meaningfully fourth across to start held clear in like in like of held It is in February. still I the share you then the share coming holiday December mentioned, during digesting. And It December. terms the accelerated I coming with the of basis the part globe, quarter, as we into X. gained about is globe, how share, X of for if out share of branded And And we looks I've in points of checkout and somewhere November into like lost have the period.

in As in or you Amazon minus exclude held things we X quarter, the we plus if look X all U.S. points. the of these at this, basis fourth Again, share. or are

basis have points. If X the lost you view had or Prime the we is for X best an the U.S. include we Amazon, Day that that have But right holidays, now. which might in extra

as when What's Apple somebody mobile look advantages But NFC inherent flows, advanced checkout our look flows, XXX and authentication, now I we in where it's advanced have the script, of mentioned interesting even mobile, has our most in like about our we share. in of chip. are clear at exclusive at gaining third top use is that checkout the most you some checkout, implemented of if you there,

market. proud about going that that I'm making and more latest with things team with deploying has So checkout of the we overall the in working a That's really question. our another done we can of in so talk Maybe integrations. after on improving the are share and are difference why big what

there or share. of losing world, we're Later the rest across like the markets gaining Europe, Pay of been share. QX, either are some we've Buy holding a Australia, on holding bit lost due UK a bit players we're where in in pull In to to major that Now, of countries of the share we and share. starting In QX, back quite now Across we little that. most are And market, the

looking we an share. product really to world, bit. we're look where share. I market do. think losing gaining some at countries And little But the But holding have have of of places incredible do terms a of a steady we're probably our a our places U.S., as in are the the year teams we're across can where teams we obviously We some like what can lot other job So I gaining year, overall, and there share, in sales holding we're where improve still checkout after the done lot experiences. year or after either

you. That's great, Dan. Thank

Yeah, you bet.

comes next Please Tien-Tsin from from Huang go JPMorgan. ahead. Our question

is Your open. line

product And investment of we're given has just like SME on curious the expansion. and it Hey, savings, budget you space, sounds really unbranded extending changed bigger the focused the in checkout, thanks. think, the some cost at I'm and margin to makes R&D incremental you're some road map which got your the if PayPal sense. I because

development. latest So balancing in on thinking investments cost savings just love your product the with

Yeah.

to road is availability. that are the The to five we sure above a we're Cyber progress. harden of at were done high ton focus the are what capabilities we've to our thing growth Braintree that all I and [ph] focus, And against additional the sharpened map. to mean, team have look do in whether doing terms make we first season create that X, the is making you over we investments in need since holiday our -- drive during conviction executing ensure we honed we infrastructure, mean of investing Xs the our areas. we we've I and Again, our

like set. terms of in the auth competitive of the Braintree's more sales, something rates, over people better basis points us. XXX that see than kind to you new And volume moving

a is And unbranded, lot put midsized making lot ton play. so investment progress. our which and against a of small and We've partner investment of a channel of PPCP, and there

it's not checkout advanced and through we're to way, flows. to most move with has it, going PPCP our take the TikTok, by Adobe, And TPV just through most and XX% about probably our of Shopify, flows integrations that unbranded. advanced checkout It our in

we've that, so the Postman, to And really is to on And seven, requested XX Like two we're to, invested SDKs the and look APIs, developer that. ago, which if go in, are both playing SDK and checkout. We eight things one popularity largest APIs, of like and based quality our market. at obviously, years of were go that you of today, the top number now in like APIs not we that one sites developers number SDKs and actually of and at Stripe. rest

have from APIs. nowhere top so SDK terms And in our and XX almost really gone of to we

stuff, focused, our checkout. basic and going that is we of we invest we to to where #X hygiene, And our And wallets, need that. invest we investment unbranded there. in as digital next-gen Like the on, are just so plenty working our much we're to -- the all going and have are us. for that's as We're and into

put At and then of you OpEx, non-transaction-related the like the were then at the guess, growth, ago, low it. XX% to growth, look best negative same if our single-digit X.X, time, you I is XX% look really, now course three growth, way years over we and high

X%. you come somewhere, that all OpEx up our X% growth was to to I about so. together, And add you or it, If X% call traditional

still Honestly, come we've a to So we've more go. we just lot back been. to have where

already where get business, we grow line mentioned, and I a go are consistently same of we to we're identified more going we And back place we the forward. see as our operating you're productivity that feel we and top million. into XXXX, and $XXX grow our going going efficient to a more that As go so as an incremental margin against as have we we more to executing were, more mindset as

you're feel err And balancing balancing But we we're when decision, we're structure amount resource investing, towards a investing. cost we also the all we great but against making about that. right We that the have Obviously, aligned always that. of have sure going forward.

you, Got as you Thank succession news it. on And compliments well. to my Dan. the

you. Thank

comes next Our from Bank Jason ahead. question go Please America. from of Kupferberg

Your line is open.

congratulations. Thank that The per to whether kind active drivers Hoping can a Thanks. recurring feel growth delve of know the follow-up of drivers, this into you you, elevated quarter, some and a XX%. the on wanted been of I on sustainable stayed do in it's it's primary Dan, you payment theme in the the transactions specific I call. engagement. XXXX?

Yeah.

without the one of is we times a and which active that the Braintree So X of nearly Braintree the X people number, in XXX is is a our for about, base number, I things million because a a Braintree without that half of use month. so. or think Those lot about monthly users, information of of in number, user us active monthly new that are to in it's us piece talked kind

They a have times those And up year-over-year. So they're XX and year high characteristics highly extremely XX XXXX. that is engaged, extremely low rate. XX% is It's That growing an up to us. ARPU. those they X% -- churn of transacting MAUs with satisfied are from with

active we're Enormous. is platform Our platform. they active year, so enormous move to We on generate to organic come MAUs. accounts to on our Every amount biggest of single come ubiquitous. And because opportunity our our into they accounts. our an

We the Europe. have in coverage across accounts U.S. top XX% XX X,XXX and million merchant of the accounts,

a do or they done. a they transaction, request, they and a one PXP so -- make of And kind and get They they come. and

monthly accounts our the best users, of way about, wireless the think the how postpaid thinks I industry and MAUs, active between probably that And about prepaid. rest analogy the and is

MAUs have them Our app. new they ARPU postpaid up They by to our low very, are they're mobile And churn. goes new as accounts. ready ARPU, they're When high engaged on we very try a our on. on new They're try Again, XX%. their very put put when service, satisfied. service, in we services

top of in, take coming with just ensuring very we add people those on. of we funnel. no gross tremendous that our organic the By organic on are our those Like things CPGA. per way, the grow coming that cost that focused at that, number on we MAUs And are and constantly not are so

is them bit base and into sword. it obviously, but best move merchants a transacting But of active get accounts a churn, -- experiences checkout at take One, two-edged MAUs. those -- value side as proposition our we adds a churn we of to proposition, It's our that that's with a a as compelling not the all. consumer of opportunity kind across into we upgrade more better possible it our

highly have churn, or thing to for incredibly satisfied, that acting consistent, That's actually. where subscription for really coming What's subscription what's false other they management Every single instance, management. from. and what's us Hulu services. use probably narrative is is engagement MAUs them, growing. quite us your about that's are our million happening, whole whether subscriptions a that's we This happening with our staying be And bit their automatically happening XX for we to with manage -- a consumers month, really

are as to ton on moving is which sticky high-value it's opposed for a a focus base, MAU such us, active so And that those accounts. for why to people have of focus us we customers and incredibly net

Understood. Thank you.

Yeah.

You're welcome.

Our next from Suisse. question comes ahead. from go Timothy Chiodo Please Credit

open. is line Your

Two this checkout drill lot. the third, with progress. a great little modern on going year to numbers gave gold PayPal the going that. to want I one top were down Thanks XX% you to XXX. for migration core a The to on bit XX follow-ups

us a to see is one quantify and you would kind that there, The in experience what first going about modern integrated is, when checkout uplift third XX could of mean? could little conversion bit talk that you new to the the help

a one you some of win-win about and people it's Clearly, can speed help talk to you're resources But could the little that both the allocate what help for bit a you up? are to and the client. financial recap the either is, or And that? you actions second that taking things incentivize

great a It's questions. set of

in the we lift XX% conversion a low So latest up a it's conversion. X% checkout put lift in experiences, from when anywhere to of in a of

So meaningful pretty we that's what of terms see. actually in

integrations latest desktop. across mobile web in across mobile, share checkout our and there see growing our also we're We that

integrations. and forward highest on lot They're progress, a plus solid loss value Now, top to seamlessly Pay quite to implement payments the our Buy also industry, play. has an quarter of there. great good sophisticated move I the top the account-by-account is with lowest a mentioned, ability And the loss we're lot have rates integration. increases They for XXX, in in which it's clearly, matter rates legacy their XXX teams. And another conversion Later, And making as every reason the single a those proposition and

to Conversion up thing. XX%. same Mobile SDK, rates

in We portals. now developer are

Now, a Our which Buy asking in forward, second merchant come requirement in being also Later merchants most checkout terms advanced of SDK, be really half, In something included on mobile is new will in our going the are Pay without merchant for no that. mobile so that also can our in integration is our SDK flows. that seamless of

they We're going us. that Braintree, to that's and we auth that's XXX PPCP, partners. go going midsized happens. rates We're for through for opportunity able about our talked tail we've then big direct in into PPCP, that channel a addressable that Braintree, a market go already into when for in billion -- immediately somebody And and checkout signs with have up But on never basis points force experiences. our up $XXX customers to on sales longer latest been I when before. average going both

tail. working we France, long it, As XX% In Shopify TPV that's, Adobe there. when to And we partners, will beginning on instantaneously already PPCP, upgrade those And feel them channel out I of integrations almost they merchants and PPCP. with mentioned, call our upgrade we're like we TikTok. are that with that

detail So as quite think, each well. address a we've around pretty to with, the movement significant got bit them I and of part of plans market pretty significant

that. the on conversion. you thank the And numbers Excellent. for giving I appreciate

of bet, course. you Yeah,

Okay.

have I think time we more one question. for

Togut Please from next ahead. will Evercore Our from come go ISI. question David

line is open. Your

you. Thank

plans including you've in there to full-stack your if of about, when reduced Is transaction transaction that that guidance PPCP, SMBs and which from with to expect margin contemplates margin some XXXX partners. initiatives not, would pressure? channel Braintree? you pressure your these And anything alleviate to from margin more segments, reduce unbranded talked at downmarket profitable it processing Braintree to time over pressure by Looking expanding

start off that. And can thank I'll the and you follow for question. on maybe Gab

or end way, number And a Braintree. the customers we're have for a we is a on are the and Braintree both But So business. America, into like that into us. lower-margin margin PayPal we that expanding a introducing margin. businesses margin lot higher high-margin be risk-as-a-service, South Europe for are payouts add of serving highest Braintree FX-as-a-service, us. of the is the structure lower higher-margin itself had We're businesses a we'll that always things by which there higher to of

structure because much for. customized unbranded, really is to is of we into sort move with PPCP, and up. as need unbranded, then platform more each customize mass call see platform. small expect whole, of So a needs is that a that the higher merchant And Braintree merchants one to go we have margin. those we midsized obviously customization a as unique margin of it that a a

you'd is there Gab, that else anything add?

investing in mean, bring to platform. point, investments to a we're services and Dan's efficiently overall. mix, us say of the geo over to are more we've talked also the allow value-added the lot margin-enhancing that layer really all about to I those mix Yeah. scale that the And making merchant time. are I'd business

piece incremental each of us less as So process. profit volume will actually cost to a

doing we we efficiently as can lot we're a of as we on doing also terms processing We're possible those side time, and efficiently everything volumes that, can. how to sure in as about own as think scale over to going our make

down the smaller slightly would of the as overall. progression Braintree as think And merchant of about about U.S. think of a we in set a multiyear of more sort how move again, I terms we it into dynamic so out

does come profile the the value-added really In addition, and through. on layer margin as we services

that. for Thanks Congratulations, Dan.

you so much. Thank

look on for you just Thank again sending great going to think to over against the Bye-bye. the little of your top all for me care. focused work hour. forward We're quite your I we're we're questions. that closely. to Thanks you speaking Take our to thank the Okay. executing already. Again, e-mails soon. want all Well, plan, you're a of everybody for and again I time.

This call. conference concludes today's

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