PayPal (PYPL) 8 May 232023 Q1 Earnings call transcript

Good afternoon. My name is Sarah, 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 First Quarter 2023. [Operator Instructions] Thank you.

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

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

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

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

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

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

differ actual materially from may statements. these Our results

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

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

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

for thanks, and everyone, us joining today. Gabs, Thanks,

XXX expected geopolitical to checkout FXN. basis of we there strong challenging key up start, to to remain with growth Both while We had and see QX our our environments than branded X.X% from a particularly as to unbranded good from the are TPV also our complex TPV QX, difficult to post from Even meaningfully predict. forward. and macroeconomic growth across navigate year-over-year issues the many growth stronger look the growth XX% start metrics. with accelerated the And to points financial accelerate year FXN, I'm pleased

giving to we one to I'm And our reflect proposition on can to and our map. to strong the number focus is executed PayPal we last team merchants strategic the We the this value beginning times, is message innovate things invest road priorities job these In and consumers. we control. that is improve our consistently against work delivered and results. our to year, have in honed our Since know

course, areas, but are making we a improve our multiple strides both and from ago. strengthened Of large are in have room still experiences, consumer year in to merchant which upgrading significantly we

executing possible. focused are and We on way in most the efficient cost-effective

OpEx than can from plan. performance, non-transaction-related more As our we delivering you are our tell against

As encouraging as journey. these early would beginning results a efficiency as are point out at the we multiyear are, I that just

programs. learning For several and forefront years, management AI we've to of our fraud forms sophisticated and implement risk the of advanced been at machine to combat

to advances we new of With able the be will our generative productivity also accelerate initiatives. AI,

of not We and expect a AI, to for will years merchants consumers. propositions will data, come. and and our drive Furthermore, of scale AI unique sets set but that for enable will us differentiated believe value with costs our to combined only drive lower unique also we efficiencies, meaningfully our

reduce reap continuing fact the making next difficult are and in believe to is we to the strong year drive a positioned investments today's that products despite So structure. overall efficiencies poised our are and we macro to well forecast, cost year we deliver to our from revenue while environment enter streams additional

me our Let results. now QX to turn

were we quarter. said, I the with As pleased quite

being with X.X than the we half. the nearly revenues of $X.XX growth billion in the than by in XX.X% year Consequently, year revenues better guidance. front half be points anticipate Our stronger our full to similar expected, to grew our QX, to FXN roughly back we

driven points share transactions we gained by basis our We by in our acceleration global XX% FXN in we growing of checkout believe share quarter. an the sequentially QX X.X%, TPV, X.X $XXX processing. billion XXX billion of nearly and improved of branded to processed With from checkout unbranded

We with while expectations, saw year-over-year. grew base XX% by increased our our slightly TPA in active line monthly

PayPal the quarter per throughout transactions and, points XXX year. user of in was Importantly, our March in than core improved last consumer basis March, higher

we in addition, saw In last in improvement quality a of cohorts consistent new the versus year. QX

had focus on year. Driven For exceeding by of and March our and continued end our These driving engagement of our $X.XX. by in high-value our last the high XX% and results EPS grew by cohort guidance XX% to for higher QX TPA strongly $X.XX, instance, to accounts non-GAAP March our new resources XX% than ARPA reinforce accounts. discipline execution, higher decision of

$X.XX, result, a to we guidance for year up the EPS are As increasing XX%. non-GAAP our

three Our digital our of our and improve checkout unbranded adoption grow consistent: core proposition, drive wallets. priorities strategic processing remain our

making are these each steady We goals. good progress on and of interrelated

our Payments. suite to channel for highlight of services, our PayPal partners, Complete unbranded I'd and like SMBs and newest including Braintree platform

and fragmented offering share. in apples-to-apples that merchant and Android Stripe. services growing unbranded to highly market, these our taking that the the are comparison, ecosystem, in other volumes are of than we areas our equal PSP believe roughly and processing across Within faster an We is now

There unbranded are to four our make points want momentum. I regarding

have our merchants us we our It merchant ensure most and our First, helps base. is deep us. Pay latest unbranded a Venmo that technologically enables PayPal checkout Later and with Buy imperative our our unbranded service processing Now, strategic our bring for a and integration relationship across most merchants. sophisticated with to to important Enabling service

PayPal forward, primarily Going focus Braintree Payments. and enabling unbranded will our checkout branded on we latest and through processing experiences Complete

our of integrations when observations, branded are grows place. early our on our in checkout latest checkout share stabilizes or Based

best-in-class, to their invest merchants increase our enabling our fraud help reduce to and continue will to unbranded conversion we platforms ensure rates. Second, sales are

have multi-PSP and providing layer enables single a We will in this point of to while do contact a a orchestration that our integration environment. merchants comprehensive

reliability amongst integrated servicing best-in-class, Our increasingly capabilities now is differentiated. platform the our and are

of structure the our substantially margin improving unbranded we are business. Third, focused on

midsized a significantly new with Complete $XXX Our platform enhanced in small opens and compared structure market, customers. margin enterprise the our largest PayPal Payments a with business TAM billion

value-added higher we capabilities, And we enhance both Our to margins. and are are add also PayPal our payouts and FX-as-a-Service omnichannel drive functionality overseas Braintree like Payments incremental adding services full Complete platform and expanding to Risk-as-a-Service, platforms margins. can where

our services other and provide fuel to merchants. will And for scale our our merchants the differentiated set. incremental stream checkout our a constant engines and platform. enabling data our improve And the checkout AI with next-generation will unbranded to that no of in data experience use our future, to replicate engines capabilities able drive unique entire of nature the finally, to data be We feed believe company will AI

combination of unbranded our drive become margin enable with win to and services new of clear and this new that sources of initiatives I our Nation, Live marquee customers we add next anticipate expand generation like continue to additional a in Booking.com enable will and growth. checkout, And provide our checkout We growth that branded services leader, market would Adobe.

checkout market a in Our in in and results. are the clearly making improving focused our efforts branded difference our

product and driven improvements engineering have and teams latency Our substantial in passwordless availability, login.

begin our our the in SDKs, that to our to largest with platform our our APIs in-app base legacy and along also We fruit checkout partners, solution bringing Complete our to PayPal Payments latest should of channel native deployment via significant integrations. bear expect

at Buy and Buy our consumers consumers X inception million continues merchants. have Now, Over to Later Later used XX million provide Now, our Pay since merchants. to Pay value nearly both meaningful

XX% We we on currency-neutral most Later, are Buy popular have Later the more industry. and basis. on world growing now spend TPV the when $X we Now, in with authorization believe our Buy rates and amongst QX, in one of Consumers in highest lowest the rates a loss services Pay Pay of the XX% billion checkout using branded at Now,

pleased see points its its from billion. and TPV we double to to improve were We're the grow continually to to QX basis accelerate continues by PXP Venmo Venmo working $XX digits, revenues XXX experience.

across experience intuitive more we with easier, wallets, people, Venmo transfer ability and to for to and an ad way PayPal. recently the bringing crypto multiple users We payments it to the launched for $XX,XXX. we customers the external quarter, Venmo par on limit on split increased funds to other also added PXP This

year, customer to the we user for PayPal a vice user pay and ability this Later both Venmo versa, a utility more will bases. add to bringing

the teen parents and have for requested teens some both time. which currently accounts, by We piloting been Venmo are of launch upcoming

Starbucks continue signed just to and and grow deal Buy Microsoft McDonald's Now, a Microsoft's we with Venmo Amazon and nicely, launch Our experiences PayPal both and for Pay to Xbox recently Venmo with and launched store. Later with Pay

successor. the Finally, with to The Board subcommittee, touch are briefly I'd a search my firm. formed has and working leading for a search we like on

sense well the detailed We still replacement before to have underway. candidates. and both skill external and access sets and my to is process announce plan internal year-end, criteria We of

this but retire as to the decision not criteria path was One climate economic right of felt emerge payments. to my also clear most the that in important that strong only from PayPal financial leader health, on market influencing in a was

Our work a hard but responding execution. to I'd always that quarter prove, point and we are still solid excellent our our all for that to their and to another results is and and lot efforts, this path. that like are Star. will on our are of proof our employees We North have thank accomplish be customers

the turn over I'll to that, with call And Gabs.

Dan. Thanks,

team start deliver off I'd us to global quarter. helping partners and great thanking for customers, our to like by a

strength platform. and diversification payments relevance, the demonstrate results Our of our

with conjunction revenue management solid top and efficiency expense in We earnings gains, are growth. reporting outstanding and volume growth. performance, in healthy resulted line This

our sequential foundation quarter with cost allowed February, Notably, expand to deliver both earnings established the we profitable gains to and a and EPS productivity Relative we outperformed. to growth. us revenue on last margins year-over-year realize both The accelerated operating shared targets and year and you and for our growth basis. discipline in we revenue first

quarter, second results. Before discussing I'd for review outlook to quarter our first like the our

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

income X% our volume. primarily XX% a grew lesser due Transaction grew to store and, consumer processing balances unbranded $XXX to merchant revenue extent, credit. to customer Other predominantly interest driven services to million, solid and $X.X by higher value-added from billion on performance revenue

revenue quarter, grew at first currency-neutral came and sequentially. of XX%. the and grew in points both as overall Xx primarily International a than processing rate a X TPV spot volumes. year-over-year These increase in last U.S. QX accelerating TPV XX X% Transaction revenue driven basis faster higher X% on basis, In volumes our than points, grew This growth. year. growth approximately unbranded basis by XX% our was expense

result, expense XX%. dollars transaction a As grew

declined points a basis of loss basis dollars X the rate TPV X a Transaction versus loss last quarter, X%. as improvement was Transaction year. for point

mitigation Credit ended We TPV. receivables, million QX volumes drove performance. basis risk ongoing net activities and losses X $X.X rate mix with flat this improved or were in of a $XXX points sequentially. Our our of as billion

Pay Now, Buy Originations were the our primarily franchise. by driven Later of strength

year, of As we this this a reducing sustainable externalize securing and a our portfolio, partner support growth. balance have later significant discussed, as portion plan we healthy to long-term exposure to sheet

from Our reflecting reserve our loans coverage deterioration ratio improved X.X% sequentially X.X%, in in to the portfolio. QX some Relative reserve increased portfolio in points. to and coverage consumer basis XXXX, QX PayPal business ratio XX receivables our growth

Similar a pre-COVID of to industry, levels. overall, portfolio the seeing normalization credit to delinquency we're broader our

be and to the portfolio credit quality with to perform appropriate we ensure continue pleased We the and while monitoring are internal our our of within macroeconomic risk adjustments making appetite. to environment closely continue diversification

dollars $X.X from branded Volume-based to expenses last margin growth transaction increased aggregate trend from dollar in in outpaced the in resulting year. growth growth. processing and QX to in margin of margin grew declined XX%, XX.X% XX.X% Continuing Transaction XXXX, volume transaction billion. unbranded slower X% the volume,

across do as we processing that Dan strategies volume franchise. that against believe we our and we execute growth drive unbranded this outlined improve profitability will our of ongoing to increased the shift, While mix branded anticipate accelerated performance

operating reductions offset in than Strong and and basis, discipline significant expenses more marketing, than expanding billion. to growth On sales more operating support customer a the in technology expenses quarter with non-transaction-related expense XXX margin income in is reached operating first Non-GAAP the from across eight performance in operations points that in transaction of leverage. growth resulted margin. expenses we highest and non-transaction-related the declined and contributing operating XX% experienced XX.X%, non-GAAP non-GAAP $X.X This operating development, have income contraction in basis XXXX. XX%, This quarters.

pleased growth addition, $X.XX be non-GAAP In XX% earnings to for representing share in reported we're year-over-year. QX, per

strong quarter a billion. cash in the ending be of a balance and position to very liquidity equivalents sheet from investments perspective, with and $XX.X cash, continue We

in share by billion transfer free to allocated taxes billion intra-group During the of quarter, generated we $X QX, property flow. related Cash cash repurchases. intellectual approximately million. operating reduced $X.X And cash the $XXX in to we flow

generate shares. to $X repurchase For roughly to continue our flow and billion approximately full year, in we expect the billion cash to $X free of

second like the for I'd full guidance for our our update outlook the discuss year. to quarter and now

expect we a currency-neutral approximately grow quarter, second X.X% X% on to X% at spot. the basis For X.X% to revenue to and

expect we to to approximately range addition, be the range. at In XX% share $X.XX, non-GAAP representing $X.XX of growth the of earnings the in of per midpoint

we growth given XX% non-GAAP from year, coming shared EPS revenue our start indicated full increase contemplated quarter, the growth our framework for X points to first we the mid-single XXXX, the an our grow earnings in in For guidance earnings of February. as outperformance of now low year, the as in At digits. expect we outlook. growth XX% of are in the that to We share $X.XX, per non-GAAP approximately raising

baseline. this shared also revenue was objective that exceeded deliver that We our to performance

steps for this and the quarter towards meaningful first Our achieving are the second quarter objective. performance guidance

macro As roughly year. with now in that the Dan current continue, growth of in back expect to assuming our be line first our the we revenue conditions indicated, half performance half

the Additionally, of our unbranded expansion XXXX. operating contribution processing margin volumes based in on to growth, of now basis at XXX expected least points expect we

are at time. same And to to one and the the environment is agile year, We execution and start will plan We're environment focused continue to on out. be to playing that dynamic. the mindful responsive revenue macroeconomic a remains guide our by and the quarter at how we encouraged time,

revenue well great our entered XXXX us. earnings wrap of to business and we're growth, We're deliver the strong free fundamentals. to in a continuing and To to off We're with expand meaningful accelerate generate as up, strong and margins we capture positioned believe the invest cash flow. focused more to year and a start opportunity ahead growth

And which us look margin platform and continuing accelerate expansive realize our wallet and advantage digital our We conviction progress of will efficiencies We to depth, with branded unrivaled our competitive powerful you. our checkout creation gains. strategy platform profile for to creates our breadth that unbranded forward payments processing significant enables and result in for digital the is have a share our in addition, franchise, value improve enduring shareholders. to strengthen to we and us. believe In additional scale our productivity our

for With questions. that, go I'll turn over it operator please to Sarah, the ahead.

[Operator of from Your the line Instructions] Please of question Huang ahead. first Tien-Tsin JPMorgan. comes go

here performance revenue. a thanks Hi, on Nice lot.

growth about second line like in Looks just clearly was better we in have before. second like what which in with points It's half, the the had about talked what And I'll one than ask here. what and better than there. So what question reported guys then the QX model. we -- you're you X talked line revenue modeled is for quarter you half calling first is with lower than

as of banking quality benefit Dan, with maybe all gains, question any sort of stresses if products well curious is the my curious seen share system. some flight is, some And on of as So from integrations in macro-related been change your with the if we've much different versus momentum this the thinking how is you've there. new that, talking and about you're to

work every that. Somewhere suggests

don't Thanks. So on your hear love that, to you thoughts mind. if

question? Sure. That was one

Yes. No, a it's lot.

Sorry.

So Gabs start let come then that me can with and in.

points FXN XXX better think what on all, of expectations, to us XX% on but real was obviously, we expectations is we First accelerated. parts that. still than around strong the XX.X%. missed basis a of had And business at just It's stronger growth pleased that our than revenue I all our the start really year,

was almost to points You And XX%. on points to just Growth sequentially up X.X%. even points. basis unbranded Branded basis Venmo XXX cylinders fire XXX from by continues basis XXX at had TPV XX%. all up grew QX to gone

start. good And a so it's strong

is that And X-year quarter. Promoter customers is the a other Net our mention thing Score, didn't us, feel our about of we which kind high at do how this is

So obviously, be. going they way things the that are a hoped lot of we would

QX of quarter, onetime X growth. fourth put quarter think growing pressure some of and point if points quarter That down, I or events lapping things in you'd QX. so. those second our and third X.X%, coming have look X.X to off you at X% Normalized, QX onetime on then about we're

normalized So quarter. of kind in the growth the that's

year as half to of of back through things As to we're out happening And we just coming think the way all, our the what's the the in opposed outlook, changed the two year. look now. first one-third rest the are in of year that we right into there are

any be improving hold taking last silver year. that in. First There's things, no our the comes it in bullet whether of in thing initiatives These the of latency a on all, are are number XX% one small market.

this by it of Our to improve goal by XX% end is the year.

Our availability all-time an high. at being

much bugs off. very a are reducing friction. that, almost channel do all lot We all have X.Xs We investment unbranded. and high the of small And is put calls There over. for less it coming midsized and as fixing our pretty at and market service can what We're PCP the well. are in partners in time. with taking into we expectations We're

seeing new And significantly mentioned that things cohorts seen like we've we're in are than strength, time. my as cohort remark, in quite higher I some

And a ours, you do there. small start -- effect. know a scale making lot flywheel still to incremental But has improvements, so Tien-Tsin, when and we we it like go you have have to

And pretty what so with we're we're pleased there. seeing

digits. maybe could into first in e-commerce could growth. came The single that e-commerce other positive general. high negative We -- maybe call digits, saw year flat We X%, muted expectations like around thing think it mid from anywhere to is, in low it with quarter. as We thought be the be it look, we really global, mid-single X% pickup as

spend it thought we very their continue we different to growth going expect of of be And see as e-commerce, us to we think than what our that half those think more coming half it. many is in as trends, first turning equal back the now to to are is consumers I long growth. Clearly, and

much improved it's you have outlook anything before. we than Gabs, So a add? to want

No.

much. so Thanks

Yes.

You bet.

comes go Your the line from MoffettNathanson. Please of next Lisa ahead. question with Ellis

unbranded and my for for Thanks the the all strategy. Terrific. thanks taking detail on question

how follow-up couple of TPV on clients questions the there, in will is? bit that you. Meaning, couple it a can a XX% for is that Just little a talk about One, what's going And and that's large Thank driving unbranded growth Dan, win of think elaborate is like, more you a lap? eventually this just what bit downmarket Complete Or -- broad-based you to exactly can and positioning Payments that ramp? then you where how little growth? more second, and will competitive quickly you. PayPal sustainable

Yes.

And in on PSPs. services this we're So Braintree to are winning And we continues Braintree share momentum open some our last It's big architecture some third-party we've and Look, in And our PSP growing where and perfectly We've Braintree are we think servicing. availability. a I incremental transactions to growth, did deals do it's driven differentiated. it's of we orchestrate overall expect Braintree. deals do its But its we've an moderate year, to clients, clients honestly, our other by just of we willing extraordinarily And as the working to -- expect well. too. lot got our success not well. integrated but year. big got volume largest got lapping

now think amongst I best-in-class. it's

of to services that I basis rates to great more really others than have, more very and clients value-added may like high others. the FX-as-a-Service. points vaulting whether of a and and the on updates rates And loss up we're we've adding to, card expanding real we're highest they some lowest or think are better XXX valuable we've number payouts, fraud be time are also got got margin industry, be that the but APMs loss in

at much we're from look from If and you why their can add see you results audience see to eager comes come FX-as-a-Service, profits how you that.

of and side it, obviously there PPCP you the some as benefits market. into the small are On move midsized

dynamics we with obviously your all, you see structure you button higher large of that have. that margin enterprises. clearly a the And First than even do PayPal in we have

APMs, real-time a including got fully all of account Zettle It's integrations. simple got update all or the integrated capabilities. vaulting it's flexible, got with Apple integration. as Pay. It's latest IP it's our plus, really for It's And It's featured omnichannel well.

conversations channel really And channel good And we run is also at channel once as we're hosted, with quickly are partners service, in that them partners. our it latest base, thing. PPCP, major channel integrations to their And checkout partners. services move a very merchant those making progress initial our part partners. that's important some that's hosted a our last If they really, targeted into of upgrade those of

they've to our a now, way our the learning that important highest quarter. tail EU with of amongst our it's latest engines, unbranded U.S. the got to rates here to in they other the moving if industry, data We'll next a checkout besides, lowest the the the integrations. clients, expand live a on fact We're conversion AI instances it's our Australia fraud, fully and rates. merchants and long ton of machine drive with of relationship important PPCP really loss into thing And of have most services deep lowest in our we why the about And

transaction time us. so, unbranded. is And that, it's of of problem all have. why out us is not asked us I looking imperative to spend at have margin, with that for To about high-class our People what's that calling strategic for a me, a really happening growth we're unbranded our why together, looking

that in faster we winning are We than market anticipated.

drive margin beginnings and in that on that business. We and that have strategy already very happen, we're we're of the a very set of to actions And thought happening. focused well through making seeing

I question, Lisa. So appreciate the

really it's one. important think a I

Thank you.

bet. You

from Your the of question comes ahead. Darrin go Please line with Wolfe Peller next Research.

to very factor the guidance in expense know second on just I XX you But lowering if take the understand results? strong us could help a thanks. half. of in margins. with bps dynamics obviously margin obviously incremental despite and guys, the growth Hi mix Braintree management were by you're rate basis XXX margins points

of second a to understand offerings in And either we expect seeing volume, just as us other we're mind. Braintree when have to higher-margin versus, related the to a variables any is again could how half Thanks keep of Braintree that, translate faster the strength add-on in guys. much mix would that quick you just to the at some we to the Maybe pace? help actually

Yes, start. you bet. I'll

You're right.

So, to half some half as relates versus first performance, out, it calling operating we have second specifically it are worth margin that relates as to dynamics margin.

QX would strong was margin XXX is margin very, QX, points our be operating it expansion. of that actually very Our with ahead that performance basis about expectation operating In from standpoint. an expansion

operating really of half we're the vast year delivering expansion so, expect margin dynamics some lapping QX, pressure operating on the And I'd the in in modest an to margin, majority have maybe we from nuances that the year. Within half, overall. say the and that, margin for more it's operating margin see will back standpoint of some worth that XH expansion slight I'd pressure. result actually much first some The some highlighting on

of in have on In them. dynamics We're year. to benefit you're specifically, few do year, expansion rates. than the sort some TE We again, from interest in modest side. there of are, see also increased more really benefits drivers the QX, Dan were that back the seeing really expansion QX, we'll of a in half lap, lapping highlighted the but the some and of then And the first half beginning and the of what

QX in increased in on really continued the that store And revenue we QX. that customer starts balances, earn

expect in we expansion don't half. margin as that, the much back operating to as lap see So

lap to in a back savings half of we addition, the lot started year. really the began work last of In cost that

And not and QX meaningful a so, great percentage what non-transaction-related seeing while QX. see and expenses in decline to it as in QX, a be decline from do we're both standpoint, we operating QX will expect in as

And year. between we so, that half basis we're the result at and op all expansion. predominantly half expect expansion margin to will that the is driven slightly for the in op see when do being called the at of that that by Again, margin differential least you XXX talking that between least taken full about back together That the fact our XXX ahead. out XXX, and points change revenue first

that more strategies some coming impact. but the also a talk business visibility Dan, lot A little in you the from in pipeline, bit about benefit Braintree margin lot that having to line, our unbranded? seeing of do is and contributing the a having that's we're want top to and

OpEx back our to maybe a I over we've look, for to record on We've in that. a is dollars, track doing think, actions average strategy second. through sure set and along had Yes, mean deliver transaction thought I increased strategy general of deliver margin we I that. step good to EPS think that's a time double-digit a growth well a of I'll and going got with And reductions, make take that year-after-year-after-year. do

our year #X the about a focused lot that's that drive we've talked checkout the We've initiatives and we're for branded a priority. over now. on Its on, been focused same thing

I our that. that all and our to unbranded, It's are highest drive my of talked linked bread service. we're absolutely determined because best-in-class. initiatives butter, of remarks. be We want have margin our in to All about things and It's to the

our collection we data margin will be and do generation can things branded us unique in In us It without those, helps with on all the of new sense checkout. for It data. helps a of unbranded source share us, of of question.

beginning extremely managing already and we're place those quarter, OpEx Many take well. into will put to expect the in things of then to majority of into XXXX. clearly, fourth the are And by to effect start our I place. those go them We services see

I'm focused We're deliver again talk this And down real detail we'll high It's set we do. this. we've on question got well. plus. negative XX% single-digits to to anyone more that. with can But year. executing likely out year confident that go we thought more anybody thought next a that I And up, it, would on to I on able be, if about has it. initiatives strategies of going against were a what negative talk they'll costs said be and But be XX%, as it can - we on if set

both. you Thank guys. helpful really It's

bet. You

question from Bank go the comes next of of Kupferberg America. ahead. Your with Please Jason line

Thanks switch side revenue outlook guys. over improved to wanted actually see to I growth. branded to here. Good the TPV the of

which a As verticals had to mentioned, understand that? of Wanted drivers, you acceleration or what there. countries you points couple was of or behind other

balance of Would improvement checkout? the how then talked of revenue Thanks. outlook growth any through during trend in amount on of directional you may you the the branded TPV material just about? comments any And attribute support checkout of year the rollout advanced the

Yes. Thanks, Jason.

grab one. maybe think that I'll I

back retailers for no got if comes other online just right? that a XX about as top XX% general, points except to like auth online U.S., basis those leader in We've step except in So that in take the I rates average. million is of a are second, checkout, the market wallet the merchants, close industry X,XXX the our than better acceptance. Yes there's we're XXX

hundred a merchant and They a website. puts trust means a that their things a six more does consumer PayPal XX% that a merchant on we that. It from every see conversion time buy by brand we've got of approved lift in midsized smaller them. consumer And to when doing trust

presentment. we obviously, going So really we're there's that advantages strong forward. stuff these right? are of going a do, still leverage We're can optimizing But ton to

through there, sure making whether the out partners. we comes through are that going and that PPCP, that We're have, comes branded through integrations comes our SDKs that checkout, channel our whether that into whether new best-in-class APIs

share we growing or have we best-in-class share of because checkout. our stable have either know - when we So integrations,

is as XX%. Our Xs latency, I in X it improved of availability, by our mentioned, closing

difference to in rates. We'll better, it up XX% a conversion improve giant makes

again or Our there. Now, biometrics. by to this intend be Buy year. intending take of there, Pay or ID taking are through login forms points We passwordless we that Later, last we're to grow and whether keys XX continue full to share that pass other improved year, share

Our also auth is anyone loss think Buy customers higher, PayPal, why that's rates because coming think, we lowest have -- are customers of XX% rates. we Pay the are the in than over coming else already in to we customers Later we know Now, the

business with our as merchants. Now, We of know Later and in that are are and all PayPal our full know we checkout to our checkout to as our And coming - see mobile And Buy And APIs. largest that have Buy our up, are we're mentioned targeting flows. obviously, clear after are Now, quality we - when contracts Pay now shift services. in competitors because we market GA flight people and we Later share somebody we when SDKs on well spend going a Pay the

of And the we we generation call experience, just checkout to checkout but with looks not the PayPal first full are what for now the at the checkout, experience merchants. experiment our checkout experience, full AI-powered which beginning

our I here. But in So we done, of team is say just extremely checkout. branded to this, well they do. underway executing will something get things they're have When the a lot they going say

will executing. are they They a that market. think happening map they road What the consistently have in is happen

branded that of continue be a got we'll I've strong. so And confidence share to lot checkout see of

we the France, most by expand the it'll our U.S., Australia position. improvement And of markets, EU saw, way, share Germany, and in in U.K.

way of any of when uniform growth lot measure a market momentum. at you look points, a sequentially XXX up your you're basis one course, share but branded there's or goes by share, that's Of odd it

Thanks Dan.

you bet. Yes

from comes ahead. the question Please line of ISI. David next Togut Your Evercore with go

you to next the beyond on based will for in you OpEx trend cost are margin maybe XXXX? year continue QX. extent savings if particular, potential And and weigh that the against dynamics transaction as in saw we could reduction the How thinking about opportunity those well

can Yes. your Gabs I'll the and start of off, last then attack part question.

going had all, progress do, to solid we're obviously, negative in against of said QX. First we XX% good we what

I a think And journey. I much is as said this on year we decline our than as XX%, expected. remarks, could beginning OpEx in efficiency my bit as which we're just for the negative higher full

our going costs see you're to continue year-over-year-over-year. think down come to I

both it's cost, back this going impact name office, By it and do just about and doing not of every almost office, but in not legal, about to cost be about not you PayPal, doing the about is just to It's about is There's way, have better. And allow efficiencies. lower AI inside AI is higher It's that marketing, function performance no it. not that our engineering, question have front things will us trade-offs. there. whether things an reduction. impact

transaction NPS. mentioned, calls, We're processes. well with resolution. higher they're engagement I result, as doing they're first the other are as friction teams doing process, simpler removing seeing Right The thing is onboarding fewer much improving now, that a better extremely and a

newest with and You're seeing in higher that our ARPA. coming in significantly cohorts TPA

be well. cost same that before think doing been this the time, I we'll be so, And just as ever be than to a we've doing them think is time to we'll journey come. going a things long on for And better at I

Yes.

Understood. Yes.

ahead, please David. Oh go

Yes. No.

dollar in accelerating piece the see later year point which that of well, of XXXX? as point there inflection is, you some in or an terms margin coming transaction growth Dan, this at is Just early second

to Do that? you want take

Yes.

journey I continue of We're saw that unbranded were drive growth branded volumes business think to off really acceleration while side, very the very in seeing. the really It business. a and profitable in the at in branded. start. So continue same was strong growth of good multiyear the through we're time more we processing to the it to on unbranded side what to really the on a transition we about accelerating terms see QX, the broad-based we platform. And as

acceleration Sequential and very is scale unbranded size given impressive. its on

would the credit say Given nuances just our see to included dynamics. QX basis we normalizing that it overall XXX from time will did what provisions. some the I TM of an point run, impact would beta see in I have take inflection about some it, which sort to business

credit unbranded, well. So loss rate was mix. that's as provisioning really sort the TM not of that specifically related It to branded impacted

QX. to to TM of out see some the exciting seeing in as the we But expect business, that continue your in that's we dynamic continuation point, a put the however. we're do There through move trends year, to are

in It it QX So in was XXXX. cross-border has I'd business of course, we say of that the cross-border overall. is what encouraging. higher QX for saw That, yield quarter a quite and growth since to really had we in strongest the

of on from side And just not help. that as start then up, those will also we pressure the well PayPal. see And unbranded some on did specifically pieces QX is in this business see for of Brain pick the as So we to which ongoing we PPCP don't some the exit unbranded side given business. This in quarter, transitioning to pressure to we for what has PayPal our created processing the our is are the as expectations PPCP. be sort of the think a how of TM we standpoint, about year some

about to the continuing the growth disciplined we're of be So business.

these number expect but an take overall it's and quarters to we going we expect before the do turn all start to play profile, what call help a point. I start We TM see of would inflexion to strategies to out would

Thank you.

bet. You

line next Morgan Your question comes ahead. Stanley. with James of the from Faucette Please go

bit mentioned a afternoon. and lot some this thanks to of I you've good time comments Gabrielle, follow-up can Hi, a the this you I around engagement. call, that's give Dan, or on one of afternoon, wanted quite Dan topics wonder update. on if

You've engagement, improvement mentioned can that I'm how those specifically, like there's engagement cetera? wondering give some on if an update in et advanced been things helping especially conversion, but checkout, more initiatives, you that's and

be unbranded how can levels and little tie give that? those improvement merchants, Thanks. cetera? there And And at least if of into et more further from what kind think getting maybe we think we of a by about uptake in or the initiatives detail the engagement of lift you're some should

Sure.

and So all I branded of they of these checkout. three lead all, first as of they together, driving mentioned, we've initiatives, and tie to all got volume kind more share

more unbranded, in our integrations friction, and more put the away and through our And do integrations. go market. we more So take market, and latest we our as our integrations see away latest we out we take into latency, lot the we we engagement, on a when checkout latest more put out

our is But point really what one the initiatives digital about wallets. of time that haven't talking we on spent we're doing

ARPA right, engagement structure. drive on. our active together that linked the the on monthly and and and and So are focused wallets, those four they're three, checkout, users Those drive we're our envelope digital brand, a through then keep our all things own are our tight drive cost

progress, In of about payments Look, making on the right of of apps side XX% used the the be commerce it. PayPal the PayPal That's It's we're one our by in solid good the wallet, users our up largest the world. whether churn already base app Venmo wallet is now. and on less that about monthly XXX our is than got greater base. year-over-year. are And on our XX% They've of basis their the XX% transactions users and users. predominantly it. got at more least for our ARPU. power points rest They've app active active And XX%

is quite pleased are we've that team and some velocity what I'm to thing is in doing like his our of now in nothing the And time. that that wallets experimentation seen Kim the see really John

the more champion lead going by just starts have have that hypotheses to and going been challengers overcome engagement that challenger, champion, through. to We constant out, and replacing more

saw the are As I March per increase in basis consumer than mentioned XXX March, we In the transactions on single side, user consumer every quarter. they month a year better points introduced rewards the specific And call rewards. recently. now shopping, areas. the saving about We whole of that One, right it's where and prepurchase, are idea three upfront discovery, apps really ago.

X XX We that million I Those in need are will transactions using We huge to per of increase numbers. in have mean it their now. from the monthly to right that but over X in million an million, are rewards X users go happen XX have over million our million active. active to XX% obviously time. these

last easy package talked We packages? the right Gmail. XXX% into this to in call, put that. Then like which we in have being about to flexible, purchase. do plays refunds Later which off there, of on How do now we the my earnings I that my ramped the tracking, I How we're easily? purchase, get is do now is track package all taking wallet? post We way I all iOS. scraping we're And that. Now, most And Pay there, Buy I drive clearly into And things do have intend really about then like how clearly share. purchase,

So purchases PayPal all of your purchases. place, see can in and you non-PayPal one

track can one of you So in place. all that

do that, again, And their engagement have their transactions those that started app up users up are for XX%, and XX%. to is

better can what than most to about are just an XXx, and and went all so they integrations in so wallet, valuable on and things, there we MAUs, away, the these slightly together QX. and of active valuable doing our our drive And just They and checkout, ARPA. customers drive user drive by really going up more driving doing that unbranded in in XXx they to forward when we're what out which link James, are all being we're far think better you transactions

this a flywheel. So is

we improvements for we're As seeing what taking have it. are reason taking it is up the EPS takes to the kind up because well of our seeing lot you our of take right But drive in we're place distinct expectations things our will think now, growth market. time the be, said, a as revenue we

Thanks for all have. that I Dan. That's

Yes, My you pleasure. bet.

one last question from of the We Deutsche Keane ahead. Bryan have time Please for Bank. line of go

of for credit Hi, credit book to maybe taking book the as about thanks credit. exposure about on Are to and of merchants a and different. maybe different the fiscal managing question. BNPL losses wanted Thanks. the you result year ask the given any for any I 'XX macro the to for thinking provisions rest and impact just of managing

bet. Yes, Thanks, Bryan. you

book. the which We of the increase is on our credit is PBPL portfolio, loans portfolio. that will Q, in last of see the our box so filed of in widen we our you'll middle overall XX% provisions which overall about sliver the portfolio Overall, tomorrow, the business receivables, PayPal a be So did sort year. did of

its was seen we through some would that working liked way is performance less have strong system. have than We that our

we an that just I the increased to so already that's started our something And systems. overall we'll box. through a work its provisions. way improvement see We've in mean

strategy. to of remainder delinquencies the upon throughout quarter based the origination QX this improve peak expect We and year through in the worsen

continues book Buy Now, area Later originations portfolio. piece where very the But seen component Pay very importantly, we're really the small more growing we're we've there, broad-based strong the to really And I'd a the overall of portfolio. that is where say be of strength. that are And really, quite growing the

branded that's so And business excited overall. that growth on strategy. a our It in of continued side, important and the about checkout performance the the of improved part supports our we're really business

provide expectation remarks and that portfolio prepared mention during in of the sort a our support of for did that in sustained year partner this work with growth is We to portfolio. that to really longer-term externalize part

book. to our the As pleased performance portfolio. I continue with we credit -- seen in We've say, across good very be overall, very

are in which post we see some COVID normalization, kind historically it expected seen terms of to back getting we as relates just really what seeing of and to performance. of normalization sort We to

first But coverage, better quarter basis hundred a when of CECL started, in reserve the terms overall. points we're when coverage take versus we few of few -- reserve today which at hundred a was look actually XXXX, points a

And book so the continues itself healthy. to be quite

Thanks so it. much. Got

You bet.

the we're of top right. I at think Well, the hour. All

So for your time, look soon. I again great for all your you and of just want thank Thank to to everybody with questions. you we forward speaking

care. Bye-bye. Take everybody. thanks, So

conference call. This concludes today's

your You lines. may disconnect now