PayPal (PYPL) 30 Apr 242024 Q1 Earnings call transcript

Good morning. My name is Sarah, 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 First Quarter 2024. [Operator Instructions]

I would now like to introduce your host for today's call, Ryan Wallace, Head of Investor Relations. ahead. go Please

you Conference Thank PayPal's Quarter First Good for Earnings Call. XXXX morning. joining

today our Joining and Alex is me Chriss, our Jamie President CFO. Miller, CEO; and

conference to We're slide call are Investor Both accompany call our and is on website. our the providing presentation also presentation commentary. Relations a available webcast. being This

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

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

Our forward-looking and on and remarks include our current involve uncertainties. based today that are will statements and expectations, assumptions forecasts risks

results materially actual these statements. Our may differ from

report more You Form the with and our find date. that recent is XX-Q could available uncertainties our SEC website. disclaim All today's this of on information presentation can We quarterly information. and obligation this most other expressly Form factors information any on about risks, update as on in annual filed in results report our affect and to XX-K

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

you and this us Thank morning. you, joining for to everyone Ryan, thank

set we results, a solid off of good quarter, This is and the to a delivered year start.

leadership team really to business. well our together, is and starting the we arms are around operating get new Our

the You make efforts a see read-through difference. our will numbers are in and our that beginning to

and We we execute. continued need how retooling customers for with also our how substantial we see of the work company,

still that growth a We a to lot are realistic profitable to but of we opportunity drive us. ahead have encouraged work by progress do of the lot remain of to and date

making choices success. for transition year business the still year of that on a will said long-term where execution is What set focused start we at This the the we critical are and up holds.

prudently improvements focused driving and return this operational We have it more clear our remain the across sustainable business organization. needs including and get drive to company to Venmo, take large a in But execution businesses, it consumer plan opportunities small to there. meaningful for to and see across enterprise, will and be that We on where time a efficiency will transformation.

first X%, In on currency-neutral thanks part delivered better grew total $XXX margin performance which revenue took. on to a the actions growth expected, payment was quarter, volume. billion dollar in than we basis we Transaction in XX%

earnings year-over-year. increased non-GAAP Our per XX% share

Our the earlier the running put results and to are context the making require unpacking them understand are of company. what we stronger are namely, the in to than way the we we What year. in expected focused year, full want on, changes to some you is surgical I they

immediate impact Some of will these fruit. to longer have take an and will others bear

to we that decisions go proposition such, for to throughout consumers flexibility and This we long-term includes prioritize As growth decisions and to to we merchants. our can the reinvest, important and make how year this be taken of to business. the where drive maintain about actions sharpen need market value

our guidance mid- better-than-expected we in that QX With the by a year. and through results, take will start now few grow is mind, in Jamie which to driven of full partially year year high to to single EPS just moments. our you contours the expect updated digits, do

on Let our customer priorities me to on our strategies some update our time efficiently. and detail against an more first execution and spend investment operate progress providing efforts

groups. our customer X to Turning

and product steady portfolio. make strengthening to our continue progress We on positioning strategic

driving accelerating our checkout to in growth profitability large and the business. branded we enterprises, focus on For continue of

to to We are core market. executing to get the our checkout branded upgrades experiences

at show users early Fastlane good in make nearly data are that Fastlane those progress a XX%. from by PayPal And our to converting We testing group of continue merchants focused with of merchants. alpha returning

conversion in improves so generally make and year. U.S. started getting and results for available far for lift growth we as participating to promising, profits. merchants' in double-digit low guest just checkout Fastlane our merchants. conversion the incremental and expect the The is of already are the We this in half a are Demand creating product encouraging second

on with the to checkout experience, are PayPal redesigned will continue processes, in we even it rates. focus friction we launch conversion checkout the higher we to and from to to result removing pay more making by easier process. months, biometrics, coming continuing like passwordless mobile move authentication which Additionally, will believe In a

reflect of with the services largest payments discussions enterprise processing our our platform commercial provide. the active to that we begun value on customers focus We've outcomes and true

Customer will can As XXX provide. plan for our market many merchants deep bring California the teams Conference, to we the speak, of our our they and on to we are this go gathered annual in value where year Commerce top innovations

of We our dynamics the are of in overall early the and stages also merchant accounts. XX,XXX top evaluating pipeline

such orchestration. As processing programs, we processing, already clear PSP as services prevention fraud with our with opportunities but value-added to not evaluate only to services our that we we and see payouts, price value, our provide, especially

take focused fruitful This we have through game merchants having unlock the value-added services. our value with that helping we additional already can they strengthening and including us, process by are will plan, relationship understand a time, are but conversations their

example, fraud For with and Fraud to example with differentiator where themselves the area is learning protect to analytics our threats. businesses offering machine our ever-evolving provide. to This showcases DraftKings competitors. from can we an management went Protection intelligence which fraud our advanced benefit a Advanced, combines help live is against customer also best-in-class drive recently solution, and a an value we It leverage price of to and ability our key AI

more quarters. gaining our good the been progress businesses, PPCP's the XX past European more U.K. has now of medium-sized countries. than PayPal We've XX expanding Complete first we to For in markets. Canada, reach and than geographic small- the platform to couple over expanded made momentum Payments Platform the the of In launch and quarter,

added also months. Germany and PPCP recent the in features new We to Australia, in U.S.

in integrate and and new for March. to tools no-code to Additionally, our launched we low- are developers seeing positive we which response merchants PPCP,

the through accelerate customers. can volume approximately our with SMB adoption quarter, focused end Payments, to of X% the of already that of first As number PayPal partners of largest on is on Complete our team the distribution

efforts here PPCP include latest shop, checkout are have so consumers merchants they will benefit Fastlane, a from checkout our experience Our that wherever will merchants because conversion. best-in-class and ensures which integration, have important higher branded

merchant revenue adopt On PayPal average, PPCP use a products, is approximately merchants reduces and deepens account our X relationship who Xx to on PPCP churn. that an for an per translates of full-stack the nearly This SMB that which integration. legacy average

PayPal an I for ball. passion As its deep have small Frankly, area businesses off the took eye you where know, helping succeed. a this all is

who correct and area Over affected using products are and to that, have the we've Despite that where pricing of us deprecated negatively we population still years, for eager decisions to products SMBs is investing positioning. more we anywhere, made our largest an for our do This our are the course. them. market

and We to the are market. here business small serve win

of to for money with and revamped enable introduced In quarter, On opportunities. the sources center the feel out customers their to expansion conversion to consumer of a our create PayPal program to margin while power the app revenue front, and unlock look and our more most the at of data new PayPal app is rewards and leverage value of our shoppers enhancements the increasing the to the merchants. get we strategy for new our first

program. tested app in began approximately a our of cycle testing users, a it life we increase comprehensive user. drive nearly we Additionally, When with and margin XX% per X% marketing app transaction increase weekly rewards-focused logins saw PayPal in X%

to who debit adopts card average is debit products, our a have new to customer users first-time enabled a consumer the the to during from enhancements the account nearly PayPal, can quarter. activity consumers Introducing engaged, average, our value like the card The of Approximately accounts debit debit a to active users first help Xx compared major card. XX% XX% is who On in to team more X% onboarding revenue made primarily generating a maximize U.S. checkout. per transaction focus. they increase our and in PayPal PayPal a receive that use card a our lift flow increase

So while our is more we of work have business. do, a to the economics lot meaningful to this

We their believe drive to the In branded only shipments accounts allows launch, package these tracking purchase a app offers app, and Receipts. the X active use key we've tracking package track will personalized approximately to our and but had the PayPal million within WooCommerce months pillar not will XX enable future make consumers also innovations relevant In recommendations the present is activity. the Smart This quarter, incentivize we Package since tracking. onboarded checkout our AI-powered and solution. strategy. in PayPal BigCommerce with to engagement app post-purchase our us and through

Google in ways coming payments most more consumers in PXP customers the Xx will on with debit Venmo transaction dollar easier when revenue of which contributed For engaged among use quarter. card. in which margin In cardholders our Pay, accounts increase and person Venmo, use Pay we it Apple XX%, our year-over-year first money Venmo than Remember, grew PXP-only are our XX% the the are Simultaneously, In are we using debit quarter, their quarter, their focused incremental to immediately in see the making Venmo and in customer. to consumers or Venmo balance-funded the first that on for saw drives market balance average the a a card friends. the by giving debit to senders sending we you making overall months. to growth

payback through where is the to and in Our focus driving for business you backed operate today. are a about leadership team top mindset is branded customers horizon continuing are serving priority. This throughout for and areas durable heard to can time better top that will we greatest business me bottom, path our by organization. and X Investing and customers from in offer talk shift we growth our checkout more Investing clear efficiently a invest PayPal. innovation remains the our entire understanding a impact go the small

value new good actively have strategic changing. remittance gained services that business, and also to similar share. strengthen negative our We been support our example now this of A about are while greenlighting which revenue is its business trajectory accelerate investments future of is due to growth a This has That proposition. has on and Xoom, lack evaluating and prioritization clarity stagnated a priorities.

refinements cost pricing the product provide customizable right and over option of the We plan an funding intended enhanced to with to reduce altogether more cross-border executing PYUSD fees and long model growth run. with bundled consumers stablecoin. to transaction our the are promote transfers when eliminate We the

are tangible progress beyond. and we plans, and those activating to XXXX throughout We expect see

in is are investments we market where economics The these investment company. the that takeaway These believe of ultimately we where XXXX areas growth may of mean of profitable the contribute here and focus. our in that and invest of believe handful to same we will are unit At a the process key maintain there assessing compelling to time, decisions make the will we sustainable must we upside.

the evaluate see to update and continuing we we markets we you will are areas and and operate we action We focus to improve accordingly. Where the in take prioritization, offer. products

efforts productivity Finally, words on efficiency a PayPal. few continued to across and drive operational our

We reducing are to comes a company instilling stone discipline it and the throughout leaving cost/benefit rigorous unproductive no costs. unturned when

to also investing simplify our more and help in quickly. our questions, team customers' will are process frequently deploy for automation integration our the We answer merchants asked that enable solutions

earnings call, our metrics non-GAAP compensation part beginning reporting the started this of on have as last stock-based quarter. mentioned As we

also payment cash In better to income focusing to addition incentive on non-GAAP to annual from margin have operating aligned and stock, our shifting transaction incentive our growth. particularly programs we performance, plan,

We with appropriately on pay focus a aligns that culture to will continue results. pay-for-performance

for customers. the thanking PayPal team by conclude our continuing and to serve I'll innovate

early are transformation aiming encouraging of meaningful what of the are for, an our renewed still first the results high-quality and focus can execution quarter comprehensive achieve. sustainable to we persistent innings PayPal driving strategic we of While and in team's and growth our are deliver indication a

I taking We confident are execution the build you to steps transparent will year growth. that we the our long-term right profitable update about throughout am continue progress. to on our and be

to over our it to With first quarter you results. through that, hand take Jamie I'll

a the to first start Thanks, above morning, had that results We with our Alex. expectations. quarter solid were everyone. Good year

As it's Alex the still mentioned, early in transformation. company's

both understanding opportunities our deeper greater much our and are We with clarity. challenges in getting

and growth. making future decision-making, goal do and is laser-focused into with key on for Our back business analysis to for excellence. are up set for decisions the path so, investment our by and XXXX the business to we innovation aligning executing the And foundationally driving strategic

encouraging, While and team it to for will steady efforts is results, take at through sustainably we time the making our flow progress. moving are which is speed the

our of summary a with financial start performance. me Let

measures As This how enhance related compensation is stock-based intended include evaluate operating our performance a many the reminder, our and non-GAAP change results taxes. align impact already transparency, discipline and to now our of payroll investors expense business. to

results. Now moving our to

drivers at than XXX the Alex the fourth on margin basis. in revenue XX% first dollars quarter, in improving As Transaction year-over-year, currency-neutral by a more X% minutes spot grew tailwinds mentioned, basis increased I'll X% on through quarter. growth shape we half. points walk pronounced the first from growth that and more including in the expect that few of year, and the context provide the to half compared to a second of in the be

above a guidance updated on basis. excluded per impact share year-over-year were $X.XX, our would non-GAAP methodology, increased company's per comparable stock-based mid-single-digit $X.XX, prior growth. earnings share Under our non-GAAP XX% compensation, which methodology, growth XX% Under for earnings have the to representing approximately the of

share earnings ongoing the interest margin expense by investment a were Relative to spend outlook, certain factors, better-than-expected our dollars, timing driven discipline, in and combination income. higher of transaction per marketing of including

Total growth products. our positively Now activity quarter inflect accounts and PayPal and metrics to that X those from and merchant active relationships I'll million deeper in key remain first quarter in the other accounts million through fourth some accounts. increased more monthly across in we consumer active XXX walk support active and driving quarter, and nearly accounts total results. by base. see ended were to encouraged accounts operating the included total with addition million customer on focused XXX active We the We

to continued X% from XX%. with up Transactions number, up a Venmo. is was per in contribution PayPal active the trailing to progress, accounts account, Monthly year-over-year and steady million show XXX which first XX active quarter, both XX-month

transactions is grew which Braintree, active X%. processing, per account PSP Excluding primarily

billion. Moving a on primarily In and to International on to first Europe currency-neutral volume XX%. grew TPV improvement TPV strength Asia. in XX% U.S. a grew currency-neutral spot $XXX.X TPV growth. the and Continental driven XX% by grew basis in basis quarter,

X% Global from in branded to quarter. accelerated fourth basis checkout X% a currency-neutral on growth the

leap as about The growth day from as ongoing included quarter marketplaces. first a global benefit of the point X benefits from well

of growth. are large and the contributors deeper improving and small- Within by XX% which quarter. XX% businesses momentum experience, like in markets from in biggest were in processing branded U.S. the volume and Braintree solutions grew the remain particularly adoption our the on international mobile driving medium-sized quarter enterprise and driven laser-focused to fourth critical, markets We U.K. checkout, continued best-in-class PSP to with compared the

that as have innovation. disciplined and Conversations renewal a excited the with more merchants been to and encouraging already on process recognize we shift our and pipeline have improvements to we about profitable are Merchants started focus a performance product focus make emphasizes growth. go-to-market upcoming of the

in $X XX% Other quarter and on the a earlier, basis basis billion. to noted driven billion XX% revenue spot X% branded currency-neutral first basis checkout. in Braintree $XXX million. revenue X% services I As revenue a increased on the at by to spot quarter $X.X value-added to grew a Transaction and spot on declined

be services, value-added to other on balances customer meaningful a interest Within tailwind. continued

relatively credit performed because expectations business revenue with in factors. of lower X our with Our main line

First, after lower we originations year. tightening carrying receivables last are merchant

share Second, had we off-balance credit consumer portfolio lower rates. have of due U.S. loss normalization our on sheet to revolving ongoing revenue

hedges. rate lower foreign take X.XX% fees by lower to driven exchange and X currency gains from Transaction primarily foreign declined points basis

losses margin lower customer checkout, large branded the impact transaction increased largest branded to merchants to and rate. shift were interest the in credit our mix quarter. addition, checkout dollars better contributors loss In continued take Higher balances, Transaction to performance first X% growth. on

be few relatively less expect move year. of a tailwinds that the performance these as likely business meaningful through has the we are we the of been consistent, core to While

lower expect interest year-over-year on balances to we and loss customer Specifically, from loan performance. and benefit see lower on year-over-year improvement transaction

deferred well and to stock-based XX.X%. margin $X.X actively operating non-GAAP investments certain operating grew result while manage income XX% in points expenses decline corporate of Non-GAAP marketing X% key the reinvesting initiatives. to cost as is declined Non-transaction-related the of half as to operating to basis Part strategic as XX lower a continue we expanded quarter structure billion, the in and compensation. second operating our into expenses

bringing repurchases $X.X PayPal and share to $XX billion. in billion generated our in of Now, Pay debt $XX.X impact $X.X equivalents the the ended cash excluding flow with repurchases, or held-for-sale In share externalization. we European Buy investments in billion, cash, free completed billion to accounting XX the $X.X over first of We the related quarter months Later past $X.X billion billion. of the approximately quarter cash and quarter,

and X guidance. February, time. to move to XXXX in guidance provide now we approach I'll continue at shared second will with we Consistent a the quarter our quarter revenue

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

we expect a addition, percentage. earnings In double-digit low non-GAAP share to increase by per

we full share, the earnings With grow expect year, and high environment. relatively a non-GAAP consistent single-digit consumer to per a For mid- to percentage. macroeconomic plan continue for XXXX we to spending by EPS respect now to

in a compared our As main bridge transition EPS, linear. non-GAAP I approximately there Alex that help point we to. flat progression said To you we this are our not factors are be to year, and expect earlier, do will guidance outlook X prior would quarterly for

First, expected to by expense X EPS growth percentage results year. points of this compensation non-GAAP our within inclusion benefit approximately is stock-based

quarter portion into of Second, we relative reinvest saw this meaningful first to outperformance business. to We back our performance intend the in the plans. a

income normalization performance earnings half and of through progress less We more year and the loss muted be from transaction growth to benefit actions. second timing year loan primarily the the on we balances, of interest in as expect the to due in investment expected customer

the dollars margin transaction to be full expect now positive we year. outlook, for our Underpinning slightly

outlook reinvigorate decisions invest make profitable portfolio efforts. increase go-to-market accelerate components of non-transaction slightly. the is the key expenses growth Embedded to flexibility to expect and to within within this operating We and strategic

year, CFPB given impact the fee services litigation and roughly industry the expect regulation, be year-over-year. the value-added potential flat For banking late This and full pending on timing we any to both implementation. other uncertainty revenue from excludes across

these time we mitigate a taken to have future though steps take already take As impact, to company, the fully hold.

quarter, the year. out from with impact the rolling Consistent last new approach this includes guidance our we shared innovations minimal

execution focus launch. as from test moving is phases and on Our into begin pilot we

expect free approximately billion billion We $X at to be flow share continue for to $X XXXX for and least buybacks. cash in

start change solid a to significant off is XXXX closing, as the drive we company. In across

have further. We lean in opportunities to clear

doing position has profitable now energizing and in growth incredibly ahead, are to PayPal the the the see work this We commitment years to for goal. hard it been to team's

that, I'll back With hand to it now begin operator the Q&A. to

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

wanted hear to and what of side, transaction main course, if acceleration those you some on Maybe any change other on we've I ask you or calling other? more the dollars, love branded to there's the thinking in businesses, if us strategy reclaim Just a bit to margin mind, detail of on been can there checkout, the across give on the divest don't growth growth unbranded there. the little And assets. even

you, Yes. Tien-Tsin. Thank

to hand we strategic you I'll it transaction through the year. to over walk think me other the Let how and Jamie more margin, about take and on piece then

with growth progression. the for company mentioned really position TM over time. were the we've prepared through growth I'll underway to just I quarter. margin growth walk for the positive remarks, happy got you during my transaction drivers in the lot a positive We

contributor customer was leap quarter, contributor. benefit checkout and we highest and I'd balances from it PXP. wasn't on a this our benefited had over been continued bit, from but improvements And just grow income enterprise nice year quarter. interest ramp also day, product meaningful Venmo steady that this the profitably to growth a In time, just Branded but small it quarter. and to We've focused PSP this large profitability, to ongoing the a say on we but did in was strength We walk international. in very will contributor and little

of your shifting better loss some performance. transaction and other a the And then parts there did the question, credit smaller So drag and smaller portfolio. of see last the point we lastly, saw from we to

through that a don't do you bit. Alex, I to little know, want talk

Yes.

take we've year. Tien-Tsin, me thinking step sort back, Let talk how a about just of about the been and

we're us focusing profitable sort heard way The growth into transition this really You've sure set of to team been talk on the about we've year. that make components X different the up for is as well a future.

ensuring where have, have that to ensuring and got and innovation that's experience customers a allow best accelerating side checkout; we've we merchants consumer the available. side processing our on that innovation, is first an best-in-class to whether The again, in frictionless, our incredible unbranded

So innovation. really accelerating velocity our of the

in The are adoption We an that greatest that market, to and merchants I'll ensuring engagement. just our this changing you that the higher onboarding our latest onboarding it, actually consumers We about is call the give using in integrations. a debit quarter is saw once that debit and app that the innovation changed PayPal our second of talked the by are last and card for opportunity flow past the card engagement XX% inside flow. example.

the So innovation actually adoption. a just delivering big delivering but the not focus on on team our

this And strategic different business up to we Xoom And that the that then we at underperforming is a were decisions there priced as business. That we on, or to we make business an not? corridors profitable, and just hard. been where mentioned that And for a should couple now. very strategic that market at a a of when we mentioned, call. underperforming in could for be make some services. growing that's of a we a asset is lastly, us, you number it, decision our looked of opportunities actually the looked on years out of ourselves make profitable had the realized on grower this wanted It's cleaning I

going focus there know and execution, make just the an decisions. around. organization. markets businesses bottom you to throughout turn and will example. let be will meet there that we'll And we And or with some when be And don't that, those we'll cut, ones so top that's We're that other

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

if of the first initiatives the don't and I your some conviction mind, impact from perhaps helpful, them you it and margin. transaction around be timing the -- on unbranded revisiting on think just around would

you've maybe around than value But even more to those discussions pricing how merchants conversations but the in this more prepared had on to specifically, Braintree and you are think win, I remarks, pricing, with pricing touched going? if

market-wide, the think we the the value-added lately? services about and resonating And appreciation that in when for how X-sided of Alex, differentiator I guess, market has PayPal's network, been

Thank Yes. Darrin. you,

So both again, segment of sort just this picture on important us, and to high unbranded, an for the for enterprise paint -- on is for small business.

We customers the best And So auth basics, have for uptime, the best nail availability, to best right? the we now our rates, those are that best reliability. things looking the are the providing. are

been whether years, In beachhead building establishing think I as real ensure able also doing a to we totally though, a last our able we with have across haven't building with value-added been investing price been market. PPCP, it's engaged in That's that over for Braintree the we're services service, and value our And that, the transparent, to so, conversation. to we've now. we've end-to-end be that product haven't been to in or now strategic customers or changing been the few we

And conversations, extract mentioned, the and We're on end-to-end solutions, strategic so now the them merchants great having services with deep enterprise bear, can again, of our are mix. X-sided we're around we're value both more services that, you small that as for conversations in business your and bring unbranded, strategic and question, branded, both to value-added network, -- around the conversations now ad really the that new then we to the and our really platform on like providing. merchants even things with our that marketing having

largest time. to for I with Especially mentioned Customer time really, our just and in going adopt. the the to on and now as call, these right innovations it them them with Obviously, it's of conference But for all encouraged conversations. the XXX very out and So good showing L.A. our takes having really conversations. take some are, roll teams merchants,

time going throughout take It's the So year. encouraged with to start. the just

the UBS. line comes question Chiodo with of from next Your Timothy

I one really, wanted around mechanics, to [indiscernible], parts the around one X uplift.

and net could reside about think an a you we end, which routes uplift, end give if lastly, if us might both. And is where with be on the would a look color more about Wanted an, take, on to any part more as-a-service X of ways in of maybe processor-agnostic a this. the you mechanics, it available on first, or But processing. basis. able either can negotiations would of for be the you to at then offering, your see, scenario, you separate does But the rates could the fee. high On unbranded Fastlane, it might it pricing, that it which do be be at of it spectrum? and there on to if at way part to range is make then the Fastlane the take branded go unbranded way your Braintree be alternative be of low to and could that One think on eventually

Tim. Thanks, Yes.

the add Jamie part Let wants to me if take anything in. first and see

now We as gets market. Fastlane are to about it excited really

partners, continue We and to are live the with a handful early impress. results of just

users we're our more XX% that rate. at see Fastlane with What's through non-PayPal so these we're And returning checkout flow. now even a start for conversion unrecognized we've guest a just reminder, users, XX% in enabling early been that actually exciting, to to rate these are as to merchants, opting now seeing is able users,

that I a allowing pricing leverage go-to-market around just us years of shows deliver think this even through for that the to merchants take and a about brand we've of point the question checkout unveil your our to element. checkout that the for don't go-to-market data to bit conversion and rate our think it established we how of goes exactly our But work. beyond continues unbranded want a PayPal will guest ecosystem. is market not go within experience. over XX This what actually XX% shows the processing little And and is because power power that the that incredible it's we just That to about to it PayPal be. can it how shows an brand, just how

we're signs really the by early So there. encouraged

the think easy as many In partners, rollout deliver side, it our terms on. and that on for small one Fastlane our about how platform continue we becomes turn of we that it, obviously, platform through to of PPCP businesses to, click, to

will of big then again, merchant large in part conference. as that CXXX good the well at this And enterprise really And conversations rollout. on kicking are week So those earnest a our side. be our off having

year year, add aggressive a transition the pricing, XXXX if say I'd to we very see just when on may again, this get want Jamie, then, it to for So drive comes on pricing we because anything, want thing you on to last is and Fastlane focused adoption. the side we've because

and we value think up as prove this ensure as fast And they pricing as create conversion really them all encouragement shopping this about season, merchants the to so in the and is get possible win to. best to running assured, should season they low-code, is get to can them, the that We improve think this our for winning onboarding innovation value that be we'll time that. And right the rest for access to have that that over no-code themselves market from opportunities improvement.

add? you'd anything Jamie,

over focus holistic I our that I time. the reinforces being strong value all. core, for will checkout it pricing value No, And our you've think really prop, strong both it and I think and drives merchant unbranded. a branded for prop, think, and at support said Fastlane on conversion,

days. The is our But not coming guest that last conversion with what's I XX% checkout in, handful just point would is returning brand early of is the users. just me the that's rate This to Fastlane, exciting this with of so users XX% leveraging only merchants. it's a is unrecognized thing and for conversion this just rate --

network is This effect. a

become as rates gain coming through, those more As these and more improve. we and users users users over over continue now returning again, to should

and this is just than else network continue market. so anything And to an effect with better. order get it expect better that the in of already scale magnitude have, we we to the And

question from with Ramsey Barclays. next El-Assal comes Your of line the

there's product how advantage competitive a and more Europe? U.S. of you European opening ruling up some in iPhone whether open for mean, take NFC I Alex, the from the to could type that move. a you see as NFC that a well about environment? Commission ready comment rumblings are you as in I on PayPal open to perspective of a on hardware handset, know the the

Ramsey. Yes. for Thank question, the you

So context think let the it. that we it's me so about how clear set

in First, we play must an omnichannel world.

We the ourselves use as online market us checkout. established And globally for have love in and our leader in customers online. the us

of customers off-line security that an But and and to for value not to purchase. get they able deliver our demanding be an PayPal the to are basics we everywhere, opportunity, start flexibility, also as to continues as provide to but anytime, every improve, platform a we omnichannel we're service only rewards to our deliver able opportunity, want the

So we playing environment. omnichannel will be in an

we available, very up, it's where NFC iPhone obviously us Android locations in there there an -- or that not ready. provide to in are where operating a That and easy opens we are becomes still where omnichannel. for environments will system, a will opportunity If operate an wallet be

strategic for checkout. And and in we'll us, is purchase play in. whatever incredible again, functionality every delivers initiative we is and market, market an it's that omnichannel have something we every take whatever advantage customer-backed So PayPal whatever of a and experience, for features

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

X-part just I had a question.

growth. second a half of you're the that year. the for following a The transaction now positive little from seem levels, know deceleration little even would the the expecting up maybe QX first, though I comps just imply are I slightly on to profit easier. guess dollar bit

normalization to expectations in full growth? loan helped loss sense So and is just you for your change is a of of whether or just some then there payment any like part transaction in QX. And wanted that branded the volume things year second just conservatism get that's

So walk just to the bit second through half a half, of little margin dollars. on transaction dynamics first

and tailwinds. mean, about before benefited talked I meaningful do I in those less As from a the And we particular throughout expect we be move year. QX will noted, few you as

year, income on was customer are the get more you challenging. interest First largest last it to look latter contributor. in comps of the the just balances, in half start the in when But all, growth of year. at later our Rates rising the

move loan benefit Transaction out, or continue may don't the not to in transaction in meaningful year. we throughout may in the we quarter. loss a you pointed loss expect first in either. saw, improvement as as sustain in saw we loss losses credit material particular be quarter, also And first that We -- the not and as and

to those few So I'd And new will then about, the our ramp. say dynamics. things innovation talked Alex it are of some some the take initiatives and that time of

measured We on steady see we're to now, really results. we until right expectations want So execution keep focused execution.

have talked that -- to have we limited we upside innovation to put put we've these expectations. this Jamie's just And in not about underline point, or

the building rest And flexibility, having about term. so not by as us take that the do well right the year. ensuring time But built in as again, of and the long are the the this those right thing we is customers to the us

by a we you nice We when some branded It last of at revenue. But And we terms be our from asked transaction dollars. quarter leap as as look with about revenue that. had did consistent Yes. look this quarter we healthy well. that, a day. in pretty TPV was to have we year trends And margin at and contributor expect and large, benefit branded to

comes we're large mixing as bit from that the the take rate same to that, I of it And We when the a drop through trend little do rate little just the of make side. rate that is comment for take you think towards impacting take come year, last line decent this seeing bit a And not but I And that's extent. again might year. on branded expect will we a enterprise guess is SMB. down other saw nearly us, about

Ng of with Your next Mike question Goldman from Sachs. comes line the

me. Just X for

you smaller out talk I more part margin could that First, the the transaction does wondering just When about little of of drags was the of and part if dollars. work from kind on a bit portfolio itself the system? smaller the just -- of

Venmo And of Could contributing opportunities quarter. in you growth, balance-funded growth you the transaction Venmo talked next see attach And users? Do card what couple that? for the bit over scaling that the to are margin on years? improve to then transactions about dollar to related you expand little a

Great.

macro smaller coming at had of say I'd that seen a on portfolio, these this through deprecated. of part level, year. the a is at we drag smaller what a pretty the I are mean, parts On It I rate. year significant guess last products we've

Alex Some acquisitions just really as of looking these we that through in. hard a haven't these. frankly, mentioned, process of going invested we're at are, And

declines smaller. just the are some in are decline, Candidly, but

more that to investing a really maintenance we're it this But few in is which off. burn year, will years for smaller to some, making or profile really decisions in be in and put the mode, And going forward. shifting will take it

Yes.

me the Let Venmo talk and for up-level and about there. about minute opportunity talk -- a

the users XX% have U.S. with customer on the incredible So than higher XX million active average, base again, positive the we actives. XX-month platform disposable million PXP XX monthly leading side, with and income

this So for an at. work platform us is incredible to

customer many about to just in. we are they traditional for Venmo I'll to mechanisms be alternative about flowing delivering, of in monetizing looking for their talked experiences they're thought As we've use when the really about dollars really how expenses. of thought And looking Customers dissatisfied an want and reiterate Venmo right? in all for ways, dollars and able previous and I'm for, calls, here, to in platform looking that are

-- net is every of flow platform that within into those Venmo That leave to the just XX funds numbers days. Just unacceptable. behind you it. single There's put some new give of month. dollars $XX XX% billion of

to penetration, for of ability as when the debit and onboarding out access dollars focus you've heard improvements our a come users. This or for Venmo our that make starting a so card and our customers us. is products in services focus, a to improving we those in already, provide just on; money area significant money opportunities in, and heard need opportunity capital whether you've for opportunities And which are that's to and flows, or our clear some clear providing other

But is a very Venmo and we're hear reinvigoration in early again, the team days. voice my us. about it. of can focused ahead So where be it. on what you very, excited of Hopefully, opportunity taking The of sort

Bank. Bryan Your of next Deutsche question Keane with comes the from line

just grow competitive here. been months. you on would PayPal results I advantages the little quarter on first of PayPal PayPal think My Apple say methods is still still has the like In challenged at What know do now The in the over X the question market? branded? to structurally a naysayers for you've the particular Alex, rise big Pay. missing naysayers Solid with on is the payment more company picture. are

Bryan. you, the Thank for question. Thanks

enough. people So are here not a think couple thoughts that appreciating I of maybe

is to mark. not market does the still what be consider The use market would first is XX% the of I still any of XX% nonconsumption.

we're that's for. So what playing

best We have the brand.

us a remarket I able and into and put of but opportunity the with PayPal best We only Fastlane and stat the not that like be deliver. earlier, have And best opportunity ability reboarding through Fastlane to to products services now gives taking experience, customers, and be them an delivering XX% customers. customers around to in products for to able turn our unrecognized to coming them a that

think nonconsumption, So is got and there. market we've one, opportunity the step a I of leading XX%

that we're customers experience we our and not and XX%, said the transparent And that still innovation this to I other the expect. delivered the I've player. have expect the leading On be, again, and before, would

We are experience. latency then conversion rewards. the Improvement opportunities reducing improve app, in doing for an in that value-added XX%. the passwordless proposition an and and by the increased improve the passkeys value Investing our improvement now. rate in opportunities creating with branded consumers experience, And and will

that only experience. I we're end-to-end to out provide that at the player have scale we think the there

to the an customers. for rewards. can what can on everything omnichannel PayPal experience. It's use the And be anywhere. Buy debit you anytime, that now, with call, It's earlier Later. play I provide the back our It's Now, we mentioned Pay solution again, And

the play But start got our same the brand to now again, that, it, something to in and I think, the and ability every same take experiences great to our is got continue So an offline and we've and create we've excited. me to customers. to in to execute experience gets market prove for world purchase,

follow-up. had just And great. That's one

PayPal on Any CFPB the on impact on CFPB regulation fees. fees? questions We pending a late caps from late on are getting few

is uncertainty. PayPal of as And consumer timing right while lot not and share of impacted we revenue the indirectly are the given partner. by excludes our credit both There's that just through a uncertainty our that, of implementation mentioned around I that. first, directly impacted So before, our impact now with regulation, guide

And The impact the industry that, time. expects if we offset would over focused be largely been on very mitigation. implemented, have

year, of in for offsets terms those We I guess in. to underway. in but what is really, it time I'd it mitigation. takes is fully implementation that point a scenario, percentage were X May for implemented, -- the is say be XX if approximately date. actions that's impact to date EPS the In set being have that impact before growth now but be And right any would to the But debated

expect that roughly XXXX, and time. by half be we of then over impact So to more would offset,

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

served sounds the to progression, derive that think the deriving How timeline back ultimately merchants making then so cetera? go merchants done, about like about the least most initial to Fastlane at Wanted But you the the more to ultimately, now. just could beyond up by it. comments first with PayPal Fastlane. and what terms in should those for moving around by merchants like of trying et Braintree, -- served to it to of that And to end be that Alex, start we all going merchants how they think -- needs made broadly. available that It using and are can of benefits you're

Thanks, James. Yes.

Here's the best it. think about to way

for the continues running and and to and early -- First it get delight to up important the in hold to innovation was and these certainly foremost, And we the customers have best merchants. market. using data it. some have We us

all they to world, talk other. this in look, And each

us now value. start to for to merchants for improvement scale our great checkout conversion we so ability to the price through Fastlane again, the now seeing fans proof be and they're points as rabid of about And it, think that is

the able The We second of a out. this clear, we've we're and There's okay, mean, about for merchants QX, just in that will line driving at and proven world. proven works I we've to out we roll it really which proven started rate -- really that conversion sure the some and this was to need make QX the be, leg largest be we've now to on that out talking in ensuring a we're measured pace at it to and that, moving nail lot this be why is before this, to scale.

okay, get shopping right having enable PPCP we're to conversations now our it to year, with having as conference some we're at up now, out what rolling are the we to conversations that they CXXX the the holiday is The year? of half our businesses, have the win of small way this in platforms the is of season, really merchants can that the we the half and back second can season the running so that,

very Merchant thinking about encouraging. we're demand how that's is it. So

in a lift improves guest conversion, rate As you and imagine, that's conversion a a you checkout double-digit provides have that when would game-changer. product

And we as upgrade And sure sure could and is sense be onboarding to so to make for folks wanted experience is that customers possible, wanted and friction onboard. integrations as them. the make that high. want make for to which ability make to have low that sure why we would easy we to demand new We

season, XXXX. for holiday So Not this will on is, into the everyone on plan the and back This can continue expect year, win merchants we time. get will they the half season. will as of so that that many still get take holiday

merchants, the for well. integration and best years build margin for consolidate modern results customers. for all as I about latest and XX best on where deprecate allows will our integrations. really us to old at And we includes transaction be our continue what If over customers, we and to That merchants to the will experiences integrations that's Fastlane. more obviously be take the stack our drive greatest going which for are tipping expect or important we a think us for to point. a the But to And is of continue of a next legacy modern point, integration, then and the more there milestone to innovation, on be X an going them year some company move to years, as

great. ways versus costs trying could PXP finding there cetera? a transacting are mentioned be. in of you're the what Just transaction And coming et payment in Alex. and from Venmo understand bit little getting Venmo as you the Appreciate is to there, acceptance much That's improvement of transactions, to and potential reduce the a option then that Venmo increased How drivers color kind of margin. of what

Pay use the say button, to them off. mentioned really brand. Yes. that their It we're an dollars when And is it's in a well-loved see account. U.S., -- starting earlier I'd an take is that it's in combination. I incredibly it's Venmo Obviously, seeing opportunity those are to What that people for with

online. piece that's So exciting an

that, about omnichannel, again, I'm with excited the piece, it's the but for PayPal sort is offline of talk I and piece Venmo. about future The right? dissatisfied When for

continue of to that in penetration innovation we come dollars and pay billions tap have those that Venmo give out. so our coming debit to and card every other And check are able up, be customers whether it's opportunities, to with month we into for the ecosystem, or to them

will margin. move transaction of all towards so And that improving

said, getting risk also better with That and we're AI. leveraging models our

improve comes to AI losses, in leveraging the and the leaders scale of data customer customers when -- that would conversations over it are our at for to there's our have of lot transaction we a ability margin our We transaction market. say the I are one time. improve we improve service the

a days. path continue the work for pretty is direction early high. my Venmo of excitement There's for again, still, the to and again, But lot there. So

for to is the back call will questions. the I That closing turn for remarks. all time we Chriss have Alex

Sarah. And today. for us Fantastic. Thank you, joining thanks, everyone,

our and profitable As had deliver. with I And growth we execution the quarter, We results good transformation steady company will that comments our we on are tell can return we're in a know deep efforts. and to first from we mode. making you this today, can progress time,

all. you So thank

conference This call. concludes today's

now may You disconnect.