PayPal (PYPL) 29 Oct 242024 Q3 Earnings call transcript

Good morning, and welcome to PayPal's Third Quarter 2024 Earnings Conference Call. My name is Sarah, and I will be your conference operator today.

As a reminder, this conference is being recorded. I would now like to turn the program over to your host for today's conference, Steve Winoker, PayPal's Chief Investor Relations Officer. Please go ahead.

Sarah. Thanks, Third Call. PayPal's XXXX Quarter to Earnings Welcome I'm Miller. CEO, Alex CFO, Jamie Chriss; and joined by

today forward-looking these remarks results Our include may uncertainties. risks differ Actual and materially from statements. statements that involve

our Our commentary our as see we view the today. world businesses best them is and of on based

on the As world our and release, elements those SEC press in website, may changes. described filings earnings our change as

you, to Alex. over Now

We innovations market, important campaign forge adoption. multiple brought We new encouraging highly we made significant operating And joining with and progress us everyone partnerships marketing this with results. productive thank third are early had PayPal and seeing Steve, continued to coupled quarter. Thanks, our leaders for to a a good strong in continue on transformation and you morning. delivering to while financial commerce. global

early get We're ahead work we our to and be. want journey, in lot have of a transformation to we where to

of and over unlock in potential been proud steps to PayPal able the I'm me we've taking necessary achieve we're Venmo and gives that it of to what the However, year, time. full last the conviction

and velocity. of assembled from leaning advantage, consumers leadership set team, reignited increased are now solutions evolve a millions the our innovation a point into We've products and hundreds into network of of moving of with of powerful a millions a to commerce purpose tens and our two-sided customers competitive clear disparate around world for platform. world-class and We're of payment merchants

that across new and Adyen, to for mutual more our over we've commerce platform, Amazon, of brand, from we're announced momentum we just industry. the resonating. payments commerce value and X world's a demonstration are Global and These partnerships leading the our us and have are a discussing with Shopify shift players more In months, clear relationships company a to customers. partnered with As innovations Fiserv, add Payments actively expanded collaborations

that of seeing excited team's key City. and Investor there. on we will in will to this our person Day opportunities, New to in host details, discuss announce February and many quarter's XX you we we get strategy, Before how financial forward operating targets I'm York look longer-term sharing in an We

volume QX delivered billion. $XXX our $X.X excluding growing results. and billion revenue, to to Transaction grew $X.X Total of a X% customer currency-neutral payment were balances. turning X% X%, grew billion in X% on interest Now up We margin dollars the benefit to basis. on

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

growth plan We're free into drive continued Importantly, flow. profitable long cash term. results to this of over translated a these have proud the clear significant and

we're same and raising we believe another we're guidance for After share. strong quarter, will transaction profitable our time, At per earnings growth. the in invest areas dollars to full long-term continuing year that drive non-GAAP margin

and promising to and significantly few both improve and rolling mobile shared We've more When business to to on Let to customer me the I results we and update improve seeing. it you PayPal we're mobile. desktop testing new on customers checkout do checkout. past strategies are conversion. we was the fallen had work particularly innovation, joined, we behind significant clear In do had designed branded to on work on These that competitive, to mobile experiences are our be early experiences had devices. to completed new new quarters January, checkout over experiences out second now none.

Pay conversion onetime on Later are uplift experiences We're average are more of in for When These points XXX Buy properly, points and seeing increase a of XXX use. up the basis vaulted lift for new resulting XX% product checkout. season to live basis on of our than implemented and our hard in also experiences consumers to conversion checkout into get hands reestablish XX% holiday shopping merchants. to pushing traffic them I'm as as velocity our experience of we're throughout and U.S. converting we the into close the best year. checkout ourselves team's to branded next and for proud more of X% the of innovation today, Now, merchants

for enterprise. price that reflects quarter making initiative merchants. our solid X strategic large We're focused the us. our merchants, can both to constructive growth transaction we long-term a Braintree years, growth. we second is to opportunities progress that way in with to Continuing very is on services value that bring dollar meaningfully enable ways than our margin This contributing now We're on the having in drive more in conversations our consecutive upside current of

value-added personalization that capabilities today services, long-term it of now We're including effectively, processing. attract in convert our world-class payment that more is them we a about as orchestration, as is guest suite excited and risk service, addition progress new to help What here payouts, value is a creation. have to different and checkout key customers

recognize the to we a launched Fastlane to reaction pleased a also our purchases provide information their using milestone reached with experience to ability and Fastlane, drive XX% fill auto mark. first-time branded in conversion. merchants Since for initial X,XXX over increased we August, Finally, in the and we're to have new made customers a without of which users. targets We've seamless Fastlane e-commerce

to but now get scale with enjoy with so We next Global solutions, platforms hands the and U.S., our checkout us choosing it on In with us. Payments way guest try merchants, to they are the reasons only Adyen why not of more through many ahead is time of and seamless year. the of wait The are consumers very one Fiserv, Fastlane. to eligible primed can't the Fastlane partnerships into partner the PPCP, puts also Braintree who PayPal platform of customer million spend a profiles XXX other and first PayPal on checkout, guest can

important legacy PayPal our products Hong from geographies, Kong live, the to converting is Moving medium-sized XXXX. small- businesses. horizon month, in What solutions. and new XX% come that are in with and branded on In now markets example an we is both more where launched merchants steadily checkout these and PayPal Last of including to and for China of volume with that market Complete with the we're PPCP many processing SMB volume nearly Payments using integrated of this benefits payments, our the remember on unbranded is platform.

also to us Payments platforms, including small Shopify. work partner medium-sized allows many through with Complete and businesses PayPal

PayPal in is an announced in the for we As processor additional quarter, U.S. now Shopify Payments the

for branded into are single, Payments, experience Shopify Our solutions now checkout to unified drive business integrated operational creating owners a time-constrained efficiency.

offering partnership Amazon Buy a bring announced recently with also Prime. PayPal with to Checkout We SMBs to

expand that shopping Prime. with receive shipping consumers accounts with to PayPal Prime option the Prime to Next Amazon they work use Buy their while year, we will PayPal so can give our together and members link benefits

take significant to we here. needs will better is there to they and time realize, businesses. the While more serve opportunity small can of do

drive last PayPal with and this marketing offline. go-to We're sending consumers, to capabilities for of as That adoption we give the happen invest PayPal's more builds campaign all to of shift This shift to an as whether may perceptions is branded to earning area payment debit signs online redefining The than with established early on to we're beginning card, month's time. drive plan which reintroducing and solution rewards consumers starting awareness online about goal For launch our incentives through products, powerhouse option. We're of on who our back going to a is not and This for checkout. or aiming cashback we're of broader brand confidence our working. of is complementary continue spending, an position to over overnight. never our where suite strategy perception seeing as the us said, doing PayPal thought the PayPal initiative shopping to value position PayPal Everywhere. an proposition online have we're that PayPal

card PayPal Since first-time we've launched X Everywhere, million more we than added debit users.

rewards allowing customers are category choice of consumers is that daily seeing which card. at in-person debit me now X cashback gas a with to categories, we're top and are What pick and their per groceries, each so choosing $XX their for excited us customers reminder, far a purchases make restaurants. month, so is we're gets month. The capped PayPal earning As

they omni X checkout of We debit Everywhere Europe data proposition learnings next online. customers a the within to incorporating our more year, card frequently in first addition, when plan spend existing In choosing now weeks PayPal our from PayPal shows users sign-up. increase value Xx Early expand are U.S. to total branded the shop these from launch.

We and of will adoption expect further use help of drive capabilities the availability NFC PayPal.

Venmo, our lives. making in we're strategy to a consumers' With of service PXP executing progress to part from a solely shift financial central

we're Our value. look strongest Venmo Venmo, completely transforming taking a at eventually that experience. We and the and and monetization to multiple of unlock will the prioritize that we inherited innovations upgrading We team have opportunity see an that one PXP know user new levers. brands leadership Venmo's believe is fresh

contributors. meaningful X see we term, short the In

of each unpack me Let them.

both Venmo average First revenue We're encouraging allows is monetization. their card quarter, engagement customers XX% online monthly which trends offline. In spend of seeing and driving the we're of in exciting account early accounts. as all with debit Xx This the the grew yet the again. days that card, and in per adoption, is to accounts is active debit but balance, Venmo

ahead of Venmo us. only Venmo active debit card However, demonstrating the users X% accounts of opportunity active are monthly

Venmo, involves lever which pay second strategy Pay consumer adoption. Venmo with seamless online. way and This Pay with provides merchant is The a to both with

were have Xx grow. Venmo users, side, Monthly Pay Pay account is of to accounts. consumer X% Venmo that Venmo with users all the per active active are the up and of XX% in quarter, average Venmo the accounts with On monthly we active so room revenue

to bundle PayPal On the our merchant go-to-market motions distribution. side, we with with Checkout Venmo Pay will in accelerate

leaning these Venmo for improvements for now the we're time in years. With into first product marketing place, in

this to product will unlock potential over our the a obsess fully We as franchise. needs long-term multibillion-dollar consumer brand's and continue foundation on to and build

we're thank stronger. win. team company transforming to got to it and want right We've their team for in to I place making playing our even and PayPal continued the the commitment

With Jamie. that, over to

Thanks, Alex.

encouraging, profitable drive team time, still The stability progress the already to strong the to advancing another quarter and is foundation. of top our growth. we is and takes ahead remain of but have we and of on Change Moving making delivered steady PayPal consistency X. transformation solid work business of on an durable, results. lot underlying focused a Slide

a on Venmo, high-level the slightly accelerated financial currency-neutral quarter. to at Transaction the interest revenue quarter, transaction to customer growth loss X-point Looking spot quarter, addition better in benefit both branded and the from dollars a Braintree, increased contributed basis. in margin X% performance checkout, from balances, and results second nearly the in on

to price per factors, paying materially again including as year-over-year on with growth revenue continued driven focus earnings deliberately of to in Relative even outperformance Braintree to credit. off were improvements XX% Non-GAAP and share by Our is optimization $X.XX, representing contributing loss, Venmo guidance, of was transaction margin growth. slows. dollars our number value and a volume transaction

Turning to Slide X.

progress. of and nearly progress, up contributions X XXX third up from quarter accounts active million. quarter another consumer PayPal with steady to accounts Total is to show million continued a Venmo. XXX quarter, Our increased active reflect number, the operating X% in second metrics per Monthly XX.X account, year-over-year active which Transactions were XX-month million X%. accounts from the by trailing to

PSP active Excluding grew processing, transactions X%. per

Slide on spot Moving Total to $XXX to volume grew billion. X% currency-neutral a payment X. and basis

the enterprise currency-neutral breakdown third a on branded product, large merchants. last X mid-single-digit for seen strength at by Looking global checkout with continue the basis to across branded Within marketplaces X% international grew years. quarter, checkout, growth the we and we've consistent in the platforms, see volumes

best-in-class hard our chat wider modern As is at drive to Alex work most team of coverage experiences. mentioned, our

and small both We important us businesses our for on areas positioning. are particularly improve and focused medium to critically mobile,

grew PSP XX% volume second the in quarter. XX% to processing compared

our of at low of part growth or price-to-value healthy, proportion profitable prioritize than As deliberately are processing decisions margins. even making negative moving and rather strategy, targeting volume we a high that

in balanced What more customers to of our total agreement level. processing our share that practice this renegotiated looks of often like with enterprise largest some payment a reduces is a

but improvements So for with with more services. transaction revenue means XX%, partnerships, better volume we to XX% margin and economics of but a growth. lower with strategic from and are and dollar This breadth and products Braintree greater example, driving

basis to primarily grew branded revenue X% driven revenue continued by credit quarter financial the the ] tailwind X to Moving compared a quarters. in Slide customer Other value-added a billion OVAS was to services to and X% Braintree, spot and detail to past on Venmo. on $XXX Transaction [ less more and meaningful checkout to $X.X pressure balances increased XX. million, interest on revenue under be

business light tighten have the to We're needs. flow, to and with spending balance the We'll exposure now risk. portfolio's have modestly last with of sheet continue to and seeing on balance lapped sustaining ways We their to performance our reduce while grow fully actions providing year borrowing taken credit now the the more model originations. prudently customers across goal started manage manage better cash our merchant portfolio sheet underwriting and

X.XX% rate Transaction enterprise and branded to and exchange take by last monetization take by large compared payouts Braintree X X These foreign were in decline points to and Improvements a benefited faster marketplace declined checkout, basis rate. basis offset within growth Venmo transaction growth. quarter. point

margin transaction quarter balances, were branded and performance largest on customer growth data Venmo continue in isolator, contributors. with to Braintree some interest the transaction to from mortgage Turning the transaction benefit efforts optimize to favorability. loss expense dollar as analytics and Results checkout,

PayPal rollout growth from increased of expenses actively to operating the in X% as structure and Everywhere. that half initiatives the reinvesting continue new like including was manage first of Non-transaction-related cost the while year deferred key we our products and initiatives, marketing

billion flow over in of XX to $X.X grew the to leverage. to from quarter. basis share past as third well operating free months We benefiting the transaction expansion billion. income cash completed bringing margin XX% in quarter generated $X.X $X.X share $X.X of billion. repurchases total margin billion expanded as expense the number XX.X%, approximately XXX Non-GAAP operating the Non-GAAP in points repurchases, PayPal

ended and the cash $XX.X with cash, quarter billion debt. investments we in and billion in Finally, equivalents $XX.X

guidance quarter XXXX. year fourth Slide to and full on for the the Moving XX

assume environment relatively spending a year. We macroeconomic continue to the remainder and of for consistent consumer the

drive Braintree expect and For profitable low to growth. grow This negotiations the a related directly is single-digit by fourth percentage. quarter, quality, efforts we to revenue ongoing to merchant

renegotiated deliberate is continuation throughout we've have this we accepted and year, articulated a of earlier, revenue for a we Braintree better margins lower a action have where mentioned near-term agreements. strategy exchange I the As in the profile as

for reset relationships. build stronger, efforts, As through a healthy expect and result volume the business XXXX lower a is profitable Braintree baseline. and reaccelerating revenue from that more before we This fourth margin strategic these benefits the trade-off and the dollar quarter growth of transaction in growth

We expect during spend, marketing the concentrated and the intentionally higher season. year the support half PayPal as investment innovation, more the discretionary products go-to-market quarter have nontransaction new fourth timed we for marketing to in OpEx of as our holiday growth back in particularly key brand ongoing well including This Venmo. in the and and as of is initiatives, of and strategically campaigns

we year. low to low growth OpEx to non-GAAP percentage. Due profile EPS to to for range single-digit by a given this now year fourth the like any expect XXXX's to expect this year, decrease the quarter. increase unevenness in reasonable is timing, full quarter we we mid-single-digit nontransaction expect a business think in rate, But OpEx next which way about the some

detail. Moving full year to the more in

percentage. a initiatives. reinvestments guidance increase share. to and in We growth the in transaction outperformance teens earnings dollars expect margin the quarter to dollars are third margin back into mid-single-digit raising non-GAAP high well our full per by reflects EPS increase transaction non-GAAP and as strategic for We year as XXXX now This grow

seen innovation, like I'm PXP business, the product the profitable initiatives. encouraged checkout strategy, impact by the the price-to-value Everywhere. the growth to have our steady of and rollout advancing Venmo are our ongoing teams of response branded and of checkout customer launch We PayPal in enhancements from areas initial and our

headwind some interest and increase We're normalization XXXX also expect quarters balances of products. As low with now first mind. fourth range factors on due we growth we growth into the in fund beyond, our transaction to and fourth Beginning transaction to minimal there to on the expect We full as to in are customer nontransaction strategic new margin helping an Through X-point we benefit rate we continue roll keep out and to efficiency for in ongoing then in benefit making X transaction percentage loss move from in interest and to few balances interest progress, quarter, the to dollars. the planning a operating the but expect losses year, cost approximately beginning year were cuts. investments. customer a growth and single-digit quarter expenses improvements

productivity, As largely of right to long-term savings into striking investment better the automation. will generated seeking from and investments tech balance move fund be year, between and focus we next deployment our on through

plan flow year. to and of cash XXXX this continue continue buyback expect billion of to We free for billion $X share $X approximately

the like strengthen for drive to In change to meaningful ongoing I'd their our dedication thank closing, for team we profitable growth. PayPal as foundation

continuing are February. progress We to with to and our Day Investor you share execute we're good making at in we're and excited more

to back that, With you, Alex.

future. confident about am ever than our more I Today,

have market to We differentiated in. a durable we has PayPal a massive that position aggressively and strong opportunity. and a global invest brand continue

we harness the most PayPal. place and this are for our into ready for the a all firing to enviable to XXXX. as an and value cylinders. We we're position, and drive have of team the that Overall, we to opportunity good season in right holiday make head customers shareholders on It's and it was quarter

are execute We and ability in XXXX. confident going into our the and holiday to season strategy

Steve, to Q&A. let's go

open [Operator please Sarah, the line. Instructions]

line first from Wolfe of [Operator question Instructions] the Peller with Darrin Your comes Research.

in gross able results like decelerated nice you've meet to successfully And profit on as looks quarter. pricing value. It for expected. Look, that been with the unbranded strong

and response start on could So pricing if you're table. what you changes Alex, touching to maybe, bringing the just customer the by to

perhaps And conviction think dynamics just trends? again, more but to what you that margin [indiscernible] in embedded 'XX. along was about sustainability quarter the the rate then deceleration, into touch should the in terms any fourth underlying color, with and growth just the on how in helpful maybe Jamie, exit gives of we the

question, the I start Why Darrin. part of talk And Alex about response. merchant then second your with don't

I'll our about about third we margin for about momentum we're quarter. and comparative you margin look fourth to transaction transaction XXXX. at excited talk then quarter throughout when the as talk second maybe and And just So mentioned, pause really a dollars,

important here from And Branded was TPV dollars have income we second importantly, is checkout the contributing was have growth. more good third growth really underlying from quarter. nicely points. margin Braintree with growing profitably transaction X quarter It what's our It But drivers. benefit was interest transaction margin. X%, about to did we up

that's So days, transaction mentioned as rolls call just starting continued Alex data on through see to to great. And very move it's progress the there, monetization. has dollars. And points starting Venmo of early And that we're margin a the couple which but consistent been along. then become that it really

consistent is that all little in going that the that, benefit a to That different one, planning of growth on been the all is fourth a quarter. So less year. income, bit transaction margin of is in in number trends point a seen quarter. to fourth lower tailwind fourth dollar be We've quarter in interest the quarter. fourth meaningfully contribution than I'm X it's

a So immaterial. comparative We're basis. transaction lower new just recoveries also then for products, as also launching planning And really well. have loss on normalization we some we're relatively and fraud

quarter, mid-single-digit So feels but if weeks most strong to good up quarter's pull start. us, at the But important growth looking dollar ahead quarter. off The the are transaction I for we're a for consumer to low holiday margin of fourth fourth at really point. the this

as And we think transaction 'XX, on think same dollars margin then at is grow if least fast ex-interest I to that expect income, to when thing we I about to 'XX, pull as basis. XXXX at the look

conversations Jamie. I'd a as number very Darrin, characterize personally strategic. merchant hit healthy in these Thanks, involved I've just Great. them and and on And very response. of been to the

this revenue lot laying remarks, is us a really profitable her focused of out on As be strategy Jamie to growth. our described in

at table but And at more and to our that relook contracts the bringing partnership I comes we're with a think a now. relook the sometimes

bringing have these where that is services bringing conversations about we're bringing the platform. additional healthier, so going. Fastlane, allow And merchants we're we're We're to ads we're a conversation innovating, us having stronger value-added with we're

bringing conversations, as part durable that with feel table. the So of the we've were all that conversations place have a focused building it's conversation. really the excited back we're a not I big understand And these but we're like, levers that and merchants we sure is talked into growth they where about, getting and to again, from to have on are and coming merchants making we healthy more

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

love to excited XXXX. margin this but And little might hear the going improve the we all to just what you what of fourth quarter? here. that Appreciate here the what I us -- income, hard be about on should for dollar completely drivers it's favorable you're more a the -- on bit all to interest 'XX? and give in be acceleration Can what most transaction view offset more of the And growth recognize for detail data here looking into points some just curious would

the gets The been year. that think on set key the this investments really the consumer seeing themes checkout. branded that and back I as around trends and very part working year. in We've for this our really we've innovation back been year. all focused to making our we're have profitable product with throughout to we've And it deep experience growth things merchants gets consistent durable, on up of branded

constructive breadth And Alex those we're got at that confidence than second, now how the been growing margin the and this profile that deeper mean on teams with much where of of are the a visibility the services really momentum our things to really more about, to is ago. we've and today focus X have a all I we again, talking getting and place months with just Braintree were merchants. was this year, holistic, we're value-added and we things that continues looking into be platform dovetails just have holistic really more have how that seeing more the around what but of just

roll team really are the us. has momentum. nice nicely the when PayPal of and points And it year, and actually remarks. when the is Venmo, look those us. how his then data at prepared we're and had the at you PXP to consumers activity sticky money in And shared product product look rich. even good And some this for turn real this for Alex kind continuing bring a transfer, products see the you But then just we our hear Venmo really of really turning to actions PXP, peer-to-peer through, in we very Venmo's a consistently of to X really broaden

and excited see quarter I what about just really as as then that. into So moving And fourth 'XX that's well. continuation

reinforce about, just Jamie talked my about the with talked contracts heard from that now Just have, what core we've Venmo, in what Braintree, pretty think we to drivers innovation on Tien-Tsin, an just remarks, clear. I perspective. we that's you implemented

Pay with rollout. Venmo, Our continued

is embedded Our in debit card now the product.

So I feel very good about the durable growth there.

we well and haven't what Everywhere, to all dots that PayPal connected durable into all just something Fastlane it checkout, with the PayPal Maybe the that bringing with doing see on on my we're enough I getting now in innovation we're is but to about and right? checkout with also real remarks Everywhere offline branded the habituation people back checkout, comes not branded that to online. starting of talked access back growth,

that just Same starting where now more get them branded experience, to this back is we're are can Fastlane, with all them growth. checkout more of we now back. and PayPal to used users to bring market driving to and So the seeing

continued the as feel customers are and into important focused and durable drive will on 'XX are places profitable that our transaction So core growth into we that margin for I dollar matter business, move innovating are we like and in the drivers very we the beyond. XXXX, to

in think a to question. talk about helpful little I because rates just a Yes. bit And bit. little that probably it's come And set back interest mentioned table I maybe, on Tien-Tsin, your to that and you want

think dollar as we transaction talked year-to-date look last transaction we've at really margin we're couple ex-interest a metric main in business, operationally years. growth So been of X%. as what measure about but because we to doing we X% look at the When income, has metric compared dollar just at that the you margin negative the which much growth do is year really represents it this

we when at really we're excited very So what seeing about look that, there.

I fourth our to let's benefit on immaterial. cuts level minute X-point this we've quarter. portfolio relatively pause we when and for rates, about forward just duration. had a about year, that are X-month curve, benefit a that, is expect that up a that But The talk assumed be rate

takes transaction will think equivalent But any you're margin. timing to on through. of just it it basis to And about it when about time, way it So rate when the $XX and a cut particular depends XX time 'XX flow that is thinking and take point to cut happens. for about million rate

just on we're if to growth. to points X-point down a year, it's okay, margin said, drag you take But going XXX it to by about dollar next transaction XXX basis X-

running as go So very very, to be income business going is something we're ex-interest the on we focused forward.

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

that have us yields? unbranded in acceptance you of Help the average the on Fastlane update how you a strategy? sample size Now us potentially think larger versus take through monetization can be marketplace, additive Fastlane rates volume might

Yes.

Jamie, if with on the and you anything. pile take of want Fastlane to then, me rollout Let

in over are mentioned uptake We I merchants. seeing great X,XXX Fastlane.

right you've of a XX% in the nonconsumption are bring And as to part as mark. is also, innovation really, focus of that starting seen, We the rate well. of now processors that improving conversion platform additional the is as branded on of

is of market. have the majority the checkout. still best now the checkout product We So guest in checkout guest converting

our so focus is And now adoption. right

them as Our many focus and because multiprocessor Fastlane is are enterprises processors That's ensuring we Braintree many a Adyen we need well as will up well. bring large and get and of potentially as important, as an experience to Fastlane start running. into particularly

to built our of Fastlane is so again, Pricing on all now, our contracts. focus in is And adoption. of all right

directly to up. has our with drive have merchants. We focus But that now been relationships right we'll continue the on and adoption,

merchants. lot economics this includes midst of the a how and we've respect flow with pricing through, are And the will to element. that in all Yes. And conversations got of And we of it through partners to get take time XXXX, through good and numbers. will Fastlane quarter ramp ramp. to will as arrangements we take well. with in see our fourth And with as Clearly, time the and

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

just part checkout sense XXXX? I'm continued assuming if And where the ask you branded experience. that, the rollout growth. of I to Any gave as months? TPV new of wondering of checkout around the wanted X% branded at of in just U.S. the that XX about new you're traffic I'm will know over is that accelerate next expecting the goes QX. in growth on metric stability experience broader potentially I the X%

Thank Yes. Jason. you,

the So when been transparent year checkout a had of on question, as I really very sit some into part particularly point basis with first for we experience. data focus, And see mobile. consistent fallen conversion. I've improvement point here innovation, that to the your on is trends in with excited comes yes, this with Again, and Vaulted checkout. behind improvement today, the in basis we to I improvement I consistent market. I've onetime branded putting branded our now been the in it XXX XXX really shared checkout, we checkout conversion. am improvement and experiences in the now on are proud the And of our

iOS So we've just We've is XX% switch, XX% also and like additional which is overall mobile-specific on versus reduced included -- latency which it's by experience over innovations password, for lift an driving success now. success rate app in XX%. the -- driving

experience entire So sheet, overall, pay rebuilt entire we have the on the mobile.

flywheel into not mentioned PayPal to on improve focus us business, Everywhere, This I driving for continue Fastlane continued core but I checkout. the these checkout. back everything branded experiences and branded a is as to expect only earlier,

out. need to in this So see all all, play we

early about it ramp, some way have is are in the Look, mentioned are some merchants. with so we our of the season integrations integration ramp We X% terms holiday -- And of it as there as many, we and need, we I into have about up we're about do that think we've hundreds year. I now. of or talked -- that ability X/X to roughly Think we need continue the -- before, next then In many the some merchants to on. throughout work will to we patterns different do

the get conversion merchants these ramped good excited do healthy, experiences The getting about with are news now they're And new And the have and is an so up once incentive are improvements past the very it. to they they conversations now holidays. significant.

expect I X% still. momentum standing next XXXX. quarter the continued So that and on into throughout we're not

of from Your Dolev line comes next Dan with question Mizuho. the

wasn't I sneak debate? So if wanted preview 'XX again. see a this of give you addressed results how us to you because already. I it. our remains appreciate a to able from Are like ask big Amazing it conversations,

some that of comments really shape think talked degree. about a helps 'XX we've already to I the

And You start looked we've with When with mentioned had that conversations prepared deliberate remarks in that's the implicit some intentional flow in in of our very quarter we through the impact revenue some line. well. third we're the to making trades begin merchants, of the as I also quarter. and seeing ] we're branch at [ of my guide fourth numbers the the revenue

from on least trend as expect shift we've talked better-margin really portions that high continue in more of income, about favorable XXXX a that margin, Transaction see contracts. we holistic, little at really interest XXXX. We focusing to as to expect through revenue just to bit

all expect marketing reinvesting do addition that, of And minute into And quarter really One business. half. to the fourth seen very that, to we second area on deferred expenses into is a we've the OpEx And see back really we spend a proportion first haven't had favorability about year. we than I deliberately in talked in the higher if half OpEx. we're from the

now to framing flows from perspective. see But that's be more quarter. an digits in the you way low throughout that probably through. and single just pop And to balanced well. OpEx how So terms up think the year in look up XXXX, when you as about it full fourth We expect the at the right it of year

just the talk it about think and how love just sneak business. about because you it and we a share we me I'd to little how -- peek unpack in asked about Let

out in focused checkout, what to healthier we've new on the focused are the durable control like and we talked We are coming back innovations of hyper whether of innovations that on it's Braintree and everything growth everywhere. Fastlane getting we are whether levers. It's about, focus economics, rolling the PayPal why that, in it's conversations branded building

to All monetize the we is term. of that we're our things that customers in and can these its all are important innovation over of long

turned in amount last And foundation believe to and for positive We've Jamie on. We about really to solid in margin think I for be if that we interest said, metrics us. built metric because on thinking transaction income grow you now X that that us also, was XXXX. grow a that's about that. now from dollar a focused as think we control years, are can again, have XXXX and we're the negative And expect baseline I top of. really about on excluding the the of

grow in and we at least as strong the we, set baseline from 'XX. where So

team the focused. is So

and into to healthy Our out we're continue innovations roll in market, will I place. think a the

thing, of all more announced to announced, dive in February, elements. also Investor the where Day part Dan, good that's also that we that the into those we'll deeply Alex chance the have about And late today

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

I also with X pricing new aspects the pricing get with and sort And to there. bundle the on button. the of competitive rebased on want ability positioning prominent to Braintree, around positioning strategy. hit then One now

the you Braintree consider So of more merchants? these Braintree various strategy, contract to lowest of the is enterprise the this merchant still price large a reset, when first on price all pricing piece, with working [indiscernible]. be would new is acquirers With leader, relative the still meaning

often on part second bundled in the clause the be piece Is past, position the to into this button still with the pricing new And receive contracts was to of added websites. contracts is, those able as strategy? that prominent

Tim. question, great a it's Yes,

it. the I think Here's about way

the processing to some we just just merchants. are in a changing I not would conversation -- We not with cases, pricing. commodity what It consider, our is about about conversation are be a

value, I and table. the having the we price we're having, these so when myself. and many strategic when we We about I'm we're about what -- conversations full conversation healthy talk about bring to talk And of to again, talking the are what --

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the to APIs, payment target fun and Now are bringing ability right with really conversations. them to right we're time. to healthy the at really customers And start these the

yes, yes, it's have to pricing we value, And their option be to us. will so services. these actually just that more significant merchants in that's And them will bigger, important What's best value-added of payments. all with branded it's the and is we their continue honest, still price we will to drive because Yes, to to important conversations the not price -- business, still that will -- we checkout our world. converting growth branded are now important most them processing strategic help because

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

to know during would job trajectory like is course -- I you've that good add incremental the be the as appreciate, you for this that long-term take the but changing done what ad about where like. about on conversation, think change about then to really driving and the Alex, following Tim's kind as that a being platform including potential pricing that get outlining of value time going 'XX I should question of comments looks your guess there thinking we and ultimately you think you thinking thing and or in conversation that on you I the that. future? to We and of able bring up you've value, that, think there, value how

Yes.

services similar having us what most monetize is of I more just what's deeper strategic, think, is it's to that I these relationships all across shared, value-added for again, we our which important. very can

these it's to platform, different services again, ad to And well. going pieces, Fastlane, we're checkout processing, continue as to to we're the partners with should whether we branded to work again, or continue in. so monetize the lean which, going all our And or value-added all drive of

One can in of merchants strategic that that we store There's now that's have we about these are are these is Everywhere are omnichannel reignite conversations how the Everywhere, merchants PayPal the PayPal opportunities have about, interesting as merchants to that as with start hey, things right? thinking well? excited the we how work as demographics

with opportunity Venmo ability Pay Venmo. to valuable most the Pay for to bring to in As is States. of merchants incredible demographics United think an get spenders with about young, of start the the one affluent they as we now access

the on And so these themselves. good I to conversations about all conversations continue of think well. as And just feel again, build Jamie? we

the are we a just I'd little in Maybe Yes. process. add too, about bit where

in of are conversations. our good progress got years. well renegotiations, multiyear been we've agreements some in next really as worked have nature. through We way But have couple The large the typically which more

revenue margin Some more on impact years than as quarters. that the of several But renewals we others. But to expect few next happen and next accretion is well. earlier visible these over emerge importantly, more TPV expect the over renegotiations. And that we part

looking discussions a big merchant. really that been has that it following that equally, of of build-out can really mentioned piece -- already the much you a margin position with in how us we bear have in in those improves OVAS importantly, the And and But launched and value-added we're one new a third those where over but of value-added in puts that thing launched to at. significant more discussions, building bring holistic terms grow. time, a we'll we're seeing holistic we it and that we're kind service that services, relationship a of it's that's that continue already And quarter to sticky

the Your Bernstein. next Rawat of line comes question with Harshita from

larger getting I the ahead want What of are you season Good about from follow with momentum here. holiday you Fastlane. XXX the into of hearing and merchants up merchants the to testing? on Fastlane. some Alex, partnerships talked using

to experience the ball dynamics existing your about kind to experiences using with Fastlane mentioned now. you of think deliver branded go we should like here? How And checkout

question. Harshita, great

of merchants of on X,XXX those and continuing businesses smaller So and now are ramp. businesses, the the are be of we part large on holiday commerce platforms that we're Fastlane were an their some merchants turn A clear, over lot can to like lot midsized just as example. are able to the imagine, that as A big middle to in enterprises, of of season. small you

that of ramping on can. start their exciting One, going the reasons. that's very from soon the transparent our Two, hearing shut processors, QX season. works very, so multiple many which feedback as for want to for make a is of as across is is enterprises Fastlane to and is -- Fastlane large sure we're Oftentimes, to using be why code important. them multiprocessor processors the holiday lot are multiple down Fastlane for they strategy they a of What couple in

personally done. as partners, with on excited they're as getting about on I've partners can, the you number work those Fastlane, get and mentioned, just it's a is to bringing But is And they ready the as enterprises of soon they're about that had so conversations large -- processing critical. the

In are of as starting well. bringing that back we branded, to to terms that test into

opting never the us, been of which For largest again, of experience bypassed accounts about have right that getting you if that any users, experience, in people the PayPal These those have of to them branded think population users, or Fastlane. some XX% never the now. have are are been folks we're PayPal

we're to experience. their we're branded So profile into vaulting bring the and now creating them, a instrument, we're able back them for

you've go you've to rewards profiles, platform rates go out, users seen sharing we for want in XXXX, why because and to seen most consumers most we pay marketing burn rewarding our so those PayPal is that's experience on way with the the that minds to those that start us the of people the to really to now around rewarding be the at even through into to in through value them building that able or we levers, check out but has. branded branded going to be big unique it's building us, that's think them initiative a into branded be into Everywhere experience. through guest the us whether into checkout. much we to high 'XX and checkout so a bring continue experience, that And starting that PayPal proposition that checkout have experience And Fastlane again, a for -- habituated PayPal And focus as

line question next Jefferies. Williams the of with from Trevor Your comes

transaction to the take rate. wanted I go to back

Braintree. I think this a bit and little there branded better decline despite was a between quarter mix bigger year-over-year the

unpack If you trajectory from rate of take here? how just could that, about the the you're thinking

enterprise large quarters consistent that's then relative helpful. a specific how be branded, And guys. to spread would that callout versus been from within marketplaces looked few last relative SMBs, growth faster and Anything more on you the the of

a incentives And as there's lower well of the product geographic know, lot as rate both of mix, directly I mix impacting pricing. see take overall And mix, one customer are that our that's in rate, impact our as -- significant shift we just improvements have take of as would the mix take Braintree say, impacting So you numbers. that factors rate, mix, our the rate. you things take one in we have margins, things in more improving terms that's of the margins

lower also mix medium having the our And that. FX small with as that rate is rates on math just enterprise medium some impacts that that just well enterprises take businesses, compared offset by as And impact faster small well. And from had as had payouts a large than large at businesses. in we've we've to and and growth also business shift

the businesses global, able FX, is small great Venmo, business. But be businesses different we into we Fastlane, for have package really days, small that easy we lean together especially no-code, good others. feel the overall, I all right now getting, onboarding, solutions, small these with as bringing to product. allow exactly the low-code can feedback developer innovation feel pile rolling PayPal to about Complete on This as What love strong that opportunity capital. just Payments me. I the as to think innovation really for know, very and passion you to is out. all we the I'd a merchants is, small the is Money access for money to opportunities to now best out, in we one-stop business. payments things to we're And about be able shop do send still about have to we're

long a it Where takes of I'm small businesses. is now right time, is right? dissatisfied just tail This

a ultimately touch, You've is got over millions merchants period of a time. of what

go-to-market in team that to just a us a switch as enterprise of have really just XXXX penetration the bringing the grow fast beyond. are building conversations. to small make of I'm business motions. to But expect as it's handful and what look So up, as and continue the able large is I to and into we we being not very confident in

Let's more try to fit in X questions.

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

X% just that doing wanted do branded e-commerce I about growth and think how you to the checkout, market rate. the Alex, share? thinking to are the about how compares ask you guys versus

some to do you and company? you on single have branded the goals for can think growth it SMB, And of or focus the in set you that checkout Fastlane think guys and digits can you rates? get then kind you high with improvements just Do branded get where

say branded What has Yes. consistent. very is I'd checkout been

same gives largest, best branded share the and been in We time, has we are the my it grow. And improve anywhere and that world, opportunities. know again, there continue call that most me innovations in remarks consistent. talked checkout the of and opportunity are to about confidence I that the the experience At converting to earlier and in have we

also about take continue think If I . bringing to Everywhere, you habituation people Lane, you PayPal for think experience, of back us there. share online the the to Fastlane then about branded room if there's think into

about, got you've So have I'm excited innovation. to first,

to a value got proposition. You've have

market and we've into now flywheel turning. we put those think got I the

where I'm go So none again, going to we this about of but is happen excited there. overnight,

question. last the take We'll

line Citi. last Schmidt with the comes from of question Our Andrew

seeing you the the Venmo moment. for with the Maybe especially monthly about promotion? the in PayPal and -- what the I side wanted a talk trajectory to switch to consumer Everywhere see just actives, given you're

just products broadly a of for where And area consumer the about consumer terms then questions in the side. just we fit. could on get pipeline talk of maybe an just you just speaking, the It's lot

Yes. Andrew. Thanks,

is real opportunity just online, consumers into most say us checkout, app the on is actually PayPal the the back innovation, is with to last in habituation rewards but for what now PayPal you've enhanced which quarters Everywhere innovation branded experience, giving offline an have driving the to putting launch, app, in competitive into platform. an few starting what advantage not And drive innovation to the is seen we really both First, I'd durable have. consumer

for side, honest, have asking scheduled groups that, in on been to and adding direct Venmo with And deposit. with the years payments customers for, leading then innovations and be

And continuing comes to for as business but to so about that when be we and to in I great through customer think products the to to going continue customer grow customers. is essential us continuing growth to lean growth, innovate provide and want our

really is So satisfied ramp last that's when the what up company. we an look back inside I over have machine innovation most I'm year, the to of now starting about,

Our velocity is improving, reducing while tech we're debt.

Our map of releases consumers. have very be put ability driving into innovation And for our we'll healthy to road engineers to a consumers' our more out our very, we that hands.

lean So quarters. next over we very about in the excited where

Yes. internationally. monthly And progress also really sequentially both and in year-over-year. And consumers both say, our consumer just I the PayPal Venmo our seen steady well, would actives, as and we've is that

launch months. about we've really launch. that. seeing are habituation users had [ last more But one Alex usage. we well. the things on We're drives had it about, the inflection and think new million I And adoption, here of really we're has strong than that really ]. We really attractive since economics really is remarks as talked strong Everywhere the couple PayPal in excited of the X nicely And really haven't teased his And

things, with about both we our the Just those all the like of with engagement see but to just forms app, effect Alex product the engagement spend halo was that respect products. branded the also across with with of talking the core other with debit and that card,

about, a more we're of. we'll think, example have of and that I one that's, So great excited really

thoughts? I any know final Alex, we've gone over a little bit, but

Yes.

So Steve. thanks thanks, and to all, you

and to holiday And proud we've I'm look, and So and excited momentum and deliver solid consumers, upon, merchants a very trajectory customers strategy. I'm executing our set our build we're the our a to we've for created for XXXX. solid continue season team of foundation against partners. into the our

So take care, everyone.

Thank you today's Thank participating. conference. for you. concludes This

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