PYPL - Earnings call transcript Q4 2024

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Operator

Good morning, and welcome to PayPal's Fourth Quarter and Full Year 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.

Steven Winoker

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

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

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

James Chriss

joining and us everyone this thank Steve, Thanks, for you morning. to

improvements operating had we've year to we've transition successful at The delivering XXXX financial PayPal proud durable growth. a Venmo [indiscernible]. executing progress make our a of growth to sure to for out made strong checkout, of the make that and and a set that strong PXP focus the branded One beginning it foundation to results. we XXXX to year plus We later, the we've the business. narrow laid I'm are matter our and initiatives the most

monthly our the well each on progress dollar accounts. our XX% contributed executed as great Venmo and our Braintree to We strides Venmo exit Put and transformation. growth Card renewed team Driven last point transaction with year a at high drove simply, innovations PayPal during in quarter branded growth active margin monetization made dollar over our with a checkout in meaningfully Pay the over pricing-to-value, quarters. the X is fourth margin making transition Venmo strong Debit checkout focus by year growth new has accelerated quarter. the branded on to transaction scaling in customers. to are growth checkout U.S.

and increased in active shopping the innovation the strongly. to X% 'XX year margin and to $XX we Total X%. We which grew benefit of we growth interest for value made dollar revenue, excluding inflection investments throughout balances. The to point transaction returned finish nearly us volume proposition billion and XX% $X.X an our allowed enhanced season accounts as market. delivered growth, in on payment brought customer reached up perform during well holiday to XXXX trillion. the We Total

generated buybacks. Our increased flow share non-GAAP earnings billion year-over-year. in and share in cash $X completed billion $X.X XX% free per We

expect year flow, XXXX, Jamie dollar will growth free For solid transaction strong of another and margin which we cash discuss.

look we the want 'XX, ahead we're focused to As on. I areas to most share

First is innovation.

expanded and With we the Everywhere, XXXX, can checkout PayPal we're team velocity Payments. we've which branded and launched new place rolled executing, the in Complete proven innovations with leadership experiences, to PayPal market. out bring we Fastlane introduced In

there, customers' innovate we'll stopping and solve to not continue to our are We biggest challenges.

product on The second of adoption will focused adoption. our is XXXX innovations. be scaling

just and In offer. about We will expect the We're you solutions marketing 'XX, all can continue and have scratching our go-to-market and we world-class playbook. we so educating surface, products ahead. more have revamped completely customers to

Third to and Fastlane adoption bring is more partnerships. customers. year, we Last to drive formed significant value partnerships

brands on leadership establishing with. building and as in commerce and to the payments are We work platform leading that position our want ourselves

more throughout even strike will XXXX. We partnerships

effectiveness made We our AI effectiveness. improve and we year, to the critical experience AI prioritizing XXXX, efficiency efficiency reduced XX%. investments are by automation, deliberate of customer to use are which drive is we Fourth the In PayPal. This and in headcount and and future. within

in on 'XX. We areas expect X these progress to make meaningful of all

'XX, our drive grow walk SMB. Venmo strategic this scale beyond. you year key win checkout, how initiatives will me results Let and our be In this through and Omni, accelerate to focus will

priorities daily. and tracking these Our progress organized teams around are

more latency the When for of shared. we've points average, traffic, the more than which with now consistent experiences lift These With our desktop conversion upgraded Starting basis results XXX with live quarter. drive win #X checkout, reduce X% early U.S. by on upgraded we from mobile. fully checkout is now up experiences, our XX% have leading last XX% solution priority. on than more upgrades the checkout implemented, of and than are and

the We grow lot U.S. then and in have as of here expands a adoption globally. increases room to

In benefit the markets presentment after see sales XXXX, on which improve billion and can merchants spend BNPL higher our experience. And On volume, help the brand more is PayPal XX% growing our approximately conversion, critical one more BNPL $XX like trust wallet. the these all which adding top make solutions messaging when higher Now, new to of and to Later, can of in total we year. the their the sites, of share experiences payment branded BNPL sale XX% Pay and average. Consumers drove expand from prior Buy of merchants customers difference.

can we next more lot a have year. with do the BNPL in We

Merchants X,XXX to nearly working continue can now on interest fourth We and strong running in to Fastlane are implementation. Fastlane. have StockX Fastlane. quarter, with future that that I'm we have excited share the merchants on selling brands volume. and to signed NBCUniversal, focused show Roku and In up drive large we

We inflection adoption bring point we through to more Payments efforts go-to-market even Fastlane this our Adyen, and when year. expect merchants an Global in expand and Fiserv

merchants but is data, have the of last to Fastlane new more not means haven't that months. are for improves Fastlane been or users exciting enables dormant To users. early and introduces also before, that never and consumers reengage half Fastlane PayPal to a than PayPal account say of have XX% our us PayPal users. XX conversion more active in This XX% From had that active what's but a account in simply, only PayPal shoppers

of renegotiate that improve mutual customers. merchants relationships with provide. shared adding our new largest build A as key our one a value-added value-added services services of built continue of We that to ones. the experience value suite that to reflect strategies is part we for is we and We introduce world-class the deals to deeper our

is conversion, and fourth the FX-as-a-service, it's which launched for we already Meta. currency In quarter, automated live

our a and key live is Instacart, merchants value-added billing Mobile actively which also the network tokens transaction including of use is We of we are growth with capabilities, Mint scaled of services expansion driver margin The dollar the automated delivering. for Poshmark.

We truly significant adoption card omnichannel. spend. PayPal of up debit increases categories opening Next, to e-commerce the September, QX. added first-time nearly our about and card new card become driving in launched let's more beyond talk fourth debit in We in users is was million TPV than PayPal and to Everywhere initiative which X.X expand in XXX% quarter, debit

deeper active most and overall, users are PayPal driving Our online. with reward and off-line our more new are groceries volume categories These restaurants. gas, capabilities and relationships

habituation debit are transacting PayPal users X% branded to grew use than more more XXX who generate times The users, consumer activity compared and actives per to quarter. per the checkout. Power transaction than account which average in the accounts fourth the only is leading card a revenue Xx average year-over-year Xx year, This

momentum seeing today proposition this to several European NFC push, launching including with capabilities our We are markets we we're our getting but started. omnichannel Germany. just plan to So strong year, value in Everywhere PayPal expand

progress Moving grow to our to Venmo.

experience send improving fourth users Venmo, bringing they've Debit Card including by asking twofold: and like capabilities more task engagement Our and quarter, first, Venmo. drive scheduled on users; search. improved is of and PXP adoption of giving our second, continue that more the to we Venmo the social made products, the experience increasing payment Venmo improve monetized been Pay the In our for continued with the

increasing. With these steady improvements see we to engagement the experience,

Venmo quarter the we XX account grew instant and XX% monthly Pay than monthly transfers million PXP X% card fourth actives card plan debit grew the debit Venmo and reaching of in more per XX%. user with actives active monthly Venmo more in growth active monetization, average beyond Venmo. grew more driven with than Pay XX% the active on than Venmo and monthly 'XX. XXXX more to base quarter, the in adoption accounts increased Monetized by On we engaged build grew than and in accounts. Our revenue Venmo that Venmo

in like We continue acceptance JetBlue to we major the announced, brands with MoonPay to and flight fourth the And recently for Venmo's became airline Instacart as accept the bookings. Venmo quarter. expand Venmo first adding

early confidence and playbook customers. resonating So to beyond. we proven that a we gives move XXXX Venmo, in have are still while as us is monetizing with This we

efforts to growth cover Finally, for accelerate I'd to like our SMBs.

of of from was step our benefit PayPal moving business from are payment products end-to-end continue disparate first a make small adoption of towards that driving checkout XX% an checkout and processing PPCP integrated progress Payments more needs. platform. to suite solutions an We Complete branded the building and set SMB suite of on volume to solutions, now upgraded with Merchants we experiences. on solve this

services payment set Key for with growth they financing success our of connected our is businesses Entrepreneurs growing payment example help start beyond move services, us throughout to to cycles. solutions. a their merchant expanding a business their our business. value-added us customers come and retain life us partner which on to and for provider platform Take our small in as

buy access and inventory, to As in invest they grows, their to business need marketing higher. capital

early-stage Capital is Working solution PayPal a purpose-built for companies. financing

PayPal more matures, increasing business the Business offers the financing to complexity multichannel businesses. of nature As larger and match traditional Loan merchant

solutions loyalty taking PayPal after XX% their Loan. by and a after business adopting Capital PayPal volume Our Business PayPal increase Merchants typically engagement, driving and financing the flywheel. XX% increase Working PayPal

of originations our grow focus this of our lending help demonstrating services their there's a services ecosystem offer of example trajectory to room merchant of customers. is is that Our support businesses. SMBs XXXX $X were leadership the This beyond. the and change to one 'XX and we just that in billion plenty in Expanding value-added

PayPal. the thank to team the and up their customers important delivering have every well PayPal far am in was It come focus want for year that we an for proud I for out, strong close year. for sets how day. XXXX of momentum To on beyond. I transition created We last

and We later that in, this are Day we share plan our a month. to executing confidence more excited Investor now at have game I'm

that, over Jamie. to With

Jamie Miller

Thanks, Alex.

X. solid end PayPal year. Slide the of Moving quarter to another results delivered to

we the making is to there be established. done, work on more team While that foundation progress, have the is still firm building

customers moving the second our teams better the energized our as quickly. on durable, profitable remain enter we We drive As focused are seek serving year growth. and company's to of we transformation,

the high-level currency-neutral on a the spot Looking both and at in Revenue fourth grew quarter. X% results financial basis.

balances. basis. revenue interest on higher benefit from balances. by both in was checkout our the customer compared and For year, grew fourth Venmo, the earned driven on spot currency-neutral and or and contribution excluding to grew dollars guidance performance branded full of quarter the Outperformance margin X% credit X% customer Transaction interest X% a on

excluding rate share, non-GAAP program. the year, transformation the up customer margin higher ended efforts, full a discipline, year benefited transaction We growth, grew year quarter, fueled dollars per per return share expense and of and earnings with XX%. transaction interest from to dollar were X% $X.XX margin results a strong up balances. return Non-GAAP full environment X% or earnings by benefit the the full These of the For interest our $X.XX X%. in capital

Turning to Slide X.

steady of to by million. grew steady nearly and PSP Monthly progress, third active Total nearly quarter another X% up show $XXX quarter year-over-year progress. consumer also to to last accounts $XXX continued processing Our accounts million reflect Transactions from operating active account the metrics with $X active from accounts contributions PayPal million per Venmo. $X X%. from million excluding increased and year

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

nearly trillion, basis. currency-neutral the grew For to and on year, up $X.X full XX% TPV a spot

breakdown accelerated quarter. growth. currency-neutral product strengths product, basis Venmo to impact. by point TPV X% prior quarter. the from Global to checkout volumes sixth are XX% consecutive also accelerated starting an for PXP make at PayPal was in the in campaigns Looking key improvements marketing incremental build reinvigorated XX fourth points quarter see a some X% starting increased we with branded about to the a basis acceleration the to X areas. on This combined Steady by growth.

branded spending be volume Underlying this experiences. the we were are checkout fourth remains U.S. a Winning increase this From most enterprises, strength our can continue environment to greatest checkout the quarter. perspective, and vertical platforms we in the focused to on see exposure. U.S., best-in-class critical and marketplaces. our Part modern, across growth, we healthy merchant large to scaling a specific priority. improve of see encouraged In attributed

should accelerate Our more higher goal which over a time. selection to engagement TPV drive PayPal and is consumer rate,

PSP. to Turning

volume the the past business within processing and quarter. Braintree throughout discussed to healthy, go the let in X% prioritize moved unprofitable volume. growth year, In in PSP to intentionally fourth with our XX% of line quarter As third this we rapidly compared grew profitable strategy,

add merchants holistic, with more to needs value of appreciation of moving price can customers' how suite share processing card have our and Our full deeper our solutions. of a and we beyond conversations through become

headwind XXXX. We expect growth about in large handful renegotiations Braintree to a of merchant result X to a revenue points of in

will but margin in point pressures result dollars is Shifting benefit away from and year. revenue accretive gross to volume this transaction more this than X

drive over We we value-added expect this benefit to services. as more build time

should renegotiations, which we new quarters, point growth. next to drive continue baseline and Over faster the a few we to revenue at work volume will through reach

X% in to the to more to basis $XXX billion, primarily on growth financial spot Transaction by XX. acceleration Venmo. Other Slide driven detail and $X.X by services revenue checkout in to on driven branded Moving quarter return revenue This was grew revenue. million. a grew X% credit value-added largely a

see portfolio. We our performance credit solid across continue to

payouts foreign by As within was Alex Transaction offset have Venmo grow merchant a be and credit revenue shared, X.XX% driver points profit Braintree, basis by and take in slight modestly we branded to checkout largely X to a expect originations faster in merchant rate begun exchange. positive monetization XXXX. declined and to mix driven and by mix. growth benefit,

were balances, increased and Transaction our interest largest return margin value profitable XXX than Venmo, price more focus growth by growth. to branded the on to reflecting contributors checkout, second consecutive for a in margin Turning credit dollars. customer to basis points percent transaction quarter, on The Braintree. and

As investment and marketing included growth efforts in first products spend quarter, to the deferred planned, increased XX%. half nontransaction strategic the of operating rollout by we support of expense growing new the This initiatives. year and the of level from our

year operating $X some Non-GAAP includes $X.X the from benefit a points XX to declined the cash X% meaningfully ahead flow full be to to which the $X.X flow bringing year we the at margin billion. cash lower of in generated quarter, free Non-GAAP grew the PayPal basis billion XX%. cash start quarter taxes, billion free $X.X headwind billion. for and This of in to expect planned in operating we is XXXX. of income

completed In the year $X billion in full share billion. $X.X to repurchases, share we quarter, bringing repurchases

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

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

is the the For a leap point on currency-neutral expect we X by which headwind a first revenue discussed lapping growth to I includes also efforts basis, renegotiation year's day. This Braintree flat from quarter, low earlier. last single-digit impacted heavily about

X% between transaction billion be margin expect $X.XX We which to billion, midpoint. at and growth the $X.X dollars represents

midpoint. to nontransaction growth in of for expect or EPS quarter, We low the OpEx X% the are planning to single-digit the at $X.XX range and non-GAAP $X.XX deliver in approximately we growth

served accelerating a this continue transaction healthy believe one full guiding enabling quarter during we to driving that the the time, our are revenue plan year. well company and profitability. We to long-term decision-making transformation, Moving We margin Over revenue prioritizes focused at time. both approach has on faster dollar growth.

For the year, billion billion, midpoint. at to of transaction the $XX.X X.X% expect representing approximately growth full $XX.X we dollars approximately margin

from customer In interest a X-point had XXXX, on benefit we balances.

about interest $XXX million For point to XXXX, includes due a or a our about guidance cuts. rate X headwind

on of the XXXX. balances least customer customer from on dollars minimal In in to for margin balances, of grow X% by expect the interest year. a interest headwind benefit remainder quarter, Excluding the growth growth expect X.X% then we we transaction at to first compared and

XXXX, to factor in point other loss benefit X in is mind saw we keep improvements. One transaction a from that

out for we XXXX We planning during transaction products. normalization are as new some and loss roll

focus in deployment. to balance and to tech fund Our from savings right largely and investments the better is productivity, automation through between strike XXXX investment long-term generated seeking

single-digit expenses to We expect operating nontransaction increase low in range. full the year

the spend to of comparisons timing unevenness the and prior to year. due likely will be some There quarter-to-quarter initiatives, marketing

expect than result, periods. be to we a As second OpEx growth other in higher quarter

tax deliver a includes X% interest the rate. lower non-GAAP in X-point representing EPS expected the of rates impact increase about negative and non-GAAP just to growth at range We full our effective over midpoint. expect to in This $X.XX year $X.XX, from

$X full approximately we approximately includes buyback, expect also year cash in billion. guidance billion $X free billion to $X share of and flow Our

transformation. I'd team like of and we we gives their PayPal's to up year on XXXX to focus us for in progress PayPal wrap second strong a The continued into move by the foundation the made thanking dedication. build as

our be we take in to XX. at but of February impact, execution efforts time of Day Investor our our of and with better scaling and customer and more experiences. drive confident innovation One It plans, we're financial driving are focuses year primary on and road in will map build excited you adoption our to will for some recent this our share

back to that, Alex. you, With

James Chriss

Jamie. executed XXXX, Thanks, transition out. To laid we we in the summarize, plan

created compete win intense PayPal have the momentum we positioned have adoption. about change. year We scaling they of and up sets to and which during the results us delivered is and a proud along strong I'm of well very The for XXXX, our way. team impact made

transformation, in is but objective our is our early It still clear.

commerce a platform shop helps payments win PayPal to helps sale company every from smarter. are that and a consumers evolving We merchants

go to Q&A. let's Steve,

Steven Winoker

[Operator Instructions] the line. Sarah, open please

Operator

first Your Schmidt Andrew of comes Citi. from question Instructions] [Operator with line the

Andrew Schmidt

good unpack How Jamie, to and on we think And those reinvigorating -- frame you consumer share performance wondered integrations, set the your Alex branded to digging to the volume sort volume come to of expectation Maybe about it transformation U.S. particularly just quarter you a mentioned remind stage right what there, did unlocks in biggest of growth. that as checkout? of XXXX, of us what into know time here. I the growth? for Maybe see the side. expectations trend the see are are in checkout next relative branded then in terms are the just And can few the play? drivers I fourth your just things the

James Chriss

Yes. Thank you, Andrew.

and over hand then to it kick me off Jamie. Let

was was felt it what good checkout. of 'XX most I as we just it customer course of tested our XX, year about branded do And remind context good and on #X at really then about 'XX, how throughout felt team us number a to pay the experience. So improve we innovation throughout focused but priority, by We talked of experiences, about let the the really the the we time me on and of the we on first, walked different gaps into executed a were different sheets, rolling clearly, desktop innovation in that experience, number of that out. vaulted of mobile. got the the

as is onetime And improvements conversion. roll out, we on checkout our as start points just XXX basis to a reminder,

on XXX points Our is improvement conversion. vaulted basis

the and business mobile so And is our our really on base. -- small biggest and impact

about excited innovation now really rolling out. So the that's

X% QX, We'd talked we to about started about QX. throughout out. ramp in As had to that we just roll

our execute XX% We rollout got the continue on to of year. the up end that by to and

feeling innovation, 'XX, out we to quality So ability the and really good as I'm exit about roll of it the impact our customers.

And as 'XX, and up look the Later have, of starting Now, best-in-class things pay to XX% we now to believe, on effects attach, I this is see desktop, on we with Buy knock-on like sheet. our experience mobile which new Pay

So really customer good and an 'XX. perspective, go innovation as impact from we feeling perspective into a

Jamie Miller

around crypto, Alex also did we're Yes. there really quarter. dynamics, the that very, fourth the still to ramp on. we of and early checkout in in we with And to our mentioned sequential see U.S. specific gaming, is exposure Andrew, as, about to but get vertical focused we cetera. that that the something market just in And improvement et 'XX, on due add very key U.S., X checkout travel, branded in into growth are quarter-over-quarter modern of points respect the certainly experience, was

in to reasons experience. really also checkout those consumers innovation, priorities driving giving mentioned biggest improvements you choose. Our And more around are

the app to our as really internally, all really of that done the people getting and experience, the And around our contacts adding different way. find consumer consumers merchant adding about of things rewards, talk and to throughout improving flywheel a the is how year that, between some elements around different So continuing move experience. we like in engaging the can things we've

checkout last perspective, and our XXXX a still TPV digits [indiscernible]. branded on mid-single to year year with we grow into from have from consistent this to with So expect guide about acceleration some initiatives growth

Operator

comes El-Assal Barclays. The next Ramsey question with from

Ramsey El-Assal

growth on as decelerated you of again value baseline we pursue as reaccelerate level, us strategy. Can volume As higher of to your price timing here? expected, and the unbranded the thoughts move confidence your at updated volumes you unbranded forward levels toolkit profitability sort give

James Chriss

Yes.

touch me And on the are these how conversations evolving. just just thanks on -- me Ramsey. question, -- Let for let touch we're how

strategic has conversations, us. I'm into nature, not conversations to this see throughout continuing are our So quarter just sort encouraged but strategy of another is first, year. TM branded/unbranded for just in having the again, exciting contribution The evolving dollar to of which processing now been We're steps. Braintree they're growth. to be two

bringing to these we're part price that value mentioned of services to chargeback unbranded and able value-added of all we're these Risk-as-a-Service, things as FX-as-a-Service, the orchestration, are now some monetize is automation, that to I market. One a best-in-class offering. of

starting we're customers these In addition, conversations by really in being to able differentiate bring the to ourselves conversation. though, to

of to greatest do down processing. and our so to And sit beyond of it well we It their bear. customers largest are about again, I how as goes really CEOs with really needs, what some goes just customers talk more bring

hundreds And this we're that have consumers of hey, two-sided leveraging the ad around to that of and first We the being have world. we able is millions PayPal network now an platform. the really has say, time

We platforms. have reward

unbranded inside ability have them. our app We growth to to additional and able PayPal to of offers enable processing be to create rewards drive customers the our for

having not ability dollars, end-to-end, acquire how holistic, do we how conversations, to we these we're processing two-sided honest, leverage so because really be but their network. just in do now their customers become marketing to And our fun leverage

Jamie Miller

some the respect larger our And that some mean, the work I couple lap of in forward time. some way still over quarters, sluffing this, will we Yes. growth volatility. have agreements we not should off we years next as large the is on similar perfect And the through. But do something over agreements we revenue to of build next a happens that dynamics few in line. trends with this just expect do

the is the be revenue the renegotiations But X-point here TM growth that XXXX. to about For important accretive in headwind. point on a point it's dollars XXXX, other a we expect growth X

very intentionally driving. dynamic important we're mentioned, So that, as you there I think an

Operator

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

Jason Kupferberg

to the branded to topic. wanted just TPV come back I

the think imply guess quarter, X in U.S. that would I points accelerated slowed. you caught if I right. that international mentioned I

how you international how that a little between color and give the And non-U.S. that U.S. quantify can splits U.S. bit of between outlook profile global branded. volume of us a mid-single-digit branded perhaps So just sense for and 'XX maybe differs transaction then margin and on

Jamie Miller

to with had in still internationally. we position strong take full are international continue share pullback. a international, and a very respect Jason, we market less than We there point to

some in TPV split, what I XX-XX. healthier in say. And perspective, look when and line. the U.S. to And margin from line you international much softness outside it's would at really Just Europe in is line, U.S., the it's both very in TM slightly but a the it's the

Operator

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

Tien-Tsin Huang

you Venmo. from it algorithm I on just growth, a about lot curious user Just existing XX, expanding? products is what Can more it is products Just about new but -- talk on there. know ARPU February or you'll grow the

Is more that mind, clarification. quick a consider? in onetime for step-up If CapEx issue? to XXXX, sustainable a is in you The of don't it you a level

James Chriss

Venmo then hand hit me Jamie. let it Tien-Tsin, and over to

digits $XX $XX quarters, really and for as million continue TPV Venmo to on in, monetization at excited. we PXP seeing #X is it So grow to we is and again, saw the think, platform first MAAs But grow as -- growth. of X, we'll Day billion. deep in We're it are certainly up this well on will time hitting up exciting the We year. growth see to to Again, will both U.S. all customer double Investor you X really, be Venmo, continue I XX%, end by Venmo. the the to dive

So really see of growth active to exciting continuation the users. and

which been focus important of again, of revenue with average across proven This about account base. we've up our that adopt card card penetration this up debit seen levers MAA and products of when per Pay XX%; XX%. revenue was MAA and card, Venmo single-digit Pay we've reason debit Venmo growth, in growth, across are debit as up monetization, a our on is which terms And is those In per reminder, consistent. was Xx The is just account they with Xx. the both we average delivers is MAA

grow we're elements. And continue customers to active grow we're growing of so penetration monetizable as and we to customers, starting

for this exciting So is us.

We focus also will on just continue innovation. to

But start to to think bring I a ecosystem. enable able other innovations once the think out move able new highly road way and and is an for have 'XX money money really ecosystem our be is groups We've to about we more really needs of to really, very exciting ] demographic. are the the just gifting a map scratching the we're scheduled money engaged, [ what theme valuable rolled into like to send direct surface as and deposits the across spend that in What are and needs Venmo. each obviously this other of the customers -- be to them in other. omnichannel

throughout well and 'XX, have, exciting very good up for us which we've monetization of sets what will baseline a Venmo about So built 'XX.

Jamie Miller

and years, CapEx, build-out relates center should next with seeing, $XXX in down. But it few we're then after things. a And other consolidation an to connection infra program with increase and data to respect it X the X about build-out And the million. Good. both $XXX million years, platform the to over in to come tech

Operator

from with Peller The next Darrin Wolfe question Research. comes

Darrin Peller

Jamie, I branded think said 'XX stable your you're built growth you on outlook. you'd expect -- what's through based into what

on should debit more checkout, know year impact. they you more I the embedded guess around year building in have they I of were a just in impact like I'm your modern things experience think. there just curious initiatives more The international, of could XX% have or and Germany when an so maybe softness? and guys Or material impact, has those the substantial. further is think of more it last Marketing initiatives are through the other outlook is where have acceleration would Are as which any card ramped You has you that end I been out. now, progresses? on your now kind checkout uncertainty branded

then one think flows, ex margin in of follow-on growth the my context X%, the would X% exit rate just be branded. I of And quick transaction this

your of than think forecast. so Is maybe that. you you're plus, think growth X% this leap anything quarter you've Otherwise, other rate when fourth X% curious, was about just year? I'm So capture unsustainable -- may I we added that there

Jamie Miller

Yes.

branded let's XXXX. in checkout first, the about So talk growth

were You flowing going our specifically That this that something into is checkout through scale we to U.S. at addition, And XX% point. And well. got expect of most that Alex asking about mentioned, in as experiences get as 'XX. as we're initiatives. we've modern with global the we TPV

to in embedded we of expect that So over that we our start some build from some to impact your we do flow time. it guide, have expect And point, to and to through.

we TM, it. of you asking. wouldn't impact Having want we've second that, up planned said European we we've as may here. of I will through then left how in exact were roll And remind to we've out, think but things the be I me your explicitly question? also for there. softness navigate on flow for as this Having overlay It different this put pick an you to say room ourselves uneven question we prudently see And was do because said that, the didn't

Darrin Peller

from I done. KPI at the in guess, Growth despite rate, X% you're non-float you've X% acceleration X% right, initiatives a underlying already impacted. you're guiding all plus, plus And -- without the any

that should So sure rate nothing there's unsustainable just in on you 'XX's exit QX's making growth. inform

Jamie Miller

to 'XX are probably two look Yes. think headwinds to When things there's perspective, TM about TM. at that you XXXX from a

and rates. really you into interest products there, beyond. clearly loss to I expect as full point the and that TM, all rate basis we it credit, headwind. . When X%. and normalize profile we when mentioned at a underlying all-in on that around would those 'XX into headwind the We revolved million even a get point look the I then little year. And about things you branded really, you of are total which are But we talk checkout, full expect to we is Venmo, And as that we're with X.X continue a XX, Braintree, we it's about expecting had we into are get in believe carry TM, though 'XX get that at first expect of look The durable we point of all-in TM transaction And or -- we mean, $XXX when fully bit, growing diverse benefit. of things transaction interest things a benefit higher rate. basis should too. loss around

James Chriss

want to important to as I well I branded our think really because in strategy just pile -- Darrin, comments it's context. Jamie's on I And set to checkout

as Jamie the throughout consistent been year, innovations. I and excited we've think about First, the we're said,

coming. a pretty to have in results looked I that see think we tell want the been you at we've guide. way we before We they're the forward prudent

step worked just strategy, what about think 'XX, I checkout. fixing on would basics of if we I and the did really we in just about the innovation branded back think what But call and

now the of an now customers we're described the mobile, and to to starting improved see to mentioned, that and both in product desktop scale, we'll I continue earlier, throughout that 'XX. As and rest you hands up of the on scale XX%. as quarter And

in will to to the next innovation the playing weren't bring that to few checkout, and go to new out after We scale guest we in continue experience. scale which But needs users expanded We've to Fastlane which guest now now we over starting is checkout expanded years. our check have best-in-class off-line. market we're before. again product, to in through And to

an off-line before. where So now we're didn't commerce we're just playing but see we that in seeing not world it's omnichannel branded,

habituation. And it's driving

are Our higher revenue debit active. as much card transacting driving average and branded as just a XX% users twice per user

a beyond here base that's going just forward. commerce strategy growing way, experience, can put starting in be partner to -- really a active but growing monthly we're button their holistic our to customer base our we where engage So starting a single holistic customer really together just

Operator

from comes UBS. with Chiodo Timothy question next The

Timothy Chiodo

better branded when And was in the talked periods of we past, the grew discretionary in within about metric it looking checkout, about XXXX, depending the So mix industry. branded the you're skewed not XXXX, the and if growth very data we the growth that than goods. to to during strong at. line, button discretionary faster, in on The and talked or the being typically checkout prior industry

better you see of branded the have than mix evolved, the industry? discretionary to expect bit spend, that a we little maybe checkout if how another faster, all? about button we Could a not in if period And if should period talk were of growing might line, at

Jamie Miller

one just some things larger or is areas, Tim, has a so the would a years And that of different balanced last services our expanding might across look look you I in when growth done the now, nice couple particular years at now, to of I in that been more the you mentioned really ago, the we've few dynamics you when verticals verticals. in really composition but of that X job say one shift of of a the the of is you of when And space. have services. X at we're seen to some

that the with it, good of expect it. to discretionary muted of side dynamic I side to more the on respect So be

Operator

KBW. question next Sakhrani comes The from Sanjay with

Sanjay Sakhrani

Just question a follow-up U.S. on branded volume. the

was I you there quarter that growth this sort high that the on trended Alex, into any it mentioned mean, quarter-to-date? new think, the and exited point. is color of rate at I year what how it

Jamie Miller

Yes.

and pure there. off about in But the first areas saw that is branded reflective have focused around in was some of X really, continuing the impact was growth on mobile quarter and our the about shift, on around year. to market obviously specifically other points of think that. way fourth U.S. that driving a I along, base. a hit the and quarter that very of particular, that talked focused into shifting Alex And we of And third really part We innovation, a lapping moving continuing as So is position. couple been we're to lot U.S. we

Operator

question Sebastian Baird. from with next Colin comes The

Colin Sebastian

innovations positive customer of acquisition that first, that And in ability for terms you on, mean that? hoping the already I and initiatives are guess, operating non-transaction efficiency. a was AI those margins on the focus are the through seeing does -- investments maybe impacting the term? to expenses the consumers, with in could are turning be ROI near year. what of Or the relatedly, some educating Maybe from might specifically use I for margins operating And to guess year? investment scaling sort you expand just more incremental and that rewards I requiring

James Chriss

Colin. Thank Yes. you,

to me is us. with start opening it Let maybe for Jamie. AI opportunity hand up a then over and huge AI

on at First, our we billion year. last our transactions scale, saw platform XX

that we data are actively be investing to working We to efficiency. massive able have a and and in set drive our effectiveness

it of Let into a couple different me pieces. break

First, see in have. cases down we tens with AI rolled now our we've of support of we our cases Assistant, the out events customers. and really we're on to year, how phone every leveraging side, really calls become and and support our We millions interact more customer-facing PayPal that is cutting which efficient active

a offer this offer to understand also the been button a personalized a personalize that journey to create to moment are merchants of so and journey, just in the leveraging AI Buy Pay enable or able It's in be a dynamic, to the even with commerce to merchants dynamic button profile cashback show across When on checkout. experience. starts reward magical they and be consumers. the consumer, understand that they've perhaps anymore. for or experience a a static We Later Now, This become working and our not able the up can really really at

efficiency that drive the branded us more all so for AI-enabled all both generate checkout sales things standpoint, more also our and for from this And is and merchants. but will consumer

just employee back In to risk not the decisions. honest, past. our that in things also what the get to at of ensuring just often, decisions decisions are we're engineering time now be side, ensuring addition, in response fashion. risk billions models be on customers well of we and do AI are see these these productivity and We're as very that that the risk and right but right We manual billions both also an risk automated how to looking we in our leveraging the nature understand like the able office globally automate and across as even at

Jamie Miller

million, then will were the consumer increasing our brand XXXX, consumer prop XXXX and slightly. very as we to And Yes. increased we really we marketing scaling then reinforcing did be with the respect about nontransaction in it, And $XXX and marketing spend into OpEx, value really we focused get around reinvigorating as by we and

Our total OpEx single digits. is up guide low

digits seeing PXP MAAs year. the results And that been of up I in at consumer weighted look really we've saw at would of the card plus look we terms second up the improvement. heavily up We're say true with seen debit sequentially. towards the quarter starting very MAAs targeted. profile marketing as low It's We to we is single throughout come how it, sequentially.

there's of been kind of what seen. through So nice we've flow a

haven't will year We've looking that acquisition started yet. customer the been got cost, We've deploying be this or for to suite really But we that CAC, be budgeted get into as we'll that. we things some full deploy XXXX. but testing

Operator

Harshita Rawat Bernstein. question next The from comes with

Harshita Rawat

to Fastlane. want on up I follow

You talked about the new merchant wins.

PayPal users. users? And holiday season also the about that there? more Can competitive talked how merchants especially large then, merchants converting those of PayPal XX% are into because going consumers solutions, Alex, or with the some conversations open Fastlane to kind are us over, Now dynamics is and how integrating there's also those new dormant being new you you're you of just about remind

James Chriss

Yes. Thanks, Harshita.

you're So right. exactly

so guest is this just checkout, really in X the months Our Fastlane, for reminder, market. -- as a

have new. -- that brand guest almost experiences still market it's one many some checkout There years, other So for to the for up a are in been decade.

new but excited. delivering our converting really gets merchants. the the experience best And that's we're for what so we're entrant, And us

are Fastlane start in we experience, As our double-digit scale merchants. for deliver our continuing conversion to to we still lift

'XX, set NBCUniversal, conversations steam full StockX. And many focus been has the few holiday season I And do ones. those of our get into as so integration. throughout them we ahead. a our as actually mentioned enterprise the ready merchants, call, the on really largest Roku, But has -- it's been the to up obviously go-to-market weren't this now focus on on

these have they just very a something that also conversion checkout a are playing excited around as lot conversations, the not is with. we about Now as Guest spent time of they've reminder, uplift.

have a it's sitting around like scrum not play merchants team ready guest So these with there checkout. to

So maps. they're road their working on

really I the us see And scale. about of scale will conversations continue conversations board, done. for to the have this getting are base. I the do across we'll to a think this take on It's quarters out are But number merchant So merchants and been think exciting, great. now this implementation

of users are months. To are XX% again, dormant customers XX into new the Fastlane perspective, your customer that we're coming XX% PayPal. that last a we in Fastlane XX% are -- opting what from And question on are seeing clip. these in again, to were at

actually So continuing they experience. see customers to, checkout guest opt that we're into go once experience, the choosing Fastlane to into

reinvigorate To us, able the to them. surface being now of scratching this is just

it's past PayPal really the experience. a through consumers to app well in branded to both reengage accelerated The of right? We've them gone it's e-mail, online started ramp we be these notifications to and good guest gone up as news experience. sort checkout for So the It's still conversion. through efforts. bite the it to incentives and find for reasons things as and off-line for They've channels, merchants. the is able second experience. like They've our through apple, that We've a testing marketing created early, at

through can a and full going And they experience have branded could cash-back into we we're a reignite now continue a those end-to-end experience offer, go being those to PayPal. remind lean users checkout. to more consistent into that a And tracking users package consumers active offer, a to what great gotten on

our up is just that a I the that so their still fraction. of use online to is active all one us The habituation have of us omnichannel that really us. purchases use just continuing for MAAs drive love is every and PayPal don't but last but talked for about that an why users important app, for users context PayPal, using are power Because have as thing us just use still to our we say purchases. single those not I'd that PayPal This users are just their

branded of of Fastlane to PayPal going And actually branded and to the ultimately so gather the so users is and them benefits experience to remind through even our of growth. will up through drive experience our important the checkout ability, those

Operator

comes Jefferies. . last the Our of Trevor from question with Williams line

Trevor Williams

QX. sounded to Venmo. it next biggest to of back like contributors I to it go one growth wanted in TM was to the dollar branded, Jamie,

on dollar could an given stats transaction have guys But across buckets. helpful different would more across 'XX. growth transfer? growth it thinking good on for some You attach just to if different you number you're the of debit then updated get how And mix Venmo. card, in the about just then with the and buckets, current dollar user Venmo, rate And margin Venmo's be instant Pay transaction revenue margin anything contribution

Jamie Miller

Yes.

been has it checkout, branded cetera. behind transaction contributor Venmo a growth. was 'XX, interest growing to So margin dollar Certainly Braintree, in et

-- grow you to in continues it TPV Venmo in quarter. terms XXXX, to is into really get its look see. our When we which fourth was at As XX% of the on great impact TM, up

TPV up PXP was Pay was with Our debit card XX%. up up XX%. X%. Venmo was

we our not about leaders' really with to investments excited more target the is dig end excited which in a really get we Venmo to and February, this when the making in this, we new which, continued looking the we're detail, unpack we're with there. you can When of and Day the we're lot drive. at to the Investor So talking really into only we'll all growth PXP XXXX, forward about debit Pay we're beginnings core but strength Venmo of also just

Steven Winoker

Alex, thoughts? any final

James Chriss

dive the growth Day to to a take our what future at get just share thanks, long-term seeing thank later and you, it's our going into February on huge and look strategies you of XX, there. our many will Investor medium all us for I to No, this to of month we you for Steve. forward and vision where and

So take care, everyone.

Operator

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

You may disconnect. now

PayPal (PYPL) 4 Feb 252024 Q4 Earnings call transcript