Q3 2023 PayPal Holdings Inc Earnings Call

Okay.

Speaker 1: Good evening, my name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the PayPal Holdings earnings conference call for the third quarter, 2023.

Good evening My name is Krista and I'll be your conference operator today at this time I would like to welcome everyone to the Paypal Holdings earnings Conference call for the third quarter 2023.

Speaker 1: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by in the number one on your telephone keypad. And if you would like to withdraw your question, again, press R1. Thank you. I would now like to introduce your host for today's call. Ryan Wallace, head of investor relations. Please go ahead.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question during that time simply press star followed by the number one on your telephone keypad.

You would like to withdraw your question again press Star one. Thank you I would now like to introduce your host for today's call Ryan Wallace head of Investor Relations. Please go ahead.

Speaker 2: Thank you. Good afternoon and thank you for joining us. Welcome to PayPal's Earnings Conference call for the third quarter of 2023. Joining me today on the call is Alex Christ, our President and CEO , and Gabrielle Rabinovich, SVP and Acting CFO .

Thank you good afternoon, and thank you for joining US welcome to Paypal is earnings conference call for the third quarter of 2023, joining me today on the call is Alex Chris, our President and CEO, and Gabrielle Rabinovich, SVP and acting CFO.

Speaker 2: We're providing a slide presentation to a company error commentary. This conference called...

We're providing a slide presentation to accompany our commentary.

This conference call is also being webcast with the presentation and call are available on our Investor Relations website and discussing our company's performance, we will refer to some non-GAAP measures you can find the reconciliation of these non-GAAP measures to the most directly comparable GAAP measures in the presentation accompanying this conference call.

Speaker 2: Both the presentation and call are available on our Invest Relations Web.

Speaker 2: In discussing our company's performance, we will refer to some non-gab measure.

Speaker 2: We find the reconciliation of these non- GAAP measures to the most directly comparable GAAP measures in the presentation accompanying this count.

Speaker 2: We will make forward-looking statements that are based on our current expectations, forecasts, and assumptions and involve risks and uncertainties.

We will make forward looking statements that are based on our current expectations forecasts and assumptions and involve risks and uncertainties.

Speaker 2: These statements include, without limitation, our guidance for the third quarter in full year 2023, our planning assumptions for 2023, our comments related to anticipated foreign exchange rates, operating margin, impacts from our sale of loans to KKR and share repurchase activity. Our actual results may differ material.

These statements include without limitation, our guidance for the third quarter and full year 2023, our planning assumptions for 2023, our comments related to anticipated foreign exchange rates operating margin impacts from our sale of loans to KKR and share repurchase activity.

Our actual results may differ materially from these statements.

Speaker 2: You can find more information about risks, uncertainties, and other factors that could affect our results in our most recent annual report on Form 10K and quarterly report on Form 10Q, filed with the SEC and available on our Investor Relations website.

You can find more information about risks uncertainties and other factors that could affect our results in our most recent annual report on Form 10-K, and quarterly report on Form 10-Q filed with the SEC and available on our Investor Relations website.

Speaker 2: You should not place undue reliance on any forward-looking statements. All information in this presentation is as of today's date, November 1, 2023. We expressly disclaim any obligation to update this information. And with that, let me turn...

You should not place undue reliance on any forward looking statements. All information in this presentation is as of today's date November one 2023, we expressly disclaim any obligation to update this information.

Good evening.

Krista: My name is Krista and I'll be your conference operator today. At this time, I would like to welcome everyone to the PayPal holdings earnings conference call for the third quarter 2023. All lines have been placed on mute to prevent any background noise.

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

Speaker 2: Thank you, Ryan, and thank you to everyone for joining us this afternoon. It is a pleasure to speak with you all on today's call, my first as President and CEO of PayPal.

Thank you, Brian and thank you to everyone for joining us this afternoon.

It's a pleasure to speak with you all on today's call My first as president and CEO of Paypal.

Speaker 2: Before I dive in, I'd like to take a moment to thank my predecessor, Dan Schillman, for his diligence and professionalism in handing over the reins and helping me onboard quicks.

Krista: After the speakers remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you.

Before I dive in I'd like to take a moment to thank my predecessor, Dan Schulman for his diligence.

Diligence and professionalism and handing over the reins and helping me on board quickly.

Speaker 2: Additionally, I'm very excited to welcome Jamie Miller to PayPal as the company's next chief financial officer. Jamie will officially be joining the company's next chief financial officer.

Additionally, I am very excited to welcome Jamie Miller to Paypal as the company's next Chief Financial Officer.

Krista: I would now like to introduce your host for today's call.

Jamie will officially be joining Paypal on November six Jamie.

Ryan Wallace: Ryan Wallace, head of investor relations. Please go ahead. Thank you.

Speaker 2: Jamie is a world-class CFO who joins us with decades of experience in both senior finance and operations roles at a number of different Fortune 100 and private companies, including GE and Cargo, and was most recently CFO of EY. Jamie is a...

Jamie is a world class CFO, who joins us with decades of experience in both senior finance and operations roles at a number of different fortune 100, and private companies, including GE and cargo and was most recently CFO of Eli.

Ryan Wallace: Good afternoon and thank you for joining us. Welcome to PayPal's earnings conference call for the third quarter of 2023.

Alex Chris: Joining me today on the call is Alex Chris, our president and CEO.

Jamie is a vital addition to our team.

Speaker 2: Under Jane's leadership, I have no doubt that we will drive the financial discipline, necessary efficiencies, and operational excellence our company requires.

Ryan Wallace: And Gabrielle, former benefic, SVP and acting CFO. We're providing a slide presentation to accompany our commentary. This conference calls also being webcast, both the presentation and call are available on our investor relations website. In discussing our company's performance, we will refer to some non-gap measures. You can find the reconciliation of these non-gap measures to the most directly comparable gap measures in the presentation accompanying this conference call.

Under <unk> leadership I have no doubt that we will drive the financial discipline necessary efficiencies and operational excellence our company requires.

Speaker 2: I look forward to introducing Jamie to you over the coming months. And you will also hear from her of course on our next journey.

I look forward to introducing Jamie to you over the coming months and you will also hear from her of course on our next earnings call.

Speaker 2: As excited as we are to welcome Jamie, I also want to take a moment to express my sincere thanks to Gabrielle for all her hard work, dedication, and passion as interim and then acting CFO .

As excited as we are to welcome Jamie I also want to take a moment to express my sincere thanks to Gabriel for all of her hard work dedication and passion as interim and then acting CFO.

Ryan Wallace: We will make forward-looking statements that are based on our current expectations, forecasts and assumptions and involve risks and uncertainties. These statements include without limitation, our guidance for the third quarter in full year 2023, our planning assumptions for 2023, our comments related to anticipated foreign exchange rates, operating margin, impacts from our sale of loans to KKR and share repurchase activity. Our actual results may differ materially from these statements. You can find more information about risks, uncertainties and other factors that could affect our results in our most recent annual report on form 10K and quarterly report on form 10Q filed with the SEC and available on our investor relations website. You should not place undue reliance on any forward-looking statements.

Speaker 3: She's helped drive the company forward and has been instrumental in helping me get up to speed over the past couple of months.

She has helped to drive the company forward and has been instrumental in helping me get up to speed over the past couple of months.

Speaker 3: I truly appreciate her partnership as well as her commitment to PayPal and look forward to working with her during this next chapter of PayPal's trick.

Truly appreciate her partnership as well as her commitment to Paypal and look forward to working with her during this next chapter of Paypal is churn.

Okay, let's jump in.

Speaker 3: When I was asked by the board to take on the CEO role, I was so energized by the possibilities of the impact PayPal can have on the world.

When I was asked by the board to take on the CEO role I was so energized by the possibilities of the impact to Paypal can have on the world.

Speaker 3: I've dedicated the last 19 years of my career to fighting for the underdog.

I've dedicated the last 19 years of my career to fighting for the underdog.

Speaker 3: Helping consumers and small businesses around the world achieve their dreams, interact with each other and build a better.

Helping consumers and small businesses around the world achieve their dreams interact with each other and build a better life.

Speaker 3: Paybill takes that mission to a whole new level.

Paypal takes that mission to a whole new level.

Speaker 3: The assets, the data, the scale, and the brand, the full foundation of what PayPal sits on today is unrivaled. And for me, that is the opportunity of a lifetime. I am also walking in eyes wide open. There are clearly challenges to tackle. I am someone who speaks.

The assets the data the scale and the brand.

Ryan Wallace: All information in this presentation is as of today's date, November 1st, 2023. We expressly disclaim any obligation to update this information.

The full foundation of what Paypal sits on today is unrivaled and for me that is the opportunity of a lifetime.

Alex Chris: And with that, let me turn the call over to Alex. Thank you, Ryan. And thank you to everyone for joining us this afternoon.

I am also walking in eyes wide open.

There are clearly challenges to tackle.

I am someone who speaks plainly and transparently if.

Alex Chris: It is a pleasure to speak with you all on today's call, my first as president and CEO of PayPal. Before I dive in, I'd like to take a moment to thank my predecessor, Dan Schulman, for his diligence and professionalism in handing over the reins and helping me onboard quickly.

If we are doing things well I will highlight them.

Speaker 3: If there are things we can do better and need to fix, then I will have no hesitation in calling those out.

If there are things, we can do better and need to fix that I will have no hesitation in calling those out too.

Speaker 3: Our innovation activity has accelerated, but we still have work to do on maximizing our impact for our customers and results.

Our innovation activity has accelerated but we still have work to do on maximizing our impact for our customers and results.

Alex Chris: Additionally, I'm very excited to welcome Jamie Miller to PayPal as the company's next chief financial officer. Jamie will officially be joining PayPal on November 6th. Jamie is a world-class CFO who joins us with decades of experience in both senior finance and operations roles, at a number of different Fortune 100 and private companies, including GE and Carville, and was most recently CFO of EY. Jamie is a vital addition to our team. Under Jamie's leadership, I have no doubt that we will drive the financial discipline, necessary efficiencies, and operational excellence our company requires. I look forward to introducing Jamie to you over the coming months and you will also hear from her, of course, on our next earnings call.

Speaker 3: Competition and complexity have increased and the company's focus has not been clear. We are doing a lot of things, but are we folks?

Competition in complexity has increased and the company's focus has not been clear.

We are doing a lot of things.

What are we focused enough with our resource allocation.

Speaker 3: Are we executing with excellence behind the most important work to provide customers with a compelling and differentiated value proposition?

Are we executing with excellence behind the most important work to provide customers with a compelling and differentiated value proposition.

Speaker 3: Are we partnering with customers in a way that brings them deep value, but also rewards the PayPal share?

Are we partnering with customers in a way that brings the deep value.

It also rewards the Paypal shareholder.

Speaker 3: These are questions I am maniacally focused on answering with the team and doing a better job of executing across the board.

These are questions I am maniacally focused on answering with the team and doing a better job of executing across the board.

Speaker 3: But let me be clear, notwithstanding those realities, this is a growth company with great prospect.

But let me be clear notwithstanding those realities this as a growth company with great prospects.

Alex Chris: As excited as we are to welcome Jamie, I also want to take a moment to express my sincere thanks to Gabrielle for all her hard work, dedication, and passion, as interim and then acting CFO. She's helped drive the company forward and has been instrumental in helping me get up to speed over the past couple of months. I truly appreciate her partnership as well as her commitment to PayPal and look forward to working with her during this next chapter of PayPal's trip.

Speaker 3: Even within the first month on the job, I am more energized and have more conviction and clarity than I expected over how we win.

Even within the first month on the job I I'm more energized and have more conviction and clarity than I expected over how we win.

Speaker 3: We have significant opportunities for growth and impact. The foundation is strong, and the value pools and growth vectors are there.

We have significant opportunities for growth and impact the <unk>.

Foundation is strong and the value pools and growth vectors are there.

Speaker 3: We must simply execute better and with higher velocity.

We must simply execute better and with higher velocity and we will.

Speaker 3: I'd now like to share with you all my onboarding process and what I've learned and observed so far.

I would now like to share with you all by Onboarding process, and what I've learned and observed so far.

Alex Chris: Okay, let's jump in. When I was asked by the board to take on the CEO role, I was so energized by the possibilities of the impact PayPal can have on the world. I've dedicated the last 19 years of my career to fighting for the underdog. Helping consumers and small businesses around the world achieve their dreams, interact with each other and build a better life. PayPal takes that mission to a whole new level.

Speaker 3: Then I will describe changes you will see going forward. And lastly, I'll set expectations for what you will see from us over the next few quarters.

And then I will describe changes you will see going forward and lastly, I'll set expectations for what you will see from us over the next few quarters.

Speaker 3: While I've only been here a little over four weeks, I've been conducting in-depth conversations with internal and external stakeholders, including employees, customers, partners, and investors, and diving into the business with our products and go to market.

While I've only been here a little over four weeks I have been conducting in depth conversations with internal and external stakeholders, including employees customers partners and investors and diving into the business with our products and go to market teams.

Alex Chris: The assets, the data, the scale and the brand, the full foundation of what PayPal sits on today is unrivaled. And for me, that is the opportunity of a lifetime. I am also walking in eyes wide open. There are clearly challenges to tackle. I am someone who speaks plainly and transparently. If we are doing things well, I will highlight them. If there are things we can do better and need to fix, then I will have no hesitation in calling those out too.

Speaker 3: The feedback has been encouraging, exciting, revealing and very clear.

The feedback has been encouraging exciting revealing and very clear.

Speaker 3: There are two lenses I've had in synthesizing the input. First, how do we differentiate in solving the most critical customer problem?

There are two lenses I've had and synthesizing the input.

How do we differentiate in solving the most critical customer problems.

Speaker 3: Second, what are our unique growth vectors? And how do we accelerate our impact for customers and share?

Second.

What are our unique growth factors and how do we accelerate our impact for customers and shareholders.

Speaker 3: Before I run through my thoughts after 30 days, first, let me say I've been surprised and delighted with how consistent and clear the answers to the previous questions have become.

Before I run through my thoughts after 30 days first let me say I've been surprised and delighted with how consistent and clear the answers to the previous questions have become.

Alex Chris: Our innovation activity has accelerated, but we still have work to do on maximizing our impact for our customers and results. Competition and complexity have increased and the company's focus has not been clear. We are doing a lot of things, but are we focused enough with our resource allocation? Are we executing with excellence behind the most important work to provide customers with a compelling and differentiated value proposition? Are we partnering with customers in a way that brings the deep value, but also rewards the PayPal shareholder?

Speaker 3: We are not searching for ideas for tremendous growth.

We are not searching for ideas for tremendous growth our assets and our position in the market are incredible.

Speaker 3: Our assets and our position in the market are incredible. We know exactly what needs to be done. We simply...

We know exactly what needs to be done.

We simply must execute.

Speaker 3: To give you some additional context, here are a few of my initial observations.

To give you some additional context here are a few of my initial observations.

On our employees, our people are kind caring dynamic innovative and engaged.

Speaker 3: how people are kind, caring, dynamic, innovative, and engaged.

Speaker 3: They cared deeply about our customers and one another and are energized by our mission.

We're deeply about our customers and one another and are energized by our mission.

Speaker 3: My focus is to clearly define our mission, vision, and purpose, and unleash this team to execute a clearly defined and durable strategy.

My focus is to clearly define our mission vision and purpose and unleash this team to execute a clearly defined and durable strategy.

Alex Chris: These are questions I am maniacally focused on answering with the team and doing a better job of executing across the board. But let me be clear, notwithstanding those realities, this is a growth company with great prospects. Even within the first month on the job, I am more energized and have more conviction and clarity than I expected over how we win. We have significant opportunities for growth and impact, the foundation is strong and the value pools and growth vectors are there. We must simply execute better and with higher velocity and we will.

Speaker 3: We will establish and refocus systems and processes to galvanize the entire organization behind our purpose and growth out.

We will establish and refocus systems and processes to galvanize the entire organization behind our purpose and growth outcomes.

Speaker 3: on our customers and innovation. I generally see our customers falling into three categories, consumers, small businesses, and large enterprise.

On our customers and innovation I generally see our customers falling into three categories consumers small businesses and large enterprises.

Speaker 3: When looking at our customers through this lens, each segment has unique assets and a multitude of growth opportunities.

When looking at our customers through this lens each segment has unique assets at a multitude of growth opportunities.

Speaker 3: I've been encouraged by how much innovation our teams are delivering, but we have an opportunity to a focus our teams on what's most important to these customers, and b, package our innovation in a way that is clear and differentiates us in the market.

I've been encouraged by how much innovation our teams are delivering.

Alex Chris: I'd now like to share with you all my onboarding process and what I've learned and observed so far. Then I will describe changes you will see going forward and lastly I'll set expectations for what you will see from us over the next few quarters. While I've only been here a little over four weeks, I've been conducting in-depth conversations with internal and external stakeholders, including employees, customers, partners and investors, and diving into the business with our products and go to market.

But we have an opportunity to focus our teams on what's most important to these customers and b package, our innovation in a way that is clear and differentiates us in the market.

Let me give you some examples.

Speaker 3: For consumers, we have not only tremendous breadth, mind share and wallet share of our consumers, but these are active and engaged users.

For consumers, we have not only tremendous spreads mind share and wallet share of our consumers, but these are active and engaged users.

Speaker 3: And the US alone over 70% of the adult population has used PayPal in the past five years.

In the U S alone over 70% of the adult population has used paypal in the past five years.

Alex Chris: James. The feedback has been encouraging, exciting, revealing, and very clear. There are two lenses I've had incentivizing the end play. First, how do we differentiate in solving the most critical customer problems? Second, what are our unique growth factors and how do we accelerate our impact for customers and shareholders? Before I run through my thoughts at the 30 days first, let me say I've been surprised and delighted with how consistent and clear the answers to the previous questions have become. We are not searching for ideas for tremendous growth. Our assets and our position in the market are incredible. We know exactly what needs to be done. We simply must execute.

Speaker 3: Let me say that again. Over 70% of adults in the US have used PayPal in the past five years.

Let me say that again over 70% of adults in the U S have used paypal in the past five years.

Speaker 3: And with a recent launch of our Venmo Teen account, we are now seeing adoption of our core products and services across the entire addressable market in the US.

And with our recent launch of our Venmo Tina Count we are now seeing adoption of our core products and services across the entire addressable market in the U S.

Speaker 3: Additionally, we've innovated with unique products and experiences for consumers that each on their own provide tremendous customer benefits. For example, our PayPal cashback mastercard provides 3% cashback on PayPal purchases, as well as cashback on all other purchases.

Additionally, we've innovated with unique products and experiences for consumers that each on their own provide tremendous customer benefit for example, our Paypal cash Mastercard provides 3% cashback on Paypal purchases as well as cash back on all other purchases.

Speaker 3: Customers with this car make on average 56 more purchases with PayPal in the year after they adopt the product than they did the year before.

Customers with this car make on average 56 more purchases with Paypal and the year after they adopt the product than they did the year before.

Speaker 3: Over 25 million consumers have used PayPal rewards in the past 12 months, and we've put more than $200 million back in our customers' pockets, with cashback and savings during that time.

Over 25 million consumers have used Paypal rewards in the past 12 months and we've put more than $200 million back in our customers' pockets with cashback and savings during that time.

Alex Chris: To give you some additional context, here are a few of my initial observations. On our employees, our people are kind, caring, dynamic, innovative and engaged. They care deeply about our customers and one another and our energized by our mission. My focus is to clearly define our mission, vision, and purpose, and unleash this team to execute a clearly defined and durable strategy. We will establish and refocus systems and processes to galvanize the entire organization behind our purpose and growth outcomes.

Speaker 3: But even more interesting, for our rewards product, we have an active database of over 300 million SKUs of inventory from our merchant part.

But even more interesting.

Our rewards product, we have an active database of over 300 million skus of inventory from our merchant partners.

Speaker 3: These data points can help us use AI to power a robust shopping recommendation engine to provide more relevant rewards and savings back to our customers.

These data points can help us use AI to power a robust shopping recommendation engine to provide more relevant rewards and savings back to our customers.

Speaker 3: We've just begun an already rolled out past keys to more than 10 million consumers globally to reduce friction in the signing experience.

We've just begun and already rolled out past keys to more than 10 million consumers globally to reduce friction in the sign in experience.

Alex Chris: On our customers and innovation, I generally see our customers falling into three categories, consumers, small businesses and large enterprises. When looking at our customers through this lens, each segment has unique assets and a multitude of growth opportunities. I've been encouraged by how much innovation our teams are delivering, but we have an opportunity to a focus our teams on what's most important to these customers and be package our innovation in a way that is clear and differentiate us in the market.

Speaker 3: We've added additional security features by providing fraud alerts for all your cards in the PayPal wall.

We've added additional security features by providing fraud alerts for all your cards and the Paypal wallet.

Speaker 3: We're gaining ubiquity both online and in-person as our PayPal and Venmo branded credit and debit cards can now be added in the Apple and Google Wall.

We're gaining ubiquity, both online and in person as our Paypal and venmo branded credit and debit cards can now be added in the Apple and Google Wallets.

Speaker 3: And we've launched the first regulated stablecoin by a global payments company in PYUSD, connecting our PayPal and Venmo ecosystems together and creating one of the most robust peer-to-peer networks in the world.

And we've launched the first regulated stable coin by a global payments company in Py USD connect.

Connecting our Paypal and venmo ecosystems, together and creating one of the most robust peer to peer networks in the world.

Alex Chris: Let me give you some examples. For consumers, we have not only tremendous breadth, mind share and wallet share of our consumers, but these are active and engaged users. In the US alone, over 70% of the adult population has used PayPal in the past five years. Let me say that again, over 70% of adults in the US have used PayPal in the past five years. And with the recent launch of our Venmo team account, we are now seeing adoption of our core products and services across the entire addressable market in the US.

Speaker 3: individually. These are each incredible innovation.

Individually these are each incredible innovations.

Speaker 3: but we have not yet brought them all together into a cohesive, integrated, and seamless customer experience and value proposition.

But we have not yet brought them all together into a cohesive integrated and seamless customer experience and value proposition.

Speaker 3: As I said at the beginning, we have brand awareness and reach consumers in most markets around the world. They know PayPal and they are rooting for us.

As I said at the beginning we have brand awareness and reach consumers in most markets around the world.

They know Paypal and they are rooting for us.

Speaker 3: He is our responsibility to now put together these innovations into a world-class seamless experience. And that is...

Our responsibility to now put together these innovations into a world class seamless experience.

And that is exactly what we're going to do.

Speaker 3: As an example, we have refocused our consumer product and go to market team to relaunch a brand new end-to-end consumer experience with checkout at the center that will bring value to consumers with every single purchase.

As an example, we have refocused our consumer product and go to market team to relaunch a brand new end to end consumer experience with checkout at the center that will bring value to consumers with every single purchase.

Alex Chris: Additionally, we've innovated with unique products and experiences for consumers that each on their own provide tremendous customer benefits. For example, our PayPal cash back faster card provides 3% cash back on PayPal purchases, as well as cash back on all other purchases. Customers with this card make on average 56 more purchases with PayPal in a year after they adopt the product than they did the year before. Over 25 million consumers have used PayPal rewards in the past 12 months, and we've put more than $200 million back in our customer's pockets with cash back and savings during that time.

Speaker 3: We will make it abundantly clear why choose Payton.

We will make it abundantly clear why choose Paypal.

Speaker 3: This is the first core priority I've asked the teams to focus on.

This is the first core priority I've asked the teams to focus on.

Next for small businesses the.

Speaker 3: The core customer problem we can solve is helping them get more customers.

Our core customer problem, we can solve is helping them get more customers.

Speaker 3: From a breadth and depth perspective, we again have tremendous reach. We serve approximately 35 million merchant accounts and the vast majorities are SMBs.

From a breadth and depth perspective, we again have tremendous reach we serve approximately 35 million merchant accounts and the vast majorities are smbs.

Alex Chris: But even more interesting, to our rewards product, we have an active database of over 300 million views of inventory from our merchant partners. These data points can help us use AI to power a robust shopping recommendation engine to provide more relevant rewards and savings back to our customers. We've just begun and already rolled out pasties to more than 10 million consumers globally to reduce friction in the sign-in experience. We've added additional security features by providing fraudulers for all your cards in the PayPal wallet.

Speaker 3: We have recently launched our new PayPal Complete Payment solution in the market. This solution helps small businesses sell globally and accept a range of payments, including PayPal, Venmo, and PayPal Pay Later products to help drive checkout.

We have recently launched our new Paypal complete payment solution in the market.

This solution helps small businesses.

<unk> globally, and accept a range of payments, including Paypal Venmo and Paypal pay later products to help drive checkout.

Speaker 3: We provide SMBs the tools to transact globally and are innovating for them with critical services such as package stress.

We provide smbs the tools to transact globally and are innovating for them with critical services such as package tracking.

Speaker 3: Package tracking is now live with over 5,000 merchants on big commerce, blue commerce and ultra-car.

<unk> is now live with over 5000 merchants on Big Commerce will commerce and ultra car.

Speaker 3: Early results show merchants are experiencing an 80% decrease in item not received disputes, 40% higher dispute wins, and 65% faster funds rose.

Early results show merchants are experiencing an 80% decrease in item not received disputes, 40% higher dispute wins and 65% faster funds release.

Alex Chris: We're gaining ubiquity both online and in-person as our PayPal and Venmo branded credit and debit cards can now be added in the Apple and Google Wallets. And we've launched the first regulated stablecoin by a global payments company in PYUSD, connecting our PayPal and Venmo ecosystems together and creating one of the most robust peer-to-peer networks in the world. Individually, these are each incredible innovations, but we have not yet brought them all together into a cohesive, integrated, and seamless customer experience and value proposition.

Speaker 3: This is a good start, but what really gets me excited is how all of our profile and pain data comes together to empower each of our merchants to improve their conversion rates via our next generation checkout. While making our consumers checkout experiences more efficient.

This is a good start but what really gets me excited is how all of our profile and payment data comes together to empower each of our merchants to improve their conversion rates.

Our next generation checkout.

Making our consumers check out experiences more efficient.

Speaker 3: We've just rolled this product out to a handful of pilot merchants. And with the breadth of our consumer coverage, we are able to identify the majority of consumers that visit a merchant's site.

We've just rolled this product out to a handful of pilot merchants and with the breadth of our consumer coverage, we are able to identify the majority of consumers that visit our merchant's site.

Speaker 3: That means we can auto fill payment information for consumers and streamline guest checkout for our merch.

That means we can autofill payment information for consumers and streamline guest checkout for our merchants.

Alex Chris: As I said at the beginning, we have brand awareness and reach consumers in most markets around the world. They know PayPal and they are rooting for us. It is our responsibility to now put together these innovations into a world-class seamless experience. And that is exactly what we're going to do. As an example, we have refocused our consumer product and go to market team to relaunch a brand new end-to-end consumer experience with checkout at the center that will bring value to consumers with every single purchase. We will make it abundantly clear why choose PayPal. This is the first core priority I've asked the teams to focus on.

Speaker 3: To serve small businesses with our best in class product, we must get PayPal complete payments to scale globally.

To serve small businesses with our best in class product, we must get Paypal complete payments to scale globally.

This is the second core priority I've asked our product and go to market teams to rally behind and you will see us with a concerted push to dramatically improve the end to end Paypal complete payments product rollout and adoption in the next couple of quarters.

Speaker 3: Once we've accomplished this, we will have earned the right to expand additional offerings to small businesses.

Once we accomplish this we will have earned the right to expand additional offerings to small businesses.

Speaker 3: As someone with deep experience scaling products and services for the small business segment, we have the right to play and win in a number of meaningful and durable businesses that will solve core customer problems and delight our users.

As someone with deep experience scaling products and services for the small business segment, we have the right to play and win in a number of meaningful and durable businesses that will solve core customer problems and delight our users.

Alex Chris: Next, for small businesses, the core customer problem we can solve is helping them get more customers. From a breadth and depth perspective, we again have tremendous reach. We serve approximately 35 million merchant accounts and the vast majorities are SMBs. We have recently launched our new PayPal complete payment solution in the market. This solution helps small businesses sell globally and accept a range of payments, including PayPal, Venmo, and PayPal pay later products to help drive checkout.

Okay.

Lastly for our enterprise customers, we have proven that we can win in the market and take share with Braintree.

Speaker 3: We have proven that we can win in the market and take share with BrainTree. Serving the largest enterprises such as Adobe, Booking.com, DoorDash, Picket Master, and Uber.

Serving the largest enterprises, such as Adobe booking dot com door dash Ticketmaster and Uber.

Speaker 3: In the last 12 months, we processed over $450 billion in volume out of an estimated four to five trillion of global large enterprise e-commerce. That's approximately 10% flowing through us. We now...

In the last 12 months, we processed over $450 billion in volume out of an estimated 4% to five trillion of global large enterprise E Commerce.

Alex Chris: We provide SMBs the tools to transact globally and are innovating for them with critical services such as package tracking. Packaging is now live with over 5,000 merchants on big commerce, blue commerce, and ultra-car. Early results show merchants are experiencing an 80% decrease in item not received disputes, 40% higher dispute wins, and 65% faster funds released. This is a good start, but what really gets me excited is how all of our profile and payment data comes together to empower each of our merchants to improve their conversion rates, via our next generation checkout.

Approximately 10% flowing through us.

We now have a beachhead to build upon.

Speaker 3: We will address additional customer needs, such as payouts, fraud management, chargeback automation, and FF.

We will address additional customer needs such as payouts fraud management chargeback automation and FX.

Speaker 3: These value added services not only address specific customer pain points, but also help PayPal drive additional marks.

These value added services not only address specific customer pain points, but also help Paypal drive additional margin.

Speaker 3: To be clear, our focus here will be continuing to improve performance, provide additional services, and expand March.

To be clear.

Our focus here will be continuing to improve performance provide additional services and expand margin.

Speaker 3: And lastly, on our company as a whole, let me touch briefly on our evolution to operating as a platform company.

And lastly on our company as a whole let me touch briefly on our evolution to operating as a platform company.

Speaker 3: Our ability to seamlessly delight customers end to end is a function of the quality of our technology and data platforms, which are very strong.

Alex Chris: While making our consumers check out experiences more efficient. We've just rolled this product out to a handful of pilot merchants, and with the breadth of our consumer coverage, we are able to identify the majority of consumers that visit a merchant's site. That means we can autofill payment information for consumers and streamline guest checkout for our merchants. To serve small businesses with our best-in-class product, we must get PayPal complete payments to scale globally.

Our ability to seamlessly delight customers end to end is a function of the quality of our technology and data platforms, which are very strong.

Speaker 3: But we have a significant and important opportunity to further become a platform company that builds company-wide capabilities, accelerates its scale, and drives efficiencies across the organization.

But we have a significant and important opportunity to further become a platform company that builds companywide capabilities accelerates at scale and drives efficiencies across the organization.

Speaker 3: fully unlocking this will accelerate innovation, velocity, the market, and value. Further, our data is...

Fully unlocking this will accelerate innovation velocity in the market and value.

Further our data and scale are key strengths.

Alex Chris: This is the second core priority I have asked our product and go to market teams to rally behind, and you will see us with a concerted push to dramatically improve the end-to-end PayPal complete payments product, roll-out, and adoption in the next couple of quarters. Once we've accomplished this, we will have earned the right to expand additional offerings to small businesses. As someone with deep experience scaling products and services for the small business segment, we have the right to play and win in a number of meaningful and durable businesses that will solve core customer problems and delight our users.

Speaker 3: Our machine learning capabilities combine hundreds of risk and fraud models with dozens of real-time analytics engines and petabytes of payments data to generate insights by learning user's behaviors, relationships, interests, and spending habits.

Our machine learning capabilities combined hundreds of risk and fraud models with dozens of real time analytics engines, and petabytes of payments data to generate insights by alerting users behaviors relationships interests and spending habits.

Speaker 3: This scale gives us a very unique advantage in the market.

This scale gives us a very unique advantage in the market.

Speaker 3: Our ability to create meaningful profiles with the help of AI is exceptionally promising.

Our ability to create meaningful profiles with the help of AI is exceptionally promising.

Speaker 3: You will see us using our data and the advances in generative AI in responsible ways to further connect our merchants and consumers together in a tight flywheel. This is essential. We must build products and customer experiences that are strengthened by our unique two-sided net.

You will see us using our data and the advances in generative AI and responsible ways to further connect our merchants and consumers together in a tight flywheel. This is essential we must build products and customer experiences that are strengthened by our unique two sided network.

Alex Chris: Lastly, for our enterprise customers, we have proven that we can win in the market and take share with BrainTree, serving the largest enterprises, such as Adobe, booking.com, DoorDash, Ticketmaster, and Uber. In the last 12 months, we processed over 450 billion dollars in volume out of an estimated four to five trillion of global large enterprise e-commerce. That's approximately 10% flowing through us. We now have a beachhead to build upon. We will address additional customer needs, such as payouts, fraud management, chargeback automation, and FX. These value added services not only address specific customer pain points, but also help PayPal drive additional margin. To be clear, our focus here will be continuing to improve performance, provide additional services, and expand margin.

Speaker 3: Harnessing an end-to-end data platform will help us drive network effects throughout our business.

Harnessing an end to end data platform will help us drive network effects throughout our business.

Speaker 3: In order to maximize this opportunity, it will require technology consolidation and automation across the company.

In order to maximize this opportunity it will require technology consolidation and automation across the company.

Speaker 3: Simply put, our cost base remains too high and it's actually slowing us down.

Simply put our cost base remains too high and it's actually slowing us down.

Speaker 3: As such, I'm in the process of evaluating our most profitable growth priorities and aligning our resources to those priorities. We will become leaner, more

As such I am in the process of evaluating our most profitable growth priorities.

Aligning our resources to those priorities.

We will become leaner.

More efficient.

And more effective.

Speaker 3: driving greater velocity, innovation, and impact for customers.

Driving greater velocity innovation and impact for customers.

Speaker 3: To recap my observations and focus areas, how assets and brands are unrivaled, our innovation is accelerating and will drive impact, but we must focus and execute.

To recap my observations and focus areas.

How assets and breadth our unrivaled.

Innovation is accelerating and will drive impact, but we must focus and execute.

Alex Chris: Lastly, on our company as a whole, let me touch briefly on our evolution to operating as a platform company. Our ability to seamlessly delight customers end to end is a function of the quality of our technology and data platforms, which are very strong. But we have a significant and important opportunity to further become a platform company that builds company-wide capabilities, accelerates its scale, and drives efficiencies across the organization. Fully unlocking this will accelerate innovation, velocity to market, and value.

Speaker 3: The weight of the organization will be squirreling behind one, reinventing our consumer experience to drive a clear and durable value proposition with checkout at the center.

The weight of the organization will be squarely behind one reinventing our consumer experience to drive a clear and durable value proposition with checkout at the center.

Speaker 3: Two, improving and scaling PayPal complete payments for small businesses globally, and three, driving margin expansion and brain truth and other products for large enterprise.

Two improving and scaling Paypal complete payments for small businesses globally, and three driving margin expansion and Braintree and other products for large enterprises.

Speaker 3: Additionally, we will invest in our company-wide platform, driving efficiency and acceleration of innovation while right-sizing our expenses.

Additionally, we will invest in our companywide platform driving efficiency and acceleration of innovation, while right sizing our expenses.

Alex Chris: Further, our data and scale are key strengths. Our machine learning capabilities combine hundreds of risk and fraud models with dozens of real-time analytics engines and petabytes of payment data to generate insights by learning users' behaviors, relationships, interests, and spending habits. This scale gives us a very unique advantage in the market. Our ability to create meaningful profiles with the help of AI is exceptionally promising, processing. You will see us using our data and the advances in generative AI in responsible ways to further connect our merchants and consumers together in a tight flywheel.

Now I.

Speaker 3: I'd like to share what you can expect for me in terms of how we will communicate to all of you and the principles to which we will adhere.

I'd like to share with you can expect from me in terms of how we will communicate to all of you and the principles to which we will adhere.

Speaker 3: You'll see this starting with our next earnings call in terms of how we report our numbers and what we view as important metrics to our shareholder.

Youll see this starting with our next earnings call in terms of how we report our numbers and what we view as important metrics to our shareholders.

Speaker 3: I believe in the last several years, it has been difficult to model our company consistently because the company itself hasn't provided consistent metrics to allow you to do so.

I believe in the last several years it has been difficult to model our company consistently because the company itself Hasnt provided consistent metrics to allow you to do so.

That is going to change.

Speaker 3: For our next earnings call, we will unpack for you the following.

For our next earnings call, we will unpack for you the following.

Speaker 3: First, we will be clear what our operating principles are and how these principles drive the growth opportunities we pursue. And in turn, drive capital allocation, technology allocation, and talent allocation decisions across our business.

First we will be clear what our operating principles are and how these principles drive the growth opportunities, we pursue and in turn drive capital allocation technology allocation and talent allocation decisions across our business.

Alex Chris: This is essential. We must build products and customer experiences that are strengthened by our unique two-sided network, harnessing an end-to-end data platform will help us drive network effects throughout our business. In order to maximize this opportunity, it will require technology consolidation and automation across the company. Simply put, our cost base remains too high and it's actually slowing us down. As such, I am in the process of evaluating our most profitable growth priorities and aligning our resources to those priorities. We will become leaner, more efficient, and more effective, driving greater velocity, innovation, and impact for customers.

Speaker 3: Second, we will be clear about what metrics matter than most to us and how we are managing the business.

Second we will be clear about what metrics matter than most to us and how we are managing the business.

Speaker 3: I can tell you right now what I care about most is high quality customer growth and profitable revenue.

I can tell you right now what I care about most is high quality customer growth.

And profitable revenue growth.

Speaker 3: Going forward, PayPal will be focused on generating real profit for the company. I can't emphasize that...

Going forward Paypal will be focused on generating real profit for the company.

Can't emphasize that last statement enough.

Speaker 3: It is key to how I believe this company should be run. And it is how you should expect us to measure our performance.

It is key to how I believe this company should be run and it is how you should expect us to measure our performance.

Speaker 3: Unprofitable growth is counterproductive to the long term prospects of this or any other growth oriented company.

Unprofitable growth is counterproductive to the long term prospects of this or any other growth oriented company.

Speaker 3: Third, as a management team, we will be guided by margin of creative revenue growth. Over time, I believe we have a tremendous opportunity to grow revenue outside of purely transaction-related volume as we continue to serve our customers' core needs.

Okay.

As a management team, we will be guided by margin accretive revenue growth.

Alex Chris: To recap my observations and focus areas, our assets and breadth are unrivaled. Our innovation is accelerating and will drive impact, but we must focus and execute. The weight of the organization will be squirreling behind one, reinventing our consumer experience to drive a clear and durable value proposition with checkout at the center, two, improving and scaling PayPal-complete payments for small businesses globally, and three, driving margin expansion and brain trees and other products for large enterprises. Additionally, we will invest in our company-wide platform, driving efficiency and acceleration of innovation while right-sizing our expenses.

Over time, I believe we have a tremendous opportunity to grow revenue outside of purely transaction related volume as we continue to serve our customers' core needs.

Speaker 3: We are taking a closer look at how best to report our financial performance and which KPIs we will be focused on going forward.

We are taking a closer look at how best to report, our financial performance and which Kpis, we will be focused on going forward.

Speaker 3: Once we complete this review, we will consistently use the same metrics, and it will be easy for you to model the business. Judge our performance and hold us accountable.

Once we complete this review we will consistently use the same metrics and it will be easy for you to model the business judge our performance and hold us accountable.

Speaker 3: Next, I want all stakeholders to be able to understand in a simple way how we do what we do and how we make money doing it. This includes our customers as they are the lifeblood of our

Next I want all stakeholders to be able to understand in a simple way how do we do what we do and how we make money doing it.

This includes our customers as they are the lifeblood of our existence.

Speaker 3: Lastly, I am laser focused on operating leverage and making sure we manage our cost space with relentless attention and commitment.

Lastly, I am laser focused on operating leverage and making sure we manage our cost base with relentless attention and commitment.

Alex Chris: Now, I'd like to share what you can expect from me in terms of how we will communicate to all of you and the principles to which we will adhere. You'll see this starting with our next earnings call in terms of how we report our numbers and what we view as important metrics to our shareholders. I believe in the last several years it has been difficult to model our company consistently because the company itself hasn't provided consistent metrics to allow you to do so.

Speaker 3: As I said before, I believe our cost space and complex structure is slowing us down.

As I've said before I believe our cost base and complex structure is slowing us down.

Speaker 3: We have opportunities to accelerate our revenue growth while reducing our expenses, helping further drive operating leverage.

We have opportunities to accelerate our revenue growth, while reducing our expenses, helping further drive operating leverage.

In terms of the timeline from here.

Speaker 3: I can tell you that we are already hard at work determining a comprehensive plan for 2024 and ensuring we are prepared to deliver it.

I can tell you that we are already hard at work determining a comprehensive plan for 2024 and ensuring we are prepared to deliver it.

Alex Chris: That is going to change. For our next earnings call, we will unpack for you the following. First, we will be clear what our operating principles are and how these principles drive the growth opportunities we pursue. And in turn, drive capital allocation, technology allocation and talent allocation decisions across our business. Second, we will be clear about what metrics matter the most to us and how we are managing the business. I can tell you right now what I care about most is high quality customer growth and profitable revenue growth.

Speaker 3: There are team stacked against the focus areas I mentioned earlier, and they are deep in execution mode. Our core execution and fast twitch operating muscles are building by the day.

There are teams stacked against the focus areas I mentioned earlier and they are deep in execution mode, our core execution and fast Twitch operating muscles are building by the day.

Speaker 3: In parallel, the leadership team and I are refreshing our strategic priorities and focus areas for 2024 and we'll be sharing them with you in our next earnings call in February .

In parallel the leadership team and I are refreshing, our strategic priorities and focus areas for 2024, and we'll be sharing them with you at our next earnings call in February.

Speaker 3: I will unpack for you then the clarity of our strategic focus, our focus growth priorities, and how we will achieve durable, profitable growth.

I will unpack for you than the clarity of our strategic focus.

Our focus growth priorities and how we will achieve durable profitable growth.

Alex Chris: Going forward, PayPal will be focused on generating real profit for the company. I can't emphasize that last statement enough. It is key to how I believe this company should be run and it is how you should expect us to measure our performance. Unprofitable growth is counterproductive to the long term prospects of this or any other growth oriented company. Third, as a management team, we will be guided by margin accretive revenue growth.

Speaker 3: adjustments we will make to drive efficiencies across the organization and guide what you can expect us to deliver in 2020.

Adjustments, we will make to drive efficiencies across the organization.

And guide what you can expect us to deliver in 2024.

Speaker 3: It is clear to me that the things we need to do better are all going to be achieved overnight.

It is clear to me that the things we need to do better are all going to be achieved overnight.

Speaker 3: And of course business bike life is not a straight line.

And of course business Likewise.

Not a straight line.

Speaker 3: However, I can tell you one thing for sure. We are going to move at lightning speed to get there as quickly as possible.

However, I can tell you one thing for sure we are going to move at lightning speed to get there as quickly as possible.

Speaker 3: With that, I'd like to hand the call over to Gabrielle to take you through the Q3 results, and they would be happy to take some questions.

With that I'd like to hand, the call over to Gabrielle to take you through the Q3 results and there would be happy to take some questions.

Alex Chris: Over time, I believe we have a tremendous opportunity to grow revenue outside of purely transaction-related volume, as we continue to serve our customers' core needs. We are taking a closer look at how best to report our financial performance and which KPIs we will be focused on going forward. Once we complete this review, we will consistently use the same metrics and it will be easy for you to model the business, judge our performance and hold us accountable.

Speaker 4: Thanks, Alex. It's great to have you on board. The past few weeks have been incredibly inspiring and invigorating.

Thanks, Alex it's great to have you onboard the past few weeks have been incredibly inspiring and invigorating.

Speaker 4: There's renewed energy and excitement at PayPal with you leading us forward.

There is renewed energy and excitement at Paypal with you leading us forward.

Speaker 4: I look forward to welcoming Jamie and working with you as we enter this new chapter of growth for PayPal.

I look forward to welcoming Jamie and working with you as we enter this new chapter of growth for Paypal.

Speaker 4: I share Alex's enthusiasm for our increased pace of innovation and the outstanding opportunities we have given the power and scale of our global franchise.

I share Alex's enthusiasm for our increased pace of innovation and the outstanding opportunities, we have given the power and scale of our global franchise.

Alex Chris: Next, I want all stakeholders to be able to understand in a simple way how we do what we do and how we make money doing it. This includes our customers as they are the lifeblood of our existence. Lastly, I am laser focused on operating leverage and making sure we manage our cost space with relentless attention and commitment. As I said before, I believe our cost space and complex structure is slowing us down. We have opportunities to accelerate our revenue growth while reducing our expenses, helping further drive operating leverage.

Speaker 4: And I agree that with increased focus and improved prioritization, accelerating our growth and delivering operating leverage are mutually reinforced.

And I agree that with increased focus and improved prioritization accelerating our growth and delivering operating leverage are mutually reinforcing.

Speaker 4: Importantly, we're committed to increase transparency and improve consistency in how we discuss our business and the ongoing enhancement of our disclosure.

Importantly, we're committed to increase transparency and improve consistency in how we discuss our business and the ongoing enhancement of our disclosures.

Speaker 4: I would also like to thank the entire PayPal team for their steadfast focus on delivering for our customers and executing our priorities. First.

I would also like to thank the entire Paypal team for their steadfast focus on delivering for our customers and executing our priorities.

First several highlights from the quarter.

Speaker 4: We're reporting 9% revenue growth on a currency neutral basis and 20% growth in non-gap earnings per share, both of which are ahead of our guidance.

Alex Chris: In terms of a timeline from here, I can tell you that we are already hard at work determining a comprehensive plan for 2024 and ensuring we are prepared to deliver it. There are teams stacked against the focus areas I mentioned earlier and they are deep in execution mode. Our core execution and fast twitch operating muscles are building by the day. In parallel, the leadership team and I are refreshing our strategic priorities and focus areas for 2024 and we will be sharing them with you in our next earnings call in February.

We're reporting 9% revenue growth on a currency neutral basis, and 20% growth in non-GAAP earnings per share.

Both of which are ahead of our guidance.

Speaker 4: In the third quarter, we again demonstrated strong expense discipline and our ability to operate our business with improved efficient.

In the third quarter, we again demonstrated strong expense discipline and our ability to operate our business with improved efficiencies.

Speaker 4: In addition, we continue to make progress in the quarter across our long term strategic initiatives, which are focused on driving more profitable growth. Moving to-

In addition, we continued to make progress in the quarter across our long term strategic initiatives, which are focused on driving more profitable growth.

Moving to our customers, we are encouraged by new cohorts coming in.

Speaker 4: Retention and active use based on product innovations are starting to pay off.

Retention in active use based on product innovations are starting to pay off.

Alex Chris: I will unpack for you then the clarity of our strategic focus, our focus growth priorities, and how we will achieve durable, profitable growth. Adjustments we will make to drive efficiencies across the organization and guide what you can expect us to deliver in 2024.

Speaker 4: That said, during the quarter, active accounts declined by 2.8 million, as we continue to flush out low-quality customers predominantly in Latin America and Southeast Asia.

That said during the quarter active accounts declined by $2 8 million as we continue to flush out low quality customers predominantly in Latin America and Southeast Asia.

Speaker 4: As a reminder, we said this would be a year where we churn off lower quality active and in which total accounts would decline. Year to date, churn has been lower than our expectations.

As a reminder, we said this would be a year, where we churn off lower quality active and in which total accounts would decline.

Alex Chris: It is clear to me that the things we need to do better are all going to be achieved overnight. And of course business like life is not a straight line. However, I can tell you one thing for sure, we are going to move at lightning speed to get there as quickly as possible.

Year to date churn has been lower than our expectations.

Customer growth is a vital pillar of our growth agenda.

Speaker 4: We're an organization focused on serving our customers and improving our value.

We're an organization focused on serving our customers and improving our value proposition and we're positioning ourselves for a return to growth in our customer base.

Gabrielle Rabinovitch: With that, I would like to hand the call over to Gabrielle to take you through the Q3 results and there would be happy to take some questions. Thanks Alex, it is great to have you on board. The past few weeks have been incredibly inspiring and invigorating. There is renewed energy and excitement at PayPal with you leading us forward. I look forward to welcoming Jamie and working with you as we enter this new chapter of growth for PayPal.

Speaker 4: and we're positioning ourselves for a return to growth in our customer base.

Turning to volume growth.

Speaker 4: We're reporting total payment volume of $387.7 billion.

We are reporting total payment volume of $387 7 billion.

Speaker 5: representing 15% growth at spot and 13% growth on a currency neutral basis with that growth primarily driven by brain tree.

Representing 15% growth at spot and 13% growth on a currency neutral basis with that growth primarily driven by Braintree.

U S CBD grew 10%.

Speaker 4: International TVB grew 19% currency neutral, accelerating five points sequentially, primarily driven by strength in Europe as well as improvement in Asia. I would now like to comment.

International TVD grew 19% currency neutral accelerating five points sequentially, primarily driven by strength in Europe as well as improvements in Asia.

Gabrielle Rabinovitch: I share Alex's enthusiasm for our increased pace of innovation and the outstanding opportunities we have given the power and scale of our global franchise. And I agree that with increased focus and improved prioritization, accelerating our growth and delivering operating leverage are mutually reinforcing. Importantly we are committed to increased transparency and improved consistency in how we discuss our business and the ongoing enhancement of our investors. I would also like to thank the entire PayPal team for their steadfast focus on delivering for our customers and executing our priorities.

I would now like to comment on our branded checkout performance.

Speaker 4: PayPal's global branded checkout volumes grew approximately 6% in the quarter on a currency neutral base.

Paypal global branded checkout volumes grew approximately 6% in the quarter on a currency neutral basis.

Speaker 4: relative to 7.5% growth in Q3 last year.

Relative to seven 5% growth in Q3 last year.

Speaker 4: growth accelerated in July to 8%. But moderated as we move through the quarter.

Growth accelerated in July to 8%.

But moderated as we moved through the quarter.

Speaker 4: To date in Q4, brand trends have stabilized and are tracking in line with the first half of the year.

To date in Q4, we ended trends have stabilized and are tracking in line with the first half of the year.

Speaker 4: As I mentioned, revenue increased 9% on a currency neutral basis, an 8% at spot to $7.4 billion.

Gabrielle Rabinovitch: First, several highlights from the quarter. We're reporting 9% revenue growth on a currency neutral basis and 20% growth in non-gap earnings per share, both of which are ahead of our guidance. In the third quarter, we again demonstrated strong expense disciplines and our ability to operate our business with improved efficiencies. In addition, we continue to make progress in the quarter across our long-term strategic initiatives, which are focused on driving more profitable growth.

As I mentioned revenue increased 9% on a currency neutral basis, and 8% at spot to seven 4 billion.

Speaker 4: Transaction revenue grew 7% to $6.7 billion, driven by brain tree and PayPal branded checkout.

Transaction revenue grew 7% to $6 7 billion, driven by Braintree, and Paypal branded checkout.

Speaker 4: Hedge gains for the quarter were $7 million, $149 million lower than Q3 last year.

Hedge gains for the quarter were $7 million one.

$149 million lower than Q3 last year.

Speaker 5: In Q3 of last year, we also benefited from approximately $75 million in contractual compensation for merchants, which did not contribute to...

In Q3 of last year, we also benefited from approximately $75 million in contractual compensation from merchants.

Gabrielle Rabinovitch: Moving to our customers, we're encouraged by new cohorts coming in. Retention and active use based on product innovations are starting to pay off. That said, during the quarter, active accounts declined by 2.8 million as we continue to flush out low-quality customers predominantly in Latin America and Southeast Asia. As a reminder, we said this would be a year where we churn off lower-quality active and in which total accounts would decline. Year-to-date churn has been lower than our expectations.

Which did not contribute to our revenue this year.

Speaker 5: In addition, as we discussed last quarter, migrating and consolidating legacy paypal payment services was also a drag on the growth and transaction revenue.

In addition, as we discussed last quarter migrating and consolidating legacy Paypal payment services was also a drag on the growth in transaction revenue.

Speaker 5: Other value added services revenue grew 25% to $764 million almost entirely driven by increased interest income on customer stored balances. In the third quarter.

Other value added services revenue grew 25% to $764 million almost entirely driven by increased interest income on customer stored balances.

In the third quarter U S revenue grew 7%.

Speaker 4: Interest revenue increased 10% at spot and 11% on a current in neutral basis, accelerating sequentially and year over year.

Revenue increased 10% at spot and 11% on a currency neutral basis accelerating sequentially and year over year.

Gabrielle Rabinovitch: Customer growth is a vital pillar of our growth agenda. We're an organization focused on serving our customers and improving our value proposition, and we're positioning ourselves for a return to growth in our customer base. Turning to volume growth, we're reporting total payment volume of $387.7 billion, representing 15% growth at spot and 13% growth on a currency neutral basis, with that growth primarily driven by brain tree.

Speaker 5: As with TPV, we saw strengthening performance across Europe , which was most pronounced in the early to mid-summer. And in China, our seller business...

As with <unk>, we saw strengthening performance across Europe, which was most pronounced in the early to mid summer.

And in China, our seller business improved as well.

Speaker 5: Transaction take rate declines 13 basis points to 1.72%.

Transaction take rate declined 13 basis points to 172%.

Speaker 5: Similar to our Q2 results, approximately 70% of this decline was driven by three factors.

Similar to our Q2 results approximately 70% of this decline was driven by three factors.

Speaker 5: Lower gains from foreign currency hedges, which are recorded as international transaction revenue, a decline in foreign exchange fees in part driven by lower currency volatility, and the headwind from lapping elevated contractual compensation from merchants last year.

Gabrielle Rabinovitch: U.S. TVV grew 10%. International TVV grew 19% currency neutral, accelerating 5.2%, primarily driven by strength in Europe as well as improvement in Asia.

Lower gains from foreign currency hedges, which are recorded as international transaction revenue decline.

The decline in foreign exchange fees in part driven by lower currency volatility and the headwind from lapping elevated contractual compensation for merchants last year.

Gabrielle Rabinovitch: I would now like to comment on our branded checkout performance. PayPal's global branded checkout volumes grew approximately 6% in the quarter on a currency neutral basis, relative to 7.5% growth in Q3 last year. Growth accelerated in July to 8%, but moderated as we move through the quarter. To date in Q4, branded trends have stabilized and are tracking in line with the first half of the year. As I mentioned, revenue increased 9% on a currency neutral basis, and 8% at spot to $7.4 billion.

Speaker 5: In addition, the mix of volumes from large merchants continue to pressure our branded checkout tapes.

In addition, the mix of volumes from large merchants continue to pressure our branded checkout take rate.

Speaker 5: Our total take rate declined 12 basis points to 1.91%. And was affected by the same factors as

Our total take rate declined 12 basis points to 191%.

It was affected by the same factors as transaction take rate.

Speaker 5: Transaction expense as a rate of TPPV came in at 93 basis points. Four basis points higher.

Transaction expense as a rate of TPB came in at 93 basis points.

Basis points higher than Q3 last year.

Speaker 5: This increase was primarily driven by brain tree volume growth and was partially offset by the geographic mix of PayPal volumes and rate benefits in Venom.

This increase was primarily driven by Braintree volume growth and was partially offset by the geographic mix of Paypal volumes and rate benefits in venmo.

Gabrielle Rabinovitch: Transaction revenue grew 7% to $6.7 billion, driven by brain tree and PayPal branded checkout. Hedge gains for the quarter were $7 million, $149 million lower than Q3 last year. In Q3 of last year, we also benefited from approximately $75 million in contractual compensation for merchants, which did not contribute to our revenue this year. In addition, as we discussed last quarter, migrating and consolidating legacy PayPal payment services was also a drag on the growth and transaction revenue.

Speaker 5: Transaction loss of the rate of TPPV was eight basis points for the quarter. Flat to last year.

Transaction loss as a rate of <unk> was eight basis points for the quarter.

That to last year.

Speaker 5: Credit losses were $117 million, or three basis points of their rate of TPPV.

Credit losses were $117 million or three basis points as a rate of PPV.

Speaker 5: In the aggregate, volume-based expenses increase 21% in the third quarter.

In the aggregate volume based expenses increased 21% in the third quarter.

Speaker 4: Consistent with our expectations going into the quarter, Q3 saw a higher level of pressure on transaction margin dollar and rate performance due to several lapping and more transitory factors that we've discussed on past earnings calls.

Consistent with our expectations going into the quarter Q3 is a higher level of pressure on transaction margin dollar and rate performance due to several lapping and more transitory factors that we've discussed on past earnings calls.

Speaker 5: Transaction margin dollars declines 3.5% to 3.4 billion dollars.

Transaction margin dollars declined three 5% to $3 4 billion.

Gabrielle Rabinovitch: Other value-added services revenue grew 25% to $764 million, almost entirely driven by increased interest income on customer stored balance. In the third quarter, U.S, revenue grew 7%. Interest revenue increased 10% at spot and 11% on a current neutral basis, accelerating sequentially and year over year. As with TPV, we saw strengthening performance across Europe, which was most pronounced in the early to mid-summer. And in China, our seller business improved as well. Transaction take rate declines 13 basis points to 1.72%.

Speaker 5: and transaction margin declined 558 basis points to 45.

Transaction margin declined 558 basis points to 45, 4%.

Speaker 5: In the third quarter, we delivered 540 basis points of operating expense

In the third quarter, we delivered 540 basis points of operating expense leverage.

Speaker 5: Non-transaction related operating expenses decline 12%.

Non transaction related operating expenses declined 12%.

Speaker 5: We've been actively managing our cross structure and in Q3 reductions across each of our principal operating expense categories contributed significant levels.

We've been actively managing our cost structure and in Q3 reductions across each of our principal operating expense categories contributed significant leverage.

Speaker 5: Non-depth operating income grew 8% in the quarter to $1.6 billion.

non-GAAP operating income grew 8% in the quarter to $1 6 billion.

Speaker 5: Our non-gap operating margin declined 18 basis points to 22.2%, with operating expense leverage largely offsetting transaction margin compression.

Our non-GAAP operating margin declined 18 basis points to 22, 2% with operating expense leverage largely offsetting transaction margin compression.

Gabrielle Rabinovitch: Similar to our Q2 results, approximately 70% of this decline was driven by three factors. Lower gains from foreign currency hedges, which are recorded as international transaction revenue, a decline in foreign exchange fees in part driven by lower currency volatility, and the headwind from lapping elevated contractual compensation from merchants last year. In addition, the mix of volumes from large merchants continued to pressure our branded checkout take rate. Our total take rate declined 12 basis points to 1.91%, and was affected by the same factors as transaction take rate.

Speaker 5: For the third quarter, non-GAPEPS increased 20% to $1.30, which exceeded the high end of our guidance range by 6.

For the third quarter, non-GAAP, EPS increased 20% to $1 30.

Which exceeded the high end of our guidance range by <unk> <unk>.

We ended the quarter with cash cash equivalents and investments of $15 billion.

Speaker 5: We generated $1.1 billion in free cash flow, which represents a 30% decline from the third quarter last year.

We generated $1 1 billion and free cash flow, which represents a 30% decline from the third quarter last year.

Speaker 5: As a reminder, last quarter, we classified the European installment loans that we intended to sell to KKR as held for sale.

As a reminder, last quarter, we classified the European installment loans that we intended to sell to KKR as held for sale.

Speaker 5: All loans subsequently originated in this portfolio are also classified as health for sale and are reflected as outflows within cash flow from operation.

All loans subsequently originated in this portfolio are also classified as held for sale and are reflected as outflows within cash flow from operations.

Gabrielle Rabinovitch: Transaction expense as a rate of TPV came in at 93 basis points, four basis points higher than Q3 last year. This increase was primarily driven by brain tree volume growth, and was partially offset by the geographic mix of PayPal volumes and rate benefits in Venmo. Transaction loss as a rate of TPV was eight basis points for the quarter, flat to last year. Credit losses were $117 million, or three basis points as a rate of TPV.

Speaker 4: In Q3, this dynamic reduced free cash flow by $810 million.

In Q3, this dynamic reduced free cash flow by $810 million.

Speaker 5: In future periods, we will recognize the cash from proceeds of sales as an offsetting inflow to cash flow from operations.

In future periods, we will recognize the cash from proceeds of sales as an offsetting inflow to cash flow from operations.

Speaker 4: Adjusting for this temporary impact, pre-cash-low grew 21% to $1.9 billion.

Adjusting for this temporary impact free cash flow grew 21% to $1 9 billion.

Speaker 4: Our strong balance sheet and free cash flow generation are competitive differentiators, and provide us with significant optionality for value creation.

Our strong balance sheet and free cash flow generation, our competitive differentiators and provide us with significant optionality for value creation.

Gabrielle Rabinovitch: In the aggregate volume-based expenses increased 21% in the third quarter. Consistent with our expectations going into the quarter, Q3 saw a higher level of pressure on transaction margin dollar and rate performance due to several lapping and more transitory factors that we've discussed on past earnings calls. Transaction margin dollars declined 3.5% to 3.4 billion dollars, and transaction margin declined 558 basis points to 45.4%.

Speaker 4: We have also made progress this year, advocating a disciplined approach to capital allocation and managing our balance.

We have also made progress this year executing a disciplined approach to capital allocation and managing our balance sheet.

Speaker 5: In the third quarter, we completed an additional $1.4 billion in Sherry purchase.

In the third quarter, we completed an additional $1 4 billion in share repurchases.

Speaker 5: Through September 30, we've now returned $4.4 billion to share.

Through September 30, we've now returned $4 4 billion to shareholders for.

Speaker 5: For the full year, we continue to expect to allocate approximately $5 billion to our Sherry Purchase Program.

For the full year, we continue to expect to allocate approximately $5 billion to our share repurchase program.

Speaker 5: Given our conviction in our business, relative to its valuation today, we've taken a more aggressive approach to our capital return program. And have reduced our weighted average shares outstanding by 7% over the last eight quarters.

Gabrielle Rabinovitch: In the third quarter, we delivered 540 basis points of operating expense leverage. Non-transaction related operating expenses declined 12%. We've been actively managing our cost structure, and in Q3, reductions across each of our principal operating expense categories contributed significant leverage. Non-gap operating income grew 8% in the quarter to $1.6 billion. Our non-gap operating margin declined 18 basis points to 22.2%, with operating expense leverage largely offsetting transaction margin compression. For the third quarter, non-gap EPS increased 20% to $1.30, which exceeded the high end of our guidance range by 6 cents. We ended the quarter with cash, cash equivalence, and investment of $15 billion. We generated $1.1 billion in free cash flow, which represents a 30% decline from the third quarter last year.

Given our conviction in our business relative to its valuation today, we've taken a more aggressive approach to our capital return program.

And have reduced our weighted average shares outstanding by 7% over the last eight quarters.

Speaker 5: We believe that Cherry Purchase remains an optimal use of capital, allowing us to retain the flexibility to continue investing opportunistically in our business.

We believe that share repurchase remains an optimal use of capital, allowing us to retain the flexibility to continue investing opportunistically in our business.

Speaker 5: In addition, as a result of our decision to sell our European pay later receivables to KKR, we ended Q3 with $5 billion in net credit receivables, a 16% decline year over year, and a 9% decline sequentially.

In addition, as a result of our decision to sell our European pay later receivables to KKR. We ended Q3 with $5 billion in net credit receivables.

A 16% decline year over year, and a 9% decline sequentially.

Speaker 4: Two weeks ago, we closed on the first step of this commitment, receiving approximately $1.4 billion in proceeds.

Two weeks ago, we closed on the first step of this commitment receiving approximately $1 4 billion in proceeds.

Speaker 5: Later this month, we will close on the next tranche of our back book sale of credit receipts.

Later this month, we will close on the next tranche of our back book sale of credit receivables.

Speaker 5: We are also maintaining a Titan-D origination strategy for the PayPal Business Loan Sport Folio.

We are also maintaining a tightened origination strategy for the Paypal business loan portfolio.

Speaker 5: Principle and interest receivables decline nearly 30% in the quarter. And this portfolio now represents approximately 12% of our overall credit receivables portfolio versus 21% 12 months ago.

Principal and interest receivables declined nearly 30% in the quarter.

Gabrielle Rabinovitch: As a reminder, last quarter, we classified the European installment loans that we intended to sell to KKR as held for sale. All loans subsequently originated in this portfolio are also classified as held for sale and are reflected as outflows within cash flow from operations. In Q3, this dynamic reduced free cash flow by 810 million dollars. In future periods, we will recognize the cash from proceeds of sales as an offsetting inflow to cash flow from operations. Adjusting for this temporary impact, free cash flow grew 21% to 1.9 billion dollars. Our strong balance sheet and free cash flow generation are competitive differentiators and provide us with significant optionality for value creation.

And this portfolio now represents approximately 12% of our overall credit receivables portfolio versus 21% 12 months ago.

Speaker 5: As you heard from Alex, we're evaluating our growth priorities and aligning our resources to accelerate our velocity with greater...

As you heard from Alex we're evaluating our growth priorities and aligning our resources to accelerate our velocity.

With greater focus we can be more effective.

Speaker 4: Consistent with this approach, we're divesting happy returns.

Consistent with this approach we're divesting happy returns.

Speaker 4: In September , we entered into an agreement to sell happy returns to UPS for $465 million in cash, meaningfully higher than our acquisition price.

In September we entered into an agreement to sell happy returns to UBS for $465 million in cash meaningfully higher than our acquisition price.

Speaker 5: were thrilled that following a rigorous process over many months, our team was able to find happy returns the right long-term home with UPS.

We're thrilled the following a rigorous process over many months our team was able to find happy returns the right long term home with UBS.

Speaker 5: This sale, which is expected to close in the current quarter, will enable us to put even more focus on our core business and priorities. I would now like to discuss our outs.

This sale, which is expected to close in the current quarter will enable us to put even more focus on our core business and priorities.

Gabrielle Rabinovitch: We have also made progress this year, advocating a disciplined approach to capital allocation and managing our balance sheet. In the third quarter, we completed an additional $1.4 billion in sharey purchases. Through September 30, we've now returned $4.4 billion to shareholders. For the full year, we continue to expect to allocate approximately $5 billion to our sharey purchase program. Given our conviction in our business relative to its valuation today, we've taken a more aggressive approach to our capital return program and have reduced our weighted average shares outstanding by 7% over the last eight quarters.

I would now like to discuss our outlook for the remainder of the year.

Speaker 4: Relative to the plan laid out on our earnings call three months ago, branded check-up growth has been lower than expected.

Relative to the plan laid out on our earnings call three months ago branded checkout growth has been lower than expected.

Speaker 5: As I mentioned earlier, after an acceleration in the summer, we've seen a return to growth that is more in line with trends throughout the first half of 2022.

As I mentioned earlier after an acceleration in the summer with Hino returned to growth that is more in line with trends throughout the first half of 2023.

Speaker 4: We now expect fourth quarter revenue to grow between 7% and 8% on a currency neutral basis, or approximately 6% to 7% at spot.

We now expect fourth quarter revenue to grow between 7% and 8% on a currency neutral basis or approximately 6% to 7% at spot.

Speaker 4: In addition, we expect non-GAP EPS and Q4 to be approximately $1.36. Representing 10% growth relative to 2022.

In addition, we expect non-GAAP EPS in Q4 to be approximately $1 36.

Gabrielle Rabinovitch: We believe that sharey purchase remains an optimal use of capital, allowing us to retain the flexibility to continue investing opportunistically in our business. In addition, as a result of our decision to sell our European pay later receivables to KKR, we ended Q3 with $5 billion in net credit receivables, a 16% decline year over year, and a 9% decline sequentially. Two weeks ago, we closed on the first step of this commitment receiving approximately $1.4 billion in proceeds.

Representing 10% growth relative to 2022.

Speaker 5: Our guidance contemplates a sequential improvement in transaction margin dollar performance.

Our guidance contemplates a sequential improvement in transaction margin dollar performance.

Speaker 4: That said, on a year over your basis, we now expect transaction margin dollars to decline.

That said on a year over year basis, we now expect transaction margin dollars to decline.

Speaker 5: In addition, we expect our non-gap operating margin to contract from the fourth quarter last.

In addition, we expect our non-GAAP operating margin to contract from the fourth quarter last year.

Speaker 5: For 2023, we now expect revenue to grow approximately 8.5% on a currency neutral basis, and approximately 7.5% at spot.

For 2023, we now expect revenue to grow approximately eight 5% on a currency neutral basis and approximately seven 5% at spot.

Speaker 5: The ongoing strength of brain tree volume in conjunction with lower than expected branded checkout trends are resulting in incremental pressure on our non-gap operating march.

The ongoing strength of Braintree volume in conjunction with lower than expected branded checkout trends are resulting in incremental pressure on our non-GAAP operating margin.

Gabrielle Rabinovitch: Later this month, we will close on the next tranche of our back book sale of credit receivables. We are also maintaining a tightened origination strategy for the PayPal business loans portfolio. Principle and interest receivables decline nearly 30% in the quarter, and this portfolio now represents approximately 12% of our overall credit receivables portfolio versus 21% 12 months ago. As you heard from Alex, we're evaluating our growth priorities and aligning our resources to accelerate our velocity with greater focus, we can be more effective.

Speaker 5: Relative to the 100 basis points of expansion previously expected. We now expect approximately 75 basis points of margin. And we now expect approximately 75 basis points of margin.

Relative to the 100 basis points of expansion previously expected, we now expect approximately 75 basis points of margin expansion.

Speaker 5: We're slightly increasing our expectations for full year 2023 non-DPPS.

We're slightly increasing our expectations for full year 2023 non-GAAP EPS.

Speaker 4: which we now expect to be approximately $4.98. Representing 21% growth.

Which we now expect to be approximately $4 98.

Representing 21% growth from last year.

Speaker 4: This increase reflects the benefit of Q3 app performance and changes to our tax rate of sum.

This increase reflects the benefit of Q3 outperformance and changes to our tax rate assumption.

Gabrielle Rabinovitch: Consistent with this approach, we're divesting happy returns. In September, we entered into an agreement to sell happy returns to UPS for $465 million in cash, meaningfully higher than our acquisition price.

Speaker 4: In addition, we now expect free cash flow for 2023 to be at least $4.6 billion.

In addition, we now expect free cash flow for 2023 to be at least $4 6 billion.

Speaker 4: In closing, we believe that we're well positioned to navigate the road ahead.

In closing, we believe that we're well positioned to navigate the road ahead.

Speaker 4: As Alex noted in his comments, we're working on our plans to accelerate profitable growth. And we'll share our progress with you along the way, with consistency and transparency.

As Alex noted in his comments, we're working on our plans to accelerate profitable growth and we'll share our progress with you along the way with consistency and transparency where.

Gabrielle Rabinovitch: We're thrilled that following a rigorous process over many months, our team was able to find happy returns the right long-term home with UPS. This sale, which is expected to close in the current quarter, will enable us to put even more focus on our core business and priorities.

Speaker 5: We're committed to building PayPal for the future and guided by our relentless focus on creating the best possible experiences for our customers.

We're committed to building Paypal for the future and guided by our relentless focus on creating the best possible experiences for our customers.

Speaker 5: Actraff continues to be complex, we're taking an appropriately prudent approach to managing our business. And with that,

Archrock continues to be complex, we're taking an appropriately prudent approach to managing our business.

Gabrielle Rabinovitch: I would now like to discuss our outlook for the remainder of the year. First, relative to the plan laid out on our earnings call three months ago, branded check-up growth has been lower than expected. As I mentioned earlier, after an acceleration in the summer, we've seen a return to growth that is more in line with trends throughout the first half of 2023. We now expect fourth quarter revenue to grow between 7% and 8% on a currency neutral basis, or approximately 6% to 7% at spot.

And with that Alex and I are happy to take your questions.

Speaker 1: At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad. We ask that you please limit yourself to one question and then return to the queue. We'll pause for a moment to compile the Q&A roster.

At this time I would like to remind everyone in order to ask a question. Please press star followed by the number one on your telephone keypad. We ask that you. Please limit yourself to one question and then return to the queue, we'll pause for a moment to compile the Q&A roster.

Speaker 1: Your first question comes from the line of T.N. Sin Hu Long from J.P. Morgan. Please go ahead. Your line is open.

Your first question comes from the line of Tea Ensign, who long from J P. Morgan. Please go ahead. Your line is open.

Gabrielle Rabinovitch: In addition, we expect non-gap EPS and Q4 to be approximately $1.36, representing 10% growth relative to 2022. Our guidance contemplates a sequential improvement in transaction margin dollar performance. That said, on a year over year basis, we now expect transaction margin dollars to decline. In addition, we expect our non-gap operating margin to contract from the fourth quarter last year. For 2023, we now expect revenue to grow approximately 8.5% on a currency neutral basis, and approximately 7.5% at spot.

Speaker 6: Hey, thanks so much, and now I'd appreciate your observations and priorities here. Can you maybe share a little bit more on your early impressions of the assets and portfolio products that PayPal? I'd just love to hear what surprised me the upside and maybe what assets.

Hey, Thanks, so much and Alex I appreciate your observations and priorities here can you maybe share a little bit more on.

On your early impressions of the of your assets in the portfolio of products that Paypal, just love to hear what surprised to the upside and maybe what assets.

Speaker 6: could require more work to turn around than what you thought. If, for example, happy returns being sold as you called out last week, we see more sales, the vestitures, repite forming, that kind of thing. Thank you.

Could require more work to turn around than what you thought and if.

If for example have returns being sold as you called out last week, we see more sales divestitures re platforming.

That kind of thing thank you.

Speaker 7: Thank you, Tenjen, and good to hear from you. You know, it's been exciting to come in. If I would be remiss if I didn't say it wasn't a surprise, but it has delighted me from an asset perspective. The first I'd highlight is our employee.

Yes, Thank you Tien tsin and good to hear from you.

Gabrielle Rabinovitch: The ongoing strength of brain tree volumes in conjunction with lower than expected branded checkout trends are resulting in incremental pressure on our non-gap operating margin. Relative to the 100 basis points of expansion previously expected, we now expect approximately 75 basis points of margin expansion. We're slightly increasing our expectations for full year 2023 non-gap EPS, which we now expect to be approximately $4.98, representing 21% growth from last year. This increase reflects the benefit of Q3 app performance and changes to our tax rate assumption. In addition, we now expect free cash flow for 2023 to be at least $4.6 billion.

It's been exciting to come ahead, if I would be remiss, if I didn't say it wasn't a surprise, but is delighted me from an asset perspective first I'd highlight is our employee base.

Speaker 7: This is a tremendous team that is energized, has welcomed me to the team, and has fired up to go tackle all the opportunities ahead.

There is a tremendous team that is energized has welcomed me to the team.

And as fired up.

To go tackle all of the opportunities ahead of us if I, if I didn't think about the different components.

Speaker 7: If I didn't think about the different components, I'd been really impressed with all the different pieces that we have to deliver for consumers.

I've been really impressed with all of the different pieces that we have to deliver for consumers.

Speaker 7: We have a ubiquitous platform that's globally recognized with PayPal. Venmo is a verb and it's something that...

We have you.

Equities platform that is globally recognized with Paypal venmo as a verb and it's something that is.

Speaker 7: You know, tremendous in the US and has opportunities beyond. If I think about all the different core problems that we can solve with the assets that we have for customers, rewards, buy-and-out pay-later, cashback cards, all of those are tremendous and within our grasp. We just, as I mentioned earlier, just have to put them together into a core value proposition. And that's what the team's working towards right now.

Tremendous in the U S and has opportunities beyond if I think about all the different core problems that we can solve with the assets that we have for.

Gabrielle Rabinovitch: In closing, we believe that we're well positioned to navigate the road ahead. As Alex noted in his comments, we're working on our plans to accelerate profitable growth, and we'll share our progress with you along the way, with consistency and transparency. We're committed to building PayPal for the future and guided by our relentless focus on creating the best possible experiences for our customers.

Customers rewards buy now pay later cashback cards all of those R. R.

Our tremendous and within our grasp we just as I mentioned earlier, just have to put them together into a core value proposition.

That's what the teams working towards right now on the merchant side again, we have tremendous penetration into small businesses and enterprises, we have a beachhead now with Braintree, which I'm really excited about about and I think we've earned the right now to expand margin and make sure that we're.

Speaker 7: On the merchant side, again, we have tremendous penetration into small businesses and enterprises. We have a beach head now with BrainTree, which I'm really excited about. And I think we've earned the right now to expand margin and make sure that we're really pricing the value and ensuring that we're delivering what we need to across the board. And then if I really think about the biggest surprise that I didn't realize before coming in, it's probably around the data.

Gabrielle Rabinovitch: Acturop continues to be complex. We're taking an appropriately prudent approach to managing our business.

Krista: And with that, Alex and I are happy to take your questions. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad. We ask that you please limit yourself to one question and then return to the queue. We'll pause for a moment to compile the Q&A roster.

Really pricing to value and ensuring that we're delivering what we need to across the board and then if I really think about the biggest surprise that I didn't realize before coming in is probably around the data.

Speaker 7: When we look at the data that we have across

When we look at the data that we have across.

Speaker 3: This two-sided network it allows us to do things

Alex Chris: Your first question comes from the line of TN Sin Who Long from JP Morgan. Please go ahead. Your line is open. Hey, thanks so much. And Alex, I appreciate your observations and priorities here. Can you maybe share a little bit more on your early impressions of the assets and portfolio products that PayPal. I'd love to hear what surprised me the upside and maybe what assets could require more work to turn around than what you thought.

This two sided network. It allows us to do things that I think others, just can't and when I think about how we can personalize branded checkout.

Speaker 3: I think others just can't. And when I think about how we can personalize brand to checkout, how we can recognize people that check out with our data and create an experience that is frictionless, that is personalized, that drives conversion for our merchants, I think we're just scratching the surface of the opportunity there. And so that is a big opportunity that gets me very excited.

We can.

Recognize people at checkout with our data and create an experience that is frictionless that is personalized.

That drives conversion for our merchants I think we're just scratching the surface of the opportunity there and so that that is a big opportunity that gets me very excited.

Speaker 7: I mean, in terms of, you know, opportunities,

Alex Chris: And if, for example, happy returns being sold, as you called out last week, we see more sales, the vestiges, repot forming, that kind of thing. Thank you. Yeah, thank you, Tenjen, and good to hear from you.

In terms of opportunities.

Speaker 3: where we have more work. I think you saw it with the happy returns to the best of sure. And what I would say overall is we have lots of opportunities, but we're doing too many.

Where we have more work I think you saw it with the happy returns divestiture.

And what I would say overall is we have lots of opportunities, but we're doing too many things.

Speaker 3: We're spread to you, then. And we have an opportunity to focus the organization on what matters the most, on the most impactful opportunities to customers and to growing the business. And we'll be looking at.

Alex Chris: You know, it's been exciting to come in if I would be remiss if I didn't say it wasn't a surprise, but has delighted me from an asset perspective. The first I'd highlight is our employee base. This is a tremendous team that has energized, has welcomed me to the team and has fired up to go tackle all the opportunities ahead of us. You know, if I, if I didn't think about the different components, I've been really impressed with all the different pieces that we have to deliver for consumers.

Were spread too thin and we have an opportunity.

Pretty to focus the organization on what matters. The most on the most impactful.

Opportunities to customers and to growing the business.

And we'll be looking at that over time.

Great. Thanks, Alex Thanks, guys.

Speaker 1: Your next question comes from the line of Ramsey L.S.L. From Barkley's, please go ahead. Your line is open.

Your next question comes from the line of Ramsey El <unk> from Barclays. Please go ahead. Your line is open.

Speaker 8: Hi, Alex and Gabriel, and appreciate all the clarity you guys provided on your priorities. You gave us some great detail also on your approach to the SMB side of the business, such as some commentary on PPPP. I guess the question is, given your prior experience with SMBs, do you see SMB becoming a more important part of PayPal strategy relative to the past, and I guess which areas of the product renovation roadmap get you most charged up? But it's...

Hi, Alex and Gabriel and appreciate all the clarity you guys provided on your priorities.

Alex Chris: We have a ubiquitous platform that's globally recognized with PayPal. Venmo is a verb and it's something that is, you know, tremendous in the US and has opportunities beyond. If I think about all the different core problems that we can solve with the assets that we have for customers, rewards by now, pay later, cash back, cards, all of those are our tremendous and within our grasp. We just, as I mentioned earlier, just have to put them together into a core value proposition and that's what the team's working towards right now.

Some great detail also on your approach to the SMB side of the business such as some commentary on PCP I guess the question is given your prior experience with Smbs.

Do you see SMB, becoming a more important part of Paypal strategy relative to the past and I guess, which.

Areas of the product or innovation roadmap get you most charged up at this point.

Speaker 7: Yeah, thank you, Ramsey. Small businesses are a passion of mine. It has been for the last 19 years, and it's very personal, I used to.

Yes, Thank you ramzi.

Small businesses are.

Passion of mine it has been for the last 19 years and.

Alex Chris: On the merchant side, again, we have a tremendous penetration into small businesses and enterprises. We have a beachhead now with BrainTree, which I'm really excited about, and I think we've earned the right now to expand margin and make sure that we're really pricing the value and ensuring that we're going to be able to deliver what we need to across the board. And then if I really think about the biggest surprise that I didn't realize before coming in is probably around the data.

That's very personal I used to.

Speaker 3: I used to run a small business and so it's in my DNA and something that not only is important to PayPal and has been in the past, it's really been the lifeblood of the organization but it absolutely will be a priority going forward.

Used to run a small business and so.

My DNA and something that.

Not only is important to Paypal it has been in the past, it's really been the lifeblood of the organization, but it absolutely will be a priority going forward when I think about small businesses in general there is two really core customer challenges that.

Speaker 3: You know, when I think about small businesses in general, there's two really core customer challenges that the small businesses have. The first is getting customers and growing their business. And the second is managing cash.

All businesses the first is getting customers.

Growing their business and the second is managing managing cash flow.

Alex Chris: When we look at the data that we have across this two-sided network, it allows us to do things that I think others just can't. And when I think about how we can personalize brand to checkout, how we can, you know, recognize people that check out with our data and create an experience. That is frictionless, that is personalized, that drives conversion for our merchants. I think we're just scratching the surface of the opportunity there. And so that is a big opportunity that gets me very excited.

Speaker 3: On the getting customer side, you know, we have a tremendous opportunity with PPCP to help them convert customers to find customers, to drive new customer acquisition, and really help them over time. This is a data play, it's a ubiquity play, and with our two-sided network, it's where we're focused right.

Getting customer side.

We have.

A tremendous opportunity with <unk> to help them convert customers to find customers to drive new customer acquisition.

And really help them overtime.

This is a data play it's a ubiquity play and with our two sided network, it's where we're focused right now once we do that I think we earn the right to expand into their second challenge of cash flow cash flow, it's all about money in money out and access to capital.

Speaker 3: Once we do that, I think we earn the right to expand into their second challenge of cashflow. Cashflow is all about money in, money out, and access to capital.

Alex Chris: I mean, in terms of, you know, opportunities where we have more work, I think you saw it with the happy returns, the bestiture. And what I would say overall is we have lots of opportunities, but we're doing too many things. We're spreading too thin. And we have an opportunity to focus the organization on what matters the most, on the most impactful opportunities to customers and to growing the business. And we'll be looking at that over time.

Speaker 7: We play in all three of those areas. We just have to put together the assets that we have to be able to help small businesses, again, manage their cash flow in a way that helps them grow their business and get past any ups and downs.

We play in all three of those areas. We just have to put together the assets that we have to be able to help small businesses again manage their cash flow in a way that helps them grow their business.

And get past any any ups and downs.

Speaker 3: Very excited about small businesses going forward.

And the market so very excited about small businesses going forward.

Fantastic. Thank you so much.

Speaker 1: Your next question comes from the line of Darren Peller from Wolf Research. Please go ahead. Your line is open.

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

Unknown Attendee: Great. Thanks, Alex. Thanks, guys.

Alex Chris: Your next question comes from the line of Ramsey LSL from Barkley. Please go ahead. Your line is open. Hi, Alex and Gabrielle, and appreciate all the clarity you guys provided on your priorities. You gave us some great detail also on your approach to the SMB side of the business, such as some commentary on PPP. I guess the question is, given your prior experience with SMBs, do you see SMB becoming a more important part of PayPal strategy relative to the past?

Speaker 3: Hey, thanks guys, Alex Congrats again on the new Roland Gabrielle. Thanks for everything. Obviously we know you'll be missed by your investments.

Hey, Thanks, guys, Alex Congrats again on the new role and Gabrielle. Thanks for everything obviously, we know you'll be missed by your investors guys. I know you lowered your outlook a bit for revenue in the fourth quarter and I think you said you continue to see a decrease in gross profit for fourth quarter can you just give us a bit more color on what youre seeing in the environment on E com.

Speaker 3: Guys, I know you lowered your outlook a bit for revenue in fourth quarter, and I think you said you continue to see a decrease in gross profit for fourth quarter. Can you just give us a bit more color on what you're seeing in the environment on E-Com, both US and perhaps globally, and just if anything you're seeing in the trend is what led to a more cautious outlook, either on the holidays or anything more.

Both U S and perhaps globally and just if anything youre seeing in the trend is what led to a more cautious outlook either on the holidays or how many more broadly thanks guys.

Alex Chris: And I guess which, you know, areas of the product renovation roadmap get you most charged up. This Point. Yeah, thank you, Ramsey. Small businesses are a passion of mine, it has been for the last 19 years and, you know, it's very personal. I used to run as well business and so it's in, it's in my DNA and something that not only is important to PayPal and has been in the past.

Speaker 4: Yeah, Darren, you bet. Thanks for the question. Overall, I'd say we're seeing very healthy trends in our check out business.

Yeah, Darren you bet. Thanks for the question overall, I'd say, we're seeing very healthy trends in our checkout business.

Speaker 4: We're heading into the heart of Q4 and we really see no meaningful shifts in our performance or our demand environment.

We're heading into the heart of Q4, and we really have seen no meaningful shifts in our performance or our demand environment. We have taken an appropriately prudent approach to planning for Q4, and obviously, we've contemplated a range of outcomes.

Speaker 4: We have taken an appropriately prudent approach to planning for Q4, and obviously we've contemplated a range of outcomes.

Speaker 4: As you know, headed into Q3, we had expected to see brand-of-check at accelerate through the back half.

As you know headed into Q3, we had expected to see branded checkout accelerate through the back half.

Alex Chris: It's really been the lifeblood of the organization but it absolutely will be a priority going forward. You know, when I think about small businesses in general, there's two really poor customer challenges that the small businesses have. The first is getting customers and growing their business and the second is managing cash flow. On the getting customer side, you know, we have a tremendous opportunity with PPCP to help them convert customers to find customers to drive new customer acquisition and really help them over time.

Speaker 4: Branded did bump up in July and as I discussed a few minutes earlier it moderated through Q3 Overall, we've seen very solid performance in Branded so we think about the sort of what we're seeing in the back half relative to the first half Very consistent performance and global branded checkout But it's just not as elevated as we planned and that's really what's informing the outlook

<unk> did bump up in July and as I discussed a few minutes earlier it moderated through Q3 overall, we've seen very solid performance in branded so when we think about the sort of what we're seeing in the back half relative to the first half very consistent performance in global branded checkout, but it's just not as elevated as we had planned and that's really what's informing the outlook.

Got it thanks guys.

Speaker 1: Your next question comes from the line of Mike. And from Goldman Sachs, please go ahead. Your line is open.

Yeah.

Your next question comes from the line of Mike <unk> from Goldman Sachs. Please go ahead. Your line is open.

Speaker 9: Hey, good afternoon. Thanks for the question. First, Alex, congratulations on the new role in Gabrielle. Thanks for everything. I appreciate your comments around managing the cost base and it being too high. Could you talk a little bit about how you think about balancing the need for investment versus efficiency? The company previously talked about the opportunity for op-x to keep declining in the years ahead. Is that how we should think, still think about the future?

Alex Chris: This is a data play, it's a ubiquity play and with our two-sided network, it's where we're focused right now. Once we do that, I think we earn the right to expand into their second challenge of cash flow. Your cash flow is all about money in money out and access to capital. We play in all three of those areas. We just have to put together the assets that we have to be able to help small businesses, again, manage their cash flow in a way that helps them grow their business. And get past any ups and downs in the market.

Hey, good afternoon, and thanks for the question first Alex Congratulations on the new role and Gabrielle Thanks for everything.

I appreciate your comments around managing the cost base and it being too high.

Could you talk a little bit about how you think about balancing the need for investment versus efficiency.

The company previously talked about the opportunity for Opex to keep declining in the years ahead is that how we should still think about the future.

Speaker 3: Yeah, thanks Mike. First, let me say, as I mentioned earlier, this is a growth.

Yes, Thanks, Mike.

First let me say as I mentioned earlier. This is a growth company and we are going to assess the focused priorities, where we will invest in growth and we will make sure. Those are funded for success and so I think about that separately, then also being able to manage opex on the expense side.

Speaker 3: We are going to a fest the focused priorities where we will invest in growth and we will make sure those are funded first.

Unknown Attendee: So, very excited about small businesses going forward.

Unknown Attendee: Fantastic, thank you so much.

Gabrielle Rabinovitch: Your next question comes in the line of Baron Peller from Wolf Research. Please go ahead. Your line is open. Hey, thanks guys. Alex, congrats again on the new Roland Gabrielle. Thanks for everything. Obviously, we know you'll be missed by your investors. Guys, I know you, you lowered your outlook a bit for revenue in fourth quarter. And I think you said you continue to see a decrease in gross profit for fourth quarter.

Speaker 7: So I think about that separately then also being able to manage

Speaker 7: On the expense side, we have an opportunity to continue to manage off-ex-

We have an opportunity to continue to manage opex efficiently.

Speaker 7: We have a lot of acquisitions that we've done over the past few years. We have a lot of duplication and a lot of manual work that we have an opportunity to invest in automation. We have an opportunity to invest in a platform that allows us to build services that can be reused and leveraged across the organization, which will, again, as I mentioned earlier, actually accelerate us and speed the company.

We have a lot of acquisitions that we've done over the past few years, we have a lot of duplication and a lot of manual work that we have an opportunity to invest in automation, we have an opportunity to invest in a platform that allows us to build services that can be reused and leveraged across the organization.

Gabrielle Rabinovitch: Can you just give us a bit more color on what you're seeing in the environment on the e-comm? Both U.S, and perhaps globally. And just if anything you're seeing in the trend is what led to a more cost to sell, look either on the holidays or any more broadly. Thanks, coach. Yeah, Darren, you bet. Thanks for the question. Overall, I say we're seeing very healthy trends in our check-out business. We're heading into the heart of Q4.

<unk>, which will again as I mentioned earlier actually accelerate us and speed the company up so I think about them differently, we will absolutely invest in growth and make sure that the levers that we have to continue to delight customers and grow the business are funded for success and then we will work on building a platform that drives automation and continues to.

Speaker 3: So I think about them differently. We will absolutely invest in growth and make sure that the levers that we have to continue to delight customers and grow the business are funded for success. And then we will work on building a platform that drives automation and continues to drive down our cost base. And then we will work on building a platform that drives automation and continues to drive down our cost base.

Gabrielle Rabinovitch: And we really see no meaningful shifts in our performance or our demand environment. We have taken an appropriately prudent approach to planning for Q4. And obviously, we've contemplated a range of outcomes. As you know, headed into Q3, we had expected to see Brando check-out accelerates through the back half. Brando did bump up in July. And as I discussed a few minutes earlier, it moderated through Q3. Overall, we've seen very solid performance in Brando.

Drive down our cost base.

Great. Thank you for the thoughts.

Speaker 1: Your next question comes from the line of Jason Cuperberg from Bank of America. Please go ahead. Your line is open.

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

Speaker 10: Good afternoon guys Alex, welcome Gabrielle, best of luck and I wanted to...

Good afternoon, guys, Alex welcome Gabriel Best of luck and I wanted to actually ask about the transaction profit dollar growth.

Gabrielle Rabinovitch: So we think about the sort of what we're seeing in the back half relative to the first half. Very consistent performance in global branded check-out. But it's just not as elevated as we planned. And that's really what's informing me outlook. Got it. Thank you.

Speaker 10: actually ask about the transaction profit dollar growth in Q4. Will that Euro be your decline be more or less than it was in Q3? And then how should we think about the potential for?

In Q4 will that year over year decline being more or less than it was in Q3 and then how should we think about the potential for this metric to see improved growth into 2024, maybe you can comment on which of the initiatives that are in place offer more potential than others to move the needle.

Speaker 10: this metric to see improved growth into 2024. Maybe you can comment on which of the initiatives that are in place.

Unknown Attendee: You are next question comes from the line of Mike. And from Goldman Sachs, please go ahead. Your line is open. Hey, good afternoon. Thanks for the question.

Speaker 10: offer more potential than others to move the needle on transaction profit dollar growth next year. Thank you.

On transaction profit dollar growth next year. Thank you.

Alex Chris: First Alex, congratulations to the new role in Gabrielle. Thanks for everything. I appreciate your comments around managing the cost base and it being too high. Please talk a little bit about how you think about balancing the need for investment versus efficiency. The company previously talked about the opportunity for objects to keep declining in the years ahead. Is that how we should think about the future? Thanks. Yeah, thanks, Mike. First, let me say, as I mentioned earlier, this is a growth company.

Speaker 4: Yeah, you bet Jason, maybe I'll start. Well, as you heard, Alex discussed, and I commented it as well, our focus really is on driving profitable growth, and we're putting the weight of the organization against initiatives consistent with that objective.

Yeah, you bet, Jason maybe I'll start well as you heard Alex discuss and I commented it as well our focus really is on driving profitable growth and we're putting the weight of the organization against initiatives consistent with that objective.

Speaker 4: That said, we did see decline in our Q3 transaction margin dollars. We do expect them to decline again in Q4, but to a lesser extent.

That said, we did see a decline in our Q3 transaction margin dollars. We do expect them to decline again in Q4, but to a lesser extent, so I really view Q3, as the low point and we would expect to see an improvement in the profile in Q4. In addition, obviously, we're not guiding 2024 on this call longer.

Speaker 4: So I'd really view Q3 as the low point and we'd expect to see an improvement in the profile in Q4. In addition, obviously we're not guiding 2024 on this call. Longer term, our success won't partly determine by our ability to re-accelerate profitable growth in the business and we expect to be able to.

Alex Chris: And we are going to assess the focused priorities, where we will invest in growth. And we will make sure those are funded for success. And so I think about that separately, then, also being able to manage objects. On the expense side, we have an opportunity to continue to manage objects efficiently. We have a lot of acquisitions that we've done over the past few years. We have a lot of duplication and a lot of manual work that we have an opportunity to invest in automation.

Term are successful in part be determined by our ability to reaccelerate profitable growth in the business and we expect to be able to do that so.

Speaker 3: Anything else you want to add? You know, I just, I want to underscore, I know I've, I said it in the comments and I just want to underscore it again. We have every opportunity to

Anything else you want to add.

I want to underscore.

<unk> said it in the comments and I just want to underscore it again.

We have every opportunity to drive profitable growth.

Speaker 3: It's just a focus and a discipline that we will bring to the organization. And so it will take...

It's just a focus.

And a discipline that we will bring to the organization and so it will take time, there will be a sequential.

Speaker 3: of the quintual performance improvement on over a number of quarters. But when we make it to focus on the organization, we have enough levers and our disposal to be able to deliver on that. So, that doesn't look right on that.

<unk> performance improvement over a number of quarters, but when we make a focus of the organization, we have enough levers at our disposal to be able to to deliver on that.

Alex Chris: We have an opportunity to invest in a platform that allows us to build services that can be reused and leveraged across the organization, which, well, again, as I mentioned earlier, actually accelerate us and speed the company up. So I think about them differently, we will absolutely invest in growth and make sure that the levers that we have to continue to delight customers and grow the business are funded for success. And then we will work on building a platform that drives automation and continues to drive down our cost base.

Thank you.

Well, we have time for one more question Jamie.

Unknown Attendee: Great. Thank you for the thoughts.

Speaker 1: James Fussack from Morgan Stanley . Please go ahead. Your line is open.

James Faucette from Morgan Stanley. Please go ahead your line is open.

Speaker 8: Thank you so much for the question and wanna add my welcome to Alex and thanks to Gabrielle for all the work she's done in the CFOC. One of the assets that you talked about within that population of the US is Venmo and wondering how you're thinking about expanding its acceptance and kind of the to-doze around that. It seems like it's really important demographically. You have at least a foothold at Amazon, but...

Thank you so much for the question and I want to add my welcome to Alex and thanks to Gabriel for all the work she has done in the CFO seat.

One of the assets that you talked about within that.

Gabrielle Rabinovitch: Your next question comes from the line of Jason Copperberg from Bank of America. Please go ahead. Your line is open. Good afternoon, guys. Alex, welcome. Gabrielle, best of luck. And I wanted to actually ask about the transaction profit dollar growth in Q4. Well, that year will be your decline being more or less than it was in Q3. And then how should we think about the potential for this metric to see improved growth into 2024? Maybe you can comment on which of the initiatives that are in place offer more potential than others to move the needle on transaction profit dollar growth next year. Thank you. Yeah, you bet Jason.

Population of the U S has been Moe and.

I'm wondering how you're thinking about expanding its acceptance and kind of have to do is around that it seems like it's really important demographically you have at least a foothold at Amazon but expansion.

Speaker 8: expansion of acceptance elsewhere online, especially has been pretty slow. So just wondering how you're thinking about that as part of the asset pool and the to-do list there. Thanks.

Expansion of acceptance elsewhere online, especially has been pretty pretty slow. So just wondering how youre thinking about that as part of the asset pool and in the to do list there. Thanks.

Speaker 3: Yeah, thank you James for the question and you know if it is

Yes. Thank you James for the question.

It is it is pretty rare to be able to have an asset as powerful as venmo when something again becomes a verb in language.

Speaker 7: pretty rare to be able to have an asset as powerful as Venvo when something again becomes a verb in language is a tremendous demographic.

It is a tremendous demographic and you saw with our launch of Venmo team, we continue to expand the opportunity set there.

Speaker 3: You know, you saw with our launch of Venmo Teen, we continue to expand the opportunities set there.

Gabrielle Rabinovitch: Maybe I'll start. Well, as you heard, Alex discussed and I commented as well, our focus really is on driving profitable growth. And we're putting the weight of the organization against initiatives consistent with that objective. That said, we did see a decline in our Q3 transaction margin dollars. We do expect them to decline again in Q4, but to a lesser extent. So I really view Q3 as the low point and we'd expect to see an improvement in the profile in Q4.

Speaker 3: As you mentioned, we're in early stages with Amazon, that is going well. And we expect that both from a customer demand perspective, as well as a merchant demand perspective.

As you mentioned, we're in early stage stages with Amazon that is going well and we expect that both from a customer demand perspective, as well as a merchant demand perspective, we will continue to drive.

Speaker 3: We will continue to drive acceptance ubiquity for Venmo. I think that is very important for us, as well as just driving...

<unk> ubiquity for Venmo.

That is very important for us as well as just driving.

Speaker 3: additional services that our customers are demanding for the

Additional services that our customers are demanding.

Gabrielle Rabinovitch: In addition, obviously we're not guiding 2024 on this call. Longer term, our successful and perfect determined by our ability to re-accelerate profitable growth in the business. And we expect to be able to do that. Alex, anything else you want to add? You know, I just want to underscore, I know I said it in the comments and I just want to underscore it again. We have every opportunity to try and profitable growth.

For the Venmo App and so again as we think about providing different services expanding the opportunity for our customers to be delighted and you spend though for all aspects of their.

Speaker 3: And so again, as we think about providing different services, expanding the opportunity for our customers to be delighted and use Venmo for all aspects of their spending and managing of money, I think we're just again scratching the service of what's possible with an app that is clearly loved in the market.

They are spending.

Managing of money I think we're just against scratching the surface of what's possible with an app that is clearly loved in the market and.

Gabrielle Rabinovitch: It's just a focus that, and a discipline that we will bring to the organization. And so it will take time. There will be a sequential performance improvement over a number of quarters. But when we make it the focus of the organization, we have enough levers and our disposal to be able to deliver on that. Thank you.

Speaker 3: and has created viral growth. So, very excited to accelerate investment there and see where we can take that note.

And has created viral growth so very excited to accelerate investment there and see where we can take that.

Unknown Attendee: Well, we have time for one more question.

Thanks.

Speaker 1: Thank you. I will now turn the conference over to Alex Chris for closing remarks.

Thank you I will now turn the conference over to Alex Chris for closing remarks.

Great. Thank you Christa.

Speaker 3: And thanks everyone for joining us today. Hopefully you can see how serious we are about growing and improving PayPal across the board as quickly as possible. Before we...

And thanks, everyone for joining us today, hopefully you can see how serious we are about growing and improving paypal across the board as quickly as possible.

Alex Chris: James Faucette from Morgan Stanley, please go ahead. Your line is open. Thank you so much for the question and want to add my welcome to Alex and thanks to Gabrielle for all the work she's done in the CFOC. You know, one of the assets that you talked about within that population of the U.S, is Venmo. And wondering how you're thinking about expanding its acceptance and kind of it to do around that.

Before we close I want to leave you with three thoughts <unk>.

Speaker 3: You've heard in my voice today both a confidence that we will make this company excel and a determination to do it as quickly and thoroughly as possible.

You've heard in my voice today, but with a confidence that we will make this company XL and a determination to do it as quickly and thoroughly as possible.

We have an excellent business.

Speaker 3: but it needs to execute better and with greater clarity and focus. And it will...

But it needs to execute better and with greater clarity and focus and it will.

Speaker 3: We will impact the go-to-market strategy and financial focus of the company and ways that are immediately impact.

We will impact the go to market strategy and the financial focus of the company in ways that are immediately impactful.

Alex Chris: It seems like it's really important demographically. You have at least a full hold at Amazon, but expansion of acceptance elsewhere online, especially as been pretty slow. So just wondering how you're thinking about that as part of the asset pool and that to do list there. Thanks.

Speaker 3: It won't happen overnight, but we will get PayPal to the kind of consistent growth profile we all expect.

It won't happen overnight, but we will get Paypal to the kind of consistent growth profile, we all expect.

Speaker 3: As I've said it already, but it bears repeating one last time, what I care about is profitable growth. That is going to be our true north and...

As I've said it already but it bears repeating one last time, what I care about is profitable growth.

Alex Chris: Yeah, thank you James for the question and, you know, it is pretty rare to be able to have an asset as powerful as Venmo when something again becomes a verb in language. Is a tremendous demographic and, you know, you saw with our launch of Venmo teen, we continue to expand the opportunity set there. You know, as you mentioned, where we're in early stages of the stages with Amazon, that is going well, and we expect that both from a customer demand perspective, as well as a merchant demand perspective, we will continue to drive acceptance ubiquity for Venmo.

That is going to be our true north and receive our total focus.

Speaker 3: I've sent my entire career focusing on making sure we delight our customers and solve their most critical problems, but we must ensure we serve all our

I've spent my entire career focusing on making sure we delight our customers and solve their most critical problems, but we must ensure we serve all our stakeholders.

Speaker 3: And lastly, our employee base is fired up and motivated to win in the market.

And lastly, our employee base as fired up and motivated to win in the market.

Speaker 3: In addition, you can also expect us to add additional senior talent to our team, who I believe can help significantly accelerate our growth trajectory. We are future proofing this business, and we know

In addition, you can also expect us to add additional senior talent to our team who I believe can help significantly accelerate our growth trajectory.

We are future proofing this business.

And we know what needs to be done.

We are playing to win.

Speaker 3: In the weeks and months ahead, we are going to be moving with velocity to deliver for our customers and our business.

In the weeks and months ahead, we're going to be moving with velocity to deliver for our customers and our business.

Alex Chris: I think that's that is very important for us as well as just driving additional services that our customers are demanding for the Venmo app. And so again, as we think about providing different services, expanding the opportunity for our customers to be delighted and use Venmo for all aspects of their spending and managing of money. I think we're just, again, scratching the service of what's possible with an app that is clearly loved in the market and has created viral growth. So, very excited to accelerate investment there and see where we can take that note.

Speaker 3: I look forward to talking to you all on our next call in February and laying out our clear plan to win.

I look forward to talking to you all on our next call in February and laying out our clear plan to win.

Thank you and have a great day.

Unknown Attendee: Thank you.

Speaker 1: This concludes today's conference call. Thank you for your participation, and you may now disconnect.

This concludes today's conference call. Thank you for your participation and you may now disconnect.

Yeah.

Alex Chris: I will now turn the conference over to Alex Chris from closing remarks. Great. Thank you, Chris.

Alex Chris: And thanks everyone for joining us today. Hopefully you can see how serious we are about growing and improving PayPal across the board as quickly as possible.

Alex Chris: Before we close, I want to leave you with three thoughts. You've heard in my voice today, both a confidence that we will make this company excel and a determination to do it as quickly and thoroughly as possible. We have an excellent business, but it needs to execute better and with greater clarity and focus and it will. We will impact the go to market strategy and financial focus of the company in ways that are immediately impactful. It won't happen overnight, but we will get PayPal to the kind of consistent growth profile we all expect.

Alex Chris: As I've said it already, but it bears repeating one last time when I care about his profitable growth. That is going to be our true north and receive our total focus. I've said my entire career focusing on making sure we delight our customers and follow their most critical problems, but we must ensure we serve all our. Stakeholders.

Alex Chris: And lastly, our employee base is fired up and motivated to win in the market. In addition, you can also expect us to add additional senior talent to our team, who I believe can help significantly accelerate our growth trajectory. We are future-proofing this business, and we know what needs to be done. We are playing to win. In the weeks and months ahead, we are going to be moving with velocity to deliver for our customers and our business.

Alex Chris: I look forward to talking to you all on our next call in February and laying out our clear plan to win.

Krista: Thank you and have a great day. This concludes today's conference call.

Krista: Thank you for your participation and you may now disconnect.