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. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session.

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

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 Chriss, our President and CEO; and Gabrielle Rabinovitch, SVP and Acting CFO. We're providing a slide presentation to accompany our commentary.

This conference call is 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-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. 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 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.

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. 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 the call over to Alex..

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, b, package our innovation in a way that is clear and differentiates us in the market. 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 U.S. alone, over 70% of the adult population has use 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.

And with the 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 U.S. Additionally, we've innovated with unique products and experiences for consumers that each on their own provide tremendous customer benefit.

For example, our PayPal Cashback Mastercard provides 3% cashback on PayPal purchases as well as cashback on all other purchases. Customers with this card make on average 56 more purchases with PayPal in the 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 customers' pockets, with cashback and savings during that time. But even more interesting, through our Rewards product, we have an active database of over 300 million SKUs 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 passkeys to more than 10 million consumers globally to reduce friction in the sign-in experience.

We've added additional security features by providing fraud alerts for all your cards in the PayPal Wallet. 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 altogether into a cohesive, integrated and seamless customer experience and value proposition. As I've 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.

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 Payments 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 provide SMBs the tools to transact globally and are innovating for them with critical services, such as package tracking.

Package tracking is now live with over 5,000 merchants on BigCommerce, WooCommerce and UltraCart. Early results show merchants are experiencing an 80% decrease in item not received disputes, 40% higher dispute wins and 65% faster funds release. 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, while making our consumers checkout experiences more efficient. We 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 auto fill 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.

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.

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.

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 in volume out of an estimated $4 trillion to $5 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, charge-back 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 revenue. And 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 at scale and drives efficiencies across the organization. Fully unlocking this will accelerate innovation, velocity in the market and value. 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 payments 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. 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 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, it is 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.

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 squarely 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 in Braintree and other products for large enterprises.

Additionally, we will invest in our company-wide platform, driving efficiency and acceleration of innovation, while rightsizing our expenses. 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 will 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.

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. 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.

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. 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 base with relentless attention and commitment. As I've said before, I believe our cost base and complex structure is slowing us down.

We have opportunities to accelerate our revenue growth, while reducing our expenses, helping further drive operating leverage. In terms of the 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 delivering.

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'll be sharing them with you in our next earnings call in February.

I will unpack for you then the clarity of our strategic focus, our focused 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.

It is clear to me that the things we need to do better aren't 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.

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

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. Transaction expense as a rate of TPV came in at 93 basis points, 4 basis points higher than Q3 last year.

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. Transaction loss as a rate of TPV was 8 basis points for the quarter, flat to last year. Credit losses were $117 million or 3 basis points as a rate of TPV.

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, and transaction margin declined 558 basis points to 45.4%. 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-GAAP operating income grew 8% in the quarter to $1.6 billion. Our non-GAAP operating margin declined 18 basis points to 22.2%, with operating expense leverage largely offsetting transaction margin compression.

For the third quarter, non-GAAP EPS increased 20% to $1.30, which exceeded the high end of our guidance range by $0.06. We ended the quarter with cash, cash equivalents and investments of $15 billion. We generated $1.1 billion in free cash flow, which represents a 30% decline from the third quarter last year.

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.

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

We have also made progress this year, executing a disciplined approach to capital allocation and managing our balance sheet. In the third quarter, we completed an additional $1.4 billion in share repurchases. 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 share repurchase 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.

We believe that share repurchase 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.

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.

Principal and interest receivables declined 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 and [Technical Difficulty] with greater focus, we can be more effective. 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. 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. I would now like to discuss our outlook for the remainder of the year. Relative to the plan laid out on our earnings call three months ago, branded checkout 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.

In addition, we expect non-GAAP EPS in 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-GAAP 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.

The ongoing strength of Braintree volumes in conjunction with lower-than-expected branded checkout trends are resulting in incremental pressure on our non-GAAP 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-GAAP EPS, which we now expect to be approximately $4.98, representing 21% growth from last year. This increase reflects the benefit of Q3 outperformance and changes to our tax rate assumption. In addition, we now expect free cash flow for 2023 to be at least $4.6 billion.

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. Backdrop continues to be complex. We're taking an appropriately prudent approach to managing our business. And with that, Alex and I are happy to take your questions..

[Operator Instructions] Your first question comes from the line of Tien-Tsin Huang from J.P. Morgan. Please go ahead. Your line is open..

Hey. Thanks so much. And Alex, appreciate your observations and priorities here.

Can you maybe share a little bit more on your early impressions of the assets and the portfolio products at PayPal? I'm -- just love to hear what surprised to the upside and maybe what assets could require more work to turn around than what you thought? And if -- for example, Happy Returns being sold, as you called out last week, we see more sales, divestitures, replatforming, that kind of thing.

Thank you..

Yeah. Thank you, Tien-Tsin, and good to hear from you. It's been exciting to come in. If I would be remiss if I didn't say it wasn't a surprise, but it's delighted me from an asset perspective. The first I'd highlight is our employee base.

This is a tremendous team that is energized, has welcomed me to the team and is fired up to go tackle all the opportunities ahead of us. If I then think about the different components, I've been really impressed with all the different pieces that we have to deliver for our consumers.

We have a ubiquitous platform that's globally recognized with PayPal. Venmo is a verb, and it's something that is 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 customers, Rewards, Buy Now 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 is 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.

And I think we've earned the right now to expand margin and make sure that we're 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.

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 branded checkout, how we can recognize people that 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 is a big opportunity that gets me very excited. In terms of opportunities 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. We're spread 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..

Great. Thanks, Alex. Thanks, Gabs..

Your next question comes from the line of Ramsey El-Assal from Barclays. Please go ahead. Your line is open..

Hi, Alex and Gabrielle. And I 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 PPCP.

I guess the question is, given your prior experience with SMBs, do you see SMB becoming a more important part of PayPal's strategy relative to the past? And I guess which areas of the product or innovation roadmap get you most charged up at this point?.

Yeah. Thank you, Ramsey. I -- small businesses are a passion of mine. It has been for the last 19 years and it's very personal. 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. 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 flow.

On the getting customer side, 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 now.

Once we do that, I think we earn the right to expand into their second challenge of cash flow. Cash flow was 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. So, very excited about small businesses going forward..

Fantastic. Thank you so much..

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

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 you're seeing in the environment on e-com, both U.S. and perhaps globally? And just if anything you're seeing in the trends is what led to a more cautious outlook either on the holidays or anything more broadly? Thanks, guys..

Yeah, Darrin. You bet. Thanks for the question. Overall, I'd say we're seeing very healthy trends in our checkout business. We're heading into the heart of Q4, 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 branded checkout accelerate through the back half. 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, 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 planned and that's really what's informing the outlook..

Got it. Thanks, Gab..

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

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 just 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 think -- still think about the future? Thanks..

Yeah. 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, we have an opportunity to continue to manage OpEx 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.

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 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..

Great. Thank you for the thoughts..

Your next question comes from the line of Jason Kupferberg 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, will that year-over-year decline be 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 to offer more potential than others to move the needle on transaction profit dollar growth next year? Thank you..

Yeah. You bet, Jason. Maybe I'll start. Well, as you heard Alex discussed and I commented on 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. 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. In addition, obviously, we're not guiding 2024 on this call.

Longer-term, our success will, in part, be determined by our ability to reaccelerate profitable growth in the business and we expect to be able to do that.

Alex, anything else you want to add?.

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 drive profitable growth. 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 at our disposal to be able to deliver on that..

Thank you..

We have time for one more question. James Faucette from Morgan Stanley, please go ahead. Your line is open..

Thank you so much for the question. And I want to add my welcome to Alex and thanks to Gabrielle for all the work she's done in the CFO seat. One of the assets that you talked about within that population of the U.S. is Venmo.

And I'm wondering how you're thinking about expanding its acceptance and kind of the to-dos around that? It seems like it's really important demographically. You have at least a foothold at Amazon, but 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..

Yeah. Thank you, James, for the question. And 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 saw with our launch of Venmo Teen, we continue to expand the opportunity set there. 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, we will continue to drive acceptance ubiquity for Venmo. I think 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, 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 surface 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 Venmo..

Thank you..

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

Great. Thank you, Krista. 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 close, I want to leave you with three thoughts.

You've heard in my voice today, both the confidence that we will make this company excel and the 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. 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 receive our total focus. 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. 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. 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..

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