All right. Terrific. Thank you. Welcome, everyone, to our 10:00 A.M. session this morning. Our first converged conference, it's very fun to see some of our payments friends as well as our broader TMT friends in the audience. I'm Lisa Ellis, for folks that are maybe less familiar with me, and I'm delighted for our next fireside chat to be joined by Peggy Alford, the Executive Vice President of Sales at PayPal. Peggy, thank you for being here. Thanks for having me. Folks, if you remember, we have this fancy Q&A technique this year. There is a QR code up on the screens. If you wanna ask a question, do that. If that fails you can also feel free to just wave your arm in the air as well, if you need to. I will see any of them, on my screen up here. Peggy, why don't we just start, jump in. Some folks may be less familiar with you, but you have been at PayPal for a long time and have held a wide range of roles there. Why don't you just give us a little bit of that background? Sure. Yes. I first joined eBay when eBay and PayPal were one company in 2002. Came from consulting, where I had done auditing and M&A. Did a number of finance roles at eBay and then ran Rent.com, which is an online apartment listing site that eBay used to own, for about six years. Joined PayPal in 2011, and I had some finance roles to start out with. I ran Global Cross-Border Trade. I co-ran HR for a while, and then I actually left for a couple of years to help Mark Zuckerberg and his wife, Priscilla, start their foundation, Chan Zuckerberg Initiative. I was the CFO and Head of Strategy and Operations there for about a year and a half, and then came back to PayPal in a sales role, ran our core markets, first, and then took over global sales in 2020. All right. What brought you back? Like, what led you or attracted you to come back to PayPal when you rejoined? Well, you know, when I left, it really was, you know, they say always run to things and not away. Mm-hmm. It really was, I just felt like being able to join this philanthropy, which had tremendous funding and was really focused on using technology at scale, was something I wanted to do. It was very different from PayPal, but I always, you know, sort of stayed in touch with everyone at PayPal, love what PayPal does. I will say that there were a few things that really caused me to think that it was time for me to come back. One was, probably a number of you are aware of our sort of shift in strategy around really partnering as part of growth. You know, the partnering with the financial institutions, partnering with the largest brands in the world, those that we would also consider to be competitors. We felt like there was a role that we could be playing in really partnering as well for growth. That was something that was interesting to me. We also did a number of acquisitions. We always talked about PayPal as a platform, but there were some holes, and I felt like some of the acquisitions we did, whether we're talking about Zettle or Swift on the credit side. We had done the Braintree acquisition, got Venmo with that. We had, you know, we were doing a lot of work to sort of just bolster that platform. I felt like, you know, the sort of strength of the network with the scale, but then sort of filling in these holes with some capabilities that would really help customers of all shapes and sizes grow, was something that was interesting. Mm-hmm. The last was just, you know, I think that PayPal has always been a value-driven company. I think a lot of times I always joke that, you know, you watch the Super Bowl and you see an ad and you're like, "That was so inspiring, but I have no idea what they sell." You know, because it's not a natural thing to do good in the world, but also do well for shareholders. I always felt like there was a natural synergy where you could sort of, you know, enable a platform that could sort of level the playing field for both businesses and consumers. The scale we had enabled us to just do really well for shareholders as well. I like that combination. All right. Well, let's go back to basics with PayPal and talk about the value proposition. Let's start with branded checkout. Sure. This is kinda going back to the core of PayPal. Been around since the advent of the public internet back in the late nineties. Why do merchants adopt the PayPal branded checkout button? Yeah. Well, you know, the branded PayPal button is sort of the bread and butter of PayPal. It's, you know, historically what we were known for. When I joined eBay in 2002, the majority of the business was, you know, enabling eBay purchases with the PayPal button. Then quickly we grew this off PayPal or off eBay business through merchant services. You know, we've just expanded so much from there. You know, I think, you know, we always talk about PayPal with sort of, you know, you've got the wallet and then you have the network, which is sort of where the merchant and the consumer side come together with our branded propositions. You've got our unbranded processing business. The branded business, you know, merchants are really interested only in how they grow their business and how they reach consumers, how they enable transactions or bigger basket size. PayPal has been able to, with the scale we have, the number we operate in 200 countries, we, you know, stand for security. you know, if you don't wanna put in your credentials as a consumer, merchants know that, you know, when they have the PayPal button, it inspires trust. we are able to demonstrate that we increase conversion for merchants when consumers not only see the button, but use the button. It's just, it's something that merchants love because consumers love. You know, we're on 80% of the top 1,500 brands in the U.S. and Europe, and that breadth and that, you know, the ability for consumers to see us regularly on small and large merchants is what merchants love. Now talk about the intersection of branded with unbranded. Over the last, as you highlighted, PayPal's had an unbranded platform for a long time, but really got a jump-start about a decade ago when you bought Braintree. Yes. That platform's now been growing 20%, 30% plus these last few years. Just how does the value proposition work at the intersection of branded and unbranded? Yeah. I love to talk about this because, you know, it is true that the Braintree business has grown substantially. I think it was 43% growth in 2022, and over, as you mentioned, over the last few years, 20%, 30%. You know, we are, you know, one of the major players in the space. You know, I think a lot of folks, investors and analysts, question the growth because of the fact that it's, it doesn't have the margin profile that the branded business has. You know, the strategic value of the unbranded platform is one that is just so important, so for a few reasons. Number one, you know, when we deepen our relationships with merchants by doing their processing, and then combining it with our branded business, suddenly we are extremely relevant in the payments ecosystem of these merchants. Braintree is also on our latest integration. When we are able to sell processing, our processing business to these merchants, we are then upgrading the integration. We have a lot of legacy integrations because we've been around for a long time, and there really is no reason for a merchant to just, you know, do a bunch of work, open the engine, do a bunch of work to get the latest integration, if and unless there's a value add. You know, when we can sell processing to them, we get the latest integration, and therefore we are able to have the very best consumer experience for our branded business, whether we're talking about Buy Now, Pay Later, whether we're talking about the branded PayPal button, whether we're talking about Venmo. You're able to sort of upgrade the integrations and create a much better consumer experience for these merchants. The other thing is the data. We get very different data on our unbranded platform and our branded platform, but together, it can create a much more relevant experience for consumers on, and we can fuel an accelerated checkout product that we're developing to really create much better converting experiences for our merchants and much more relevant consumer experiences along the way. Together, it's sort of like the ability to sort of together create an ecosystem or a platform that merchants want. There is also, and we'll talk about the unbranded side, there is actually, we have a lot of strategic plans that are coming to fruition in order to increase the margin of our unbranded business. We do not have a strategy to slow down the growth of our unbranded business. Quite the opposite. We will continue to grow the volume, and we have a lot of merchants in the pipeline that we are adding on the unbranded side. The focus is really about, number one, increasing the margin of the unbranded business, and number two, creating this sort of comprehensive solution that combines our branded and unbranded business. Got it. Okay. another piece that you've also added over the years is a suite of value-added services, that you wrap around either the branded or the unbranded business, in particular, your lending business. Yes. Working capital loans and also the consumer loans, but also things like your payout capabilities for platforms and some data and analytics products. Which services from your vantage point, working with merchants every day, which of your value-added services do you find they ask for the most and are the most differentiated out there? Well, you know, I'll start with one that is been around for a little while. It was actually one of the acquisitions that happened while I was gone, and that's Hyperwallet. For businesses that actually have both a pay in and a pay out need, marketplaces is a perfect example of that, the Hyperwallet Payout product has been extremely relevant and very popular on its own. But if you can then create a solution where you're able to manage both the pay in and pay out in sort of one experience, that is extremely beneficial. TikTok started out using our Hyperwallet product first, and now they're using our pay with PayPal and pay with Venmo for the ad purchases. The payout solution was used for paying out creators. Now we've just sold the unbranded business as well. If you think about all of those things in combination, not only do you create a higher margin business overall because you've got payouts, which is higher margin, you've got our branded PayPal and Venmo, and then you have the processing business all working together. That would be an example of a value-added service bolted on to the unbranded business that creates higher margin but also higher value for the merchant. Just taking a step back from a competitive perspective, PayPal has been the leader in this space for so many years, and you have a number of competitors, both in branded and unbranded. What ultimately sets PayPal apart relative to your competitors in both the branded and unbranded side? Yeah. First, I would say it's the fact that we are the combination of the three. Whenever we think about competitors, we think about competitors in each of the areas. Whether you're talking about the wallet, right? Which is, you know, we're competing with banks, we're competing with, you know, sort of the traditional wallet players that have P2P. Mm-hmm. That have remittances, things like that. We've got our network, which is the branded business. If you think about, you know, some of our competitors in that space, Apple Pay would be an example. You think about our processing business, there are competitors, you know, the Adyen's of the world and the Stripe's of the world that are competitors in that area. No one has all three, and they all work together in a way that is cohesive and builds a business at scale. The other thing that I would say is just the scale, right? 430 million consumers, you know, over 30 million businesses worldwide in 200 countries. The scale that we have, and so therefore the ability for us to really create this network that is massively valuable for merchants and consumers alike, is something that is difficult to compete with. Mm-hmm. I think it's just the combination. Each one of the pieces, we feel like we have some differentiators that enable us to compete. The reason we've grown the unbranded business so well is because our authorization rates are better. We hear from merchants in the space that even before we were able to fix some of the product gaps on the unbranded side with Braintree, they were wanting to partner with us because our, number one, our authorization rates were better, and number two, we actually had servicing that they needed. Especially if, you know, when you're talking about payment processing at scale, it needs to work, and you need to be able to call someone if it doesn't. The servicing side of the business has been something that's been a differentiator. Each of the pieces, you know, we've got the value prop, you know, sort of differentiators, but together it's very powerful. In your role as the Global Head of Sales, you obviously run all of the sales and distribution of PayPal, globally. You also, given your tenure at PayPal, have seen merchants through their full life cycle, and you just mentioned. Right. The TikTok example where you started with one product and have added. Can you talk a bit about how an overall merchant relationship typically evolves over time? Sure. Maybe as an example of how these pieces work together. Sure. You know, one of the things, you know, I think because I come into the role having worked in a number of parts of the company, I have a real appreciation for if you are serving the customer, you need to make sure that all the pieces fit together, right? There's the sort of pre-sale solutioning where you're really thinking about what is the sort of makeup of this merchant? Who are they serving? What is their platform like? How do our products need to fit with them in order for it to work? Mm-hmm. Right? There's the sort of when you're integrating the products and you're thinking about, you know, we need to take the complexity out as it relates to the regulatory environment, the ability to manage risk, the servicing side. You know, what's gonna happen when they have an issue or their consumers have an issue? We need to make sure that we're working across the company to make sure that we're selling the right thing, we're integrating the right thing, and then it's working at scale. We think about all of those things from a sales perspective when we're selling, because that's what makes a relationship deep. That also is what enables you to have a seat at the table, the initial product that they're gonna integrate is gonna be, you know, the PayPal branded button. It's historically what they've used with us. As we've sort of innovated, we can fit, you know, a lot of other... You can use Venmo to reach the younger demographic. You can use payouts if that's relevant. We can start processing your payments. Being able to have those discussions requires that we have a deep understanding of what they need to run their business, how they're gonna reach consumers, and how our products can fit in company-wide, to really operate as a platform. All right. Looking forward now, particularly on the merchant side of the equation, who, you know, the folks that are ultimately the ones that generate the revenue primarily for PayPal, what are the merchants kind of top pain points from here, and how are you addressing them? What does that roadmap look like in terms of the merchant value proposition? Yeah. Well, what's interesting is we are serving merchants across the globe. We are serving different types of merchants. We've got those that are, you know, the small businesses that are integrated through partners, we have to manage both the channel partner and also the end merchant. We have the smallest, you know, business that is operating with, you know, one website, and then we have the largest enterprise, you know, from the likes of Walmart. We're really thinking about how to make sure that our solutions, especially for the small merchants, where it all needs to work, and they can't worry about it. It has to be an integrated solution without complexity. We're continuously working not only on bolstering our checkout products, as an example. That's an initiative for us that is something that is all hands on deck, just really increasing the conversion of that checkout product and the selection rate for consumers to actually choose PayPal. You know, if you think about our unbranded solution, we've done a lot of work over the last two or three years just to make sure that all of the features and functionality, if you are gonna be someone's processing partner at scale, are working. That's everything from improving the authorization rates to increasing the stability, making sure that the uptime is always there, thinking about the reporting side of the house, so that when you're thinking about, you know, not only the pay-in part of it, but how you're gonna reconcile that with your infrastructure. Those are all things that we've spent a lot of time, bolstering and then making sure that everything can be integrated with one set of work, right? Because a lot of these products were acquisitions, when we first acquired them, it would have required a different integration every time you wanted to you know, sort of bring on a new product. We've really been working on, you know, with the latest Braintree integration that you can then accept all of our products with just a, you know, sort of a switch of the, of the button. Mm-hmm. That's something that's been a lot of focus for our teams over the last years. Mm-hmm. Mm-hmm. You know, there's a lot of focus right now on that share of checkout for PayPal. What are some maybe more, I guess, strategic or even more sort of tactical and operational things you guys are doing to make sure you're maintaining merchant retention and then also, holding onto and gaining share of checkout with merchants? Right. I, you know, I think it starts with making sure that the integration that our merchants have is one that it creates the very best consumer experience. We do spend a lot of time trying to make sure that we are upgrading the integrations for legacy, you know, for players that have been with us for a long time and have older integrations. We're always trying to make sure that they're using the latest technology, the latest SDKs, so that it creates the very best consumer experience. We're really working on, you know, sort of the latest version of checkout using AI and machine learning to create much more relevant consumer experiences, so that for the merchant, they're able to identify the consumer that's looking to buy their exact thing at the right time. There's a lot of work that we're doing using data which comes from both the unbranded side and the branded side to just increase the relevance, to enable consumers to have rewards, to enable consumers to use Buy Now, Pay Later, which we know increases conversion and basket size. All of these things sort of coming together to create the best consumer experience, which is going to increase branded checkout, and therefore, increase our branded revenue. Got it. Well, I have a couple of topical questions that came in. People have know how to use the barcodes apparently, so that's good. Sure. One, on this point, on the branded checkout, the question is: Is the branded checkout product for PayPal, still a business that can grow in the double digits and why? Is it just kind of too big and too saturated, I guess, at this point to achieve that level of growth? Yeah. Well, I mean, we definitely have goals to increase it in the double digits, and that is really about making sure that we are thinking about the next generation of checkout, which is going to include AI, which is going to use the data that comes from the unbranded business to really create sort of the demographic of the consumer, which enables us to then target in a much better way and enables merchants to be able to target the consumer in a much better way. We are very much focused on ensuring that we're able to use all the flexibility of payment. Consumers, you know, depending on who they are and what they're buying, they wanna be able to use all the various ways to pay within the wallet. We're also thinking about earlier life cycle, where, you know, if you think about rewards and our wallet and being able to sort of embed offers and rewards in the wallet to really attract the consumer to focus on why they should be using PayPal and then select PayPal. That is really what's gonna enable the merchants to wanna use the very latest integration of PayPal. That's really what we're focused on on the branded side. All right. Another one related to your point about the integration across your different product groups. Yeah. You recently announced or in conjunction with Visa a new initiative aimed at creating interoperability between PayPal and Venmo. Yes. Using a product from Visa. The question was, You haven't commented a lot publicly on that partnership, but why do that with Visa? What was the value that you saw? You're obviously big partners with them... Yeah. doing it with them versus, say, just doing it in-house and having that as an Yeah. I mean, I think it just goes back to, you know, sort of the reason I mentioned that I loved coming back to PayPal. That is about, you know, we always have to weigh our very scarce product resources and make sure that we're really focused on time to market and the ability to get scale quickly. We just felt... You know, if you think about it, Venmo was an acquisition that came through our Braintree acquisition, it was a separate platform. The ability for us to create this interoperability between Venmo and PayPal quickly with this partnership was something we felt made sense and really gets us to the answer we wanted, which was to enable Venmo consumers and PayPal consumers to work together, and also to enable merchants to be able to use both of the products together. We just felt like it was a way for us to get that done quickly and at scale. All right. All right, keep them coming, guys, from the audience if you'd like, on using the QR code that's on the screen. Let's turn over a bit to some of the sales initiatives that you have underway. You lead the sales organization overall. What are your top priorities right now? Maybe notably, how have those evolved in the last couple of years as PayPal's kind of been going through a transition? Well, you know, I think a lot about the overall PayPal priorities because it influences everything that my teams focus on because I've got not only the folks that are doing the solutioning up front, all of those that are selling to the globe, and the different segments, whether you're talking about partner or our largest global accounts or SMB. You know, the servicing of those merchants that are providing a lot of, you know, those that are already our customers, we have to make sure we're deepening the relationship there. What I'm thinking about the most is probably is what top of mind for anyone that's following PayPal. Number one, really increasing the relevance and the penetration of our branded products and, you know, making sure that we're selling all of our branded products, whether you're talking about the PayPal button, continuing to sell that at scale and creating an integration in a way that's gonna, you know, create the best conversion. Our Venmo products, our Buy Now, Pay Later, we're very much focused. We know that Buy Now, Pay Later increases the basket size as well as the transaction volume for a merchant. We're really focused on getting that upstream, so, you know, getting that upstream presentment so that a consumer knows when they're looking at a product that they can pay, you know, in three or four, depending on where you are in the world. Really focused on, you know, deepening the penetration of our branded product. We're also very much focused on, you know, it's interesting, people always say do salespeople care about margin. Mm-hmm. I care about margin because PayPal cares about margin. I know that, you know, people have been concerned about our fast-growing unbranded business and the fact that, you know, it is lower margin than our branded business. What I'm focused on are the ways to increase the margin of our unbranded business. There are sort of three ways to do that that are part of our strategy. The first is to enable through PayPal Complete Payments, the availability of our processing products outside of the U.S. We know that we are able to, just because of interchange, we're able to get higher margins on our unbranded products outside of the U.S., especially in Europe, and there is a very high demand for them. PayPal Complete Payments enables us to offer our processing products at a higher margin outside of the U.S., which will increase the mix of the, you know, U.S. high, and, you know, mostly large enterprise, which has, you know, comes with smaller unit economics. We're really focused on outside of the U.S. We're also focused on smaller. If you look at two of our competitors, the reason why our margin structure looks different than theirs is three reasons. The being able to have a higher mix outside of the U.S., being able to have our processing products with smaller merchants, where you can demand higher margin or higher pricing, and then value-added services, which we talked about a lot. Mm-hmm. If you think about FX, if you think about Payouts, Buy Now, Pay Later, these are all things that bolster the margin of the unbranded business. These are the three strategies that we have to drastically increase the margins of our unbranded business, which will then, combined with the success we've had from a distribution perspective and will continue, will create a business that is much more attractive from a margin perspective, overall for PayPal. Can you talk a bit about sort of from a sales and distribution perspective, what you view as PayPal's top strengths as well as some of your challenges there and what you're focused on improving? Yeah. I mean, strengths, you know, I mentioned our scale. You know, it's interesting as we go through these challenging macroeconomic times, the scale enables us to weather the times and enables us to execute on the strategies that are gonna make us stronger. That scale, not only makes us relevant, but also gives us the sort of capacity to be able to continue to innovate and solve some of these areas where, you know, we really do need to focus. I think the fact that we have the three pillars, you know, the wallet, the network, and our PSP business, and the ability for those to work together and fuel each other is something that is a strength of PayPal. I think our brand. You know, I think the brand that consumers equate with security and safety, the brand that merchants, you know, sort of think about from a servicing perspective and from a quality perspective, these are all things that are the strengths of PayPal, which enable us to continue to innovate and really follow the changes in consumer behavior. We also have been, you know, the AI is such a hot topic right now. We've been using AI within our risk capabilities for years, and we so look forward to being able to use the capabilities of today to not only bolster our risk capabilities but also enable a much more relevant consumer experience. That, with our scale, is gonna be pretty exciting to use. The strength of our unbranded business and the data you can get from that fueling that using AI, I think is tremendously exciting. I think in terms of, you know, our challenges, I mean, you know, we know that we need to increase the margin of our unbranded business, especially with the size that it's become, and that's why that's such a focus for us in the ways that I mentioned. We cannot take our eye off the ball in terms of always ensuring that our latest technology is what our merchants are able to use, so that we're creating the very best consumer experience and have the best shot at, you know, the consumer selecting PayPal when they check out. We need to continue to innovate on enabling all payment methods, especially, you know, if you run a platform that is processing the payments for merchants of all sizes, consumers wanna use all payment methods. We're continuing to ensure that we are offering all payment methods. We will continue to focus on the stability and the authorization rates. That's always something that you wanna just continuously iterate and improve on. We're already best in class there, and it's something that we always have to continue to focus on because, you know, our competitors don't stand still. On that, another question. Ooh, lots more questions. I think everyone loves having Peggy here today. Very exciting. An active group. I know, I love it. A competitive question here when you've got the Head of Sales and Distribution on the hot seat. Yeah. Which, what do you find is the most, the most difficult competitive situation that you run into as PayPal, and then how do you go and win in those situations? I think whenever you have a player that has been in the space longer, on our unbranded side, we spend a lot of time sort of like winning business from competitors that have been in the market already. That's where we really have to focus on our differentiators, that's why on the unbranded side I talked about authorization rates, I talked about servicing. Those are reasons that we win. A third reason is the fact that we're able to offer this not only offer, but are willing to offer an orchestration layer. If you think about the largest brands out there, they often are using more than one PSP, but they want it to work together seamlessly. If you think about like reporting, what a nightmare if you have like three different, you know, sort of points that you have to reconcile. The fact that we're able to offer this orchestration layer enables us to get our foot in the door, where we'll say, "Okay, well, you know, you're using this competitor to process, and we can do this orchestration layer. You know, we can instrument and we can handle the volume from your other PSP. Give us some of the volume as a backup processor." Suddenly they see our authorization rates are better, and they see that our stability is better, and they see that our servicing is better, and then we're able to win more and more share. Really focused on that. You know, on the Buy Now, Pay Later, that would be another one where, you know, we have spent a lot of time looking at, you know, players that were already in market. Seeing that, you know, they were writing big checks when they were, you know, sort of venture funded and could write these large checks to sort of get exclusivity for two or three years. What we're seeing is that our product works so well, and we've been able to have approval rates which are way better than our competitors that had these exclusive contracts. What's happening, as these exclusive contracts have come due, we are winning that business. We are always focused on incumbents and making sure that we differentiate ourselves and go after that business in a way that we can sort of focus on our differentiators and our value props. All right. The good related question, so I'll go ahead and ask it, which is, what do you think or you find when you're out in the market is most misunderstood about PayPal that you feel like if you, could wave a magic wand, right? And have that clarified with merchants would help accelerate your growth? Well, I think that, you know, there's been a lot of criticism of the growth of our unbranded business and the fact that, you know, we've seen a degradation of our margins because of that mix shift. What I have been wanting to say is like, Hold on, we're just getting started, we know exactly what we're gonna do to increase the margins of our unbranded business. We're gonna continue. I tell my teams every day, "Go win. Go win that processing business," because it is going to enable us to have a much more valuable branded business. You know, the question we had earlier around, is there an opportunity for you to continue to have, you know, attractive growth rates on the branded business? Absolutely. Mm. Absolutely. The growth of our unbranded business is what's going to help do that. Mm. The unbranded business is gonna become a much higher margin business. We're not talking about five, 10 years, we're talking about, you know, these three things I mentioned are gonna be in market this year. Mm-hmm. It's extremely exciting to really see how these three businesses are going to, you know, sort of bolster each other and will make it difficult to compete against us, and that's exciting. It's what we tell our teams every day. And last one maybe on the competitive side, you probably didn't think you would escape without a direct question about Apple and Apple Pay? Yes. Can you crystallize for us, how do you go in and sell the value of branded checkout? Yeah Relative to an Apple Pay who, you know, can take advantage of their access to the NFC chip and things like that on the phone? Yeah. Yeah. Well, I, first of all, I think that, you know, one of the things that merchants really want, I mentioned this earlier, is the availability of all payment types, right? If you think about our wallet and you think about our processing business, we're really focused on enabling all payment types that consumers love. That's something that, you know, is important to merchants. The other thing is that we have always operated, you know, as it relates to integrating all payment types, including Apple Pay, by the way, is, you know, we are an open, we operate as an open ecosystem. Merchants like that. Merchants want to own their consumer relationship, and they worry when they don't, if they lose control of that. We're really focused on making sure that we are partners with our merchants and never competing against our merchants, and just enabling their growth. That said, Apple is a competitor, and it's something that, you know, it's the reason we're so focused on checkout. It's the reason we're so focused on ML and AI fueling our checkout products, so that we can really create the most relevant consumer experience. It's why we're focused on all of the services that consumers care about, whether you're talking about rewards, whether you're talking about offers. All of these things are needed to create and compete in a world where I don't think there's one player, right? I think, you know, merchants want Apple Pay, but they also want PayPal. All right. Since you just mentioned AI again, and that is not surprisingly a big hot topic over the next few days, but I had one question here about, you mentioned AI assisting in the consumer experience. Can you just give a couple of examples of that to make it tangible for folks? Yeah. I mean, one of the, one of the things we're thinking about is to take the example of a small business that wants to attract consumers, and they have their goods, and they're competing against all other merchants that offer these goods. For you to be able to, for PayPal to be able to see purchase history of the consumer in their past, the types of things that they're interested in. If you take, for example, they bought a stroller. Mm. Oh, well, they probably might need some baby blankets... Mm. ... or some bottles, or they might, you know. To be able to take the data from the, both the branded side and the unbranded side and using AI, be able to target consumers in a much more relevant way for that small business. To be able to offer a very relevant offer off of something that is extremely relevant to that consumer based on their purchase history. you suddenly can see that you can create a much more targeted experience for merchants- Mm. ... to be able to make offers or to be able to get, track the consumers to their goods. Mm-hmm. Mm-hmm. All right. One of the other things that you're heavily involved in at PayPal is the partnership strategy. This is, you know, an area where PayPal has evolved dramatically ever since spinning out of eBay. You now have a very wide range of partnerships, including players like with Amazon more recently, and then also, for a long time with the networks like Visa and Mastercard. Mm-hmm. Up to date now, what is PayPal's approach to partnerships, and what sort of resonates best in these situations? How do you use those to the benefit of PayPal overall? I mean, I think it's just having a very healthy view of the fact that you can compete and partner for the benefit of merchants and consumers. That's how we think about it, and growing at scale through partnership has you know, has been, for the last, you know, eight years or so, something that's been front and center to how we've thought about growth. You know, on Amazon, enabling Venmo, you know, the reality is Amazon was looking to reach the type of demographic that Venmo, that Venmo attracts and felt like it could be a differentiator with their payment products as well. We felt like, you know, for Venmo, we have seen a lot of interest-From other players like Amazon that now are seeing that, you know, this is something that could really help them reach a new demographic, and it is the way that, you know, young folks like to pay. We thought about it, in terms of, you know, it's a way for us to give our value and for them to see the value that Venmo and PayPal can offer. I think as it relates to, you know, we had talked about the example with Visa. You know, we're always looking for ways to use the scale of our competitors and our partners and us to be able to grow and to create solutions that consumers love. When we think about, you know, whether we're talking about our largest retailers that we compete against, but also enable, whether we're thinking about, the financial institutions that we both compete with and partner with, we just think about all the ways that we can together use our products to serve customers, both merchants and consumers. All right, let me hit on a couple of other quick hot topics before we get to our closing questions. One is just around your international strategy. Yeah. Historically, international was about half of PayPal's business. Yeah. As you highlighted, certain regions, particularly in Europe, can be a higher margin business for PayPal. Mm-hmm. And an attractive area. On the other hand, you know, you had entered some other more developing regions and have pulled back a little bit from some of those over the last couple of years. Just can you update us on? Sure. How should investors think about the contribution of international going forward? Sure. I mean, in-international is always gonna be extremely important to us. What we've done is just gotten a little more targeted and focused as it relates to what we wanna do in each of the markets. So there are markets where we wanna focus on having a consumer proposition, where we have, you know, sales people on the ground, and we're really focused on building that network, the consumer network and the merchant network. If you think about our core, we call them our core markets, so, the U.S. and Canada and Mexico and, you know, in Europe, the players like the U.K. and Germany, France, Italy, Spain. These are markets where we have a very strong consumer proposition, and we focus on creating that network that I talked about earlier. There are other markets where, you know, PayPal is known as a place where we enable and help grow cross-border trade. Some markets, we're not really gonna be focusing on building that consumer proposition, but we're very focused on enabling global trade. You know, people, consumers and merchants feel that PayPal is a place where they can safely enable that transaction and grow their business globally. If you think about markets like in Southeast Asia, in China, in Brazil, we're focused more on that enabling global trade. In Brazil, we also have a very strong processing business, and so we're focused on that as well. We're not as focused on just building the consumer, the local consumer presence. We do, though, I mentioned, our PayPal Complete Payments. Mm-hmm. Enabling processing outside of the U.S., there is a strong demand for that in Europe. Mm-hmm. We have already sold the Braintree platform, which isn't the best fit for some of these merchants. To be able to use the PayPal Complete Payments product, we know that's gonna take off with our processing and our branded together. Got it. All right. Two more questions. One, first, I wanna touch on the efficiency initiatives that you've had underway at PayPal. Just please describe for us from a sales and distribution perspective, right? How have you been able to implement some of these initiatives while at the same time maintaining morale and maintaining the level of investment you need to drive the growth you've been describing? Yeah. Well, first, if I just step back and think about, you know, the efficiency, driving efficiency and, you know, lowering our cost base overall at PayPal, the reality is because of the change in our mix and the growth, the fast growth of our unbranded business and at a lower margin, because the majority of that early Braintree business was in the U.S. with the largest businesses. We talked about the strategy to increase the margin of the unbranded business overall, but, you know, we really needed to reset our cost base. We needed to think about being very focused. We needed to think about the people we were hiring and making sure we weren't growing too fast. Mm-hmm. There's been a lot of focus on just bringing down our cost base overall. For my organization, when I came back to PayPal, we undertook a full transformation of the sales and servicing organizations, really focused on ensuring that we were organized in a way to serve this sort of like multi-product sale, globally. That we were taking a lot of the layers out, that we were really focused on, you know, reducing sort of the cost of selling-In general, and that we were measuring productivity in a way that enabled us to optimize. That was an exercise that we took on, now it's been three or four years ago. It's something you always iterate on. I always believe that you should be very cautious in terms of how fast you grow, because you always wanna keep your costs under control. It's an area that we're now thinking about PayPal-wide, and you saw, you know, in the last earnings that we've made a lot of progress already on bringing down our cost structure, and it's something we'll continue to focus on. All right. Just to close, in our final minute, just looking forward. Look, PayPal's been through a tumultuous time over the last three years really with the pandemic and then coming off of the pandemic. Looking forward, right, what gets you the most excited about sticking with PayPal and sort of the future of PayPal, now? Yeah. What I'm so excited about is, you know, I hear the criticism in the market, I see the stock price. Mm-hmm. I feel like our strategy is exactly on point to change all of that doubt, right? When I think about the focus we have on our checkout business and the huge potential in the white space ahead on that, combined with the margin profile currently versus what it will be with, you know, being able to offer PayPal Complete Payments outside of the U.S. to smaller businesses with value-added services and that changing margin profile at the scale that PayPal is, I feel like now is the time to start believing in PayPal. You know, I think you gotta believe it within first. Mm-hmm. I feel so confident that we are doing exactly the right things, and to apply that kind of strategy to a company with the value and the scale of PayPal is something that I'm excited to be a part of. All right. Terrific. Well, thank you. Thank you. Thank you. It was great to have you with us. Thanks, everyone. Thank you. Thanks so much. Stay put. We'll be up next.