Thanks for joining. I'm Rayna Kumar, and I lead UBS's U.S. Payment Processors and IT Services Equity Research. I am fortunate today to have PayPal Acting Chief Financial Officer, Gabrielle Rabinovitch. Thanks for joining us today.
Thank you for having me.
So, Gabrielle, it was exciting to see last month that the board announced the appointment of Alex Chriss as PayPal's next CEO. From your perspective, are there certain elements of Alex's background that you think make him particularly well-suited to be the next leader of PayPal? And when would you expect the market to first have an opportunity to hear from Alex?
Absolutely. So, maybe the second part of your question first. He will be leading our Q3 earnings call, so I'd expect the market to first hear from him then. And then obviously, we'll want to be having him engage with investors in events both for as well as obviously through this year, and we'll wanna introduce him, obviously, you know, all of our key stakeholders. In terms of what I think is most exciting, his background could not be a better fit for PayPal.
When you look at really sort of how he spent his time at Intuit, his track record of success, his product leadership, he was both the Chief Product Officer and then the GM of the self-employed and small business side of Intuit, which has been driving their growth for some time and is the largest contributor to their revenue in terms of how they segment their business. He has a track record of success. He has a track record of execution, of delivering profitable growth, and of innovation. He's very customer-first. He talks about going home with the customer, and really understanding what customers need and then building out products and services that are relevant for them.
So I think he comes to us with a product-led mindset, and one that is very results-oriented, and both of those things, I think, are very important for PayPal at this juncture. In addition, he's someone who is just, he's inspiring. So I think, you know, he's very values-based. I think the way he thinks about culture and management, very consistent with PayPal's culture, and he's already onboarding, and it's amazing, and we're delighted to have more certainty, obviously, and we're delighted to have him. He's also really known as a talent magnet, and so he has very, very strong followership at Intuit, and that also is very important for us as we think about attracting and developing talent.
So it's great to hear. So during your last earnings call, Dan commented that branded checkout volume growth accelerated to 8% in July. Can you talk a little bit about what drove that acceleration in July versus the first half of the year? And are you still experiencing e-commerce growth in the mid-single digits for 2023, or has that improved or deteriorated?
Yeah, so relative to the outlook that we gave when we started the year, certainly we've seen a more benign macro than we expected, and we've seen more stable and healthier e-commerce growth overall. We did call out that June branded checkout growth was 6.5%, and that accelerated in July to 8%. 8% is the highest level of branded checkout growth on a monthly basis that we've had since the end of the pandemic, and so really great to start to see that business start to accelerate. A lot of that is that we've just seen the market be, you know, the market be more benign for general e-commerce growth. We've seen spending patterns between goods and services stabilize, and we've also just seen a discretionary spend start to come through.
Our business obviously is heavily tethered to e-commerce discretionary spend, and so that also has supported better growth. Our view of the back half, you know, the guidance that we gave at Q2 was our expectation for a stable macro as we move through that part of the year, that continues to be our outlook.
Understood. Very helpful. So Adyen, a key competitor to PayPal, a lot of discussion on Adyen over the last few days. They reported a material slowdown in their North America volume as they sacrifice TPV growth to protect pricing. Can you talk about Braintree's pricing strategy in the U.S. and comment on whether you have observed any major changes in pricing in the market?
Yeah, so, I think it's important to recognize Braintree is outperforming on its performance. Braintree is a very different asset than the other processing assets in the space. Because we have this very strong consumer business, we can address merchants in a very different way. There's really no other processing platform that has a direct relationship with consumers, and so we use our unique and differentiated access to our advantage when we think about how we serve merchants. But from a pricing standpoint, our strategy has not changed. So our performance has gotten better, that's allowed us to grow those volumes at a very healthy clip, where we've become a partner for some LEs that have just not been part of our portfolio. Those volumes have ramped more rapidly. When volumes ramp more rapidly, it's based on performance.
It's not based on anything else. And so we think about pricing as a strategy, but our strategy really has not changed.
Makes sense. Let's stick with your competitor for a second. We recently spoke to an expert who indicated payment processing performance, including authorization rates among competitors, have meaningfully improved over the last couple of years. Have you seen a jump in authorization rates internally at Braintree over the last year?
Yeah, so I wouldn't characterize it as a jump over the last year. I think our authorization rates continue to demonstrate that we're a best-in-class market participant. And so the growth in Braintree clearly indicates that we've been gaining share over time. We've been able to put up a very, very strong growth quarter- after- quarter, year- after- year, and that's really based upon the underlying performance of the Braintree platform. In addition to best-in-class auth rates, I think the resilience of the platform, the stability of the platform has improved over the last several years. In addition, our sales motions have improved, and how we address our customers. You know, going back many years, sort of when we acquired Braintree, and then in the years subsequent, we actually have very different sales teams for Braintree and some of the other solutions.
And so, even when we acquired Hyperwallet, which is our payouts capability, we had a sales team that was selling Hyperwallet. We had sales teams that were selling risk, and of course, we have sales teams on the branded side as well. There was really a sales transformation that occurred several years ago that took a very customer-first mindset, consolidated and sort of transformed the way we think about our selling motions. That's allowed us to be more thoughtful in terms of how we go after that business. So that's been quite important, too. And then I think a real differentiator for Braintree is how we think about relationship management, right? It's not just signing up the merchant and getting the integration done. The LEs, generally speaking, the larger enterprises, they're all different.
They have, you know, idiosyncratic needs, their businesses have certain nuances, they have certain preferences, and they need, you know, a lot of ongoing attention in terms of how we serve them, and we want to add value every step of the way. We want to be innovative alongside them. They're very sophisticated, and they, you know, they make us better because they're so sophisticated. And so we've really sort of stood up, I would say, what we consider sort of a market-leading team on how we manage those relationships over time, and that's allowed us to do things like continue to work with the same merchants, right? We just announced the Uber, you know, the Uber agreement several days ago.
We've worked with Uber for many, many years, and, you know, we announced sort of a new sort of renegotiated global agreement that takes sort of best on the branded side, as well as best on [audio distortion] side to deliver a great product to Uber.
Anything to say on the timing of Uber or the potential financial impact to the new agreement?
Well, Uber's in our base, right? So this is just ongoing business for us. Yeah, I wouldn't expect that this should be something that we'd be calling out from a materiality standpoint.
Understood. Okay. Can you give an update on the penetration of your latest checkout experience with your merchant user base? What sort of lift have you seen from merchants who have moved over to the refreshed checkout process?
Yeah, so as we've discussed, advancing and accelerating our branded checkout business is a critical strategy for us. And when we launched the year, we talked about our goal and ambition to migrate the top 50 of our top 100 merchants over to our latest integration. We've done more than 40 at this point in time, so we're very much on track in terms of our aspirations were for the year. Each integration is different. These are the largest merchants globally, and so they have nuances and complexities, and so we're pleased to be able to be there in terms of the overall integrations. It's absolutely critical that merchants have integrations, and that's why it's such a push for us.
We can't deliver the best PayPal products and experiences if merchants aren't sitting on the latest integrations. And so it's really critical that they move over so that they can really benefit from Pay with Venmo, from Pay with PayPal, from better presenting of the button, from buy now, pay later. Sort of all these things can come with the newer integration, and so we're very pleased with what we're seeing in terms of the lift.
Is there anything you can point out on timing of how long it takes to have a merchant integrate into your new checkout?
It really depends on the merchant. So when you're talking about merchants that are global merchants, and they sit in 50 different countries, and where historically there have been different integrations with PayPal that have occurred over time, those are, those take a long time, right? A lot of this goes to the entity management. If you have a U.S.-based company that is solely based in the U.S., that's very easy on a relative basis.
Got it. Very helpful. You've, you've highlighted several initiatives that are aimed to improve unbranded transaction margins, including moving down market, expanding internationally, and adding value-added services. Can you give your thoughts on which of these levers could drive the greatest margin expansion over time? And can you talk about the competitive differentiation of PPCP market?
Sure. So in terms of transaction margin, dollar growth, and reinvigorating the performance of transaction margin dollars, and historically, we have a very strong track record of seeing strong transaction margin dollar growth. It has been under pressure over the past year, and some of those factors were transitory. Our strategies are both on the branded and on the unbranded side. So branded checkout is going to be a very important contributor to transaction margin performance over time, and our expectation is as we continue to see healthy e-commerce growth, that will continue to contribute more to the transaction margin performance. On the unbranded PSP side, we have several strategies, as you indicated. On the Braintree side, it's about adding more higher-margin revenue streams into the Braintree business through value-added services, payouts, risk as a service, FX as a service.
Those types of services, our orchestration capabilities. FX as a service is not available yet on Braintree, so we don't have that yet as a capability we can offer. That's something that we're working on, and we will begin offering it, but not this year, and I wouldn't expect it to contribute next year either. So that's more long tail for us. In addition, of course, we're expanding Braintree geographically. So we start, and the core of our Braintree business is a U.S.-based business.... highest interchange, low, I'm sorry, lowest interchange, highest transaction expense. And so by definition, the Braintree business today starts from a place where the margin, you know, the margin is the lowest relative to what we would see in other markets. We've started to move into Europe more aggressively.
This is what we're doing a fair amount of processing for Booking.com now. We also have had some success in Latin America, so those will continue to be important markets for us, which will also sort of help margin over time. In addition, we've talked about PPCP, which really is bringing a full full stack processing capabilities and a full stack platform to SMBs. We've never been in this market. We've never had a product to compete in this market, and this is amazing white space for us when we think about what we can do for SMBs. SMBs, you know, the PayPal-branded checkout button is sort of an essential need for most SMBs, and so we bring real conversion and real lift to their business.
The ability now to offer sort of the stack that can give them everything they need with one partner, we think will be very, very compelling, and that, of course, has a much higher margin profile than what we would have on the LE side.
Understood. PayPal is on track to reduce non-transaction-related expenses by as much as 10% this year and achieve at least 100 basis points of adjusted operating margin expansion. From your view, is there room for continued productivity gains beyond FY 2023, or have you [audio distortion] there?
There's continued opportunity for gains. You know, our business is very complex, it's very large, and it's very global. And so while we certainly have done a fair amount on the cost side, and as you indicated, this year, we expect the non-transactional related OpEx to decline about 10%. We will have ongoing opportunities to drive more efficiency and productivity, and we really want to be providing services that are faster, cheaper, and better. And doing that it literally allows us to deliver better operating margin over time. We have, there are areas of our business where we really, we haven't fully benefited from things like automation. We still have manual processes in many parts of our business. That too helps.
We've also talked a lot about sort of deprecation, consolidation, and platform migration as being a big part of what we've been doing over the past few years. As these things come to market and as we can deprecate different assets, we no longer need to support those. So the sustenance that we have to do to have multiple stacks in multiple geographies, that changes very meaningfully when we do the platform consolidations. It allows us to be a lot more efficient. It also allows us to serve our customers a lot better. In addition, all this integration work we've been talking about in terms of getting people onto the latest integration, maintaining those older integrations requires resources. And so as we start to move our merchants over the newest integrations, we can start deprecating those stacks, and that too, drives efficiency.
We see a lot of room ahead, to continue to kind of grow profitably and expand our operating margin.
Yes, to that point, do you see AI playing a role in creating some of these efficiencies?
Obviously, everyone's talking about AI.
Yes. You know I have to sneak in a question on AI.
Yes, absolutely. I mean, look, AI can benefit every business. I think that the AI, Gen AI is very expensive, right? So you have to be really thoughtful about where you deploy it. It's a great solution, but, you know, RPA, basic automation, basic machine learning is very, very cost-effective. And so we'll be deploying AI in certain places. We've already talked about sort of a customer assistant tool. That's a great place to deploy it. When we can make customer service available to our customers 24 hours a day, seven days a week, and they don't need to actually call a number to get service, we can think about really driving efficiencies in our customer support and operations area.
But I don't think Gen AI is going to be the solution for a lot of the manual processes we have, because those can be really solved by just basic automation.
Got it. That makes a lot of sense. In the second quarter, there was some noise around transaction margin dollar growth. Can you help parse out some of the non-recurring impact to transaction margin dollar versus some structural drivers such as unbranded processing?
Absolutely. So, from the, you know, the first half of the year, we've seen about 1% growth in our transaction margin dollar performance. To be clear, we've indicated Q3 is going to be pressured, and that we'd expect transaction margin dollars to decline in the third quarter, and our expectation is that it will inflect very nicely in the fourth quarter. So the fourth quarter will be the strongest quarter from a transaction margin dollar growth standpoint. In terms of what's been affecting, the growth of transaction margin dollars this year, really sort of the, the major drivers of the headwind has been, FX, both from translation standpoint as well as from hedge gains, and then, some merchant cleanup fees, that we benefited from last year, which are non-recurring this year. And so those really, have really very meaningful flow-through implications.
On the merchant cleanup fees, we benefited last year by about $190 million on the year. That was mostly between Q2 and Q3, and so it was $75.5 million in both Q2 and Q3. Those were headwinds to us. It was a headwind to us in Q2, it'll be a headwind to us in Q3. In addition, we had some very strong hedge gains last year in Q2, Q3, and Q4 of last year, pretty strong hedge gains, and we're up against those from a lapping standpoint. Q3 of last year, we had $156 million of hedge gains, and then in Q4, $152 million of hedge gains. We would expect not to generate hedge gains this year, and so that too is a headwind.
Those three items are really a big piece of the pressure that you've seen overall on transaction margins and overall performance. We'd expect those to abate as we move into the fourth quarter and into next year. In addition, we've talked a little bit again about this platform consolidation and migration work. A lot of that started in Q4 of last year, and so we are now lapping that. So that's had an impact on our transaction margin dollar performance, where we've deprecated platforms, and we're going to be lapping that in the fourth quarter, so that also helps us have a cleaner exit.
Just given the recent strengthening of the U.S. dollar, do you think that changes the math materially?
We haven't commented on the recent movement in, in FX. Obviously, we've been managing through a sort of somewhat unique FX environment over the past really few years with a stronger dollar, which has persisted. And so we manage it very carefully, but we'll update you in November.
Okay. Switching gears to Venmo. While Venmo TPV growth did accelerate by a couple of points in the second quarter, it's been trending well below the pre-2022 double-digit growth pace. Can you talk about the investments you have made in Venmo, as well as the progress on monetization? And when do you expect to see a reacceleration?
Sure. So Venmo today is, you know, call it run rate, $250 billion of TPV, 90 million accounts and about 58 million or 59 million monthly active unique users. It continues to be one of the largest P2P platforms in the U.S., if not globally. It's a phenomenal asset for us. At the same time, to your point, there are pieces of it that can be monetized more effectively. So we see an incredible sort of runway to continue to grow the commerce for Venmo over time. This year, we've made some great strides. In Q4 of last year, of course, we started with Amazon, so Venmo is a way to pay on Amazon. Q1, we announced an exciting initiative with Starbucks to be in the Starbucks app. In addition to that, we're now working with McDonald's, working with Mercari, working with GoFundMe, working with Xbox.
There have been a continued sort of growth in the Venmo commerce initiatives. In Q2, I think we added 27 merchants for Pay with Venmo, and so that's exciting for us. In addition, we're doing more on the reward side and doing more to provide relevant offers to our Venmo customers to help drive additional commerce to us. It's also important to recognize our card programs in Venmo continue to have significant room to grow. We have both debit and credit in Venmo. The penetration is lower than what we would like, and we see a great opportunity to focus on card penetration as a way to drive habituation offline, which will then benefit both offline and online for Venmo. The other piece of Venmo that we're quite focused on is improving some of the core P2P experiences.
So, in terms of discoverability, in terms of how the app is laid, how people engage with the app, and then just in terms of functionality, like we introduced a new split pay function this year. That too, is something where we're seeing good adoption. And then finally, we launched teen accounts for Venmo this year as well. And so that's something that we think it provides sort of a whole new set of growth opportunities for us to engage with sort of a younger demographic and help build them into our ecosystem. So we're excited about Venmo. It's obviously, there's a lot of growth ahead for it. Today, still, the vast majority of those volumes are P2P volumes, and we see a longer term where, commerce is a much healthier mix of the overall volumes in Venmo.
Just talking about the cross-border volume, that rebounded last quarter after several, several quarters of decline. Can you discuss some of the factors that [audio distortion] your cross-border business so far this year, and also talk a little bit about HS, since we're also seeing some recovery there?
Sure. So you know, 2022, our cross-border business was down to a high single digits, came under a lot of pressure for a variety of reasons. Q1 was flattish, and we saw Q2 performance firm up, and so we've seen some better trends on the cross-border side. Some of that is coming from China, I think . And so our China seller business is an important business for us. It's one of our most important cross-border markets. China, for us, is all seller, right? So it's all cross-border, and it's Chinese sellers selling to buyers in other countries. With a very strong US dollar, that's affected the Chinese seller business in part because a lot of Chinese sellers will display prices in USD, and so that's had an impact.
But in addition, there have been other macro factors in China that have very meaningfully affected the China seller business. We've seen stability and improvement there, and so that's something that we're very pleased about. The U.K. is another important market for us, from a cross-border standpoint. U.K., we were watching very carefully. From a macro standpoint, there's still a fair amount of pressure in that environment, and so that's one that, you know, we'd like to see improve more over time. And then Continental Europe is important from a cross-border standpoint, and we've seen improvement in Continental Europe from the exit from COVID. And so cross-border will continue to be an important part of our business, and we would expect, as we see more stability and growth in discretionary e-com, that cross-border business will also come through.
Got it. Recently, there's been more of a focus on engagement, with NNAs falling in the first half of FY 2023. How should we think about the drivers of the decline and how that metric should turn going forward?
Yeah, so we've called out that this year we'd expect to see our total customer accounts decline slightly. So we are seeing churn in certain markets. We'd expect to see a stable performance in our monthly active users. And so this is a situation where we're seeing churn is really long-tail markets, where we don't have a set of consumer experiences, but where we essentially were incentivizing consumers to open accounts, and then hoping to build with additional services to serve those customers. We've very meaningfully pulled back from that type of marketing program, and so maybe to be a little more specific.
In Latin America and Southeast Asia, there were a series of initiatives, that we had, we had experimented with, where we were, you know, making offers to customers, open account, you know, get a financial reward and then use it. What we actually saw in those markets, because we had very limited functionality, the users were really minimally engaged. And so to keep them engaged, you would just need to continue to do incentives and programs. We have to say we're much more focused on driving engagement on our platform and really driving sort of core use cases and habituation. So in our core markets, we're actually seeing a lot of stability in the overall customer account base. We'd expect to see growth next year, with and this year, you know, you're seeing a little bit of churn.
We've seen a few million accounts churn off this year, and that's of course on a base of about 435 million customer accounts, and so that will come through this year.
Buy Now Pay Later has been a bright spot for PayPal. Can you talk about how BNPL has performed versus your expectations and how it drives value to the branded checkout?
Yeah, so Buy Now Pay Later has been a home run for us. We started in Buy Now Pay Later in 2020. That was when we launched our first Buy Now Pay Later product. We're now in seven markets organically. We couldn't be more pleased with the overall performance, the contribution to our growth, the customer engagement, which means that we see the increased stickiness, the use cases, and the repeat usage patterns. And so it's been a really terrific way to engage with our customers and provide them [audio distortion] value. What we see time and again is that when pay later is offered, customers really like the product. Now, the product is a, you know, no interest, no late fee product on the short-dated product. We also offer longer-term installment, which has more traditional APR.
It's a great way to engage, it's also great for merchants. It drives increased average order size, it drives increased engagement with those merchants, and merchants who Buy Now Pay Later buttons upstream. They see immediate benefits to their business, and so we're delighted that we can be part of that success for our merchants. We see additional opportunities for us to penetrate on the Buy Now Pay Later side, both in terms of vertical, but also in terms of product. In Germany, we've experimented with some different nuances on the Buy Now Pay Later program, and so, we couldn't be more pleased with how it's performed. Obviously, we announced in June that we are moving forward with KKR on the externalization of our European portfolio, and that's something that we're also very pleased with doing.
Yeah, very timely. Do you think there's more innovation that could be done in the BNPL space, or is PayPal satisfied with the current point of being here?
I think there's a lot more innovation that can be done. When you think about different verticals and the needs of different customers in different verticals, there's a lot of opportunity that Buy Now Pay Later can be an appropriate use case. But you also have to be quite careful, right? Because there's a cost of capital associated with it, and so you need to really grow the business responsibly.
We can now open up the [audio distortion] for questions. So we have a mic going around, so if anyone has a question for Gabrielle, just raise your hand.
Thanks very much. Very helpful. How do we get comfortable that this business, meaning, you know, just digital payment processing, is not a race to the bottom? I'm sure you've heard this a lot recently, but just over time, you know, is this gonna always be a deflationary business where you're competing for volume, and it's just all about scale, but it comes at a cost?
Yeah. So look, card processing is competitive, right? So to be competitive in card processing, there's gonna be a pricing conversation, and that's at the very large enterprise level. That's only a subsegment of our business. And so we have this immense white space on the SMB side, where that profit pool is actually very meaningful. We essentially are going from a position where our biggest PSP business today, and the chunky, like 90% of our unbranded volumes are coming on the LE side, LEs predominantly in the U.S. So we start from a base that is the least profitable kind of market and segment of the business that you could be in. The addition of PPCP really opens up a very attractive profit pool opportunity for us.
In addition, moving downstream in Braintree to slightly smaller merchants, and the geographic expansion will support better margin performance over time. So we're not. We don't view it as a race to the bottom. We also think about the value-added services that we have and how important those can be for our merchants, and how those can also add in sort of layers of additional margin. And then, of course, there's the branded business. And to the extent that we're working with these important LEs, and then we can drive more branded share of checkout to us, that also, of course, is margin enhancing for us. I think that said, you know, if you think about the monoline processing base, like, pricing is gonna be a major part of that conversation.
Any other questions for Gabrielle? Okay, I'm glad to see no other hands because I have a lot more. So Gabrielle, in light of FedNow launching a couple of weeks ago, we were wondering where PayPal fits into the ecosystem. The initial iteration of FedNow has fairly limited capabilities, but it could pose as more of an immediate risk to P2P businesses. So just want to understand, what do you think are the [audio distortion] for PayPal with FedNow?
Yes. Real-time payments are important for the ecosystem. They lower cost overall, which is something that we're quite focused on, right? We wanna, we want to lower cost in the system over time, and we're strong supporters of that. We're also strong supporters of interoperability and of digital payments as well. And so we think, you know, FedNow helps drive additional habituation to digital payments, and that will accrue to our benefit as well. You know, we've been participating [audio distortion] through the Clearing House, through a partner, and we've never seen sort of any meaningful impact from RTP on our business. The use cases for RTP and for FedNow are very different than our core use cases, and so it's something that we'll watch.
But in terms of how we think about the overall macro, overall, we think FedNow is important for the system. And frankly, the real-time settlement piece reduces transaction losses, and so that also is very beneficial.
Can you remind us, please, about the allocation priorities and how M&A plays a role in your strategy?
Yeah. So, as you've seen over the past few years, we have meaningfully shifted our capital allocation, and we've been more aggressive on the share repurchase side and have been, and have done a lot less from the standpoint of being acquisitive. Historically, of course, we've made several acquisitions, and so when you look at the free cash flow that we've generated for the past eight years, it's just a relative balance between M&A and share repurchase. We obviously watch the market very carefully. We watch valuations, and so we [audio distortion] assets, but no real change to our posture today. We've indicated that for this year, we'd expect to return 100% of our free cash flow in the form of share repurchase.
We continue to believe that our intrinsic value is much greater than how we're valued by the market today, and so we think share repurchase is an appropriate area for us. In addition, even the smallest acquisitions cause distraction in organizations, and we have a tremendous set of opportunities for us organically to grow the business. And so from the standpoint of sort of where we're focused, it's much more on the organic growth side than the acquisition. It doesn't mean that we wouldn't look to add capabilities over time that can very much benefit our business, in terms of sort of accelerating our growth patterns or if we have a certain strategy, sort of really being helpful in terms of, like, an acquihire, or other types of acquisitions. But I wouldn't expect any meaningful shift in our capital allocation.
What are the biggest organic initiatives for you? Of course, you've highlighted many of them throughout our discussion, but for you, what do you think are the most important?
Yeah, so I mean, it's really the three overarching strategies that we've been talking about, which is accelerating our checkout business, and that is, you know, there, there's a lot of initiatives underneath that around eliminating friction, around introducing passkeys and biometrics and logon, improving latency, improving the checkout experiences, making sure that you have native integrations. All of that requires investment for us to bring to market. In the case of PPCP, which of course is part of the PSP side of our strategy, we will have PPCP in 27 markets by the end of the year. And so these are really critical areas of organic investment. And so it's, you know, branded checkout, continuing to improve those experiences, making sure we're bringing the best solutions to our consumers and merchants.
It's growing our PSP business, both on the Braintree side as well as on the SMB side, and then it's on our digital wallet experiences. And so that's improving functionality, improving discoverability, making sure we're bringing to market sort of exciting new features that serve our customers better.
I know we only have a few minutes left, so my final question is: what are you most excited about for PayPal, in the next few months, and what keeps you up at night?
So in the next few months?
Yeah.
You know, clearly, Alex joining us is a seminal moment for the company, right? One CEO since separation, this is the second he will ever have. This is like a landmark moment in a company's lifetime. And so for us, this is, you know, the most exciting thing, is having our new leader. Dan's retirement was announced in February. Now we have clarity and certainty about who our leader is gonna be. I'm excited about, you know, moving forward in Q4 with our new CEO. Our business is an exciting business, a very profitable business. It's one where we have, you know, immense opportunities to grow it. And so I think it's gonna be great to have our new leader and to work with him on sort of all of our new strategies. What keeps me up at night?
I mean, I think macro keeps everyone up at night. you know, the sort of general concern about the macro environment. We've seen consumer resilience in our core markets. We've seen a better performance overall in sort of the broader landscape in 2023. but, you know, there's, you know, there's, there's looming risk always with certain things. So I'd say just macro generally, and then geopolitics is just another area that we watch very carefully, given the breadth of our business, given all the different regulatory bodies that we engage with and sort of how we think about interactions with our stakeholders. just geopolitics in general, is something that, you know, [audio distortion]
Well, Gabrielle, it was a pleasure having you. Very insightful. Thank you so much. Thanks for everyone for joining.