Daniel Perlin   RBC Capital Markets

Thank you so much for allowing us to make a quick transition because I think it's so worth it to have another fantastic executive like Suzan Kereere, who's the President of Global Markets at PayPal, be able to share what's happening at this organization now, lots of change, transformation. You have this title of President of Global Markets. And so that means a lot of things to a lot of people.

Daniel Perlin   RBC Capital Markets

So what I thought we could start with for kind of level-setting purposes is what does that represent at the organization? What rolls up underneath your responsibilities? And then how do you think about like the strategic positioning that you're going to go forward with?

Suzan Kereere   President of Global Markets

Yes. Thanks. Listen, Dan. First of all, thanks for having me. Good afternoon to all of the folks in the room and those on the webcast. I must say navigating traffic from downtown west side to east side, east side uptown and then across to the middle in the middle of the rain was perhaps one of the hardest things I have to do in the last year. So it makes transformation quite easy. But to answer your question more directly so I lead PayPal's business in the market. I am lucky enough to have a very capable leadership team that covers the business across regions.

So we have people who cover the business across the Americas, Europe, Latin America, Asia Pacific, China and then a very able group of country managers. All of them are recently new. We have a whole new way of working, which we'll get into, I hope. We have 3 core responsibilities. We own the relationship with customers, large and small. We are responsible to ensure that the end-to-end value proposition, the way we match customer needs to PayPal Solutions comes together really well.

And we are at the core of how we think about building and developing our markets for growth. Some quick starts, which I always have to share, we do business in over 200 markets. We have a team of 7,000-plus professionals who both serve customers across account management, sales, country management, customer servicing organization and we are in growth mode.

Daniel Perlin   RBC Capital Markets

No doubt. There's no doubt you're in growth mode. So you've been in the role, I think, 18 months.

Suzan Kereere   President of Global Markets

Yes.

Daniel Perlin   RBC Capital Markets

Thereabouts.

Suzan Kereere   President of Global Markets

Yes. Not that I'm counting, but yes.

Daniel Perlin   RBC Capital Markets

Fair enough. Fair enough, we'll keep the counter rolling. So the question is very high level in that 18-month period, and there's a lot of other changes that are happening at the organization that you're going to see through your lens, what are some of those tangible things that you might kind of tease out for us as an outsider looking in, that we maybe are not so acute to see.

Suzan Kereere   President of Global Markets

Look, it's literally 18 months ago, I joined. It's been one of the most exciting things I've done in my career. I've done many things over my career, but this is perhaps one of the big highlights. I joined early in this phase. Alex had been on board about 6 months, and the leadership team around him a terrific set of colleagues had joined a few months before I did. I spent the first few months doing what I think great executives do, listening, listening a ton to employees, listening a ton to customers. I heard many things, many good things. Some of the good things I heard is that customers chose to do business with us because we were global.

We had an enviable set of assets. We were trusted. This is an important thing because you think about our business, it's highly cross-border centric, and many of them were pushing to do more. But many of the buts were around gaps they saw. And to be fair, I heard a number of these gaps from some of our employees as well. Gap one was they were concerned that they were seeing innovation, but not enough of it in markets that matter to them. They were concerned about our pace and agility. They didn't think we were moving fast enough. Some of them were turning to others for new omnichannel use cases because they were concerned we weren't pushing on the edges of innovation.

And candidly, many of them were looking for partners who could help them grow and they weren't sure they could do that with us. So much of that feedback informed a lot of the things we're doing now as a company. That feedback informed the way we thought about talent. If you look at the portfolio of people who've come into the company over the last, call it, 18 months, those people have come in with new skill sets omnichannel. This was a big thing for us. Web 3 skills. We have a great new head of AI, who brings an enormous body of data scientists with him. New ways of thinking about consumer value proposition. So talent was a big thing. We brought in lots of great talent, but we also brought in people who understood how business was done in local markets. We just opened up an office in the Middle East and Africa, and we have people now who actually know how business gets done on the ground in those markets.

So talent was a big thing. We changed organization. And this, again, was -- we wanted to be an organization that was fast and moving. To be faster moving, you need to do a few things. You have to do things that are more standard. You have to be much more transparent. You have to empower the organization. And so we built a structure that drove empowerment into the ranks of our teams and that empowerment was much -- is much more decentralized now, particularly as we have a country structure that allows teams that are cross-functional to work together to benefit how we serve customers on the ground.

We changed the pace of innovation. We will talk, I know more -- a little bit more about that. And so all of the things you see on our road map that clarity of what we were going to prioritize to do and the clarity of what we were not going to do was important. So the things we have done to modernize experiences, where we're going with omnichannel, the push into consumer value props, the changes we're making to the merchant flywheel. All of that clarity was driven through the organization at scale. And then I think this is one of the biggest things I give Alex Credit for aside from his just geniusness and product centricity is that he really changed the culture. It is more open, more transparent, more urgent, more focused, more customer back. And quite honestly, when you listen to our employees now, people say things like we're playing to win. This is our moment. We intend to make the best of it.

Daniel Perlin   RBC Capital Markets

Yes. I think that you definitely can start to see that externally. I mean, we saw it at the Analyst Day that you guys just hosted, I think that came out as the personality of the organization has changed. And I think that, that was -- I think that definitely came to the forefront. One of the things, though, that is kind of a blocking and tackling and you talked about this with local market going up to local market is to really the go-to-market motion that has changed today relative to the prior strategy. So maybe if you could put a finer point on that and then what the intended outcomes of that change ultimately you are looking for.

Suzan Kereere   President of Global Markets

Do the things that customers love, do the things that matter to growth, those things eventually return to benefit us as well. And so that's what we set out to do. We have and now 100% coverage on our largest merchant base and largest commerce platforms for small business. We're at about 80% of the way there. We have organized our teams across product, engineering and the way we go to market with our sales and account management teams around verticals so that we have vertical focused teams that can go to market together and serve the customer end to end.

And then as you think about solutioning, the way we commercialize the business is designed around the things that generate the greatest value to the customer so that we're debating value and value creation and not debating basis points.

Daniel Perlin   RBC Capital Markets

So along that same vein, with all this change taking place, kind of like children. We love them all, but there are some that maybe stand out. So the parts of the world where you're gaining momentum with all of this change taking place. Obviously, the goal is to have all of them moving in the right direction.

Suzan Kereere   President of Global Markets

Yes. I love starting with the KPIs. And I know we shared a few of these at latest earnings, and we did a little bit of this at Investor Day, and you cover us well, Dan. So you know the business probably just as well as I do.

Daniel Perlin   RBC Capital Markets

I doubt that very seriously. And I do appreciate the compliment.

Suzan Kereere   President of Global Markets

No, It's true. So on the consumer side, I mean, I really love the momentum we're seeing on Venmo. I mean Venmo is up in the very high double digits. And we're seeing growth on new accounts, up 4%. We're seeing growth in average revenue per account up 12%. I love what we're seeing on omnichannel. Omnichannel is proving to be a truly relevant part of the consumer flywheel. And I love the fact that we're seeing TPV growth over 100% off-line and in omni, but also just starting to see habituation pay back into the e-commerce flywheel.

And if you look at some of the key metrics on the merchant side, Pay with Venmo were up 50%, which is enormous. The monthly active accounts are signed up with us with Venmo because they wanted to target a much younger demography. They signed up with us because they want to continue to grow and engage customers and they wanted to connect rewards and loyalty. Their rewards and loyalty with our rewards and loyalty to make the experience more meaningful, richer for consumers as they engage with them in their experiences. They're signing up with us because they want to have new conversations on Agentic and think differently about how to solve the needs of the customer base they serve.

So that's an example of wow, it's not just about payments, but it's about the entire commerce flywheel. If you take another example, which we announced just last week, we went to market with NFC in Germany. It's a big first time. Thank you so much. And the credit goes to a multitude of people across the company, but big credit to my colleague, Diego, who leads the consumer business at the company.

So what Germany has done is launched our first wallet experience in a mobile device. The largest sort of fun parts about this journey is even before we went public with any advertising, any announcements. We had a 1 million new sign-ups for the wallet experience. And we've had massive uptick with merchants, large merchants like OB and Dikman who have turned on rewards and loyalty to be engaged in these experiences, and they're offering cashback to customers who choose to use PayPal in-store to reward them for their behavior.

So this is a first, but we've seen elements of this as we launched with PayPal everywhere here in the U.S. So 1 million new sign-ups, and we're only just getting started and you think about how habits are driven, this is yet another example of how we are executing differently, but also bringing to bear the value proposition and the way in which our flywheels come to life on both the consumer and merchant side.

Daniel Perlin   RBC Capital Markets

Yes, it's pretty amazing. When we talk with our European clients, right, they're living and breathing in those countries. And so we can kind of see some of those things coming to life. Germany was one of those examples that you just mentioned. So it's...

Suzan Kereere   President of Global Markets

I invite everyone who is either living in and/or about to go to Germany to check us out in store because it's an incredible experience, just tap your way through it and give us feedback, please give the feedback to Steve, my colleague but we will take all feedback.

Daniel Perlin   RBC Capital Markets

All the feedback and the gift cards that you're going to supply I mean the digital credential, we'll get a code to you by the end of the day.

Suzan Kereere   President of Global Markets

Feedback is a gift.

Daniel Perlin   RBC Capital Markets

Okay. Okay. That's fantastic. So let's talk about something that's always top of mind. It is the conversation piece at PayPal for clients, and it's branded adoption, right? Like there's a lot of amazing changes happen, but the organizations like what we have, what we're building, here's our future.

Suzan Kereere   President of Global Markets

Yes. So just to set the scene for folks like there is no single priority at the company that is getting more attention than the work we are doing to reinvent the way branded checkout works at PayPal. It is an important component of the journey to commerce, and it is multifaceted. So if you start at the top, the progress we've made on the product side to simplify the experience, modernize the experience to reduce friction and latency and to change the way we present products and experiences that matter to consumers like the ability to pay later. Those are just a few of the headlines of the work we've done and the modernization of the pay sheet is probably the single biggest catalyst of what drives how quickly we reinvent branded experiences at the company.

In the U.S., we're at over 45% of the volume now on modern experiences and that is continuing to scale. We are live now in Germany and in the U.K. and our confidence that we can move faster in Europe is pretty high because more than half of our European volume is already on new integrations. We are moving fast and learning a ton as we engage with merchants directly, and we built playbooks now that work across verticals because we now have a deeper understanding of what it takes to convert merchants at pace and how to make that merchant conversion journey much easier.

And we continue to stand by the commitment we made to get to 80% our experiences on new integrations by 2027. We're doing a bunch of stuff to improve authentication. And if you step back from it all and look at sort of what is that journey on branded, I mean what's really amazing is all the things that are happening around the branded experience. It's everything I said earlier about where we are with Venmo and paying with Venmo. It's all about loyalty and rewards. It's the things we're doing to enhance the merchant journey and to improve experience to reduce friction and to bring all the assets together, whether it is assets today like crypto and stablecoin or the journey we're on as we get into Agentic commerce.

Daniel Perlin   RBC Capital Markets

Yes. It's amazing. The process that's taken place. When we think about the reset on Braintree and the evolution that we've seen there, there does seem to be some differences in terms of how the U.S. versus Germany versus U.K., as examples are kind of evolving and so maybe you could speak to some of those points from your lens?

Suzan Kereere   President of Global Markets

Yes, sure. I mean, look, again, as I look at the journey on unbranded, the demand for Braintree has never been stronger. I mean, quite honestly, never been stronger. The progress we're making and again, here, a set of talented players that have come into the organization over the last 12 to 18 months, but the changes we're making on the platform, resiliency, the scale, the win which we are integrating our value-added services like foreign exchange, multicurrency payouts, all of those things continue to progress quite well. And if you look at our progress at the market level, of course, great success here in the U.S.

We just launched recently in Australia. We're continuing to show strong progress across Latin America. So across the board, geographically, the demand and performance very strong. If you look more closely at sort of the central question behind Braintree, the largest central question around Braintree historically has been that on profitability and price to value. And I would say, candidly, as one of the folks in front of that change at the company that, that has been an important change for us to make. And we feel good about where we are. We are tracking ahead of many of the conversations we started with customers and partners around the world.

We have made great progress on turning to profitable growth from unprofitable growth just over a year ago. And we are on track to inflect top line revenue growth towards the end of this year. And there are many great examples of how this is coming to life through the relationships we have with customers and Meta is one of the few that we talked about at Investor Day and one of the relationships that we hold central because they've been such a great partner of ours over the years. They have been with us many years. The relationship with them has grown across markets and regions.

The way we do business with them has changed fundamentally. They are doing more with services like payouts, doing more with us on foreign exchange, helping us jointly think differently about how to build services that work at scale with enterprises like them. And they are using the strength of that relationship to extend the portfolio of business we do with them, both on the unbranded and the branded side. That is exactly the type of business we want to do in the future, and there are many great examples like that across the company.

Daniel Perlin   RBC Capital Markets

Yes. Yes. So we have to talk about AI and in particular...

Suzan Kereere   President of Global Markets

How many times have you talked about.

Daniel Perlin   RBC Capital Markets

Yes. It just feels it's a necessary topic. So Agentic commerce and the role that it plays within your organization, again, it feels like you have just an enormous data asset. This gives you a huge runway from which to potentially create really fantastic value for your clients but it's still super early days. And so we're all still trying to figure out like what role are you going to play in a world that seems like it's moving incredibly fast.

Suzan Kereere   President of Global Markets

Yes. I mean, I think I'll start where you started, which is Agentic commerce is a massive unlock. These agents are changing the way consumers literally do everything from shopping to traveling to just living life on a daily basis. I use multiple agents myself personally, right, from ChatGPT to Perplexity. I probably use them to say, what should I do with my husband today? Like I'm running out of like really cool ideas for what I should get him for Father's Day. So I assure you, I have checked all 3 to say, this guy has everything so now what? Like what is the next frontier for our life together, my hubby and my wife and my husband rather and I no longer have to ask my kids about what should we get dad.

But the reality is we have an incredible right to play, but also an incredible right to win. You start at the fundamental with data and identity knowing who the customer is, whether that's a consumer or merchant is at the core of how Agentic commerce will be shaped and will scale over time. Understanding not just what happens when commerce goes well, but how to intervene when things go wrong. So how do you handle disputes and chargebacks, what will you do with refunds, what's the experience to do that? How will agents be trained on that? And who has the kind of scale of data and knowledge to not just arbitrate good commerce, safe commerce, secure commerce, but arbitrate the stuff that just happens in life, the stuff that goes wrong.

We've been quite deliberate about our path on this, and we started pretty early. We wanted to be out first. So we started early with infrastructure. And so the launch of the first MCP in financial services was by us. And part of that was enabling the infrastructure that agents need to interact with PayPal. We then proceeded to launch the Agentic toolkit, and this was all about appealing to developers and giving them the tools they need to do the jobs that happen across PayPal's experiences.

So everything from access to the catalog, order management, the way you do refunds, the way you do reporting, the things you do with disputes, chargebacks, we're still early in building out all of those tools, but those are the tools you need to enable if you're going to have a kind of interaction that ends in conversational commerce. And then the third pillar or the third leg of the stool was all about partnerships. And this is where just yesterday, we announced a new relationship with Selfbook. That is the agent that enables search and discovery for travel experiences. A week or so ago, we announced a new partnership with Perplexity. And that relationship is also about how we enable conversational commerce to occur.

And so we are looking at different things we do across all of those 3 pillars. It's very early, but we feel pretty good about both our positioning, but also the right we have to participate. And if I could say one more thing here, it's that, look, commerce on a day-to-day basis is still pretty complex even with the modernization of experiences, even with Agentic tools. And for most merchants, if you sit in the shoes that I sit in, the thing that most people want to do when they do businesses is keep it simple, make sure it works all the time, make sure it gives us as many of the benefits and give us a one-stop interaction to all the assets. And so we think we're in a position to bring as many agents to the center and create as many use cases and as many experiences that these merchants will need in the future. And that's the job we're setting out to do.

Daniel Perlin   RBC Capital Markets

Yes. So in the last few seconds that we have here, kind of open mic, the next 3 to 5 years, how do you look out? And what are the things that you think are going to play most prominently within the organization as you kind of perpetuate this growth trajectory? And any big bets that we think you need to make in order to achieve those?

Suzan Kereere   President of Global Markets

Gosh, I mean, just navigating the journey from downtown to uptown, I was thinking like how am I going to do this from uptown to downtown. So...

Daniel Perlin   RBC Capital Markets

That very moment. When you thought you were done.

Suzan Kereere   President of Global Markets

Let me try and be more strategic than and say, look, I am super stoked about everything at PayPal. And I'm stoked because we have an enviable set of assets. I mean we are lucky to be the generation now that gets to carry the company, hopefully forward for the next several decades. We have a bevy of customers. We have a bevy of customers, 430 million plus consumers and merchants on the platform. We have breadth scale reach globally, that is enviable and takes years, decades to build. We have a brand that people trust. And we -- it's not just trust because we are a big brand, but trust because in every interaction, every day, we earn the right to be trusted for many days forward.

You combine that with the changes we're making to modernize experience, accelerate innovation into new spaces like Agentic, that stuff we've done now to integrate the way crypto and stablecoin work and our changes in go-to-market, I mean this is what drives deep conviction in how we will grow the business for the next several decades. But as I look out at sort of the long threads to pull, long thread one to pull is that on NFC. We're at like dot 0 on where we go with omnichannel. Dot 0 on a massive TAM. Long thread to pull #2 is where we go with crypto, I mean this is just the beginning. I am just as excited about the ability to turn on payments as I am about everything we're doing on supply chain within and outside of the wallet because it is cheaper, faster.

And over time, it will change the way cross-border payments and money moves around the world. And then long thread to pull tree is Agentic. I mean 0 on the tax. That town, they say could be as big as 30% or more of commerce around the world. And then long thread to pull 3 is Agentic. I mean dot 0 on the TAM. That TAM, they say could be as big as 30% or more of commerce around the world, and we're going to be right there when it happens.

What's not to love? And I get to play an important part alongside my colleagues with a superb CEO at a company and a brand that I have followed literally all my life. And my kids say thanks very much because without Venmo, most of my kids wouldn't have made it through school, yes. So that's the strategy why I'm here.

Daniel Perlin   RBC Capital Markets

That is fantastic. And by the way, the fact that you stoked twice just clearly speaks to the fact that the culture of the business is moving in the right direction. So Suzan, thank you so much for being here. Really appreciate it. Thank you all very much.