In the profit conference call for the second quarter of 2025, PayPal reported its sixth consecutive quarter of profit growth. Despite macroeconomic uncertainties, the transaction profit margin increased by 8% and the non-GAAP earnings per share increased by 18% year-on-year. The company emphasized its advantage as the world's largest bilateral open platform, connecting millions of consumers and merchants to drive personalized shopping experiences. PayPal is transitioning from a payment company to a dynamic commerce platform, focusing on growth in online and offline shopping, payment services, Venmo, and strengthening partnerships with merchants and brand attractiveness. Significant progress has been made in the four strategic growth drivers - winning checkout, expanding omnichannel, expanding Venmo, improving PSP profitability, and developing next-generation growth vectors.

In the second quarter, PayPal and Venmo achieved 8% currency-neutral growth through improved and expanded brand experiences, especially in providing payment services online and offline. Total Payment Volume (TPV) for online brand-check transactions, including PayPal, BNPL, and Pay with Venmo, increased by 5%. BNPL business continued to show strong growth, with quarterly growth exceeding 20% and average order value 80% higher than standard brand transactions. Venmo also performed extremely well, with revenue growth exceeding 20% and TPV growth of 12%, reaching the highest growth rate in three years. Furthermore, collaborations with universities in the Big 12 and Big 10 conferences, as well as the launch of a new co-branded Venmo debit card, will further drive Venmo's usage and payments on campuses. These achievements and strategies demonstrate the significant progress the company has made in brand experience growth.

With collaborations with brands such as Sephora, KFC, Taco Bell, and Pizza Hut, Venmo has introduced the "Pay with Venmo" feature in its app, greatly enhancing the convenience of user shopping. Additionally, Venmo's debit card business saw a growth of over 40% in monthly active accounts due to a simplified registration process. On the PayPal side, debit card TPV and monthly active accounts grew by 60% and 65% respectively, with approximately 2 million US users using PayPal and Venmo debit cards for the first time. They have also launched a new PayPal Credit physical card, allowing users to access their credit limit online and offline. By introducing card products to more customers, they plan to increase market share and meet all customer payment needs through various payment options. In Germany, they successfully launched several innovative products, including the first PayPal contactless mobile NFC wallet, flexible "buy now, pay later" services, and in-app cashback offers. These efforts have resulted in 8% currency-neutral growth, and they are confident about future growth and plan to further expand to the UK.

Digital wallets have become the standard tool for global payments and fund transfers, but the existence of numerous regional wallets has caused significant friction in the global business ecosystem. In order to address this issue, PayPal has announced the launch of PayPal World, a seamless platform designed to connect global consumers and allow them to use their preferred wallets to make transactions worldwide. By partnering with large digital wallets such as Venmo, Mercado Pago, Tenpay, Global, and UPI, PayPal World will provide convenient payment experiences for over 2 billion consumers worldwide, while also eliminating additional costs and customer experience disruptions for merchants accepting multiple wallets. The platform is expected to launch in the fall and plans to continue adding partners in the coming months and years to achieve larger scale user connections.

In a key earnings call, PayPal shared its plan to reset its relationship with its largest merchants, aiming to price services based on the value provided. Although this strategy initially put pressure on growth, it has improved profitability in the long run. Now, PayPal has successfully implemented this strategy, not only maintaining customer relationships but also starting to accelerate total payment volume (TPV) growth for Braintree, with significant increases expected in the second half of the year. The key to this strategy is increased investment and expansion in value-added services, such as the Payouts service, which is rapidly growing and helping top global platforms manage funds. Furthermore, partnerships with the Big 12 and Big 10 college sports leagues, as well as the expanded collaboration with Wix, deepen relationships with small business merchants, providing them with more management tools and opportunities for accelerated growth. These initiatives collectively enhance PayPal's position as a trusted, innovative partner and optimize the profit structure of the PSP business.

PayPal is reshaping the future business landscape through innovation in artificial intelligence, advertising, and stablecoins. In terms of artificial intelligence, they are collaborating with major AI companies to provide consumers with the experience of purchasing products directly within AI clients. In advertising, they have launched Storefront Ads that allow shopping and payment within ad units. And in stablecoins, they are using the PyUSD stablecoin to solve high fees and slow speeds in cross-border transactions, promoting global economic activity.

Yesterday, the company announced the launch of a cryptocurrency payment service supported by PayPal, enabling instant conversion of over 100 cryptocurrencies to stablecoins or fiat currencies, supporting wallets such as Coinbase and Metamask, and connecting with over 650 million cryptocurrency users worldwide. This service aims to address key customer issues such as cost, speed, stability, and payment integration, indicating that future business transactions will increasingly rely on blockchain technology. Additionally, the company is accelerating innovation through platform integration, infrastructure reinforcement, and AI technology application, driving continuous growth in PayPal, Venmo, and PSP businesses. Furthermore, the company is heavily investing in AI, advertising, and cryptocurrency fields, leading the industry forward.

In the most recent quarter, PayPal achieved profit growth, with a year-on-year increase of 8% in transaction profit margin. This was mainly due to strong credit performance, optimization of the brand checkout process, improved profitability of payment service providers (PSPs), and contributions from Venmo. The company achieved a 13% increase in non-GAAP operating income through cost control and optimization of investments in products, technology, and marketing. Non-GAAP earnings per share increased by 18%, and adjusted free cash flow was $656 million, despite temporary impacts from the European "buy now, pay later" business. Active accounts and transaction volume continued to grow, with total payment volume on Venmo reaching a three-year high of 12%. The company is strengthening its online checkout business through improving product experiences, enhancing reward programs, promoting seamless authentication, and expanding brand experiences, and is rolling out these improvements globally.

The company is taking measures to accelerate long-term growth, although the curve of growth requires time due to economies of scale. In the Braintree business, a focus on quality growth has led to significant improvements in TM dollars, and transaction volume pressure in Braintree has peaked, with growth expected to resume in the third quarter. Transaction revenue accelerated to 4%, reaching $7.4 billion, and value-added services revenue increased by 16%. Additionally, the company plans to externalize part of its credit portfolio and has completed $1.5 billion in stock repurchases in terms of capital allocation. Despite facing increased transaction losses, the company has raised its guidance for full-year TM dollars and non-GAAP earnings per share. At the same time, the company is implementing key technology transformation plans, including the unification of data centers and migration to the cloud, as well as optimizing infrastructure and operations in the next three years.

In recent discussions, PayPal has detailed its third-quarter and full-year performance expectations. It is expected that revenue growth will remain in the low to mid single digits, with transaction revenue continuing to grow but at a slower pace, while facing pressure from interest rates and higher prior-year comparables. Total payment volume (TM) for the third quarter is expected to be between $37.6 billion and $38.2 billion, growing by approximately 4%, with TM growth expected to be 6% excluding customer balance interest. Additionally, the company plans to see high single-digit growth in non-transaction expenses this quarter to support technology investments and new product launches. The full-year TM is expected to be between $153.5 billion and $155 billion, growing by 5% to 6%, with transaction margin revenue growing by 6% to 7%. Full-year non-GAAP earnings per share are expected to be between $5.15 and $5.30, growing by 11% to 14%. PayPal also emphasized its progress in brand experience, the small and medium business market, artificial intelligence, advertising, and cryptocurrency, expressing confidence in the future and noting an acceleration in innovation pace.

At this analysis meeting, the discussion focused on the growth of the total processing volume (TPV) of brand online payments and the impact of tariffs on this. Despite significant progress in the strategic plan this quarter, the growth rate of brand online payments has slowed slightly, mainly due to tariff pressures, especially in the trade corridor from China to the United States. Nevertheless, management stated that if these external pressures were not considered, the growth rate of brand online payments would actually reach 6%, and pointed out that the current trend is gradually stabilizing. They emphasized that the annual target is mid-single-digit growth, and they are closely monitoring policy and macroeconomic uncertainties while focusing on strategic execution, expecting accelerated growth in the next few quarters.

The discussion focused on the global expansion of cryptocurrency payments and PayPal, exploring the pace of expansion of these two initiatives, their potential contributions to revenue and profit, and the prospects for achieving a higher level of interoperability.

The conversation discussed the enhanced interoperability between PayPal and Venmo, allowing a large number of Venmo users to make online purchases by clicking on the PayPal checkout button. This has brought PayPal nearly 2 billion additional users, expanding the Total Addressable Market (TAM). Furthermore, through the PayPal World platform, merchants can maintain the economic benefits of their brand checkout, while consumers find it convenient to use the PayPal button for payments globally. Regarding cryptocurrency payments, although still in the early stages, they are seen as a further expansion of TAM due to significantly reduced costs, attractive net income rates, and the ability for merchants to accept cryptocurrency payments to cater to consumer demands.

In negotiations with merchants, highlighting the commitment to showcase the brand checkout button has become increasingly important. The discussion covers how to provide comprehensive solutions according to the merchant's needs, from advertising to personalized commercial APIs, and then to optimizing the payment experience. It is particularly emphasized that by providing highly customized customer experiences for merchants through services such as buy now pay later and payment APIs, conversion rates and merchant adoption rates can be increased. By identifying customer needs in advance through APIs, the complexity of traditional multi-button displays is avoided, allowing merchants to more directly provide the services customers need, enhancing customer experience and merchant profitability.

The enquirer inquired about the implementation and expected results of the European Modern Checkout Plan, as well as the comparison between international growth and the US market. The respondent pointed out that the company's new brand experience in the US is progressing smoothly, covering over 60%, and they expect to continue accelerating the adoption of these new experiences in Europe. Currently, implementation has begun in the UK and Germany, and they expect the global transaction volume to continue to increase in the coming quarters.

The conversation mainly discussed the company's continued growth and market share expansion in non-US markets, especially in Europe and Germany. The company is driving the formation of consumer habits and accelerating growth by introducing innovative products and services such as the latest Find Out Pay Later app, promoting NFC technology, and enhancing the brand checkout experience. The team is committed to scaling these innovations in order to achieve accelerated growth in the coming quarters and years.

The dialogue discussed how PayPal plans to achieve its global expansion strategy for comprehensive financial services through online and offline integration, expanding financial products such as debit cards and credit services, and entering new markets such as Germany and the UK. It particularly mentioned the positive results achieved by its first full-function wallet launched in Germany, as well as plans to continue promoting this strategy globally in the future.

Hasita Rawat raised the historical challenge of interoperability between wallets using blockchain, inquiring about the potential differences in data scale expansion and international data system interoperability in this attempt. The discussion focused on the past interoperability challenges between 8000 values and how to overcome these challenges in the current environment to achieve a more widespread interoperability.

By integrating multiple wallets such as Venmo, UPI, Mercadopago, and WeChat, the platform aims to provide a seamless global payment experience. Users can use their own wallets to make payments at any merchant with the PayPal logo, without the need for additional merchant integration or changes in user behavior. Whether it's online payments or offline purchases through QR codes, the platform is committed to making the entire payment process as smooth and localized as possible, eliminating payment barriers. CEO-level partnerships and commitments ensure the establishment of this unified payment platform, aimed at bringing more convenient and enjoyable payment experiences to global consumers.

The payment company's management discussed the impact of the slowing growth of e-commerce on their business, particularly in terms of transaction growth and changes in transaction losses. They pointed out that while the credit business performed strongly in the first half of the year, they expect it to be affected in the second half due to lower interest rates and an increase in transaction losses. The increase in transaction losses is partly due to the challenges of launching new products, but the company expects the annual transaction loss rate to remain stable at 8 basis points, higher than last year but lower than in the second quarter. At the same time, the company is optimizing transaction loss management through artificial intelligence and automation technologies.

The Fastlane service is gradually expanding, mainly targeting large merchants. Although it takes time, the participation and improvement effect of merchants is significant, resulting in a 50% increase in conversion rate. 75% of new users are either new users or previously inactive PayPal users. The next key step is to introduce multi-processor support, as promised by Audience, which is expected to be achieved in the next few quarters. This is part of a long-term strategy, and the company is satisfied with the current progress.

In recent discussions, it was mentioned that some banks have started charging for access to consumer data. The speaker stated that they support open banking and have thoroughly reviewed their dependence on data aggregation companies in their business, but they believe that the recent pricing changes will have minimal impact on their business, almost no substantial impact.

The inquirer asked about the benefits of upgrading the checkout experience, especially regarding expectations for business growth. The speaker pointed out that this upgrade has already had a positive impact on 15% of global CPVs and is expected to bring about a 1% growth boost. They also mentioned that with the promotion of the brand's checkout experience, including new experiences, buy-now-pay-later options, and improvements in Venmo payment methods, overall significant improvements and growth are expected. Although this process will take time, they are optimistic about the growth in the upcoming quarters and in 2026.

In the recent quarter, the team has shown excellent performance, especially the Venmo project, which has strong momentum in development. The team's sense of urgency and innovation capability have been highly recognized. The spokesperson expressed pride in the team's achievements and is optimistic about the future of Venmo, emphasizing the team's efficiency in execution and thanking all participants for their support and attention.