PayPal Holdings, Inc.

today include forward-looking statements that involve risks and uncertainties. Actual results may differ materially from these statements. Our commentary is based on our best view of the world and our businesses as we see them today. As described in our earnings press release, SEC filings, and on our website, those elements may change as the world changes. Over to you, Alex.

Thank you, Steve. Good morning, everyone, and thanks for joining the call. PayPal is a fundamentally stronger company today than it was two years ago. Focus and execution have enabled us to drive a positive inflection across our business. Take transaction margin dollar growth, excluding interest on customer balances. We are on pace for 6% to 7% growth in 2025 compared to negative growth just two years ago. Revenue growth has accelerated in the past two quarters as a result of our deliberate strategy to focus on profitable growth. Operationally, we are winning new customers and deepening engagement across our existing base. We have reinvigorated unprofitable and underperforming parts of the business. We're leveraging our incredible brands to innovate and expand our addressable market beyond online payments. Thanks to our omnichannel initiatives, we've accelerated branded experiences TPV growth to be between 7% and 8% on a currency-neutral basis over the past four quarters. Our BNPL business is sustaining 20% volume growth quarter after quarter. Venmo revenue growth has accelerated 10 points compared to two years ago, while we have also continued to grow our user base. Our enterprise payments business has turned a corner, returning to volume growth and consistently contributing to company transaction margin dollar growth. We have delivered this acceleration in our business while remixing inefficient spend into growth investments, and returning capital to shareholders. And in total, we are on pace to deliver at least 15% non-GAAP EPS growth this year. All of this gives us confidence in the business's longer-term growth potential and ability to deliver high single-digit transaction margin dollar growth and non-GAAP EPS growth in the teens or better over the longer term. I'm also excited to announce that we are initiating a dividend. Our overall capital allocation priorities remain the same. We will continue investing first and foremost in our business's growth and transformation. We see this dividend as strengthening our overall capital return program, working in conjunction with our ongoing share buybacks. Our free cash flow generation and balance sheet are strong and give us ample room to both deploy capital to drive growth and return capital in a disciplined way to shareholders. Put simply, This is the new PayPal, built for faster, more profitable growth. Our strong foundation, differentiated competitive advantages, and clear strategic direction position us to capture a massive and growing addressable market. With building execution momentum, we are driving innovation at a remarkable pace and scale. This makes us exceptionally well-placed to win into the future. Turning to our third quarter performance, We delivered at or above the high end of our guidance range for transaction margin dollars and EPS. Importantly, our TM dollar growth continues to come from multiple areas of the business, including branded experiences, PSP, and Venmo. Non-gap earnings per share increased 12%, reflecting the flow-through of our transaction margin performance. The strength of our two-sided platform is evident in how customers are choosing to deepen their relationship with us. Monthly active accounts grew 2%. When you look at transactions per active account growing 5%, excluding PSP, you see the real story. Customers aren't just signing up, they're incorporating PayPal and Venmo into their daily lives. This engagement depth makes us a valuable partner to merchants and will drive sustainable, profitable growth. Now I'd like to discuss the progress we are making in our four strategic growth drivers, winning checkout, scaling Omni and growing Venmo, driving PSP profitability and scaling our next-gen growth factors. As you can see on slide four, PayPal's TM dollar growth excluding interest has not only accelerated, it is coming from a far more balanced mix across our business. This is important to appreciate the strategy underpinning the value our teams are working to create. Compared to last year, WinCheckout's contribution increased and PSP, Omni, and Venmo's contributions are a multiple of what they were in the past. This is a direct result of the work we have done to build more holistic, healthier merchant relationships, to scale our omnichannel presence, and to monetize Venmo. The innovation and momentum across the company are increasingly visible, as you have seen in our recent announcements, and as you will hear today. I plan to move quickly so that we can go deep in a few key areas like BNPL and Venmo, while also leaving ample time for Q&A. Let me start with branded experiences. which covers our first two growth drivers, online and in-store branded checkout. Our strategy is to meet our customers everywhere they shop, whether online, in-store, or agentic. We are focused on delivering the best checkout experience so consumers can pay how, where, and when they want. It means they can pay online with PayPal, Buy Now Pay Later, Venmo, crypto, or soon a partner wallet through PayPal World. It means they can pay in-store with a PayPal or Venmo debit card, BNPL, or tap to pay. And it means building for a future where consumers can pay through AI agents powered by Google, OpenAI, Perplexity, and others. Last September, we launched PayPal Everywhere in the US to move beyond our legacy in online branded checkout into an omnichannel world. A year in, and the results show our strategy is working. Branded Experiences TPV grew 8% on a currency-neutral basis in the quarter. This includes PayPal, Buy Now, Pay Later, Venmo, and our debit card programs and is the single most important metric to track the progress on transformation from an online payments company to a commerce company. We need to be available everywhere a consumer wants to make a purchase. But this is about more than being present across channels. It's fundamentally expanding what PayPal means to our customers and the total spending we can capture. Historically, PayPal was synonymous with online retail payments. Today, we're evolving the way consumers pay for all of their commerce needs, moving beyond retail into services, subscriptions, bills, everyday expenses, and more. We're now playing for a much bigger addressable market. Our confidence in the financial impact of this strategy comes from the flywheel effects we see across our ecosystem. When customers start using PayPal or Venmo offline with our debit card, their online activity increases as well. ARPA goes up, profitability improves. In Q3, our PayPal debit card actives transacted nearly six times more and generated nearly three times the ARPA of checkout only accounts. We see a similar pattern with BNPL. Its use drives an uplift in overall activity and engagement. The data clearly validates our strategy and gives us confidence to increase our growth investments. Most of our product initiatives, plus our marketing investments over the past year, have started in the US. It's worth examining our US proof points as they demonstrate the potential for our business as adoption scales internationally. For example, in the third quarter, We reached 10% branded experiences volume growth in the U.S., more than double our growth the same quarter a year ago. That acceleration comes from two things, growing omnichannel adoption and sustained improvement in the U.S. online branded checkout trends supported by our improved experiences. We have the right set of drivers and initiatives in place. Now our focus is on adoption and investing to amplify our impact. As we move into 2026, we will be leaning more into these efforts and expanding across key international markets. Let me address online branded checkout in more detail. TPV grew 5% in the third quarter on a currency-neutral basis. That's solid growth, especially with the choppy global macro trends we continue to see this quarter. Given the competitive intensity online, we know more work is needed to close the gap between our performance and overall e-commerce growth. Our strategy moving into next year centers on three priorities, continuing to scale our redesigned checkout experiences, improving how we are prioritized across merchants, and importantly, driving biometric adoption. We are also leaning into new verticals and geographies that expand our addressable market and avenues for growth. All of this will be complemented by a consumer value prop with a highly competitive rewards program aimed at increasing frequency and selection rate. We also have a powerful growth lever with Buy Now, Pay Later and Venmo, which I'll discuss further shortly. This year we've made significant progress deploying our redesigned PaySheet experience, which now covers close to 25% of our global checkout transactions. We're moving quickly, but untangling a decade or more of legacy integrations is complex and taking more time than planned. In the cohorts where we are now optimized in the U.S., we continue to see close to one point conversion improvement. This gives us confidence it's a when, not if, we see more benefit from this modernization. At the same time, it's critical that we keep improving PayPal's prioritization across merchants and scaling biometric login, both of which have been proven to increase conversion. On the prioritization side, we are focused on scaling upstream messaging on product pages, driving adoption of our payment ready API that allows merchants to target high converting PayPal users when they land on their site, and improving PayPal's placement at checkout. Improved prioritization and presentment are powerful. In testing, when our buy now, pay later options are presented upstream on a product page, we see a nearly 10% lift in branded checkout volume on average. That improvement drives incremental sales for our merchants and customer loyalty with repeat use for PayPal. Within biometrics, we are focused on scaling biometric login, including pass keys and driving mobile app adoption, which enables seamless authentication during checkout. In ongoing testing to date, these authentication efforts, when paired with the redesigned pay sheet we've been scaling, have shown improved conversion between two to five percentage points. Consumers benefit from a mobile checkout experience that is second to none, while merchants see a higher customer satisfaction and sales. It's a win for both sides of our network. The bottom line, the initial results we have seen to date in the U.S. make us confident we're on the right path and have the right initiatives in place, both to drive acceleration and increase growth investments as we move through next year. Now that I've covered some of the foundational work underway, let me dive deeper on two important growth levers that I mentioned, BNPL and Venmo. The shift towards buy now, pay later is a fundamental change in how consumers want to pay, and we are extremely well positioned to capture this shift. In the markets where we offer BNPL, our solutions are available nearly everywhere PayPal is accepted. It's a reach and scale that's hard to replicate. This quarter, BNPL volume continued to grow more than 20% with particular strength in the U.S. This puts us on track to process close to $40 billion in BNPL TPB in 2025. Monthly active accounts climbed 21%, and our net promoter score globally is 80. People love this product. We have everything we need to win this market. We are investing to transform our BNPL business from a payment option that consumers discover in the PayPal wallet after they've made a purchase decision into a customer acquisition channel. This means moving to the beginning of the shopping journey through marketing and upstream presentment so that consumers know they can increase their purchasing power with BNPL. This focus and investment will expand our right to win in BNPL and further accelerate growth. We are also expanding BNPL to new geographies and introducing new product offerings, both online and in-store. We have successfully expanded BNPL into Canada, and extended payment terms in Italy and Spain to up to 24 installments. After proving the model in Germany, we brought VNPL in-store to the U.S. through the PayPal mobile app, seamlessly connecting online and offline shopping. We are building the future of flexible payments, and we're doing it at scale. Moving to our Venmo business, Venmo isn't just another payment app. It's the money movement platform of choice for the next generation. One of the things that continues to set Venmo apart is its user base. Young, affluent, digitally native consumers who are shaping the future of commerce. With nearly 100 million total active accounts growing mid-single digits, Venmo has tremendous scale in this attractive demographic. We have a deliberate, sequenced strategy that's changing how these users engage with Venmo. At the core is maintaining our leadership as the best P2P platform in the market. attracting more funds into the Venmo ecosystem, driving omnichannel spending, and seamlessly integrating commerce into the Venmo app. We are already seeing results. Venmo is at a clear inflection, with TPV growing 14% in the third quarter, continuing to accelerate from 12% in Q2 and 9% in 2024. Pay with Venmo just hit a milestone, $1 billion of TPV in September alone. and pay with Venmo monthly active accounts grew by nearly 25% in the quarter. We hit a new record with our Venmo debit card, which attracted 1 million first-time users in Q3, thanks in part to our college partnerships. Monthly Venmo debit actives grew by more than 40%. This has resulted in overall Venmo monthly active account growth accelerating to 7% year over year to nearly 66 million monthly active accounts. From a financial perspective, Venmo is on pace to generate $1.7 billion in revenue this year, excluding interest income. That's up more than 20% and a 10-point acceleration from two years ago. Under the surface, we are also changing our revenue mix and growing in high margin areas. Over the past two years, we've doubled pay with Venmo and Venmo debit card revenue. Not only can Venmo become a more significant revenue driver as it scales, but it is also accretive to transaction margin. And here's what makes this so compelling. We're still in the early innings of monetization. Today, Venmo's average revenue per monthly active account sits at just over $25. While over 90% of Venmo's users engage with P2P, only 5% to 10% are using our debit card or pay with Venmo, and less than 5% have set up recurring funds in. For the subset of accounts engaged across P2P, debit, and pay with Venmo, which is still small today, ARPA is about 4x higher. For accounts that are also bringing funds in through direct deposit or instant add, ARPA is 6x higher. In other words, the upside on Venmo's revenue is a multiple of where we stand today. The good news is that adoption is accelerating. For example, new users today are adopting our debit card at nearly four times the rate they were two years ago, giving us massive runway as we continue driving attachment of these high-value products. This is one of the reasons why we are investing in our college partnerships and introducing unique, personalized rewards that drive multi-product adoption and encourage balanced spending within the Venmo ecosystem. We're also expanding Pay with Venmo into new high-value use cases like our built partnership for rent payments. At Investor Day, we discussed growing Venmo revenue to more than $2 billion by 2027, and it's clear that the team's execution will allow us to deliver well beyond this over time. Taken together, these businesses, online and branded checkout, BNPL, Venmo, and Omni, drove branded experiences TPV growth of 8% on a currency neutral basis. Moving to our PSP business, Our PSP volume growth accelerated to 6% from 2% last quarter, demonstrating that we are accelerating growth after re-baselining. This growth is profitable and contributed to transaction margin dollar growth in the quarter. We are doing this by continuing to build holistic relationships with merchants. Value-added services like payouts, adaptive payment optimization, and FX as a service deliver real measurable value, including improvements to authorization rates and cost reduction. We're seeing merchants not only willing to pay for these capabilities, but actively requesting more of our services as they begin to recognize the benefits for their business. As we continue to expand our unified enterprise payments platform globally, we are bringing these margin accretive services to new merchants from day one. We expect accelerated growth in this business as we expand the adoption of value-added services across our existing customer base, and launch with Verifone as our first omnichannel solution provider in Q4, strengthening our position in the PSP market. While we accelerate growth in branded experiences and PSP, we are also aggressively innovating in agentic, ads, stablecoins, and digital wallet interoperability through PayPal World to establish avenues for future growth. I'll highlight just a few of our recent developments. We continue to partner with leaders across the agentic space, including Perplexity earlier this year. And in September, we announced our expansive multi-year partnership with Google to create new AI shopping experiences. This morning, we announced a significant partnership with OpenAI to expand payments and commerce in ChatGPT, including adding PayPal branded checkout for shoppers and payment processing for merchants using instant checkout. This is a big win for PayPal and our customers. Today, we also announced our own agentic commerce services, which help merchants sell through multiple AI platforms, including Google, OpenAI, and Perplexity. Merchants will have one integration to access consumers through multiple LLMs. Agentic commerce will take time, but we do believe consumer behavior will shift. PayPal is building for that future. Finally, I'm very excited to share that PayPal World is officially in its pilot stage, and the first test transactions are happening this week. I'm proud of the progress that we've made this quarter, from partnerships to new product innovations to continuing to strengthen our profitability. With that, let me turn it over to Jamie to go into the financials in more detail.

Thanks, Alex. Moving to slide 10, PayPal delivered another quarter with good execution and real momentum across the underlying business. TPV and revenue growth both accelerated by two points from the second quarter. Transaction margin dollars, excluding interest, grew 7%, continuing the momentum we built through the first half. The drivers of that growth have been broad-based, led by strong credit performance, branded checkout flow-through, improvements in PSP profitability, and Venmo monetization. Growth across these areas was partially offset by higher transaction losses in the quarter. The diversification and quality of this growth is a meaningful improvement from where we were at the start of the company's transformation. We have clear opportunities to build on this progress with investments that strengthen our competitive position and drive durable, profitable growth. Moving back to third quarter financials, non-GAAP operating income grew 6 percent. Strong operating income, share buyback, and a favorable tax rate more than offset headwinds from lower interest rates, contributing to 12 percent growth in non-GAAP EPS. Adjusted free cash flow, which excludes the timing impact from the origination and sale of pay later receivables, was $2.3 billion, or 4.3 billion year-to-date. Turning to slide 11, we are driving deeper, more active relationships with our customers. Monthly active account trends showed steady progress, up 2% year-over-year to 227 million. Transactions per active account excluding PSP, which is a good proxy for engagement, accelerated to 5% growth. Moving to slide 12, total payment volume accelerated to 8% growth at spot and 7% on a currency neutral basis to over $458 billion. We've moved branded experiences to the top of this slide to reflect the importance of this metric to our more expansive strategy and value creation. Looking across the product portfolio, we see encouraging signs that our initiatives are gaining traction and making an impact. Branded Experiences TPV, which includes Online Checkout, PayPal, and Venmo Debit, as well as Tap to Pay, posted another quarter of 8% growth. As Alex mentioned, U.S. Branded Experiences TPV growth accelerated to 10% in the quarter. benefiting from both omnichannel adoption and better trends in U.S. online branded checkout. While debit card and tap-to-pay spend represent a small portion of branded experiences volume today, they are growing rapidly, up 65% year-over-year, accelerating from last quarter. Venmo TPV growth accelerated two points to 14%, marking the fourth consecutive quarter of double-digit growth. On an online-only branded checkout basis, volume grew 5% on a currency-neutral basis. Compared to last quarter, there was less pressure on volumes from Asia-based marketplaces selling into the US. At the same time, this improvement was offset by pockets of softer consumer discretionary spending in Europe and the US later in the quarter. Overall, we have seen relatively consistent growth in the number of checkout transactions, but basket sizes or average order value has decreased. While still early in a back-end loaded quarter, we've observed this trend continuing through October. We remain focused on the initiatives we can control. We're confident in our branded checkout strategy and the roadmap that our teams are advancing. The early results in the U.S. demonstrate that we're on the right path with our initiatives, including our redesigned experiences, Buy Now, Pay Later, and Pay with Venmo. We're laser-focused on execution across the three key areas Alex discussed, scaling our redesigned experiences, improving prioritization, and driving biometric adoption. All of this is increasingly complemented by a compelling consumer value prop that differentiates PayPal and Venmo as one of the best, most rewarding ways to pay. While this work is complex and takes time, we fully expect to see our efforts build as we move through the next year and scale these initiatives. Pay with Venmo and Buy Now, Pay Later continue to outpace the market, taking share from other payment methods growing 40% and 20% respectively. These results give us the confidence to begin making targeted investments in the fourth quarter that amplify the impact of these and other initiatives throughout the portfolio. Turning to PSP, which spans both enterprise and SMB processing, as well as parts of our vast portfolio like payouts, invoicing, and point-of-sale solutions. Volume growth accelerated to 6% from 2% in the first half of the year. Our focus on prioritizing healthy, quality growth within our enterprise payments business is contributing to steady improvement in both revenue growth and TM dollars. We expect to see ongoing improvement in the quarters ahead, supported by profitable front book business, our existing merchant base, and the attachment of value-added services. Moving to more financial detail on slide 13, transaction revenue accelerated to 6% growth on a spot basis to $7.5 billion. Other value-added services revenue grew 15% to $895 million, driven by another quarter of strong performance in consumer and merchant credit. We've also been encouraged by growth in customer balances and the impact of our initiatives designed to encourage customers to bring more funds into the ecosystem. While lower interest rates are still a headwind, a portion of this impact has been offset by higher balances. We continue to be pleased with the quality, diversification, and performance of our credit portfolio. In September, we took another step forward in line with our balance sheet light model for credit, externalizing a portion of our short-term U.S. pay later receivables with Blue Owl Capital. We ended the quarter with $6.4 billion in net loan receivables, down 8% sequentially. Transaction take rate declined by three basis points to 1.64%, driven largely by product and merchant mix, as well as the impact of foreign exchange hedges. This decline was an improvement relative to last quarter and included less impact from foreign exchange hedges and enterprise processing. Online branded checkout take rates continue to be relatively stable year over year, reflecting our transaction and merchant mix as well as our focus on profitable growth. As I mentioned earlier, TM dollars X interest grew 7%. TM dollar growth included a one and a half point headwind from higher volume-based expenses, largely transaction loss provisions, resulting from the temporary service disruption in August, which primarily impacted Germany. There was also a slight benefit, less than one point, from the Blue Owl pay later externalization I referenced earlier. Setting aside the impact of loss provisions related to the August service disruption, we've seen an improvement in transaction loss rates relative to last quarter. Non-transaction related OPEX increased 6% as we continue to actively manage our cost structure while reinvesting in key growth initiatives. Non-GAAP operating income grew 6% in the quarter to nearly $1.6 billion. Moving to capital allocation, as you saw in our materials and heard from Alex, I'm excited to share that we are initiating a dividend as part of a disciplined capital allocation strategy. Our strong free cash flow generation and balance sheet give us ample room to both deploy capital for growth and return capital to shareholders. In general, we continue to target about 70% to 80% of our free cash flow for capital return, with the vast majority going to buyback. The dividend serves as a complement to our existing buyback plans and will be calculated based on a 10% payout ratio relative to net income. This quarter, we completed $1.5 billion in share repurchases bringing share repurchases over the past four quarters to $5.7 billion. Finally, we ended the quarter with $14.4 billion in cash, cash equivalents and investments, and $11.4 billion in debt. Moving to guidance on slide 14, following another quarter of strong financial performance, we are raising our full year guidance for TM dollars and non-GAAP EPS. For the fourth quarter, we expect currency neutral revenue growth in the mid single digits. We expect fourth quarter TM to be between 4.02 and 4.12 billion dollars, which represents about 3.5% growth at the midpoint. Excluding interest on customer balances we expect TM dollars to grow by about 5% at the midpoint compared to 7% year-to-date. Setting interest rates aside, there are a few factors to highlight that impact our fourth quarter outlook. First, we have seen strong credit outperformance over the past year driven by good execution from the team as well as a more benign loss environment. We expect to see year-over-year comparisons start to normalize more in the fourth quarter. Second, given the performance of some of our key initiatives, we see an opportunity to lean into our competitive differentiation with additional investment to drive faster growth over time. In the fourth quarter, we will begin increasing investments designed to drive product attachment and habituation. Some of these investments are linked to volumes and therefore recorded as contra revenue impacting TM dollars, and designed to drive additional growth over time. Other growth investments, such as global brand awareness campaigns, typically sit within marketing and non-transaction OPEX. Lastly on TM, our fourth quarter guide assumes some deceleration in branded checkout growth relative to our third quarter average. From a volume perspective, The most important weeks and months of the quarter still lay ahead. That said, we are planning prudently given recent spending trends and the uncertain macro backdrop. We are also cognizant of lapping strong consumer spending in the fourth quarter of last year. Moving to OPEX, we are planning for low single-digit non-transaction OPEX in the quarter and expect about 3% growth for the full year. We expect to deliver fourth quarter non-GAAP earnings per share in the range of $1.27 to $1.31, up 7% to 10%. For the full year, we are raising our TM dollar guidance by $100 million at the low end and $50 million at the high end to a range of $15.45 to $15.55 billion, which represents 5% to 6% growth. Excluding interest, we expect TM dollars to grow between 6% to 7%. We are raising our full-year non-GAAP earnings per share guidance to a range of $5.35 to $5.39, growing at 15% to 16%. Our guidance continues to project approximately $6 billion in share buyback and full-year adjusted free cash flow of approximately $6 to $7 billion, which excludes the timing impact of the origination and sale of pay later receivables. I'd like to wrap up by thanking the PayPal team for their hard work and execution this quarter. We are making tangible progress across the business, and the foundation we're building positions us well for continued growth ahead. With that, back to you, Alex.