PayPal Holdings, Inc. (PYPL) Earnings Call Transcript & Summary

Thanks, everyone, for joining. This is Tien-Tsin Huang. I cover the payments processing and IT services sector at JPMorgan. And this is the All Stars Conference. And it wouldn't be an All Stars Conference without Dan Schulman, President and CEO at PayPal. Really excited to have him back at the event and to spend 40, 45 minutes with us to go through some Q&A. And I was just telling Dan that we assembled a lot of questions from investors. So I think we'll hit a lot of the key topics that you're asking about. So thank you for sending those in. [Operator Instructions] I'll be tracking that, but hopefully, we'll get through a lot of the big topics. But Dan, it's great to see you. Thank you for doing this.

Thanks, Tien-Tsin. It's so good to see you, too.

Sounds great. So let's dig right in, if you don't mind. I thought there's a lot of ways to pick your brain. You're in the center of so many fun themes across fintech and payments, Dan. But I wanted to ask it maybe a little bit differently, right? So given your scale and the recent app refresh that we've all been playing around with and anticipating, I actually wanted to ask it a little bit different, which is how do you prioritize depth versus breadth of products and services, right? And I'm curious what can we learn maybe from the app about your thinking around breadth versus depth, which it seems like companies within fintech are going in different directions there. We'd love to hear your thoughts on it.

Yes. I think it's a great question. We spent a lot of time thinking about it. I mean I think -- we think about things from an outside-in point of view. I mean we talked to consumers and merchants off the time. We have 400 million-plus of them throughout the world on our platform. People sometimes -- I mean I think they think we just launched things without massive amounts of market research and in-depth conversations with consumers. But I think what we saw at the pandemic is just this dramatic acceleration of people moving to a digital lifestyle. How we work, how we play, how we pay, how we're entertained, all of that is moving to the mobile phone. For sure, people are staying there at elevated levels. And these previously disparate parts of the physical world are coming together in the digital world, like payments, basic consumer financial services, shopping tool sets, deals, offers, wish lists, those are all coming together. Even messaging in those platforms are coming together as people want to spend more and more of their time on an integrated app, common sign-in, strong security, common NAV data that's used amongst the different pieces of that app to inform and make it easier to use different services on that app. And so I don't think there's really a choice. I think that's just the way the world is going. It's becoming more interconnected. And therefore, we've spent a lot of time about what are the services that we initially want to put onto our super app. And you saw that announcement. And we've really made, I think, a substantial upgrade to where we were from a consumer perspective. But the other thing for sure that is going to happen is this is just iteration and version #1. I have a Board meeting next week. We're going to take them through our full road map for all of next year on our digital app. And every single quarter, we're going to make substantial upgrades. We're either going to improve things that are already out there or add new functionality, like investment, like budgeting tools. Those are clearly coming. We'll work hand-in-hand with partners to deliver some of those. Others will -- we could potentially buy. Others, we'll do a ton of internal development around. But I think there's going to be more and more breadth. But each of the services, as we move on, will have more depth to it because they'll be informed by all of our data sets. We do 5 billion transactions-plus a quarter. That feeds all of our machine learning capabilities, our AI capabilities. And these will just get smarter and smarter and easier and simpler to navigate and will be customized individually, like what you're seeing in the app is different than what I have on my app. So I'm pretty excited. And by the way, we put some of these services out. And we saw like an ARPA improvement of almost 13% almost immediately. So I think we'll see a lot more engagement on the platform. And as you know, I want this to be an everyday platform for consumers. And this is the way that that's going to happen.

Right. So it's the beginning of a journey?

Absolutely.

I know you've been very clear about -- talking about it. So this first iteration, it looks like high-yield savings and direct deposit -- early direct deposit is a big part of it. What's the hook to convince users to deposit their paychecks into PayPal? What's your vision there, Dan?

Yes. Well, one of the nice things when you have a base of 400 million consumers, as you put services out there that we think have compelling value propositions in and of themselves. 0.4 savings is 6 to 7x the national average. Yes, there are a couple of companies that may have slightly higher, but they're not PayPal. They don't offer all of the other things that we do on that app. And I think that, that interest rate is going to be very, very compelling in and of itself. But when we put something out in the market, we get millions of consumers that start to use it. We saw that on the crypto side. We clearly saw that on Buy Now, Pay Later side. 2-day direct deposit -- early access is very compelling. But then we have within those saving goals, visual saving goals that you can do, budgeting tool sets on top of that. You can easily take that money out, put it into your PayPal balance. You use it in any way you want, paying any way you want. And I think it's the combination of all of the different integrated services on the app that is going to eventually be very compelling. But I will say this, Tien-Tsin, I think every single part of the app, each individual component needs to have a compelling value proposition associated with it. And I think, clearly, high-yield savings and early access to your Direct Deposit are compelling. And then you can be sure we're going to have a ton of marketing and cross-promotional types of efforts to expose people. One of the great things about the early part of the app -- and again, we've just expanded 25%-plus of the base, rolling out quite quickly now. We've seen discoverability of these services up multiple fold, not up 10% or 20% but multiple fold, 100%, 200%, 300%. And so you can leverage your scale. And as long as you have great value propositions and -- there's going to be a lot of people kind of discovering new things about PayPal, which is exactly what we want. And we'll help them with that, obviously.

No, for sure. Yes. No, the gravity is PayPal, right? It's the breadth of everything you just said. And so we'll be tracking that Direct Deposit piece. So I guess with other -- the features and you mentioned discoverability and Buy Now, Pay Later catches a lot of attention. And I did, of course, traffic into that when I was playing around with the app. So I want to just hear from you again. I know you've spoken at length about Buy Now, Pay Later, for example, at your Investor Day, but a lot has changed, right? You've done an acquisition in Japan, of course, where you bought Afterpay. You may have heard about that. What did you...

When did that happen, Tien-Tsin?

I don't know. It was something that happened a few days ago, I think. But I guess the question is just there's a lot of ways to think about Buy Now, Pay Later and how it inserts itself in the commerce flow and shopping. And I think Honey in hindsight to me, now I understand it a lot better and why you did that and you combined it with Buy Now, Pay Later in the app. I think it's very powerful. But I guess my question is how important is Buy Now, Pay Later to PayPal. And then to the broader payments ecosystem, Dan, it does feel like there's more to it than just an installment payment.

Yes.

What are your thoughts?

Well, we've spent a lot of time looking at Buy Now, Pay Later. We looked at a host of different acquisitions as well versus an internal build, which we opted to do, as opposed to spend tens of billions of dollars to buy something. Our internal development teams now are quite good and put together a product that is probably the fastest-growing introduction of any product we've ever had. I think our second quarter TPV was up 50% over our first quarter of TPV. I think we did $1.5 billion in Q2. We've got 7 million-plus customers -- consumers using it over 20 million times. So the repeat rate is quite high. And one of the things that we really looked at when we looked at acquiring companies or building it is we looked at their business models and we looked at the business model we wanted to put out into the market. And one of the nice things about having scale and having a whole host of different ways that you can make money is we felt like we didn't need to charge the merchant anything additional to install Buy Now, Pay Later. Most others can charge 2%, 3%, 4%. Ours is free to the merchant. We also wanted to eliminate consumer late fees, which is a huge consumer value proposition. If you look at the business models of a lot of the other Buy Now, Pay Later players, the majority of their revenues come from that. We wanted to have a value proposition that was clearly going to be the best in the market. And the other thing we knew we could leverage was our scale. We have 32 million merchants. We have some 400 million consumers using the platform. We know the merchants. We know our consumers. We know our approval rates are going to be amongst the highest in the industry, if not the highest, because we have the data and information. Our bad debt will be amongst the lowest, which we think it is right now. And so I think there's a tremendous opportunity to Buy Now, Pay Later. A lot of people conflate Buy Now, Pay Later in kind of installment Pay in 4, that kind of thing. But I don't -- I really think Buy Now, Pay Later is disaggregating the purchase from the way you pay. And those 2 have always been linked tightly together. But now you can make a purchase and you can determine post that purchase how you want to pay for it. And just because you start with installment, it doesn't mean you can't get a snooze button, delay a payment for a month, change the way you're going to pay for that and maybe do the payment half in rewards points, half in fiat currency. There's so many different things you can do when you disaggregate purchase from the way you're going to pay. And to me, that's very exciting. And like for us -- we didn't buy Paidy, by the way, because it's a Buy Now, Pay Later player. We bought Paidy because it has a really well-thought through business plan. It is a 2-sided network in Japan. 6 million consumers have used it. Over 700,000 merchants are signed up to it. It's embedded in the top 10 marketplaces in Japan. And we are a very strong cross-border player in Japan, but Japan is 1 of the top 3 or 4 e-commerce markets in the world and has very unique characteristics. 70% of the transactions in Japan are done through cash for online payments or online transactions. And Paidy has connections into all of the convenience stores, where people come into the convenience store, they pay cash and then they can complete the online transaction. And we think it is like just the beginning of us really becoming a major player in the Japanese market. So yes, they have a beautiful Buy Now, Pay Later experience, but it was well more than Buy Now, Pay Later that we have bought Paidy for.

Yes. No, it sounds like an important platform to really grow that important market, which brings me to another question I wanted to ask because we're talking in the Asia zone here. But with the market, as I talked to them, Dan, seem to really think that PayPal and Square are on a collision course to being the super apps, similar to what we see in China with WeChat Pay and Alipay. I mean do you see it that way? I mean is it that simple to think about there's going to be 2 large providers?

Well, if I zoom back a little bit and take a look at the opportunity, and we've talked about this at Investor Day, you have like a $100 trillion TAM out in the market. We're all moving into these different adjacencies. It's opening up additional addressable market for us. I don't know how many players are going to be looking at that. But certainly, it's not going to be just one. I can -- I wish it were just one, but that's just not the way it's going to be. There's going to be obviously competition. And I think the market is large. It's clear, to at least me, that it goes well beyond payments. We're going to increasingly be moving more and more to top of funnel as we do shopping tools, as consumers define their wish list or really define their demand curves. We clearly saw that with Honey, and we're really integrating a ton of the Honey capabilities into the app. And by the way, it's -- like that is just starting. We have a huge road map around shopping tool sets. I'm quite excited by the early results of that. And what we can do when we become sort of a destination for top of funnel? What we can do with merchants? What we can do with consumers? How we can surface things like universal shopping carts as opposed to individual shopping carts at each merchant? So there's a ton of things that can happen with kind of super apps going forward. We clearly will be a player in that. We'll clearly be a market leader in that. We have scale really unlike anybody else outside of China. And we'll continue to leverage that and be as innovative as we possibly can, focused on what customers are telling us they want. We'll keep an eye out on all competitors, obviously. But just because a competitor makes a certain move, it doesn't mean we'll make that same move. We'll really kind of listen to what the market is telling us. And we've got a lot to execute on, Tien-Tsin. I mean I think there's so much room in this market, so many tailwinds. It's really incumbent upon any of us in that market to put things in order of priority, execute extraordinarily well against them, adapt all the time, use a combination of internal development skills. We put a lot of investment to really increase our capacity there. We do 100-plus software releases a day. Now we used to do 100-plus software releases a year. When you look back 6 years ago, it's radically different. We also have a very strong balance sheet. And there's no doubt we are going to use it to advance our position in the industry. So I like the cards that we've been dealt or of the cards we've dealt ourselves. I wouldn't change positions with anybody, but that doesn't mean we don't have to really execute well as we look ahead.

Yes. And I think it was last year at this conference, Dan, that you talked a lot about how the platform and the development effort you've gone to put into that. I know your leadership, of course, to put you in that spot to start to introduce products a lot faster. And we can see that now, and I think the chessboard is pretty fun to analyze. And so I wanted to ask about the role of traditional banks. And I know you're not trying to replace a bank, per se. You're still working with banks. And I know a lot of the value creation for PayPal was -- started with you and the move towards choice and partnering with banks and networks. And there's a lot of discussion around this, Dan. But I'm just curious, what is your plan to partner and enter intermediate certain banking services versus doing it yourself? Because it just feels like there's a lot of room for coopetition here.

Yes. I actually think we started down the path of partnering with financial institutions, partnering with the networks as opposed to being frenemies, I guess, is the way everyone -- or Charlie Scharf used to name it with an emphasis on the last part of that word. And that changed completely over the course of the last 5 years. We're probably the largest digital distribution channel for FIs around the world. Think about it, 5 or 6 years ago, I think our total TPV, our processed volume over our network, I think it was like $280 billion. This year, we'll do somewhere around $1.25 trillion-plus. That's 4 or 5x what we were 6 years ago. And that's consumers being -- transacting at disproportionate levels when they start to use PayPal. If you look at Checkout right now, Tien-Tsin, it's very interesting. We see all the Checkout trends, right? Obviously, online and omni is growing quite substantially, and we're a beneficiary of that. But what's also happening is that share of Checkout is moving towards digital wallets as opposed to people directly putting in their credit card. And that's actually a pretty massive shift that's occurring right now. That's just going to continue to occur. And so there is going to be a tremendous amount of opportunity, especially as we go into this connected economy, online -- digital world that's connected across more and more parts of the economy, where we're not going to move into banking types of services, but we're going to offer them on our platform. And there are banks that are looking at what is more commoditized and what is value-added and differentiated? And where things are more commoditized, how can you distribute them at scale? And we think about that all the time as well, like where can you distribute things at scale? And clearly, those are more consumer-oriented platforms like the PayPal with the scale that we have. So there, we're going to continue to be very close partners with FIs. We're going to be a huge digital distribution partner. You think about it. Most of the major FIs now put all their rewards points into PayPal so that their consumers, instead of having -- maybe redeeming on some travel or a catalog that they had or 1 or 2 merchants, can take those rewards points, transfer them into fiat currency and spend them at any of the 32 million merchants at PayPal. It's a real value add for the credit card customers to be able to use their rewards in more places. And so I think there's just more and more things that we'll be able to do within the financial services ecosystem going forward than we did in the past. Clearly, things will change going forward, right? I mean the world is rapidly shifting to digital. Even those of us in the industry have a hard time keeping up with all of the changes. I think there's going to be more change in the next 5 to 10 years in the financial services industry that happened in the previous 20 or 30. That -- and it's happening at increasing rate of change. But our clear business model is to work hand-in-hand with FIs and the networks and regulators to define kind of what is the best value proposition for consumers and merchants.

Yes. No, well said. And I've been using my rewards points a lot more in PayPal. It's a lot easier because...

Yes, it is. Me, too.

I mean they cover it. So you did mention regulators. So I did want to ask that, Dan, as well with I know you're spending a lot of time with executives at software companies, at banks. I'm sure you're spending some time with regulators. You have a seat on the table with them. Do you feel like the pendulum is swinging here a little bit with more regulatory scrutiny of some of the digital platforms on the fintech side? I know that RFI was received from the SEC on interchange with your bank partner as it was disclosed in your filings. So just trying to better understand where the regulatory pendulum is if that makes sense. And maybe if I can sneak in also just on the litigation side, is the Epic Games -- I've been getting this question, too, Dan. Is the Epic Games rolling with Apple also play into your favor? So a lot of loaded question, I'll let you answer how you guys know.

Well, look, when I first came into PayPal now 7 years ago, it was very clear to me that if you want to be a major financial services player, you have to be world-class at regulatory compliance. No ifs, ands or buts. I mean -- and when I came in, there's something like 120 people inside PayPal focused on compliance, AML, financial crimes. And today, we have over 4,000, just to give you an idea of how heavily I've invested on that front because it's foundational. It's as simple as that. It is foundational. We need to have great engaged relationships with all the regulators around the world. We operate in 200 different jurisdictions around the world. We operate under 67 different regulatory frameworks around the world. We operate both on national frameworks here in the U.S. as well as state-by-state frameworks. And we work with -- closely with law enforcement around the world as well. We are often cited by law enforcement as a world-class partner with them. And so there's no debating that whatsoever in my mind. Any company that doesn't take that with the utmost of seriousness is not going to be a major player over the long run. It's as simple as that. So if there are emerging fintechs who think they can play outside the regulatory boundaries, they're wrong. They're wrong. That's as simple as that. And so I spend a lot of times talking to regulators around the world, thinking about where is the payments industry going. How do we think about responsible innovation? Because clearly, the payments industry is evolving and evolving quickly. And there's no one who doesn't think we need to modernize it. But we need to do that in a way that respects the integrity and the stability of the system as well. But that doesn't mean that we shouldn't do anything because it's clearly we need to be more inclusive as a system. There are too many people outside the system, too many people struggling. It's too expensive for those who are less affluent to do basic transactions. It takes too long to get access to your funds. All those things need to be modernized. And clearly, there's going to be some kind of connection between banks, digital wallets, the issuance of Central Bank-issued digital currencies. Those are all going to play together. And how they play together, we're all going to work together to figure out what is the best value proposition to bring more people into the system at lower cost and more efficiently. And so we're quite engaged in those conversations, quite engaged in all the ins and outs of the regulatory environment. And we kind of embrace that as a competitive advantage. All of that resource that I've invested in that, as I told the PayPal team that initially balked against that, they thought regulation was going to slow us down. I was like no, the better we are at this, the faster we will go. And so it's a foundational part of who we are, and it will continue to be.

No, I'm glad to hear it's foundational. And I know you've been talking about leveling the playing field with be underserved and with the underbanked for a while. So I think it's important to bring those 2 things together. I think sometimes we forget about it. Easy to talk about, but I think we have that -- those things come together. I can't let you go because there's a lot of questions here about in-store, Dan. I don't want to ignore the audience. I think I had that on my question list as well, but people want me to ask you about in-store. And I think the question, and similar to what I wanted to ask you, Dan, is do you need to acquire better in-store acceptance to accelerate this journey that you have to capture more in-store, which is still a pretty small part of your TPV while growing fast? Is there a sense of urgency to do more, Dan, is the question.

Well, clearly, we want to be ubiquitous and fully omni across both our merchant base and our consumer base. If you look at what we're doing with consumers right now, obviously, QR codes are integral to our apps right now. We're putting on a new merchant every 20 seconds or so onto our QR solutions. We're going to -- we have cards already. You look at the Venmo card. Whether it be the debit or credit card, that is fully integrated into the app. And anybody who can avail themselves of that credit card should understand how well you can take an off-line piece of plastic and integrate it fully into your app. And eventually, all of that is going to move into the phone, right? I mean eventually, cards is a form factor. Cash will dissipate. More and more of that will move into the phone. And more and more of that will be mobile phones talking to mobile POS that is not hardwired into various networks, but it's cloud-based. And you're going to see different types of transactions happening. And so when I talk to retailers right now, it's not just that the lines between off-line and online are blurring. It's basically -- you think about retailers now. They are thinking about how do I connect to my customer in a digital fashion? How do I serve them seamlessly with loyalty and rewards points across not just in-store and e-commerce but also extend that inventory out to various marketplaces so that it's seamless? Go to where customers are, who are creating demand curves or who want a certain product and just want to buy it. They don't want to necessarily go to a website or into a store. They just want to buy something. So how do you reach those customers that way? And so I think -- look, we bought iZettle, which was a way to move into the small and micro markets. We've launched that in the U.S. I really love the progress we're making. I love their value proposition. Our PayPal Commerce Platform is expanding rapidly to be fully omni. And all of our apps will be fully omni as well. So it's going to be a multiyear journey, no doubt. I mean even every 20 seconds adding a merchant, you add up -- we have 32 million merchants growing by 1 million-plus every quarter. It will take time to catch up to that. But let's be very clear, we want to be fully omni and fully ubiquitous as we go forward.

Yes. No, it makes sense. There's a lot of spend available everywhere. So it is all morphing to the wallet and -- which leads to another question that I get quite a bit from investors, Dan, is just philosophically, with so much that you can invest in organically, inorganically, you've done a lot of Buy Now, Pay Later organically like you called out, there's probably a lot you can do on promotions overall, putting around direct deposit, the savings piece. Philosophically, is it important to improve margins or increase margins for PayPal? I know your medium-term target says yes. But philosophically, what's your view on that, the importance of showing margin expansion as well as investing to be where you want to be as you set your long-term targets?

Yes. No, I think it's a good question, but I clearly have thoughts about it. So look, the margins in our business clearly want to expand. As we scale, just things grow more efficient. As we modernize our infrastructure inside PayPal, our cost per transaction continues to come down. The cost for certain things when we were smaller are coming down the -- most of the pressure on our take rate has come from either Venmo growing or eBay now normalizing. But those are going to alleviate going forward as well. And so there's natural -- I mean, good, it's good but natural pressures for margins to go up. But clearly, clearly, my priority is to invest in the business to grab the opportunities in front of us. Like those margins will go up, and I feel very comfortable with what we've put out as our medium-term plan. But if there is a year or 2 where we need to invest more, I think shareholders expect us to do that. I mean the opportunity is large. And we are thinking quite expansively. I want to be disciplined in the way that we spend. I think big companies do hobbies extremely poorly. I think you need to put things in priority. You need to inspect them all the time. Like our senior team, my senior team, we review the top things that we are working on every single week, sometimes twice a week. And we'll continue to make sure that we are focused on fewer things and executing them very well than just a multiplicity of things and throwing them out there. As I told my team, putting something out in the market is not success. It's -- does that scale to multiple millions and tens of millions of people? That's success to me. Do they use it all the time? That's success, not do we just throw something out into the market. That doesn't do it for me. Like there used to be a thing that you would put out a minimal viable product into the market. And I've told the team like no, I want it to be a maximum value proposition product that goes into the market. That means we may do less but we'll do it better, and there'll be -- and consumers will love the product. So clearly, my advice is to invest in the business and grab opportunities. We'll do it in a very disciplined way. And clearly, our margins want to go up. And so let's take advantage of those 2 things and create something over the medium term that allows us to take advantage of the potential that we see out there as well as live up to our medium-term plans. But where there's investment capability, I think are the overwhelming majority of our shareholders that I've spoken to. So please invest and make sure you grab that opportunity.

Yes. No, the time is now. Yes, you have high incremental, high contribution margins. But wow, there's so much going on. I don't want to miss any opportunity. And I respect that this time you guys have the rigor that you take. Along those same lines, the market -- you've seen a lot of IPOs, Dan. The market is pretty hot. A lot of well-funded companies up and down the spectrum. From an M&A perspective, same question, has your philosophy changed on what you're willing to buy or pay? Or what level of accretion and dilution that you're willing to accept as you think about the chessboard, again, of companies that you could look at on the board?

Yes. I've seen the same IPOs that you have. But our level of discipline has not changed on that. I understand growth, but I also understand fundamentals. I mean there needs to be some correlation between the 2. And we have a lot of assets we can leverage. We're really not obligated to buy where we see an opportunity and something that we think is really unique like a Paidy. We'll go into that because I think Paidy opens up the entire domestic Japanese market. Not just the Buy Now, Pay Later but the entire Japanese domestic market. That, to me, was very exciting. It's the #3 or #4 largest e-commerce market in the world. But we'll be very, very disciplined. We're going to look at small and large acquisitions, like we always have. We look at 200 to 300 different acquisitions every quarter. But I think our investors count on us to be disciplined in our capital allocation. And I don't like buying things that are dilutive for multiple, multiple years. I just feel like there's just too much of a bet -- too much of a hype beta on it. And it doesn't mean we won't do something like that if I really feel it's strategic or we go into a market. But for the most part, we have a very disciplined set of criteria. We look at -- we've been quite consistent with it. Sometimes we buy things that people don't expect like Honey, and people question it. And then you see, as we go into -- like there are plans around all of the stuff that we think about. Hopefully, some of them will be surprising to investors because it means that we're thinking about things and where things are going and not just where they are today. So obviously, we have a very, very strong balance sheet. We have very strong free cash flow. And our capital allocation model, we've been quite consistent with that. The discipline we have around investments and acquisitions has been consistent. And that -- I think that will just stay the way it is. Like regardless of whether some companies opt to go IPO at valuations that may be disconnected from what I think are realistic, so be it. So be it. Everybody has got their own view of the world. And we have ours and we'll stay consistent to it.

Yes. I ask because you're growing at a high pace, but you're doing it profitably, right?

Yes.

Some of these other names aren't quite sure on profitability or may not show it for several years. And at the same time, I would think PayPal is a destination for many of these companies because you get on that platform, it's going to amplify the growth rate.

Exactly.

So I appreciate the discipline there. But I think the both sides, bringing in Paidy on one side and then investing in the NPL organically, it seems like it's the right path in terms of the investors that I talked to. So we're almost out of time. Again, always a fun conversation, Dan, and it means a lot to me to have you. Last couple of questions here. Just thinking about eBay rolling off here. I think you guys have talked about what's going to be less than 3% TPV by year end. What are you going to talk about on the earnings call with eBay finally kind of out the way? And how are you going to fill that time? Because I felt like we spent so much time in the last 12 months talking about eBay in this transition. How are you going to fill the time now that that's moved on? How should we spend time focusing on PayPal ex eBay?

So interesting to me as I think about the arc of our relationship with eBay. When we spun out some 6 years ago, I think eBay was like 20%, 25% of our TPV. It was probably 30% of our revenues, maybe 35%, 40% of our profits. And you look at the end of this year. And it's going to be like 2% of our profit and under 3% of our revenues in TPV, somewhere in that area. And you look at kind of our growth during that time, which has been up do around 20% revenue growth this year. We'll grow our EPS this year somewhere around 21% or so. It's been a really well-thought through and done migration away from eBay. They'll still be a very important strategic partner to us. We're 60% of the Checkout in eBay. But we are clearly working with marketplaces now around the world. And we've got a number of big things we're working on with a number of big marketplaces. And we'll find plenty of things to talk about. eBay has kind of -- the impact of eBay, the height of that will be this quarter, the third quarter. And then it starts to dissipate from there on in. And a year from now, it will be completely in the rearview mirror.

And look, you guys got the Adobe news. And you picked up some other stuff. So I'm sure there's going to be some good things to say. I think about 2 minutes left, Dan. I'll get you out of here on a final question, just thinking about what you're seeing on the ground. I'm not expecting to change guidance here. That's not the spirit of the question. Just thinking about with Delta and get back to school and what not, which is a little bit different. I mean this elevated e-com spend and user growth, I mean has your thinking of the drivers of that changed much here, let's say, now versus 6 months ago?

Yes. Look, we gave guidance for the quarter. I think we'll be right down the middle of the fairway in all the guidance that we talked about. Things are coming in pretty much where we expected them to be for the quarter. And so my view is the world move towards digital. When we look at our daily active users from 2019 to now, they're like up like 43% or something like that. It's unbelievable, the change that's occurred. And I think those changes are continuing and are going to continue on. Clearly, Delta will change like what is travel doing? What is online doing? But that's okay. That, to me, is sort of like we're going to live with COVID for a while, and it will flare up in different parts of the world. But now we're beginning to get a pretty good view of what's happening in a post-COVID world. And it's an elevated spend online and a growing one. And as I mentioned before, share of digital wallets is increasing quite dramatically. And there are a lot of tailwinds clearly for us, but there's a lot of execution we need to do as well. And I'm really cognizant of that fact.

Yes, sir. Well, we appreciate your time. I know it's very, very valuable, Dan. It's always fun to chat with you. I took a lot of great notes. So hopefully, we can do this in person next time, next year.

I really hope so. That would be great.

Thank you for the time, Dan. Have a great rest of the week, okay?

Okay. You, too, Tien-Tsin.