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

Hi, everyone. I'm Jason Kupferberg, the payments and IT services analyst here at Bank of America. Very excited to have with us from PayPal the Senior Vice President and General Manager of the Venmo business, Darrell Esch. He was with us last year. We're happy to have him back. We're going to go through a fireside chat format of questions for about 45 minutes. And those in the audience, you do have the ability if you'd like to submit questions through the portal. We've got quite a bit here, but happy to entertain from the group as well. And Darrell, thanks again for joining us. We appreciate it.

Always a pleasure. Thanks for having me back, Jason.

Yes. Absolutely. So let's maybe we rewind back to the Analyst Day just over a year ago. And I know you had a prominent role at that meeting. You talked about plans to bring more features and functions to the Venmo platform in 2021 than basically in the whole history of the platform. So I guess now as you reflect back over the past year or so, which products do you feel like you've made the most progress with? What are you most excited about? And where do the priorities really lie now for 2022 now that we're almost 3 months into this year?

Yes. It's been definitely a very fast-moving period here, these last 15 months or so. I think the 2 products from the launches in 2021 that I'm feeling most excited about right now are the Venmo credit card, which is issued by Synchrony. That program has been really great success. I think it's probably one of the best launches of the year last year from a credit card perspective with hundreds of thousands of users. And then the other one that I'm really excited about where it's already come and where it is yet to go is the business profile program. So we legitimized selling businesses using Venmo as a payment mechanism this past year in the app with our creation of business profiles as well as a good and service protections flow built into the P2P flows on top of that. And so app power commerce has really, really been off to a great start. And I think we said it out loud in the earnings call last year, but I'll give you the scoop if we didn't. Like we had 1 million businesses enroll last year for the business profiles as a new program so -- and still growing strong. So the uptake on it has been consistent the whole while. Really feel good about that. On the 2022 in year, because we put so many new programs out last year, be it the card and the business profiles and the goods and service, and we rebuilt the Pay with Venmo Checkout flows in crypto, of course, so many new things, that this year is really more a year about nurturing these green shoots and getting to the Gen 2 of all of these new products as well as basically making everything a little better. So our core P2P experiences and just the app, we did an app redesign last year with the new NAV. And we're -- that was sort of a Gen 1.5, and we'll have more updates to come there. And then, of course, naturally excited for Amazon eventually. I can't talk much about that one today, but very excited about it coming still.

Okay. All right. Well, I'll try and probe you on that a little later. But let's -- you mentioned Venmo Checkout. And we do get questions from investors sometimes about, hey, does it feel like this rollout has taken a little bit longer than expected. Just wondering your perspective on that. And since you came into your role running the Venmo business, have you made any changes to the organization, the sales teams to kind of increase the execution on the opportunity for Pay with Venmo?

Yes. I'll talk about commerce broadly for a second, and then I'll get specific on Checkout. I took over at the beginning of 2020, just before the pandemic started. And I might have said it last year, but one of the things that was a great learning experience for me to understand the power of the Venmo brand because we saw in March when the pandemic started in 2020, a pullback right away. So customers kind of pulled back on volume but then surged forward. By the end of March, we were seeing new records being broken, like customers really leaned in to use the program. And it was a lot of people helping people and a lot of, in particular, people helping small businesses or employees of small businesses. So we saw things like customers tipping their bartender even though they couldn't -- their favorite bartender even though they couldn't go in. We saw people doing yoga classes online to do a video course and tip on Venmo. And then, of course, the whole music phenomenon where you couldn't go see a local band play in a bar and they do a show on Facebook Live or something, and they collect Venmo tips. So that actually spurred this notion around app power commerce and the idea for the business profile. So the recognition that Venmo app card is a community. It's largely local in nature still. And so while we had been on the Pay with Venmo Checkout path for a few years already, we haven't made a lot of progress, honestly with it. We really lean towards this app power commerce with the business profiles, which I mentioned. We signed up 1 million merchants last year. And so overall -- and I will get into pay with Venmo Checkout specifically. But last year, our monetized purchase volume on Venmo was up 5x in Q4. So from a year-over-year Q4 '21 to Q4 '20, we grew our monetized purchase volume 5x. And so you love the chart on that one, for sure. And then what I would say relative to Checkout version, it's true that it's a longer road, takes a lot to establish a two-sided e-commerce network. You have to have both acceptance volume built up with the merchants and then the value props for the consumer. So it will be a multiyear play. But having said that, one, back to your question around what we've done differently, on the day that I took over, literally pulled the team together a couple of years ago and said, "Going forward, one of the things I will change is we are going to be Venmo, and we are going to be PayPal. We will gather the enterprise value and the infrastructure capabilities and the expertise around the company and bring that to Venmo." And sales is one of those areas where we've integrated Venmo into the enterprise sales. So we have -- I think if I don't get the count wrong, I think I've got about 12 people on the Venmo executive leadership team. Most of them don't report to me. That includes like sales. So we have an enterprise sales function that supports Venmo just as we have a marketing and finance and these programs. And so we've made great, great traction. So if we -- and especially in kind of lifestyle, socially connected brands that the millennials love. So be it in areas like food delivery, we've got great, great clients like Uber Eats, Grubhub, DoorDash, Gopuff, Chowbus. Then we've got sort of the social or entertainment sector where you've got Uber and Lyft. And I put them in there because you're definite -- you're frequently going to do stuff with friends in your community members. So Uber, Lyft, Ticketmaster, Frontgate, Fandango, AMC, FanDuel, like all these great brands; and then in fashion brands like Poshmark, Stitch Fix, Seamless, Abercrombie & Fitch; and then even new sectors that we're just starting to get in with Booking.com has recently come online. So we've got -- we've made great progress. And again, these tend to be lifestyle brands that millennials are really attracted to. So it fits the Venmo base. So we've made good progress. We've got a bunch of PayPal capability that we need to consume still. But this will be a long -- Checkout will be -- it will be a long path. But like I said, if we think about it more monetized commerce broadly and being up 5x year-over-year, I'm feeling pretty good.

Okay. So when the sales teams are pitching Venmo Checkout to merchants, I guess, what does the feedback tend to be? Like have there been any kind of lessons learned from that, that have led you guys to kind of further innovate the technology or the consumer experience around Venmo Checkout?

Yes. I think the biggest things are the Venmo base is very, very attractive to most retailers. So Venmo base being overwhelmingly kind of younger, mobile-centric, highly educated, upwardly mobile. So it's this millennial sweet spot that everybody kind of wants. So the things that we're running into that we definitely still have to understand is that -- and the merchants who have come on board generally tend to understand that this will be a journey. But again, you don't build a two-sided platform capability like this overnight for the Checkout. So the 2 things: one is just around making the integration easier and easier so it doesn't always have to be an additional integration that can get more of the 2-for-1 PayPal and Venmo together; and then the other is, and I alluded to this a little bit, is just making the value prop because the consumers -- the consumer -- Venmo obviously has really been P2P historically. That app power commerce of business profile is actually taking off pretty fast, but the idea of an e-commerce transaction requesting a button is still -- it's still a new behavior. So we have to -- we still have some work to do on the consumer value prop to drive the demand. There's interest, and I think we now need to take it to the next level. And there are things -- like I'm not going to call like dates on things in this call, but there are things that you can see that we have in the PayPal arsenal, things like Buy Now, Pay Later that aren't introduced yet in Venmo. And so when I said we're going to be PayPal and Venmo over time, we'll bring more of those PayPal value propositions to life for the Venmo consumer as well.

Right. Right, right. No, that totally makes sense. And so if you think about -- let's say you have a Venmo user today who has just only used Venmo for P2P, and they've been active and engaged with it. How do you get them to kind of take that next step to monetizable experiences, whether it's the debit card, the credit card, Venmo Checkout, et cetera?

There are a number of ways where we end up doing that. So one is with the app design itself. So into the app, you may have noticed and it was about this -- it was about this time last year, actually, when we rolled it out at scale, the files, the in-app marketing capability. So up until about February of 2021, we actually didn't have any marketing inside of the app. So now we have these feed tile placements where we can introduce to the customers the new capabilities. And that's the primary use case for these feed tiles is basically introducing customers to the new services that we're turning on whether they happen to be commerce-related or if they're more like financial services around crypto or debit cards and so forth. But that is a primary way. We also in the app redesign itself made it more evident that we have other capabilities because where the app used to be just basically one stream. It was only one NAV button, which was the feed. And then after that, everything was driven off of a menu. Now the NAV buttons on the bottom itself introduce things just by seeing them there the cards. So you see the entry point to credit card, debit card. You see an entry point to crypto. And its app design itself is introducing these new capabilities. And then the other thing that's always happened with Venmo, Venmo as a community has always been kind of viral in nature. And member get member and so we use some of those marketing capabilities as well to help members bring members. And in some cases, we monetize that where you might as a member of the Venmo community earn cash back if you introduce one of the new features to your friends.

Right. Right. Okay. So let's talk about revenue generation. Obviously, last year, you achieved a target of generating $900 million in revenue on Venmo. And I think exiting the year, you were actually at an annualized run rate above $1 billion. And the forecast is for a 50% growth in that base in 2022. So maybe talk us through the piece parts of that. How much of that 50% revenue growth comes from ARPU versus net adds? Obviously, PayPal overall is going through a strategic pivot to emphasize ARPU over net adds, so would love to hear how that applies to Venmo.

Yes. We -- obviously, over these last couple of years, we've really started this journey of diversifying off of what was historically just P2P-related fees. So it was really the P2P fees driving everything. We don't report, so I won't do the first reporting on how the revenue all breaks out. So we don't split it out. But I will say that on that journey, we're really started moving things like basic financial solutions. So the credit card, the debit card, crypto, these are all monetized capabilities and generally net new commerce. And then on the commerce side, it's business profiles, it's this good and service flow where you can get protections on your P2P transactions, and seller pays a fee on that; as well as, of course, Checkout, which -- Checkout while -- again, while slower, still growing directionally twice as fast as Venmo volume at large.

Okay. Okay. So I think maybe I missed it, but I don't know that you mentioned Instant Transfer in that. I guess, how do you think about that? I know it's, I believe, still the biggest revenue stream for Venmo. And I guess there's questions that sometimes arise around the long-term sustainability. And obviously, PayPal and Venmo are not the only ones that are charging to those services. But when you think about the emergence of real-time payment networks here in the U.S., RTP is here, FedNow supposably is coming next year. We just had someone from the Fed a couple of hours ago at the conference insisting that they are ahead of schedule. So we'll see. What are the implications of that for the pricing model, if you will, for Instant Transfer-type services?

Yes. I think to that, everything is subject to change over time clearly. And real-time funds, while it can potentially create some pressure, I don't necessarily know that it creates pricing pressure in the immediate near term. It might be a slower role. And then on top of that, though, I think that it also creates opportunities on the other side. So if we were really at a place where it's real-time funds is the rule going forward, that creates obviously some new inbound flows as well. Like direct deposit becomes more compelling so that you've got more money-in opportunities just as much as you have you have potential change to money out. It also obviously changes the risk dynamic in the portfolio once you move to real-time funding. But more broadly, we're going to continue the path front in any way of diversification. And while we don't quote them yet, perhaps we will someday. But like the -- if I look at my pie chart, that slice that is not traditional P2P. And you're right. I didn't say Instant Transfer specifically, but I had it included in what I think of as my normal P2P fees. But the other slice of pie of those things, like the financial solutions and commerce, is growing at a quite noticeable pace. If I look at my pie chart over the last 3 years, those things like crypto, credit card, debit card commerce are much more substantial in the pie than they were a year or 2 ago.

Okay. Okay. No, that's interesting to note. Can you maybe talk -- you were talking a little bit about the demographic of the Venmo user base. And I know that there is some overlap with the PayPal user base. I mean there's some users that are counted effectively twice in the kind of active user count at PayPal. But when you kind of look at it at a high level, like how would you characterize differences in the Venmo demographic versus the PayPal demographic, obviously, for the people who are not using both?

Yes. Well, with -- I'll start with more than 80 million active Venmo accounts in the U.S., you clearly are in a position where we're serving people from all walks and all neighborhoods. You can't have 80 million without serving people first. But having said that, of course, there are places where we over-indexed. And then Venmo compared to PayPal or even compared to the U.S. population at large, which, by the way, PayPal is more reflective of U.S. population at large, bigger base, been here longer, Venmo tends to skew, as you would guess, younger. It's 20s, 30s and 40s, mid-20s, mid-30s kind of sweetest -- of the sweet spots, tends to be mobile-natives who are -- they are more mobile-centric than they are web-centric and which makes sense that Venmo is an app more than -- while we do have venmo.com, most of the volume happens on the app. They are [Technical Difficulty] twice as likely as...

Yes. Maybe just back up about 10 seconds, if you don't mind.

I lost you for a second. Yes. Okay. Sure. So younger mobile-natives, they are about twice as likely to be college-educated relative to the U.S. population and [Technical Difficulty]

Oh, I think we lost you again there for a minute, Darrell.

Geez, sorry.

That's okay. It's okay. I think the last thing we heard you say was 2x more likely to be college-educated in the U.S. population.

And then they are -- they tend to be middle income on the rise. So we under-indexed low/moderate income and we under-index affluent, which means we over-index in middle income, which makes sense if you think of the average typical customer being in their 20s and 30s, out of college. So they're on the rise kind of in their career. They're not to the place yet. They're not yet rich and they're not poor in general.

Right. Right. Okay, okay. And have you commented at all on 80 million-plus actives? And I know the definition of active is one transaction in the past 12 months. Have you talked about that figure at all, if we were to look at it on a monthly -- as a monthly active user?

We are -- on a monthly active, we tend to be kind of mid-50s.

Okay. Okay. And the other question I wanted to ask you was just when you think about the overall growth of total Venmo volume, last year, you were up 44%. So obviously, it's growing at scale. I think you were almost $0.25 trillion in 2021. What's the right way to encourage investors to think about a reasonable kind of multiyear range of growth for Venmo volumes? Because I think we all understand the bank gets bigger, and 44% is a big number. So what should people expect?

Yes. I do think, clearly, rule of big numbers applies in life as denominators grow. But we've come a long way in the last couple of years. And I think, though, we're also -- it's fair to say that we're only at the beginning of our move in the commerce space in particular. And we're obviously still only in the U.S. So those are the 2 things that we'll counter against, rule of big numbers. And I would expect that -- I won't peg like a percentage-grade target, but I would say I would expect Venmo to grow faster than PayPal for the foreseeable future based on those 2 things I just called out on being early in commerce and still only being in the U.S. It's just earlier in the life cycle, younger brand. So I would think, though, like any business will go through kind of S-curve, after S-curve where you see steeper periods a little flattening followed by another steeper period.

Right. As newer products or geographies roll out and -- okay. Yes.

That's right.

That makes sense. So I know that management had mentioned on the last earnings call that about 1/3 of total active users essentially drive the vast majority of revenue at the company. I mean, is that true for Venmo specifically as well? If you look at that $900 million, call it, of revenue, that was generated in 2021, was the vast majority of that generated by, call it, 1/3 or so of the 80-plus million actives?

Yes. I think that's generally true for most companies that the payer will kind of kicks in, and you have some customers who are super customers. And so directionally, though, yes, that is -- that holds true for Venmo as well as PayPal.

Okay. Okay. And obviously, the announcement on the Q3 call about Amazon was certainly big news. I know no one's got a crystal ball in terms of exactly when you'll be in a position to go live. I'm sure everyone is working to make sure the integration is just right and the consumer experience is optimized. But would you encourage people to think about midyear as a target or more in the latter part of 2022? Any rough guidance on that?

I really can't divulge anything that we haven't said on this one other than it's coming later this year.

Okay. Okay. Is there -- I mean, I guess you can interpret the word material in different ways. But what's kind of baked into the plan for 2022 from Amazon? Any material amount of volume or revenue or...

I would say on this that we have been tempered in what we have baked into our commitments. And when Dan is talking about 50% growth to -- for Venmo in earnings that we're not over-reliant on that Amazon launch to achieve that target.

Makes total sense. So I guess the other thing we've been wondering about is, has that signing of Amazon created any kind of sort of a halo effect? I mean if you look at the pipeline of large enterprise merchants that you're pursuing for Venmo Checkout acceptance, I mean can you tell like did the signing of Amazon make a difference? Has that pipeline kind of gotten bigger as a result? Does it feel that way?

Pipeline has gotten healthier over the last year for sure, even before mentioning and announcing Amazon. And I called a bunch of brands earlier, and when I look at -- when I think about who are kind of those big brands coming on board, some great ones just in this past several months of brands like DoorDash, Booking and FanDuel, like these have all been great additions. So Venmo know them, pipeline is healthier than it's been since I think the first time we tried down the path -- Pay with Venmo path. It was about 5 years ago now, and this is usually the healthiest that the pipeline has been.

Good to know. One question that just came in from the audience, which I'll ask you is, is it possible that Venmo could introduce the capability to pay back a paying for loan with stored balance in one's Venmo account, if you just think about some kind of synergies, if you will, from PayPal to Venmo? I guess maybe I'll just depend on that, bringing actual pain for functionality to the Venmo platform. Is that on the road map?

Yes. I think it's safe to say -- I'll go back to the -- we're going to be Venmo and we're going to be PayPal.

Right.

And so part of that is leveraging more and more common capabilities where they make sense. We will be -- we will respect that there are different brands and that while there is overlap in the customer base, there are a lot of customers who use one or the other. So we'll respect that the brands kind of stand for different things, but we'll also recognize there are common characteristics, and we will definitely leverage common capabilities. So I think if you just -- without being too specific, if you look at capabilities that PayPal has that you to yourselves think, wow, this would be great if Venmo had that, we're probably working on them.

Right. Exactly, exactly. Okay. Great. And let's talk about competition. And obviously, that topic has been coming up a lot more for PayPal in general. And maybe you can just speak to any changes in the competitive landscape that you've observed for Venmo, maybe over the last 6 to 12 months, whether that's Zelle or whether that's other financial services out like a cash app, for example, or others?

Yes. I don't want to, and I don't discount the competition. I'm also, though, optimistic in this area in that the primary competition for P2P-centric wallets, and I say P2P-centric not because that's kind of where these things start. And as you see with Venmo, we're expanding into new fields. But the primary competition is really still physical currency. So the digitization of cash creates ecosystem tailwind for the brands you said, plus Venmo, plus PayPal. I think there's another phenomenon going on, and I'll get a little more specific. But I think another phenomenon we're seeing is that consumers, much like back in the '80s, '90s and 2000s where credit cards were and as you might know, I got my start kind of banking credit card industry a long time ago before I came to PayPal. And in those '80s, '90s, you really started to see that households would go from one card that half of them probably kept in a sock drawer for the rainy day to having 2 cards and 3 cards and 4 cards and eventually 4-point-something to 5 kind of card. And then debit cards kicked in on top of that. And if you were in credit cards, then you got terrified of, oh, no, these debit card things are coming now, too. And I use that as a backdrop because I think there's a similar phenomenon happening now in digital wallets. So I think consumers -- as much as I would love our consumers to only use Venmo or only use PayPal, the reality is I think consumers use multiple digital wallets. And so much like in the '80s and '90s on cards, you now see people using 2 or 3 digital wallets. And I think our job is to make sure that we have enough unique differentiation that our customers choose Venmo as their primary. And -- but then the other thing that happens is, much like when debit cards really started to become popular in the late -- in the mid-'90s, in the late '90s, you were as fearful as the industry was about credit cards getting pushed aside. The reality is card usage breeds card usage. And I think we're seeing that same phenomenon at play here, that use of digital wallets and digital currency will lead to more of that behavior. So I'd love for everybody to switch just to Venmo, but it's -- the reality is the rise of multiple boats here will actually cause us to chip away faster at the digitization of cash.

Right. That's the common enemy for sure.

Yes.

I wanted to come back to one of your earlier comments around the Venmo credit card and how pleased you were with the launch of that last year. I think you said hundreds of thousands of accounts at this point. What are really the key points of differentiation for the product? And what are you seeing in terms of demographic-wise, who's really adopting it when you kind of -- I mean you outlined kind of the overall Venmo demographic. But what can you see? What patterns can you see among the credit card adopters?

Yes. I think on this one, it surprised me a little bit. This one surprised me a little, although it's nice to be surprised late down the path, too. But overwhelmingly, the single greatest point of differentiation with the app is that -- or with the card is that this is an app with the card instead of a card with an app. And it seems simple, but it's really powerful because customers interact with the Venmo app frequently and sometimes just to look into the feed to see what their friends are up to. But you're interacting with the app frequently and because of that and because now with the app redesign with this NAV for the card, it's very easy to get to your credit card and interact with your credit card. So for the consumer, the biggest thing that's different is the interaction with the account on a day-to-day basis. So I can see where are my spending trends, which categories am I spending, how are my rewards accumulating, how do I -- which category do I need to if I really want to lean in to get maximum 3% cash back, which category am I in right now that I need to lean harder. It also makes for payments and the notifications of payments being due and tying it into crypto, which is in the app with your rewards can go. Your cashback rewards can be converted to crypto. So there's so much of it just that it's part of the app is the interaction. So I thought I really -- I kind of thought like the QR and the splitting, like these are things that are core to Venmo. So like QR codes, people -- if you go in -- I was in Nashville with my son a few weeks ago. And if you go into one of the honky-tonks, you're going to see the tip jar is still there, the bucket. But overwhelmingly, they almost all have a Venmo QR code. That's how they want to get tipped. So QR codes are Venmo, splitting is Venmo. And our credit card has unique features to both of those. So it does have -- it's got the QR code on front that you can actually split with. So if my friends and I go to dinner and my best friend, whether just because he thought it was awesome or because he felt friendly peer pressured into it, which, by the way, it gets back to how Venmo gets customers. The customers bring other customers. We always do the whose card is going to come out, but it doesn't matter because we should pick up and scan the QR code on the front of the page or the back. But those are not -- those are the things like the splitting in the QR is what I kind of thought, of course, with the rewards program was going to be the really compelling part. But it's just this paradigm shift that it's an app with a card instead of a card with an app, which is where the magic is.

Great. Great. And I want to go a little deeper on business profiles because that was the other one that you said you're particularly proud of in terms of the launch last year. Maybe just take us through an example there of some of the key features of the product.

Yes. So business profile, it's a really lightweight, easy way to get a processing account, that is electronic processing account, that's very affordable, community-oriented and it has this ability for you to reach more customers. It allows you to reach the friends of your customer, to make those friends of your customer the next friends. And it's -- so for the merchants and why they love it so much, from an affordability perspective, our price is 1.9% plus $0.10 per transaction. So generally 100-plus basis points cheaper than what the competition would be bringing. You don't need hardware for it. It doesn't mean that we won't have some someday, but you don't need it. Like here's my terminal. So if everyone can say like that's kind of my merchant terminal is I slap a sticker on the back of the phone, and now it's a merchant terminal. So it's really easy to get into taking payments. They're very affordable. And as I said, it's -- probably the best part about it and why I'm so excited about this is we're just scratching surface. And the fact that we had 1 million sign-ups last year and we still have thousands of sign-ups every day, literally, every day, thousands of sign-ups for the program, we're just scratching the surface though. And this ability, the community nature of Venmo that I described that people help people and they helped our local businesses, I think more and more as we strengthen the features and we make that those connections even easier, we can imagine a lot of new capabilities coming off of it, like things like reward your friends for coming in. I said the obvious thing is if I go into the new local -- the little local bakery that has a business profile and then I transact their shares into my feet so my friends see a link to kind of a billboard for that bakery in my feed, they can click on it and interact with it so they can actually click into it and get to the merchant's website and buy stuff. But there's so much we can do with this one. We're just starting. And so yes, I think this is a horse that's going to run far for us.

Excellent. Why don't we talk about crypto trading? Obviously, that's now been enabled on the Venmo platform. So what are you seeing in terms of uptake there among the Venmo user base? And any comparing and contrasting you would do of crypto trading adoption for Venmo users versus PayPal users?

Yes. It's doing well. We're making good progress with it. I would say the uptake on Venmo hasn't been as high as it has been on the PayPal Wallet and kind of a few reasons there. One is there was a -- PayPal had a first-mover advantage and launched it with a no-fee promo. Venmo came straight into at price at full fare. PayPal also launched at Bitcoin price of around directionally 12,000. So it was like a long time ago on the Bitcoin chart. And then the other thing is, I think PayPal where crypto is doing really quite well, you've got PayPal historically has had a more robust set of services, customers using more than one service, where Venmo started as P2P. We're just now starting to add things. So people are getting used to using that second and third Venmo product. But it's out of the gate in good position. I'm more excited about the prospects of commerce still and in particular, the one we just touched on, the business profile, just because of the community, the communal nature of Venmo. Venmo is something -- and Venmo is still a noun and a verb. We -- Venmo is amongst our friends and our community. And crypto is a little more personal, like this is something that's just for me. But I -- so I -- we're off to a good start, but I see a lot more strength in the future still on the things in Venmo that play on that community strength.

Right. Right, right, because that's kind of the core asset, if you will, of Venmo and the brand, et cetera. Let's -- I know we're starting to run out of time, but I did want to get to the international expansion piece of the Venmo story because you alluded to it earlier as kind of being white space. It was highlighted at the Analyst Day last year as a potential growth driver over the long term. Maybe just give us an update. What are your latest thoughts in terms of hurdles, complexities? Which countries would make the most sense? If I recall, when we did this basically a year ago, I think you were encouraging people to think about kind of a 3- to 5-year time frame. So I don't know if that's now 2 to 4 or if it's still 3 to 5. Just a general update would be great.

I think that's about right. I think you can do a minus 1 on what I said last year.

Yes.

I'll say something -- relative to the complexity is, I'll say something, a former PayPal Chief Product Officer said about 10 years ago, is that it's easier to call yourself a payments company than it is to be one. Lots of companies out there say that they're payments companies, and it takes a lot more to be one. And it takes a lot to be one in particular because of regulatory complexities from country to country to country. And if you're not some tiny start-up flying under the radar, it's particularly complex. And so we are clearly not a tiny start-up flying under anyone's radar. So regulatory complexity is the primary kind of challenge. But I'll go back to what I've said more than a couple of times already is we're going to be PayPal and we're going to be Venmo. And in this case, PayPal is really, really good at working in multiple markets, I think about 200 directionally around the world. And so I'm not going to try for Venmo to reinvent a payments platform that's compliant from country A to country B to country C and bring on a bunch of compliance professionals for country A and B and C when PayPal has all of these things. So the big ticket -- the big thing here is just simply on the road map complexity is just how quickly we get through far enough on our integration paths on the platforms where I can leverage everything that's already been built for PayPal rather than trying to build it country by country in Venmo. I'd rather turn on a bunch of countries using battle-tested compliant systems than try to build a new one, one country at a time.

For sure. For sure. And I...

The markets that make sense, markets that make sense probably -- you probably directionally follow the core markets where PayPal operates around the world directionally again because the hardest part is those regulatory complexities. And so makes sense to go where we have lots of experience and practice already on those regards. I've seen reports that in some countries in Europe and like the U.K., I think the unaided awareness of the Venmo brand is in the mid-30% range already, which is shocking to me. Again, it's a nice surprise along the word, but that's a nice surprise, which means there are not people aware of the brand outside of the U.S. even though we haven't been there yet that -- yes, it's still part of the journey. So yes, minus 1 on the clock.

Okay. All right. Well, when we do this next year, I guess we'll be 1, 2 plus so, something I look forward to. Darrell, thanks so much for your time. This was great. Always terrific to catch up with you. Appreciate all the insights.

Thanks again.

Thanks, everyone.

Cheers.