“The back half of 2021, was always going to be the low point of our revenue growth this year.”
“…we still feel the impacts of eBay's managed payments migration over the next few quarters, although at a lessening rate.”
1 | 1Q22 to be toughest, then reacceleration 2Q22 onwards
“We expect the first quarter next year to have more difficult comps and be our lowest growth quarter.… revenue growth to then accelerate through the year…”.
2 | Out goes eBay, in comes Amazon
“Starting next year, customers will be able to make purchases on Amazon.com & Amazon mobile shopping app using their Venmo accounts”
“…we are no longer constrained, by the contractual obligations of the eBay operating agreement.”
3 | Strength of PayPal
“PayPal is the most accepted digital wallet with more than 75% of the top 1,500 largest global merchants utilizing PayPal at checkout.
“And on average, our PayPal checkout conversion is 34% higher than other checkout options.”
4 | Large Opportunity
“We've demonstrated that we can scale at a very low marginal cost. We've got tremendous opportunity…”
5 | On Long-Term Profit Margins
“…we don't manage the business to have margin expansion for the next quarter or frankly even for the next year. We're looking at how we create a company.”
5 | On Long-Term Profit Margins (cont’d)
“…our margins are going to go up over the long term and we're not going to be handcuffed to doing that from one period to the next at the expense of like creating shareholder value.”
5 | On Long-Term Profit Margins (cont’d)
“…give us confidence that over our planning horizon, our margins will go up. That's not something that I think we lose a ton of sleep about.”
➡️ Final Thoughts on Paypal $PYPL:
Not too bothered, not unexpected. Thesis unchanged.
Near-term drag with eBay till 1Q22.
PayPal $PYPL continues to be a strong business, pure play on the digital payments with Venmo, supported by secular LT tailwinds & platform strength.
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