“It’s an uncertain macroeconomic environment, but I think we finally got the guidance right, and we’re executing against that.”
— PayPal CEO Dan Schulman
Pandemic darling PayPal Holdings Inc.
has struggled to contend with the reopening of the economy after the pandemic, but Chief Executive Dan Schulman says that the company is back on track.
PayPal spent the past few quarters bringing down elements of its outlook as it acknowledged that its pandemic-era projections were out of step with current trajectories. Now the company is cutting costs and showing better growth trends, aspects fueling Schulman’s optimism about the business.
“I would say we are clearly now at a turning point,” he told investors at a Goldman Sachs conference late Monday. Schulman pointed to accelerating revenue growth from April to July as the company doubles down on its most promising areas, including core checkout.
PayPal is known for its checkout button, but some analysts have recently flagged concerns about competition in the market for online checkout as well as PayPal’s opportunities to maintain and gain share in a crowded field.
“That’s sort of the big question that everybody asks all the time and rightfully so,” Schulman said in response to an inquiry from Goldman’s Michael Ng about the potential for PayPal to improve its core checkout experience and accelerate market-share gains. The PayPal chief acknowledged that “competition is fierce in the checkout space.”
That said, he sees areas where PayPal can better the customer experience and see improved adoption. The company has made efforts to speed up the process of checkout by cutting out seconds of “latency,” and Schulman said that these reductions help drive better conversion rates, meaning that they make people more likely to go through with a given purchase.
Additionally, the company is focused on “where we are presented” in the flow of a merchant’s checkout experience, as well as driving adoption of “accelerated” checkout. And Schulman stated that “many” PayPal competitors are pulling back and “reorienting their business model[s] because they lose money every quarter,” giving PayPal opportunities to capitalize given its scale and better financial positioning.
The company is also looking to improve its monetization of Venmo, as well as the user experience for those who frequent the peer-to-peer money transfer app.
“We’re completely revamping the debit and credit cards associated with Venmo, putting more rewards functionality on that different form factor deeply integrated into the app,” Schulman said, while noting that PayPal is also focused on enhancing Venmo’s design and search features.
He shared that PayPal is having a “good, solid quarter right now,” with revenues tracking in line with the company’s outlook and earnings looking to be “coming in a bit stronger than we anticipated for the quarter,” though there’s still time left in the period.