Alex Chriss
President and Chief Executive Officer at PayPal
Thank you, Steve, and thanks to everyone for joining us this morning. PayPal delivered a strong second quarter and first half, with encouraging operating and financial results. While change takes time and we still have much work ahead of us, we are well-positioned today, have the right leadership in place and are moving full steam ahead. I'm confident we are on the right track and making meaningful progress on our transformation to position PayPal for long-term durable and profitable growth.
Looking at our results in the second quarter, total payment volume rose 11% to $417 billion, and we delivered 9% revenue growth on a currency-neutral basis. Transaction margin dollars grew 8%, representing our best performance on that metric since 2021. Our non-GAAP earnings per share increased 36% year-over-year. We're encouraged to see not only the strength and stability in PayPal's platform, but also early contributions from some of the initiatives we have underway.
Branded checkout continues to grow profitably. Braintree is now meaningfully contributing to transaction margin dollar growth for the first time in over two years. Venmo momentum continues to build, and monthly active accounts increased across both PayPal and Venmo. Given the strength across PayPal, we are raising our full year guidance for growth in transaction margin dollars and earnings per share and increasing our investment in strategic growth initiatives that we are driving. Overall, we remain on course with the strategy we set at the beginning of the year. Our teams are moving with urgency, excited about our innovation and focused on execution. We are still early in our transformation and while pleased with our progress in many areas, we know there is much more we can do and with greater speed. For example, mobile experiences, SMB and Venmo are places we are working hard to improve and we are continuing to identify ways to operate more effectively and efficiently.
I want to spend a moment discussing how PayPal stands apart as a strategic commerce partner. In the past two quarters, we have talked at length about the experience upgrades we are bringing to branded checkout. However, I do not want to lose sight of what makes PayPal truly differentiated, our two-sided network of hundreds of millions of consumers and merchants worldwide. We are building an end-to-end platform spanning the full commerce journey with superior customer experiences and sales conversion from start to finish. PayPal is one of the only players with both sides of the network, consumer and merchant, at-scale globally and with the infrastructure to support it. That is incredibly hard to replicate and a powerful foundation on which to launch new innovations, including Fastlane and the ads platform that we are in the early stages of building. The data insights and compounding network effects give us an incredible advantage that we are now just beginning to harness fully.
Today, we operate in a massive $6 trillion plus global e-commerce market that benefits from the ongoing digitization of payments and commerce in new contexts. These tailwinds, combined with the initiatives we are now executing, such as building more omnichannel capabilities and offering more value-added services for consumers and merchants will expand our addressable market and provide PayPal with significant opportunity for long-term growth.
Over the last year, we have been working to transform our global business from a series of products and services into a multifaceted omnichannel and open platform capable of generating value in multiple ways throughout the commerce ecosystem. We are building a platform that delivers far more value to our customers and partners than the individual products we offer. This is a key differentiator for PayPal and will expand our market opportunity over time. The initial response to the innovations we are introducing gives us confidence that we will see more consumers and more engagement in more places across our growing network. That in turn will drive more merchants and higher levels of commitment into our ecosystem. These network effects will be mutually reinforcing, compounding and add value to the company.
Our peers are taking note and the value of our platform is being recognized by large tech companies that are seeking to partner with us in a variety of new ways. One great example of this is Meta, which we already partner with on multiple fronts. PayPal is a top payment method for advertisers and consumers globally across Meta's family of apps. Meta's donations and charitable giving campaigns now run on the PayPal Giving Fund platform. Meta pays out creators and developers using Hyperwallet, and Meta uses Braintree for credit card processing. We are working closely with Meta to optimize the experiences and look forward to deepening our partnership with Meta in mutually beneficial ways in the months and years ahead. You will continue to hear about more partnerships with deepening commitments over the coming quarters.
Let me update you on our customer-backed business strategies. We continue to execute with high velocity to enhance customer experiences and value for our large enterprises, SMBs and consumers. We are building the foundation for our next phase of growth. For large enterprises, we continue to have a productive conversation to help merchants understand the additional value they can unlock by strengthening their relationship with us to take advantage of our full platform capabilities. For example, we recently renewed our contract with DoorDash to expand how we work together. Beyond unbranded PSP processing and offering our branded marks, DoorDash also relies on our risk capabilities to mitigate losses. As part of our new agreement, DoorDash has committed as an initial launch partner for our latest branded checkout enhancements that we announced in January, and they will be participating in our new ads platform. Combining our best-in-class payments platform with value-added services that are margin accretive is helping us create a more profitable dynamic.
Last quarter, I told you we expected to make Fastlane generally available in the U.S. in the second half of the year. I'm pleased to announce that in August, we are delivering on that commitment and making Fastlane generally available to merchants in the U.S. This includes merchants on Braintree and PPCP, as well as through partners, including Salesforce, Adobe and BigCommerce. While broad adoption will take time, we have heard from many merchants who are excited to add Fastlane and have a robust go-to-market strategy.
As I've shared before, data from our early adopters shows that returning Fastlane users convert at nearly 80% versus the industry average guest checkout conversion closer to 50%. As our network builds with more merchants and consumers, we expect benefits to scale over time because we will be able to recognize even more shoppers. The early feedback we've heard from our merchants and sales team gives us increasing confidence that Fastlane will accelerate PayPal's ability to capture the roughly 60% share of e-commerce purchases made without a branded mark. As a reminder, a large part of that 60% is still manual card entry, has low conversion today and is generally a poor experience for consumers and merchants. Much of that is now changing with Fastlane.
For small and medium-sized businesses, we are continuing to improve our value proposition through the rollout of PPCP. We continue to make progress migrating volume from legacy platforms onto this new solution as well as integrating with new partners and merchants. SMB volume on PPCP continues to trend positively, up more than 40% through the first half of the year. A large portion of that volume is coming from merchants using PayPal as their full stack processor across both branded and unbranded payments. Our efforts here are also important because PPCP ensures merchants have our latest branded checkout integration, which will include Fastlane. That will give consumers a best-in-class checkout experience wherever they shop and help merchants benefit from higher conversion. On average, merchants who adopt PPCP use more products, which deepens our relationship, reduces churn and drives higher average revenue per account. As I said before, this is an area where we are focused and we have tremendous opportunity to better serve small businesses end-to-end needs.
For consumers, we are focused on extending our leadership in consumer preference, increasing the share of checkout and driving more frequent engagement from our consumers. In the second quarter, we launched in-app offers with major brands, including Best Buy, Priceline, Lyft, Instacart, Ticketmaster, Walmart and Nordstrom. We are seeing positive trends in consumer engagement with gross merchandise volume, driven by one of our offers nearly tripling in June compared to March. And while still early days, the initial interest from advertisers is encouraging. As we've shared before, you will see us invest in marketing in the back half of the year and beyond to further position PayPal and Venmo as rewarding ways to pay.
I've talked previously about our need to improve our branded checkout experiences on mobile devices. That improvement is now happening. In the first half, we started ramping several designs and technology innovations to our branded checkout flows to improve the experience for our customers. For example, we are launching a new super simple vaulted experience for high repeat use merchants. In initial tests, the redesigned vaulting payment page alone shows a conversion lift of 75 basis points to 110 basis points. Experiences like this one are clearly resonating with consumers, and remember that every point of conversion lift drives significant value for our merchants who are fighting to win every sale. We will be ramping our redesigned branded checkout experiences to all eligible consumers in the U.S. in the coming weeks and months.
As the number one branded mark with the largest network of merchant acceptance, we are a ubiquitous checkout solution. We are continuing to innovate and create high converting experiences on both desktop and mobile and across platforms and devices. We also continue engaging consumers post purchase with smart receipts, package tracking, push notifications and more, adding increased value and driving the PayPal engagement flywheel. In fact, we drove almost 20 million app logins from our post-purchase experiences in June alone, growing more than 70% from a year ago. P2P is an essential acquisition and engagement tool for us and we are returning it to growth.
We suffered declines through 2023, but over the past few quarters we have seen an improvement, driven by product enhancements such as new global withdrawal capabilities, better risk decisioning and more cross-border activity. We will continue to invest in our experiences, pricing and marketing to drive enhanced awareness and engagement.
Turning to Venmo. We are building on the business's strong market position. In the second quarter, Venmo processed more than $73 billion in total payment volume, growing 8% year-over-year with monthly actives increasing 5% year-over-year to nearly 62 million [Phonetic] Both a strong base of peer-to-peer users and adoption of our ecosystem of products are driving this growth. For example, both Venmo debit card and pay with Venmo monthly actives grew approximately 30%.
In the second quarter, we launched push provisioning of the Venmo debit card to Apple and Google wallets and continued to enable pay with Venmo with more merchants and partners, including eBay and StubHub, which we expect will continue to fuel this growth. Our recently launched Venmo teen accounts is showing encouraging early traction, expanding our addressable market and helping us build lifelong relationships with customers from an early age. What excites me most about Venmo is that we are only scratching the surface of its potential, starting to drive customer-led, profitable innovation and we see substantial headroom for growth. Said simply, Venmo is primed for growth.
Finally, consumers who love PayPal for online purchases are also telling merchants they want to use PayPal for their offline purchases. We continue to drive the adoption of our card products and we're making it easier to add PayPal and Venmo branded cards to Apple and Google wallets on mobile devices. We are also looking forward to launching even more ways for consumers to use PayPal anytime, any place with NFC technology starting in Europe. Expect to see more from us in the coming quarters to enable and incentivize our customers to use PayPal online and in-person.
Reflecting on the quarter and looking ahead, I want to thank the PayPal team for continuing to work tirelessly as we transform our company and give our customers the best possible experiences.
With that, over to Jamie.
