Q2 2025 Block Inc Earnings Call
Matt Ross head of Investor Relations. Please go ahead.
Yeah.
Hi, everyone. Thanks for joining our second quarter 2025 earnings call.
As Jack and Amrita with us today.
We will begin this call some short remarks before opening the call directly to your questions.
Money.
During Q&A, we will take questions from conference call participants.
We would also like to remind everyone that we will be making forward looking statements on this call.
All statements other than statements of historical fact could be deemed to be forward looking.
These forward looking statements include discussions of our outlook strategy and guidance as well as our long term targets and goals.
The statements are subject to risks and uncertainties, including changes in macroeconomic conditions.
Actual results could differ materially from those contemplated by our forward looking statements reported results should not be considered an indication of future performance.
Good game, ladies and gentlemen, and welcome to the second quarter 2025 conference call minutes. I will now let you turn the call over to your host Matt relations. Please go ahead.
Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ.
Hi everyone. Thank you for joining our second quarter of 2025.
Also note that the forward looking statements, including earnings guidance for 2025 discussed on this call are based on information available to us and assumptions. We believe are reasonable as of today's date.
Directly to your questions. Thank you.
Disclaim any obligation to update any forward looking statements, except as required by law.
Further any discussion during this call or our lending and banking products referred our products that are offered through square financial services or our bank partners.
With these remarks, we will also discuss metrics related to our investment framework, including rule of 40.
Including changes.
With rule of 40, we are evaluating with some of our gross profit growth and adjusted operating income margin.
So we will discuss certain non-GAAP financial measures during this call.
Performance.
Conciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter and our historical financial information spreadsheet on our Investor Relations website.
These non-GAAP measures are not intended to be a substitute for our GAAP results.
Finally, this call in its entirety is being audio webcast on our Investor Relations website, an audio replay of this call and the transcript for Jackie and read his opening remarks will be available on our website shortly.
Please take a look at our finance. Also, note that the 42 information available to us
I'd like to turn the call over to Jack.
Thank you all for joining us as you all know we've been we've been talking for several quarters about our focus on increasing product velocity.
We will also check.
And ramping up our go to market investment.
This quarter, you can see our work paying off and we're back to growth mode across the company. We're shipping faster we're launching new features like pools in just a few months and we're accelerating the pace of delivering AI functionality to our customers.
In my letter this quarter I discuss cash up scale and impact and our strategy to continue growing by helping our customers manage their financial lives better we.
We believe the capabilities and cash App are unique and that no one else can deliver the money up we're building for consumers.
Hope you take a look at.
With that I'll turn it over to Amrita.
Thanks Jack.
Delivering strong results in the second quarter exceeding our gross profit and adjusted operating income guidance.
Gross profit was $2 5 billion at.
At 14% year over year accelerating from 9% last quarter.
Adjusted operating income was $550 million up 38% year over year.
Thank you for joining us as you all know. We've been we've been talking for several quarters about our focus on increasing productivity and ramping up investment this quarter. We're back to growth mode, across the company, we're shipping faster. We're launching new features like pools in just a few months and we're accelerating the pace of delivering AI functionality to our customers.
We expanded margins through our highest quarterly adjusted Oi margin yet 2018%.
Product innovation and go to market investments are accelerating across block, we're delivering more value faster and more efficiently and.
I discussed at scale and impact and our strategy to continue growing by helping our customers manage their financial lives better.
In the second quarter alone, we launched square AI square handheld and an updated version of square online. We showcased a claim payments on square introduced tap to pay for cash App business powered by square and rolled out cash spot our AI powered customer support agents.
We believe the capabilities and catch up are unique and then everyone else can deliver the money out we're building for consumers. I hope you take a look and with that, I'll turn it over.
Hey, Jack.
We released paying monthly for Acura <unk> single use payments in the U S. New features correspond to the accounts a new more personalized offers platform and we took cash up Paul's from development to pilot in just a few months.
We delivered strong results, in a second quarter, exiting our gross profit and adjusted operating income, guidance, gross profit with 2.5 billion dollars of 14% year-over-year accelerating from 9% growth last quarter.
It took the operating income was 550 million dollars up 38% year-over-year, as we expanded margins to our highest quarterly, adjusted to wide margin yet. 28%
And Pasha gross profit growth reaccelerate into 16% year over year in the second quarter cash.
Cash up cards delivered healthy gross profit question at scale and BNP gross profit, we accelerated driven in part by the increasing attach rates for post purchase the NPL on cash Upcard, which crossed 1 million monthly actives in July.
Product Innovation, go to the market Investments or accelerating across block. We're delivering more value faster and more efficiently.
We began to meaningfully ramp borrow square financial services during the second quarter, Our bank FFS now originates the majority of <unk> loans for our customers and we plan to continue expanding sfas originations throughout the second half of the year.
We're also exploring more ways to deepen engagement, including higher borrow limits for paycheck deposit actives.
We believe the combination of assets, we have in cash App is unique and positions us for attractive sustainable long term growth as an enduring ecosystem.
Our strategy is oriented around driving strength in our four pillars of our business first we have a scaled peer to peer platform network that drives community connection and cash up customer acquisition with $218 billion in peer to peer volume in the last 12 months.
And meaningfully wrap borrow on Square Financial Services during the second quarter.
Second our broad commerce capabilities generated $183 billion in volume in the last 12 months growing 16% year over year or 21%, excluding cash app business.
Our bank SFS now originates, the majority of borrow loans for our customers and we plan to continue expanding SFS originations throughout the second half of the year.
Our banking solutions help millions manage their money in June 8 million actives, either deposited a paycheck or spent at least $500 across cash app and borrow reached $18 billion in annualized originations.
We're also exploring more ways to deepen engagement, including higher borrow limits for paycheck deposit activities.
We believe the combination of assets. We have in cash app is unique and positions us for attractive sustainable long-term growth as an enduring ecosystem.
And fourth we've enabled millions of active to buy and sell $58 billion in bitcoin for.
For a paycheck deposit actives, who received some of their paycheck and bitcoin we provide what we believe is the only way to buy bitcoin with no <unk> and no spread.
Our strategy is oriented around driving strengths in the 4 of our business. First, we have a scaled peer-to-peer platform Network that drives Community Connection and cash app. Customer acquisition with 218 billion dollars in peer-to-peer volume in the last 12 months,
Cash App is resonating with our next generation at scale in June we had 5 million sponsored <unk> and $1 7 million actives that had graduated from our sponsored account to an individual account.
Second our broad Commerce capabilities generated 183 billion dollars in volume. In the last 12 months, growing 16% year-over-year or 21%, excluding cash app Business.
<unk> with sponsored team active is strong with nearly 80% attach rate to cash card and over 25% attach rate to cash pay simply put cash out meets the needs of this generation and delivers tools to help them run their financial lives.
Third, our banking Solutions help Millions manage their money in June 8005, cash apps and borrow reached 18 billion dollars in annualized. Originations
Turning to square year over year, <unk> growth accelerated to 10% in the second quarter and we delivered 11% gross profit growth, which included a network remediation payment. We had previously discussed at the end of last year.
We observed strong GDP growth in food and beverage and retail up 15% and 10% respectively.
International <unk> growth accelerated to 25% year over year, as we continue to expand distribution across sales and partnerships.
We are changing perceptions in square, among new and existing customers a testament to the products, we've launched in the past year and the investments, we're making across marketing field sales and partnerships.
We're focused on winning the quick serve restaurant market and we are delivering with customer wins like colectivo coffee, Shane Grinned Shack, and then soft pretzels Ah 60 locations seller that we're thrilled to welcome back to square.
These amazing sellers are category leaders in their communities and we are honored they choose to partner with us.
Beyond winning <unk>, where we continue to see strong performance from our field sales team with.
With an estimated five to six quarter payback on recent sales cohorts.
In the second quarter, we delivered our highest ever new volume added and our strongest growth in new volume added since the third quarter of 2021.
Year to date forecasted new gross profit added outpace forecasted <unk> added as we grew up market in the U S signaling healthy pricing and product attach rates.
We continue to see high Rois as we scale field sales and we expect to continue to ramp sales personnel aggressively.
Our distribution footprint further.
We're also seeing early traction with our independent sales organization investments and expect to continue to scale that distribution channel further in the quarters ahead.
With an estimated 5 to 6 quarter, payback on recent sales, cohorts.
Turning to guidance, we're raising our full year guidance and our expectations for the back half of the year.
Our Q3 guidance and implied Q4 guidance calls for continued acceleration and gross profit growth.
For Q3, we expect gross profit of $2 6 billion.
Rowing, 16% year over year, we expect adjusted operating income of $460 million or 18% margin.
year to date forecasted New Growth profit added outpaced forecasted new gpv added. As we grew up Market in the US, signaling healthy pricing and product attached rates.
We expect to exit the year with gross profit growth of 19% and over 20% adjusted operating income margin positioning us well for 2026.
As we look at Q3, there are two nuances to call out.
First we expect to see an adjusted operating income margin of 18% in the third quarter compared to 20% plus margins in the other quarters. This year. This is due primarily to risk class growth as we expand borrow we are.
We're investing behind the product that has strong unit economics on incremental growth.
Our Q3 guidance and implied Q4 guidance calls for continued acceleration in gross, profit growth.
And we expect loss rates to stay within historical ranges the timing of our expanded go to market initiatives also contributed to Q3 margin dynamics.
For Q3 we expect gross profit of 2.6 billion dollars growing 16% year-over-year.
We expect adjusted operating income of 460 million or 18% margin.
Second for square, we expect to deliver low double digit GP growth in the third and fourth quarters accelerating modestly from the 10% growth we delivered in the second quarter.
We expect to exit the year with gross profit growth of 19% and over 20% adjusted operating income margin positioning us well for 2026.
We expect third quarter gross profit in the high single digit range and fourth quarter growth to track roughly in line with GPT gross square third quarter gross profit growth is impacted by a few dynamics, including our decision to increase operational flexibility at a processing partner, which modestly increased processing costs.
As we look at Q3, there are 2 nuances to call out.
Further investments in hardware as a successful go to market driver for square, we continue to be encouraged by the strong results. We see in our go to market efforts, where square with profitable volume profitable volume growth and a return to share gains in recent quarters.
as we expand borrow, we are investing behind a product that has strong unit economics on incremental growth,
And we expect loss rates to stay within historical ranges, the timing of our expanded, go to market initiatives. Also contribute to Q3 margin Dynamics.
For the full year, we're raising gross profit and adjusted operating income guidance to reflect our strong execution.
Second for square. We expect to deliver low double-digit. Gpv growth in the third and fourth quarters accelerating modestly from the 10% growth. We delivered in the second quarter.
We expect full year gross profit of $10, one 7 billion.
Or over 14% year over year growth, we expect adjusted operating income of $2, <unk> 3 billion or 20% margin expanding margins two percentage points year over year. Despite the meaningful go to market investments, we're making to grow our business.
We expect third quarter growth profit in the high single digit range and fourth quarter growth to track roughly in line with gpv growth.
Our financial results and our updated guidance are a reflection of our ability to deliver value to our customers. We're honored to have been added to the S&P 500 this quarter.
We want to welcome new investors joining us on this journey.
Square's, third quarter, gross profit growth is impacted by a few Dynamics, including our decision to increase operational. Flexibility at a processing partner, which modestly increases processing costs and further investments in Hardware, as a successful. Go to market driver for square. We continue to be encouraged by the strong results. We see in our go to market, efforts for square with profitable, volume profitable volume growth, and a return to share gains in recent quarters.
We believe we have the best combination of assets in the industry to deliver on our purpose of economic empowerment, and we're excited to share more about our long term roadmap at our Investor Day on November 19th I'll now turn it back to the operator to start the Q&A portion of the call.
So the full year, we're raising gross profit and adjusted operating income guidance to reflect our strong execution.
We expect full year gross profit of 10.17 billion dollars or over 14% year-over-year growth.
Thank you we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad to raise your hand to join the queue. If you would.
I'd like to withdraw your question simply press Star one again, we ask that you. Please limit yourself to one question only your first question comes from the line of Tien Tsin.
We expect adjusted operating income of 2.03 billion or 20%. Margin expanding margins 2 percentage points year-over-year despite the meaningful, go to market Investments. We're making to grow our business.
Quinn from <unk>.
J P. Morgan your line is open.
our financial results and our updated guidance or a reflection of our ability to deliver value to our customers, we're honored to have been added to the S&P 500, this quarter
Okay. Thank you, yeah, really really impressive growth in the quarter.
and we want to welcome new investors joining us on this journey.
The outlook. So I just wanted to maybe check on conviction and visibility of course, then to the second half acceleration that you're talking about Jack you mentioned Youre shipping.
Baxter so given what you've seen observed I'm curious are you more bullish in certain areas versus what we talked about and where might you be a little bit more cautious with more work to do.
We believe we have the best combination of Assets in the industry to deliver on our purpose of economic empowerment and we're excited to share more about our long-term roadmap at our investor day on November 19th.
I'll now turn it back to the operator, to start the Q&A portion of the call.
90 days ago.
Yes, I think this is all a function of our shipping velocity.
And I think the biggest indicator of this is sort of the recent pools lunch.
It's pretty complicated future.
Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions simply press star 1. Again, we ask that you please limit yourself to 1 question. Only, your first question comes from the line of Kenshin from Quang from, uh, JP Morgan. Your line is open.
Just to do on network and the team did an amazing job.
Hey, thanks. Yeah, really, uh, really impressive growth here in the quarter.
Not just doing that with an ideation to execution and shipping to customers with him.
Three months, but also made it possible for us to go out of network as well.
And the Outlook. So just want to maybe check on conviction and visibility of course into the second half acceleration that you're talking about. I think Jack you mentioned your shipping
Meaning that you can create a pool.
And you can invite friends, who don't are not on cash flow currently and they can use apple pay Google pay to contribute to the pool and ideally see that functionality in the utility and then sign up themselves. So these are the sorts of futures.
Products faxed or so. Given what you've seen and observed, I'm curious. Are you more bullish in certain areas versus what we last talked about, than where it might be a little bit more cautious with more work to do than say, 90 days ago?
Yeah, I I think this is all a function of our shipping velocity. Um,
We're now able to ship much faster.
The directly contributes to our overall network growth, which contributes to our overall morality.
And really really strengthens.
And I think the biggest indicator of this is the the recent pools launch. This is a pretty complicated feature um just to do on network uh and the team did an amazing job.
Catch up catch up in the first place, which is inherent network effects that we have.
The products, we can build on top of that.
not just doing that uh within ideation to execution and and shipping the customers Within
Just gets stronger because of it and then it's all a function of us being able to show.
Uh, 3 months, but also made it possible for us to go out of network as well.
Our customers everything that <unk> plus offer an ecosystem.
But I've never been more confident of our ability to do that.
Better than I am today.
Meaning that you can create a pool and uh you can invite friends who don't are not on cash app currently and they can use Apple pay or Google pay to contribute to the pool. And ideally, you see that functionality in the utility and then sign up themselves.
It's a function of our focus but also.
The tools, we have access to today with.
Over at AIG cutting tools goose is being used by nearly everyone in the company.
Accelerating our developers, it's accelerating our designers, it's allowing us to experiment near zero cost. So that we can actually get to the right answer much faster.
And we can get the customer feedback, which first or two so we can double down and pull the thread on what.
What resonates with people, so I'm Super excited and Super bullish on our ability to ship faster, which will make every single thing about cash App and also square.
So these are the sorts of features that um, we're now able to ship much faster and it directly contributes to our overall Network growth which contributes to our overall Valatie. Um, and really, really uh, strengthens what, what what made cash app cash app in the first place, which is this inherent Network effect that we have, um, the products we can build on top of that, uh, just get stronger because of it, and it's, and then it's all of a function of us, being able to show. Um our customers everything, the cash app has to offer in the ecosystem.
That much better and more usable.
Um, but I've never been more confident in our ability to do that, uh, better than I am today.
Yeah, and I'd just add tension we saw a lot in the second quarter that gave us.
Some healthy sign some real encouragement around the products that are the key drivers of growth for us and the key drivers of acceleration in the second half and that's what gave us the conviction to raise our guidance by more than the beat and <unk> raised the back half of the year across both gross profit and NOI.
It's a function of our Focus but also, um, the the tools we have access to today with, uh, all of our AI coding tools. Goose, um, is being used by nearly everyone in the company. Uh, it's accelerating our developers, it's accelerating our designers, it's allowing us to experiment at near zero cost so that we can actually get to the right answer much faster.
On what our guidance calls for is two points of sequential acceleration into.
Into Q3, and three points a further sequential acceleration into Q4, and that's really on the back of four key things where again, we saw strong data points in the second quarter.
The thread on on what um what resonates with people. So I'm super excited and super bullish on our ability to chip faster which will make every single thing about cash app and also Square uh, that much better and and more usable.
First on the strength of borrow we now have 6 million monthly actives on borrow.
We're expanding eligibility increasing limits in a responsible way with healthy loss rates.
Seeing enhanced unit economics, as we transition that migration from a partner bank to our own bank.
Yes.
Secondly, we're seeing some of the newer products and cash App like post purchase be NPL on cash App card, which is the first real integration of Apple pay into cash App.
Yeah, and I just add tension, you know, we saw a lot in the second quarter that gave us, um, some healthy signs, some real encouragement around the products, uh, that are of the key drivers of growth for us. And the key drivers of acceleration in the second half and that's what gave us the conviction to raise our guidance by more than the the beat in too cute. To raise the back half of the year across both, you know, gross profit and and oi.
And cash out pay two important commerce products for us really resonate.
And start to compound more meaningfully.
Post purchase the NPL as of July across the 1 million active milestone, which and we're really excited again about what we're seeing in terms of growth.
<unk> purchased the NPL to borrow at similar points in time.
The newer product.
Get to learn from from Varo is outpacing in terms of attach rates and in terms of loss rates and cash or pay now at 7 million monthly actives as of June.
Um, you know what, our guidance calls for is 2 points of sequential acceleration to C, uh, into Q3 and 3 points further sequential acceleration into Q4, and that's really on the back of 4 key things. Where, again, we saw a strong data points in the second quarter. First, on the strength of borrow, we now have 6 million monthly active on borrow. Uh, we're expanding eligibility increasing limits in a responsible way, with healthy loss rates. Um, and seeing enhanced due, and economics, as we transition uh that migration from a partner Bank to our own bank SFS.
Third key drivers Protos Youll see a lot more at next week's launch event, but we expect <unk> to begin contributing to gross profit growth in the second half of the year and then finally square we're seeing some nice acceleration in the square business and we'd expect to exit the year in Q4 with faster <unk> growth, which ultimately will compound the gross.
Profit growth overtime well.
Your next question comes from the line of Tim Showrooms from UBS. Your line is open.
Great. Thank you I wanted to dig in a little bit more on cash card post purchase be NPL. So this topic comes up a lot because investors are now very confident in the ramp and borrow in the second half and the lapping dynamics. Those are supportive of gross profit growth heading into at least the first half of 2026 as well. So we're often asked what's.
Secondly we're seeing some of the newer products in cash app uh like post-purchase bnpl and cash app card, which is, you know, the first real integration of afterpay Into Cash app, um, and cash app pay, uh, you know, 2 important Commerce, products for us really resonate. Um, and start to compound more meaningfully, um, post-purchase bmpl. As of July cross the 1 million active Milestone, uh, which and we're really excited, you know, again about what we're seeing in terms of growth, if you compare post-purchase bnpl to borrow, it's similar points in time. Um, the newer product, uh, which gets to learn from from borrow, is outpacing in terms of a tax rates and in terms of loss, rates and cash at pay. Now at 7 million, monthly active, as of June
The next big product that can help drive the growth in the second half of 2026 and beyond of course, there's a long list of items and many of them are highlighted in the shareholder letter, but one that stands out is cash card post purchase. The NPL you just mentioned some of the SaaS the $1 million the attach rates the loss rates I was hoping you could just elaborate a little bit more on this.
Third key drivers Proto uh you'll see a lot more at next week's launch event um but we expect Proto to be begin, contributing to gross profit, growth in the second half of the year and then finally Square. You know we're seeing some nice acceleration in the Square business and we'd expect to exit the year in Q4 with faster gpv growth which ultimately will compound a gross profit growth over time as well.
Product in terms of those attach rates and just anything else that can help us to better quantify that opportunity in 2026 and beyond.
You are. Next question. Comes from a line of Tim shodo from UBS. Your line is open.
Sure. Thanks for the question Tim So we released the product in March and it's been one of the key drivers of growth acceleration for cash App and also what you saw overall for the <unk> platform. If you look across the second quarter <unk> for the NPL accelerated to 17% on a reported <unk>.
This 18% constant currency up from 13% and 16% respectively. In the first quarter. We also saw gross profit accelerated to 22% year over year growth.
<unk> of <unk>.
Accelerating story for the NPL overall.
The early signs that we've seen for post purchase the NPL had been really strong.
Stronger conversion strong adoption as I mentioned, we crossed the 1 million monthly actives Mark.
Great, thank you. I want to dig in a little bit more on Cash Card post. Purchase bnpl. So this topic comes up a lot because investors are now very confident in the ramp and borrow in the second half and the lapping Dynamics. Those are supportive of gross profit growth heading into at least the first half of 2026 as well. So we're often asked, what's the next big product that can help Drive the growth and the second half of 2026 and Beyond. Of course, there's a long list of items and many of them are highlighted in the shareholder letter, but 1 that stands out is Cash Card, post purchase, bnpl. You just mentioned some of the stats, the 1 million, the attached rates, the loss rates I was hoping, you could just elaborate a little bit more on this product in terms of those attached rates and just anything else that can help us to better quantify that opportunity in 2026 and Beyond.
We also crossed the $2 billion origination run rate Mark in July and expect to continue to expand eligibility and increased attach rates as we look at the back half of the year.
As I noted earlier, we're really taking the learnings from borrow and as we stack up post purchase the NPL against borrows early trajectory both in terms of origination volume and margin profile.
Because we're able to leverage our infrastructure around the cash up credit score we've been able to track ahead of where borrow is and we know that that's become a successful product for us. So we're encouraged about these early signs that we're seeing on the NPL.
Sure. Uh thanks for the question Tim. So um we release the product in March and it's been 1 of the key drivers of growth acceleration. Um for cash app and also what you saw overall for the bnpl platform, if you look across the second quarter gmz for bnpl Accelerated to 17% on a reported basis. 18% constant currency up from 13% and 16% respectively. In the first quarter, we also saw gross profit accelerate to 22% year-over-year.
Your growth, part of an accelerating story for BNPL overall.
I step back if I think about 2026, obviously, we'll have a lot more to say les.
Later in the year and at Investor Day, but I think about the nascent products that are still ramping like post purchase the NPL, which we'd expect to contribute more in 2006.
Our traditional paying for bringing that more into cash app and seeing that ramp in the 2006 cash app pay some of the newer products that we've talked about like tap to pay cash for business. All of these newer products continuing to ramp.
And in 2026 for cash App.
I'd expect borrowed a continue to be a growth driver for us as well, it's not just about the back half of this year.
And there is also as we look ahead into 2026 compounding effects of these go to market investments, we're making across each of cash App and square.
So there are a number of drivers of growth as we look at 'twenty six that we get excited about and then most importantly, the key takeaways.
From this call as you heard from Jack is really around product velocity, increasing and so there is even more coming then than what we have today.
Great. Thank you Amrita.
Your next question comes from the line of Darrin Peller from Wolfe Research. Your line is open.
And we know that that's become a successful product for us, so we're encouraged about these early signs that we're seeing on BNPL. If I step back, um, if I think about 2026, obviously, we'll have a lot more to say later in the year and at Investor Day. But I think about, you know, the new products that are still ramping, like post-purchase BNPL, which we'd expect to contribute more in '26. Um, you know our traditional Pay in Four bringing that more into Cash App and seeing that ramp into '26, Cash App Pay, and some of the newer products that we've talked about, like Tap to Pay on a Cash for Business. All these newer products continuing to ramp into 2026 for Cash App.
Guys, Thanks, and nice job just one more follow up on cash App I mean, it was obviously strong and accelerated well borrow was strong at 18 billion of originations, but really appreciate the new disclosure youre, giving I saw 8 million banking Act as you define as either one of the two and a half or $2 7 million in direct deposit users or I think someone's spending.
Uh, I I'd expect borrow to continue to be a growth driver for us as well. It's not just about the back half of this year, um, and there's also as we look ahead into 2026 compounding effects of these, go to market Investments, we're making across each of cash app in square.
$500 per month across.
Cash app. So that number was up 16% can you just touch on that metric a little bit more as a new I haven't seen that disclosure before and how you see that trending driving cash gross profit even into next year's if we're thinking about that the right way and then also I'd love to call out on new areas for potential growth in cash App. So just how has that been trending too. Thanks.
Um so there are a number of drivers of growth as we look at 26 that we get excited about. And then most importantly, the key takeaways uh, you know, from this call as you heard from Jack is really around product velocity um increasing. And so there's even more coming than than what we have uh today
Great, thank you, Amira.
You are. Next question. Comes from the line of Darren Peller from Wolfe research. Your line is open.
Guys.
Hey, Darrin I can get started on this one so.
So first of all I would say is what you saw on the letter is that we continued to experience strong growth on paycheck deposit actives with the $2 7 million that we reported in June. We also added another 100000 in July. So we're now over $2 8 million. So we continue to compound growth there, but as we have done it.
Sensitive research to inform our banking strategy, how we think about incentives how we think about marketing to this customer base and we did that customer research we observed that many more people look at cash app as their primary banking partner.
Guys. Thanks a nice job. Just to 1 more, follow-up on cash app. I mean, it was obviously strong and accelerated. Well, borrow was strong at 18 million of originations, but we really appreciate the new disclosure you're giving. I saw 8 million banking active, you define as either 1 of the 2 and a half or 2.7 million direct deposit users or I think someone spending 500 per month across uh cash app. So that number was up 16% can you just touch on that metric a little bit more? It's a new. I haven't seen that disclosure before and how you see that trending driving cash app gross profit even into next year if we're thinking about that the right way. And then I also love the call out on New areas for potential Mao growth on cash app. So just how's that been trending, too.
And the ones, who we are recording in the paycheck composite active metric so that caused us to analyze inflows we looked at spend levels we looked at.
Nice guys.
Transaction metrics to better understand how our customers are using cash app and based on that analysis. We put forward some of the new metrics that you noted in the letter in particular.
Looking at our spend threshold.
The primacy of a banking relationship and that 500 dollar per months thresholds. We thought was important the average debit card spend in the U S is about $900 a month.
Hey, Darren, I can get started on this 1. Um, you know, so first, what I would say is what you saw in the letter is that we continued to experience strong growth on paycheck deposit, active with a 2.7 million that we reported in June. We also added another 100,000 in July, so we're now over 2.8 million. Uh, so we continue to compound growth there. But as we have done, extensive research, to inform our banking strategy. Um, how we think about incentives, how we think about, uh, marketing to this customer base.
That would reflect really someone who by and large making cash app card top of wallet.
And when you look further at the <unk> of these 8 million banking actives, who are either depositing a paycheck or spending $500 first of all they are growing quickly up 16% year over year over year second of all they are deeply engaged.
They generated more than $250 and gross profit per active on an annualized basis in the second quarter.
Which is obviously three times cash ups blended $87 <unk>.
And on average they transacted more than more than 40 times across cash App in June.
So we're pretty encouraged about our traction with our banking strategy, we know that there's millions of people who place their trust in cash app to be their banking platform, we're going to be doing more you mentioned testing higher borrow limits for paycheck deposit actives.
As we did that customer research. We observed that many more people. Look at Cash app as their primary banking partner, then the ones who we are recording in the paycheck, deposit active metric so that caused us to analyze inflows. We looked at spend levels, we looked at, um, transaction metrics to better understand how our customers are using cash app. And based on that analysis, we put forward some of the new metrics that you noted in the letter in particular, um, you know, looking at a spend threshold as the Primacy of a banking relationship. Um, and that $500 per month threshold, we thought was important. The average debit card spend in the US is about $900 a month
You'll also see us testing expanding our banking benefits based on the spend thresholds.
So we will be doing more to bring awareness and incentives around our banking platform.
So that would reflect really someone who's, you know, by and large making cash app card, top of wallet. Um, and when we look further at the arpu of these 8 million, um, banking active, who are either a depositing, a paycheck or spending dollars, first of all, they're growing quickly up 16% year-over-year. Second of all they're deeply engaged. Um, they generated more than $250 in gross profit per active on an annualized basis in the second quarter.
Thank you Marie.
Your next question comes from the line of Reena Kumar from Oppenheimer. Your line is open.
I um which is obviously 3 times uh cash apps Blended $7 rpu.
Good afternoon. Thanks for taking my question last year, you started to lean a bit more into it.
Two a square sales effort and of course, you've launched a number of new products can you talk a little bit about some of the returns you're seeing on these investments and is it scaling as you expected.
Yes, we're very excited about what we're seeing in the early results of our expanded go to market playbook.
We are getting ourselves in front of a much wider set of sellers now and we're starting to see that accrete in terms of market share gains.
And on average, they transacted more more than 40 times across cash app in June. Um, so we're pretty encouraged about our traction. Um, with uh, our banking strategy. We know that there's millions of people who place their trust in cash app to be their banking platform. We're going to be doing more, we mentioned, testing higher bar limits for paycheck, deposit active. Um, you'll also see us testing expanding our banking benefits based on the spend thresholds. Um, so we'll be doing more to bring awareness and uh, incentives around our banking platform.
Particular from a sales perspective, what we're seeing is.
Strong growth in the first half of this year on new volume at 20% plus growth rates on new volume at it and we actually expect that growth to more than double in the fourth quarter just on the back of how we're ramping our sales team across both field sales and telesales field sales, which is a newer motion for us we're seeing an LTV to CAC, which is.
Your next question comes from the line of Rhea. Kumar from Oppenheimer. Your line is open.
Good afternoon. Thanks for taking my question last year. You started to lean a bit more into a um, into a square sales effort. And of course, you've launched a number of new products. Can you talk a little bit about some of the returns you're seeing on these Investments? And if it's scaling as you expected,
How we measure returns on investment.
At a extremely strong rates and payback as I noted earlier in that 5% to six quarter range.
So thats whats given us the confidence to continue to ramp both the field sales team as well as our telesales teams both in the U S and internationally.
Hey Rhea. Uh yeah, we're very excited about what we're seeing um in the early results of our expanded, go to market Playbook,
Um, we are getting ourselves in front of a much wider set of sellers now, and we're starting to see that acree in terms of market, share gains.
And the marginal returns of these new hires are very strong which gives us conviction to continue investing here. So is that sales motion.
In concert with our partner motion, where we are seeing exceed.
Exceeding our expectations from a partner driven need perspective in the second quarter and also newer channels of growth within the partnership world around our first U S. ISO partnerships, that's what's driving very strong momentum across our sales channels and I would also just note the strong growth that we're seeing from them.
You know, in particular, from a sales perspective, what we're seeing is, um, you know, strong growth in the first half of this year on new volume added, 20%, plus growth rates on new volume added. And we actually expect that growth to more than double in the fourth quarter, just on the back of how we're ramping our sales team across both field sales and Telus sales. Field sales, which is a newer motion for us, we're seeing an LTV to CAC, which is, you know, how we measure returns on investment, uh, at extremely strong rates and payback, as I noted earlier, in that 5 to 6 quarter range.
International perspective, that's another place, where we take international at 25% GP growth, 19% gross profit growth in the second quarter.
That's really benefiting from the investments that we've made on the ground with our sales motions.
And I would say even the final thing I'll say is that.
While we've seen really strong sales enabled growth through both field sales telesales and partnerships. It hasnt come at the detriment of self Onboarding from what we've seen we continue to see really strong volumes with our.
Already healthy sort of self onboard motion as well.
Your next question comes from the line of Trevor Williams from Jefferies. Your line is open.
Great. Thanks, a lot I wanted to go back to the spread between gross profit and <unk> growth and square that was a bit narrower than where it was in the first quarter. If you could talk through some of the moving pieces. There I think you had pricing that went in at the end of March the network incentives Amrita mentioned, just what the offsets to those were and then for the rest of the year.
Um, so that's what's giving us the confidence to continue to ramp both the field sales teams, as well as our Telus sales teams, both in the US and internationally. Um, and the marginal returns of these new hires are very strong, which gives us conviction to to continue investing here. So it's that sales motion, uh, in concert with our partner motion where we are seeing, you know, exceeding, our expectations, from a partner-driven lead perspective in the second quarter and also newer channels of growth within the partnership world, you know, around our first US ISO Partnerships, that's what's driving, very strong momentum across our sales channels. And I would also just note the strong growth that we're seeing from an international perspective. That's another place where we take International at 25%, gpv growth, 19% gross profit growth. In the second quarter is really benefiting from the Investments that we've made on the ground.
Sounded like gross profit a bit below <unk> in Q3 and in line in Q4, just the moving pieces within those two quarters and if longer term, we should be thinking about a pretty tight spread between those two growth rates. Thanks.
With our sales motions. Um, and I would say, even, you know, the final thing, they'll say, is that while we've seen really strong sales enabled growth through both field sales, you know, Telus sales and Partnerships. It hasn't come at the detriment of cell phone boarding from what we've seen. We continue to see really strong volumes uh with our you know, already healthy sort of cell phone board motion as well.
Sure I think the main thing Thats going on here is a few nuanced here near term dynamics.
Packing square gross profit that arent really a reflection of the underlying strength of the business.
You. Our next question comes from the line of Trevor Williams from Jeffrey's. Your line is open.
Ultimately what we're focused on is compounding sustainable GTD gross and we know that that will accrete to gross profit growth.
Key one of the key things that we're looking at we just talked about our sales motion is that our new profit added from new cohorts of customers is even stronger than new volume added in the U S, which tells us that our pricing and.
Attached to two additional products across our ecosystem continued to be strong as we onboard these new customers again that will compound over time as we get into 'twenty six and beyond in the near term. There are a couple of dynamics to point out so as I mentioned in the interim remarks, we made some changes that increase our operational flexibility.
Great. Thanks a lot. Uh, I wanted to go back to the spread between gross profit and gpv growth in square. That was a bit narrower than where it was in the first quarter. If you could talk through some of the moving pieces there, I think you had pricing that went in at the end of March. The network incentives and Rita mentioned, just what the offsets to those were and then for the rest of the year, it sounded like gross profit a bit below gpv and Q3 and in line and Q4, just the moving pieces, within those 2 quarters. And if longer term we should be thinking about a a pretty tight spread between those 2 growth rates. Thanks.
<unk> ability at a processing partner that modestly increased squares processing costs.
So in the second quarter, we absorbed approximately two points of gross profit growth headwind from this shift, which basically offset that network remediation payments that we had talked about earlier.
And that's something that we would also expect as I noted earlier to impact the third quarter, but will.
Is it sort of a couple of quarter impact.
We will lap that as we head into 2026.
Sure, I think the main thing that's going on here is a few nuanced near nearer term Dynamics uh impacting Square, gross profit. That aren't really a reflection of the underlying strengths of the business. Ultimately, what we're focused on is compounding, you know, sustainable gpv growth and we know that that will accrete to to gross profit growth. The key 1 of the key things that we're looking at. We just talked about our sales motion is that our new Prophet added from new cohorts of customers, is even stronger than new volume added in the US, which tells us that our pricing and um, attached to to, um, to additional products across our ecosystem, continue to be strong as we onboard these new customers. And again, that will
The second key thing I would point out is hardware costs.
Some of our newer hardware with handheld.
Seen strong adoption.
And it continues to be a great go to market new customer acquisition channel for us.
Pound over time as we get into Q2 2026 and beyond in the near term, there are a couple of dynamics to point out. So, as I mentioned in the intro remarks, we made some changes that increased our operational flexibility at a processing partner, which modestly increased Square's processing costs.
So that's one that we want to lean into.
As we bring new customers into the platform. So that's another impact from the Q3 perspective, ultimately, though we expect to exit the year with gross profit and GPT growth roughly in line with each other and to continue to focus on that cross sell or more of our products to customers to help them run and grow their business.
Your next question comes from the line of Hershey their robot from Bernstein. Your line is open.
Uh, we will loop that as we head into 2026.
Hey, good afternoon, I wanted to ask about cash sharp user growth Jack you talked about focusing more on network density, including a focus on families and teams and nice to see some of the product like schools that have gone through this quarter. You've also had some marketing campaigns I guess my question is.
What other things can you go can you do to grow the network and users of <unk>.
The richest stalled in recent quarters and then just as a quick follow up any comments of bitcoin mining initiatives in light of the recent deals closing.
The second key thing I'd point out is Hardware costs hard. You know, some of our newer Hardware with handheld, uh, has has seen strong adoption. Um and it continues to be a a great go to market, new customer acquisition channel for us. Um so that's 1 that we want to lean into um as we bring new customers into the platform. So that's another impact from the Q3 perspective. Ultimately though, we expect to exit the year with gross profit and gpv growth roughly in line with each other and to continue to focus on that cross sell of more of our products to customers to help them run and grow their business.
Closing GOSE score scientific thank you.
Yes.
I'll start on the Protos mining, we're going to have some news very very soon.
Your next question comes from a line of Harsha robot from Bernstein. Your line is open.
I'm really sorry.
So we're really excited about everything happening with the.
Roto.
We've built.
They are out there.
The market is about to placebo.
It's the most flexible.
Most customers will and refocus entirely.
With customer feedback on Greg, So I'm really happy customers.
Great.
<unk> take a lot of market share.
Hey, good morning.
In terms of cash flow.
<unk>.
Good afternoon. Um I want to ask about cash at user growth um Jack you talked about focusing more on network density including the focus on families and teens and nice to see some of the product like schools that have gone through this quarter. You've also had some marketing campaigns. I guess my question is, what other things can you grow? Can you do to grow the network and users at Cash app to grow the richest store in recent quarters? Um, and then just as a quick, follow-up, any comments of Bitcoin mining initiatives in light of the recent, do you from um schools even go. Go scientific. Thank you.
Just looking.
Our customer base and our future customer base, we believe that we're building.
The money up for exploration.
As we think.
A huge opportunity for us.
Yeah. Um, I'll start on a Proto and Mining. Um, we're gonna have some news uh, very, very soon as I'm Rita said, we we uh, this will be as soon as next week. Um, so we're really excited about everything happening with, uh,
Fairly untapped.
Theres not a lot of folks so that they are doing it very well.
Resonates Matthew Lee.
A younger crowd.
It's Paul works easy.
Preto. I think we've built the best minor out there and um the market is about to to see that we'll be able to prove it. It's the most flexible um, and the most customizable and we built this entirely
Absolutely everything.
People need.
<unk> are often given.
Sure.
And we plan to really leverage that.
Let me make something.
Even cooler and even more usable.
And pauses.
As a result of that we looked at what people are trying to do.
With customer feedback all along the line. So we're going to have some really happy customers and we're going to grow. Um, I'm working and take a lot of market share, I think. And I think in mining, um, in terms of cash out, it's uh, just looking deeply at, um, our customer base and our future customer base. We we believe that we're building
the money up for the Next Generation.
Hey.
We came up with this concept of multi player money.
Do you make money.
Work in a way for multiple people or lunch.
Just one incredible status of 60% of adults adults in the U S pull money for something.
Um, and we think it's a, a huge opportunity for us. Uh, it's fairly untapped, um, there's not a lot of focus out there. Doing it very well cash app, resonates naturally with a younger crowd.
So we wanted to make something that works closely but also allowed people to not have to give people the necessarily sign up for.
Frankly for cash flow.
Uh, it's cool, it works, it's easy, it has absolutely everything. Um, people need our parents are often giving as their parents access.
Can actually contribute to the pool using unless if they were to have which is apple pay or Google play.
And then see the full utility of catch up and then China themselves because they see it's so easy so we're looking very deeply.
Our customers or future customers.
And.
<unk>.
The products and the features that we built but also how we marketed.
Very early. And we we plan to to Really leverage that and and make something that is even cooler and even more usable and pools is a, you know, a result of that, you know, we looked at what people are trying to do with their money. And we came up with this concept of multiplayer money. How do you make money, um, work in a way for multiple people at once.
We have some super creative marketing.
That's only going to get stronger and stronger as the year goes on.
The number of features and number of products that we're going to be able to launch.
And and just 1 incredible stat, is that 60% of the adults adults in the US pull money for something?
Over this year is more than anything we've been we've been able to do in the past.
so we wanted to make something that, that worked flawlessly, but also allowed people to
Because of the technology, we have for growth with Jos.
So we're focused on all the reorganization that we did in the recent past.
Not have to get people to necessarily sign up for and the friends of for cash app but they can actually contribute to the pool um using a method they already have which is Apple pay or Google pay.
So now finally clicking.
And we're seeing it in the results as well.
And then see the full utility of cash app and, and then sign up themselves because they see it's so easy.
And the team is very far too.
Get as much.
Excellent product out there as we can to our customers.
So we're looking very deeply at our customers, our future customers, um, and this goes into, you know, the products and the features that we build but also how we Market it.
And.
We're reviewing a bunch of really cool stuff.
And all of it is felt like.
The early days when we were building something.
Um, we have some Super Creative Marketing and that's only going to get stronger and stronger. As the year goes on uh and the number of features and number of products that we're going to be able to Launch.
So, it's a little bit impossible, but.
We made it possible wondering did a really cool and it resonated right way so.
This here is more than anything. We've been able to do in the past.
That focus will pay off.
I think.
Today's of not shipping or over.
Uh, because of the technology, we have available to us. And, and also the focus, and all the reorganization that we that we did uh, in the recent past.
We're only as good.
Only a function of how quickly we can show up and how quickly we can experiment.
And how much we can put in customers hands in.
Um, so now it's finally clicking and we're seeing in the results as well. Um, and the team uh, is very fired up to just get as much.
Within pressure.
And I would just add that what we're seeing a lot of attack just talks about we launched relatively recently between cash that pools.
Just over this past week as we continue to ramp that to more customers tap to pay for cash that business also very recently, our marketing campaign.
the early days of cash up when we were building something that felt a little bit impossible, but
Which is a pretty buzzy and innovative behavior to get the message out to.
we made it possible and we made a really cool and it resonated right away so um that that Focus will pay off and uh,
To the next generation also sort of over the past months all of this is our.
Execution is speeding up it's all relatively recent the early signs that we're seeing on it maybe.
Maybe not even fully reflective in the <unk> results, but have been extremely encouraging.
I think, you know, the, um, the days of not shipping are are over. Uh, we're, we're only as good and only a function of of how quickly we can ship and how quickly we can experiment and and how much we can put in customers hands and and you know, it's it's never been faster.
Can I just add?
In terms of the metrics that we look at from an active an active engagement perspective. So clearly some early signs of success in reinvigorating network growth and cash App and we expect that to start showing results as we head into 'twenty six but thats part of the conviction that we had as we thought.
Appreciate that. You know what? We're seeing a lot of what...
<unk>.
Raising guidance in the back half of the year as well just on the execution for some of the very recent.
Relatively recently, you know, between cash app pools um just over this past week, as we continue to ramp that to more customers. Um, you know, tap to pay for cash app, Business also re very recently, our marketing campaign, um, which you know is a pretty Buzzy and Innovative way or to get the message out.
Yes.
Recent products and go to market initiatives from the cash out perspective.
Very helpful. Thank you.
Your next question comes from the line of Dan <unk> from Mizuho. Your line is open.
To the Next Generation. Also it it sort of over the past month. All of this is is is our execution is speeding up. It's all relatively recent, the early signs that we're seeing on it.
Hey, guys really good results.
Maybe not even fully reflective in the 2q results, but have been extremely encouraging.
Great job on growing everything, including the borrow products I do have a question, we're getting a lot of inbounds on it. This afternoon on this topic. So I did want to understand a little bit better how the Bora thing is evolving as it gets bigger as part of the business maybe murdo can you opine on the gross margin profile in terms of like.
What percent is it is it a 100% and maybe touch on the quantifying the puts and takes on the step up in losses.
In terms of the metrics that we look at from an active and and active engagement perspective. So, uh, clearly some early signs of success and re reinvigorating Network growth and cash app. And we expect that to start showing results as we head into 26. But that's part of the conviction that we had. As we thought about, um, raising guidance in the back half of the year as well, just on the execution for some of the very recent, um,
Again, because we're getting a lot of questions about this but overall great job in growing this and making a big business. So thank you.
Uh, recent product and go to market initiatives from the cash app perspective.
Very helpful. Thank you.
Hey, Dan, Yes, sure happy to talk more about borrow.
Your next question comes from the line of Dan doola from mizuho. Your line is open.
Obviously performance very strong this quarter origination volume doubled almost doubled year over year to $18 billion on an annualized basis in the second quarter and now with the 6 million monthly actives in June.
We expect that strength to continue as we rollout borrow to more states now under the sfas originations.
We also published I'd point, you towards our investor slides, which outlined our annualized net margin or A&M.
There is a big metric that we look at to measure the successful performance of the product and the unit economics of the product when we see there are the strong economics at 24% margins in the second quarter, which is above our 20% margin threshold. Then you see multiple quarters really in that mid 20% range.
Hey guys, uh, really good results. Uh, the great job on growing, uh, everything including the, uh, borrow product. I, I, I do have a question. We're getting a lot of inbounds on it, this afternoon, on this topic. So I did want to understand a little bit better. Uh, how the borrower thing is evolving as it gets bigger as part of the business? Maybe, you know, I'm Rita, can you apply on on the gross margin profile in terms of like you know, what percent is it? Is it 100% and maybe touch on. Like quantifying to put some takes on the Step Up in in losses. Uh, again, because we're getting a lot of questions about this. But overall, you know, great job on growing this and and making a big business. So thank you.
Even as we continue to as we continue to ramp.
<unk> meaningfully we also see borrow.
Hey Dan. Yeah, sure. Happy to talk more about Borrow. Um, obviously, performance is very strong this quarter. Origination volume doubled—almost doubled—year-over-year to $18 billion on an annualized basis in the second quarter. And now it's 6 million monthly active users in June.
First and foremost is a strong product on its own but also a key part of the engagement strategy for the cash that banking strategy that we noted earlier, because we know our customers really value access fast access to liquidity.
As we noted we're going to be testing higher borrow limits for a paycheck deposit actives and explore other ways that we can use borrow that drive engagement across cash app.
On the last point, taking a step back.
Some borrowers specifically the core asset that we're leveraging to power borrow and also.
Um, we expect that strength to continue as we roll out, borrow to more States. Um, now under the, you know, SFS originations, um, we also published, I'd point you towards, uh, our investors slides, which outline our annualized, net margin or A&M. Um, this is a big, you know, metric that we look at to to measure the successful performance of the product in the unit economics of the product. What we see there are the strong economics at 24%. Margins in the second quarter which is above our 20% margin threshold and you see multiple quarters really in that mid 20% range.
Post purchase on.
<unk> on cash up cards is cash ups internal credit score.
If our internal.
Huston.
Credit, scoring mechanism incorporating data across our customers and how they are using cash app to inform an underwriting decision and eligibility for our customers. It continuously updated absorbed the data across cash ups.
Ecosystem to assess basically where we can underwrite our customers, whether we can and then at.
Even as we've continued to uh, as we continue to ramp Pro, uh, borrow meaningfully, we also see borrow, you know, first and foremost is a strong product on its own, but also a key part of the engagement strategy for the cash. That banking strategy that we we noted earlier because we know um, our customers really value access fast access to liquidity. So as we noted, we're going to be testing higher bar limits, uh, for our paycheck deposit active and and explore other ways that we can use borrow to drive engagement across.
At what credit limit we can.
And we put out a white paper recently that talks to this but as we look at our credit model, our internal credit model can improved 38% more customers compared to vantage score.
Cash app on the Lost point, you know, taking a step back.
At the same loss threshold, which means that we can effectively expand access to people who are sort of left out of are underserved by the traditional.
Uh, from Borrow specifically, the core asset that we're leveraging to power Borrow. And also, you know, post-purchase on BNPL on Cash App Card is Cash App's internal credit score.
It's it's our internal, Uh, custom.
Financial ecosystem. So we're pretty excited about what borrowers being able to do and all while maintaining loss rates in that sort of 3% or less range.
With strong unit economics.
Great. Thank you, operator, and really nice to see August businesses evolving.
Joe.
Thank you.
Your next question comes from the line of Matthew O'neill from Ft Partners. Your line is open.
Yes, hi, Thanks, Jack and Amrita for taking my question.
I just wanted to drill in and here's some early observations, particularly around the rollout of new hardware and seller, notably the handheld.
We can and we put out a white paper recently that talks to this. But as we look at our credit model, our internal credit model can approve 38% more customers compared to Vantage Score.
I'm curious.
If youre seeing anything around Tam expansion and win rates improved retention or anything else that would be.
Let me get to share here.
Yes.
We've been we've been Super excited about square handheld it.
At the same loss threshold, which means that we can effectively expand access to people who are sort of left out of or underserved by the traditional, uh, you know, Financial ecosystem. So we're pretty excited about what borrow has been able to do and all while maintaining loss rates in that sort of 3% or less range uh with strong unit economics,
Definitely our best form factor yet.
We talked a lot in and again like we listened to our customers on what their needs are and it's something that's super portable Super affordable an extremely durable.
Great. Thank you and Rita and really nice to see you know how this business is evolving. Great job.
Thank you.
You're our next question. Comes from the line of Matthew O'Neal from Ft Partners. Your line is open.
But what's most interesting about it is that it scales to multiple types of commerce not just for the restaurants that can be used in the retail setting or service setting.
So it's.
By far and away our most flexible I think one of the most flexible and the.
The industry.
Launches in the U S and the.
In Q2, and we're starting to roll it out internationally right now.
Yeah. Hi. Thanks Doc, and I'm Rita for taking the question. Um, I just wanted to drill in and here's some early observations, uh, particularly around the rollout of new hardware and seller notably the handheld, um, curious. Uh, if you're seeing anything, uh, around Tam expansion win rates, uh, improved retention, uh, or or anything else, that would be, uh, would be good to share here. Thanks.
So super excited about it.
The hardware has always been a big driver for us and we think it will continue to be that makes for a very easy sale.
Especially two or you are.
Our customers are winning some of those away from from others.
Yeah, um, we we've been, uh, we've been super excited about Square, handheld. It's, uh, definitely our best form factor yet. Uh, we packed a lot in and again, like we listened to our customers on on what their needs are and made something that's super portable. Um, super affordable and and extremely durable.
But of course, it's not.
That's not the only driver there the other thing that I think it's going to be quite powerful over the next the.
Next year or so as can be square AI.
This is getting more and more sophisticated we started with just the ability for.
Customers too.
How quickly it gets more customized reports.
But as we said a few earnings calls ago, we want those to effectively act as a virtual zero.
Virtual manager if you will.
Hope folks manage their business of any type whether it be a restaurant retailer or service.
And at any scale.
The team has been working super hard and fast.
Um, but what's most interesting about it, is that it scales to multiple types of Commerce, not just for the restaurants but it can be used in a retail setting or service setting, so it's by far in a way. Our, our most flexible, and I, I think 1 of the most flexible in the industry, um, we launched it in the US and in the, in, in Q2 and we're starting to roll it out internally right now. Um, so super excited about it. Uh, when Hardware has always been a big driver for us and we think it will continue to be, it makes for a very easy sale, um, especially to our newer customers or are winning uh, sellers away from from others.
Making sure that it really lives up to that promise.
We're starting in the dashboard, because that's where all of our sellers spend the majority of their time. It's also our one opportunity to introduce them to the entire square ecosystem.
We can introduce them to a lot of our other services.
Um, but of course it's it's not uh, you know, it's not the only driver. The, the other thing that I think it's going to be quite powerful over the next, uh, next year or so is going to be, um, Square AI. Um, this is getting more and more sophisticated. We we started with, you know, just the ability for a customers to
Including banking and customer relationship management.
Quickly get more customized reports.
It's a really good flywheel for us.
It allows us to put a natural intuitive.
Language first option on all of the complexity.
Overall ecosystem that we can we can offer sellers.
Much simpler way.
And then of course.
The other big feature that we announced recently was enabling bitcoin.
Acceptance on square.
And this this is early but we think it's a big one and we think that's a good complement to.
Everything that we're doing there's also been a lot of talk about stable claims our philosophy of square has always been to accept every form of payment.
<unk> across the counter and we're certainly going to enable our sellers to accept every form of payment including declining or.
Um, but as we said, a few earnings calls ago, we want this to effectively act as a virtual Co, um, virtual manager, if you will, um, to help folks manage their business of any type, whether it be a restaurant retailer or service, uh, and at any scale and the, the team has been, you know, working super hard and and fast on making sure that it really lives up to that promise. Um, we're starting in the dashboard because that's where all of our sellers spend the majority of their time. It's also our 1 opportunity to introduce them to the entire Square ecosystem. So that we can, uh, introduce them to a lot of our other services, uh, including Banking and customer relationship management. So it's a really good flywheel for us, and it allows us to put a natural intuitive.
Tether or circle.
Anything that people are actually using to pay for goods and services, we're going to enable our sellers to accept because it means they always they always make the sale.
Uh, language first option on all the complexity, um, of our ecosystem that we can, we can offer sellers in a in a much simpler way.
um,
and then, of course,
And that's really critical to us so those three are the hardware.
Our.
The, the other big feature that we announced recently was enabling Bitcoin uh acceptance on Square.
AI efforts within the dashboard in the App itself and the new forms of payments. So all of our sellers up for <unk>.
Much more.
A much more comprehensive and flexible.
Offering in the operation.
And we pair that with just much stronger go to market and sales.
Our marketing releases last marketing release, we're done this twice a year.
And we can't wait for the next one.
And everything that Nick and team has been doing with field sales and just really refining our approach.
And uh this this is early. Um but we think it's a big 1. We think it's a good compliment to everything that we're doing. There's also been a lot of talk about um stable coins. Our philosophy at square has always been to accept every form of payment that comes across the counter. And we're certainly going to enable our sellers to accept every form of payment, including Bitcoin or uh, tether or Circle, any anything that people are actually using to pay for goods and services. We're going to enable our sellers to accept because it means they always they always make the sale.
It's starting to show the effectiveness from all scale.
So from the very small to the very large so the income.
It's a perfect formation such that we can make really compete.
Um, and that's really critical to us. So those 3, the hardware um are uh AI efforts uh within the dashboard and and the app itself and then new forms of payments set all of our sellers up for
On the merit of our offerings, which Richardson garments.
A much more, um, a much more comprehensive and flexible, uh.
Thanks, guys I appreciate it.
Uh, offering and operation.
Thank you.
We will now take our last question from the line of David Koning from Baird. Your line is open.
Yes, Hey, guys great job. Thank you.
I guess you touched on the willingness to accept stable coins at your sellers I was just thinking more broadly you focus so much on bitcoin historically kind of what's your philosophical thought around stable coins, where do you think it's going to be most useful and how might you guys play within the broader stable coin ecosystem.
Much stronger go to market and sales, um, our our marketing. Releases our last marketing release. We're doing this twice a year. It was a hit and we can't wait for the next 1. Um,
I think the most important thing is if people want to use it to purchase.
Or if they want to use it.
Transact a transmit money through catch up we're going to support it.
and, uh, everything that Nick and team has been doing with, uh, field sales and, and just really refining, our approach, uh, is starting to show, uh, the effect. And that's from all scale of our Sellers, from the very small to the, to the very large. So, I think, um, it's a, it's a, it's a perfect formation, um, such that we can like really compete on the Merit of our offerings, which, which I think are immense
Thanks Jack, appreciate it.
So you should expect square and catch up to support these things.
Thank you.
People are using them and we would focus on.
We will now take our last question from the line of David coning from Baird. Your line is open.
On the major ones in use.
We do have a bank and we do we can offer them stable coin.
And there are a lot of stable claims being.
January is at right now.
And I don't necessarily always see the product market fit frozen I don't see the differentiator. It really comes down to what are people using and why are they using it in right now several quarters are predominantly use remittance use case.
Yeah. Hey guys, great job. Thank you. Um you know I just you you touched on uh the willingness to accept stable coins at your sellers. I was just thinking more broadly, you focused so much on bitcoin historically kind of what's your philosophical thought around stable coins? You know where do you think it's going to be most useful? And how might you guys play Within the broader? Stablecoin ecosystem.
If they do become more payments oriented will be there.
I think the most important thing is, if people want to use it to purchase,
I don't think right now that it makes sense for us to offer one because I just don't think there is a huge differentiator.
Above and beyond what exist.
You above and beyond what.
Or if they want to use it to um transact or transmit money, through cash app, we're going to support it so you should expect square and cash app to support these things. If if you know um people are using them and we would focus on
<unk> provides.
On the major, uh, ones in use.
<unk> still stands alone and is being entirely net new and it has properties that none of these favorable coins have.
We do have a bank and we do we we can offer our own stable coin.
And there are a lot of stable coins being um, generated right now.
Which make it a better form of currency.
Rest of them, it's certainly proven the case over 16 years of historic value.
But our intention is to make sure that they call it becomes the native currency.
Unless users everyday money.
And we.
We think it can get there.
And I don't necessarily always see the product Market fit for all of them. I don't see the differentiator, it really comes down to what are people using and why they're using it. And right now, it's stable coins are predominantly used in a remittance use case. Um, if they do become more payments oriented, we'll be there.
Very quickly.
And the reason to focus on that is because it's independent of any one particular corporation or any government.
Uh, I don't think right now that it makes sense for us to offer our own because I just don't think there's a huge differentiator.
And.
It allows us to move much faster with our business as it does is it does become more and more of a standard.
above and beyond what exists and in my view about and Beyond what what Bitcoin provides
Not only is stored value, but remains and also payment settled.
Square to go to every single market.
Almost instantly as the same is true for cash app as well.
So we're huge believers in it we know it's going to be a long road.
Bitcoin still stands alone, and it being entirely net new, it has properties that none of these stablecoins have, which make it a better form of currency than the rest of them. It has certainly proven the case over 16 years as a store of value.
It's a protocol protocols move a lot slower than.
Products in.
But Our intention is to make sure that Bitcoin becomes a native currency of the internet and that's used as everyday money.
And companies tend to do but they tend to last longer as well.
And um, we think it can get there.
Very quickly.
And that's why we believe so much in we didn't massively accelerates our business when the dose we intend on.
On making it as soon as possible.
And the reason to focus on that is because it's independent of any one particular corporation or any government.
Great. Thank you.
Ladies and gentlemen, thank you for your participation in today's program. This does conclude the program you may all disconnect.
And it allows us to move much faster with our business, as it does, as it does become more and more of a standard, not only a store value. But remittance and also payment that allows Square to go to every single Market uh almost instantly. And the same is true for cash app as well.
So we're huge Believers in it. We know it's going to be a long road. Um, it's a protocol, protocols move a lot slower than uh products and and uh and and and companies tend to do. But they tend to last longer as well. And and that's why we believe in it so much, and reading it, massively accelerates our business, uh, when it does hit and we intend on
on making it hit as soon as possible.
Great. Thank you.
ladies and gentlemen, thank
Thank you for your participation. In today's program, this does conclude the program. You may all disconnect