Exhibit 99.1
Q2 2026
Shareholder Letter
| investors.block.xyz |
| To Our Shareholders We’ve never accepted shortcuts to building exceptional capabilities. Through multiple technology shifts, we’ve recognized early what would matter for our customers and built the infrastructure to deliver it ourselves. That work is slower at first but it compounds. And as AI collapses the cost of building software, the things that can’t be built on demand become the differentiators: judgment, trust, depth of understanding, and capability. Owning those is why we believe our growth is durable through this shift just as it was through the last ones. Our results this quarter, year over year gross profit growth of 25% and record profitability, and our raised guide for the full year, reflect years of that compounding. This letter is about the two capabilities compounding fastest right now: hardware and AI. We founded Square because many sellers didn’t have access to the tools they needed to run their business. Building a card reader that worked with early smartphones forced us to master the hard details: chip architecture, power consumption, industrial design, supply chains, manufacturing, and cryptographic security. We could have relied on third parties to build it for us, but instead we built the capability ourselves, and the reader became more than a product. It became a viral engine for customer acquisition. That is the pattern we look for: a hard capability owned end to end that converts directly into growth. That same practice keeps producing. It built Bitkey and Proto for bitcoin custody and mining. It gave tens of millions of people custom designed Cash App Cards. And this quarter it produced Cash App Tags, NFC chips that connect physical objects to a customer’s Cash App Card and turn everyday items into payment instruments, with a foundation for agentic commerce built in. Tags follow the reader’s playbook exactly:iconic hardware driving viral acquisition. A capability we built fifteen years ago is still opening new growth surfaces today. Intelligence tools are the next major technology shift, but machine learning is not new to Block. We’ve run it in production since our beginning because our business doesn’t work without it. Instant seller onboarding, rapid fraud detection, and loan underwriting are all machine learning problems, and we’ve been solving them at scale for over fifteen years. So when generative models arrived, the question was never whether we could put AI into production, but how to build on a technology improving this fast. Our answer was to stay model agnostic. | Q2’26 Highlights¹ Gross Profit $3.17B +25% YoY Growth Cash App Gross Profit $1.97B +31% YoY Growth Square Gross Profit $1.16B +13% YoY Growth Operating Income $447M 14% Margin² Adjusted Operating Income³ $864M 27% Margin Diluted Net Income Per Share (“EPS”) $0.15 Adjusted Diluted EPS⁴ $1.02 |
¹ Reconciliations of non-GAAP financial measures used in this letter to their nearest GAAP equivalents are provided at the end of this letter. Please see these reconciliations for additional detail and a description of certain items that affected operating income (loss) and net income (loss) in the second quarter of 2026.
² Margins are all calculated as a percent of gross profit.
³ Adjusted Operating Income is a non-GAAP measure of operating performance and the profitability of our business, fully burdened by share-based compensation. For more information, please refer to the “Key Operating Metrics and Non-GAAP Financial Measures” section of this letter.
⁴ Adjusted Diluted EPS is a non-GAAP measure of profitability of our business. For more information, please refer to the “Key Operating Metrics and Non-GAAP Financial Measures” section of this letter.
We built goose in early 2024 to work with any model because betting on a single lab means inheriting its ceiling. That led to us creating Builderbot to own orchestration across Block’s entire codebase, and in June, agentic AI helped write and review nearly all of our production code changes. Moneybot is generally available with over 1 million weekly engaged accounts and Managerbot is already automating marketing, margin analysis, and operational fixes for sellers.⁵ In July we launched Buzz, our internally developed system for agent collaboration, communication, and code repositories, built to give teams of all sizes more time back, reduce coordination drag, and increase the speed at which we can ship and learn for customers.
All of it runs on one internal platform for model access, routing, tools, and permissions, with evaluation systems that let us improve quality independently of the underlying models. When a better model ships we can switch, and everything we’ve built gets better the same day.
These capabilities matter because of what they’re combined with. Block sits on both sides of commerce: millions of sellers running their businesses on Square, tens of millions of people managing and moving their money on Cash App, and Afterpay connecting both. That network generates first-party context no one else has. Transactions, inventory, staff, cash flow, and operations all on one side. Spending, saving, sending, and borrowing on the other. And we already know what happens when we combine that data with owned capability. Risk and lending were our first intelligence layer. Square Loans are underwritten on data banks can’t see and serve sellers banks won’t. Our loan cohorts have had loss rates of less than 4% through every cycle we’ve seen. Cash App Borrow does the same for consumers. We chartered our own bank rather than always relying on someone else’s banking stack. The intelligence layer we’re building runs that same play across everything our customers do: giving them time back, helping improve their decisions, and getting stronger with every interaction. The durable differentiation is the combination of a two-sided network generating proprietary data and the AI capabilities to use it well.
Many companies have proprietary data but lack those capabilities. They will build on one vertically integrated lab that owns the model, the interface, and the economics. That may be the easy path. But generic AI creates generic outcomes, and no one differentiates with a model everyone else can rent. We took the opposite path. To us the models are interchangeable, and everything that matters, the harness, the data, and the distribution, is ours.
AI will make software creation abundant. Judgment, trust, depth of understanding, and capability will become scarce. Our advantage is that we understand which things matter for the customers we serve, we own the hard capabilities behind them, and we’ve connected them into a network that compounds with every seller and every customer who joins. That is what has sustained our growth through every shift so far, and it is what will sustain it through this one.
⁵ Moneybot weekly engaged accounts are accounts that sent at least one message to Moneybot during the trailing seven-day period, either by entering a message or tapping a suggested prompt. This product engagement metric is based solely on interactions with Moneybot.
Business Highlights
Square U.S. GPV growth accelerated to 10% in the second quarter, the strongest growth rate since the second quarter of 2023.⁶
New customer acquisition, retention, and same store growth all contributed to GPV growth acceleration. New customer acquisition was strong across distribution channels and geographies, as we continued to scale field sales and sign new Independent Sales Organization (ISO) partnerships. New Volume Added (NVA) growth from self-onboarded sellers grew at the fastest pace since Q2 2021 while upmarket momentum continued as we launched new drive through capabilities for quick service restaurants and a number of order management capabilities for upmarket sellers.⁷
Recent seller wins include Ladurée, the franchise of the world-renowned Parisian patisserie, who chose Square as its exclusive commerce platform across every Canadian location due to our flexibility, versatility, and ease of use, and retailer Magnolia Soap & Bath Co. who chose Square to give its 50-plus locations across 17 states a common platform for commerce, reporting, and inventory. We’re also expanding our partnership with OpenTable globally as their preferred point of sale partner. We expect this collaboration will accelerate our customer acquisition efforts, and help Square sellers deliver more personalized guest experiences.
We have high conviction that Neighborhoods has found product-market fit. Now we’re focused on scaling it.
Since launching auto-enablement for Neighborhoods, our loyalty, discovery and rewards experience that connects Square sellers with consumers, we’ve scaled the number of sellers by more than 10x, demonstrating that our onboarding model can scale efficiently. In our most recent cohorts of auto-enabled sellers, over 90% are adopting and remaining enabled on Neighborhoods, and as of June, we’ve scaled Neighborhoods to sellers representing a total of $1 billion in annualized gross payment volume (GPV), up over 220% from March. We’ve observed stable to improving Neighborhoods engagement among consumers across a range of metrics we track, and on average, spend from followers continued to reach 10% of seller GPV after three quarters on Neighborhoods. We see strong product market fit in the geographies where Neighborhoods has been live the longest.
We’re ramping auto enrollment across the country and testing new ways to drive density, such as auto enrolling eligible sellers and pairing that activation with dedicated account management. We’re also focused on increasing awareness of Neighborhoods among Square seller employees, experimenting with incentives to drive adoption. In June we expanded Neighborhoods eligibility to new hardware devices, including Square Terminal, more than doubling the number of sellers that can join Neighborhoods. We also deepened consumer discovery capabilities through Neighborhoods, adding a location specific Neighborhoods tab for customers in launched cities and a tailored onboarding flow for consumers in those markets. We continue to focus on scaling and expect that Neighborhoods will be one of the top attributable customer acquisition channels for Cash App in the near future.
Cash App’s product velocity is driving deeper engagement.
Primary Banking Actives (PBAs) grew 17% year over year as we continued our focus on building for modern earners.⁸ These customers are twice as likely to name Cash App as their primary banking platform, reflecting our focus on serving customers who earn across multiple income sources. In the second quarter we had several significant product launches to drive deeper engagement with our customers and better serve the modern earner.
⁶ Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds.
⁷ New Volume Added (NVA) is the total gross payment volume (GPV) processed, or expected to be processed, by new sellers during their first 12 months on Square. While intended to represent incremental volume from new cohorts, it may also include GPV from existing sellers in cases such as new locations or event-based merchant tokens. For the purpose of this letter, figures exclude deactivated merchants.
⁸ Square and Cash App are financial services platforms, not banks. Throughout this letter, any reference to Square or Cash App’s banking offerings or terms such as “primary banking actives” refer to products and services that are offered through Block’s Industrial Bank, Square Financial Services, Inc., or through our third-party bank partners. A transacting active is a Cash App account that has at least one financial transaction using any product or service within Cash App during a specified period. A transacting active for a specific Cash App product has at least one financial transaction using that product during the specified period and is referred to as an active. Examples of transactions include sending or receiving a peer-to-peer payment, transferring money into or out of Cash App, making a purchase using Cash App Card, earning a dividend on a stock investment, and paying back a loan, among others. Certain of these accounts may share an alias identifier with one or more other transacting active accounts. This could represent, among other things, one customer with multiple accounts or multiple customers sharing one alias identifier (for example, families). A Primary Banking Active (PBA) is a Cash App account that receives inflows from ACH or certain original credit transactions relating to earned wages, excluding tax refunds and ACH transfers, or spent at least $500 per month across Cash App, including Cash App Card, Cash App Pay, Afterpay through Cash App, and ACH bill pay during a specified period.
We built on the heritage of Cash App Card with the launch of Cash App Tags, a new line of tap-to-pay hardware that adds a physical, collectible form factor to Cash App. Tags has been a viral success: each launch sold out within hours and we have received more than 3 million requests to be notified of future Cash App Tag drops with zero paid marketing.
We launched Cash App Mobile, a $40-per-month unlimited 5G wireless plan, to save customers money and simplify their financial life. As of June, nearly 4 million monthly transacting actives pay phone bills on Cash App and Cash App Mobile is another way we can help customers save on recurring expenses while deepening engagement and long-term retention.
We also launched stablecoins on Cash App, expanding financial access for our customers through a seamless integration with USDC. Customers can transact in stablecoins across numerous blockchains without navigating unnecessary complexity, and USDC and traditional dollar balances are interchangeable in Cash App, marking another milestone in intuitive design and expanding access.
We continued to focus on expanding access to financial solutions in the second quarter.
In the second quarter, we continued to scale origination volume for Borrow, our short term consumer liquidity product, while ramping origination volume for Afterpay Post-Purchase, our retroactive consumer funded BNPL solution. We continued to observe differentiated engagement among Borrow actives, and customers utilizing both Borrow and Afterpay Post-Purchase were among the best performing risk loss cohorts. We continued to innovate for our customers, expanding BNPL functionality further by launching Afterpay Pre-Purchase to general availability. Afterpay Pre-Purchase gives customers the ability to dynamically choose between debit and BNPL before every eligible transaction. As of June, BNPL transactions were 17% of Afterpay Pre Purchase enabled card spend, showing strong product market fit among our customers, with especially strong adoption in everyday categories like groceries, gas and utilities.
The proprietary credit infrastructure that has enabled us to grow Consumer Lending Originations over 2x in the last 2 years at healthy risk loss rates also powers Cash App Score, our near real-time, individualized credit score built on Cash App activity.⁹ We continued to innovate on this infrastructure in the second quarter, expanding our Cash App Score engagement testing to more customers. We’ve also continued to expand our financial solutions innovation in Square, with Square credit card scaling meaningfully to over $1 billion in annualized spend in the quarter.
Within SFS, we recently expanded deposit-taking capabilities to offer high yield savings accounts for eligible Square sellers. Over time as deposits scale, they can help fund lending growth and reduce the amount of capital required to support that growth. SFS innovation is also expanding beyond lending: In June, SFS processed its first Square acquiring transaction and over the coming years we expect to shift more Square and Cash App acquiring volume to SFS.
⁹ Consumer lending origination volume includes originations from Cash App Borrow and our BNPL products.
Financial Discussion
We outperformed our gross profit guidance, growing 25% year over year in the second quarter, with strong gross profit growth across Cash App and Square. We reached an all time high Adjusted Operating Income margin of 27% and grew Adjusted Diluted EPS by 65% year over year to a record $1.02.
Second Quarter 2026 Financial Highlights
- Cash App Cash App Commerce Enablement volume grew 17% year over year to $56.5 billion, driven by Cash App Card and BNPL.¹⁰ Consumer Lending origination volume grew 59% year over year to $18.9 billion, driven by Cash App Borrow, while risk loss rates remained healthy. PBAs grew 17% year over year while Cash App monthly transacting actives were 59 million in June.
- Square In the second quarter, Square GPV grew 13% year over year on a reported and constant currency basis. Square’s U.S. GPV growth accelerated to 10% year over year, reflecting the strongest U.S. growth rate since Q2 2023, while International GPV growth sustained strong performance growing 28% year over year (25% in constant currency).
- Profitability We exceeded our Adjusted Operating Income guidance in the second quarter as healthy gross profit growth translated into greater profitability. Operating income was $447 million, while Adjusted Operating Income reached a record $864 million. Net income attributable to common stockholders was $89 million, Adjusted EBITDA reached a record $1.2 billion, GAAP diluted EPS was $0.15, and Adjusted Diluted EPS grew 65% year over year to $1.02.
Guidance11
| Line item | Q3’26 |
|---|---|
| Gross Profit | $3.13B |
| YoY Growth | 18% |
| Adjusted Operating Income | $875M |
| % Margin | 28% |
| Rule of X¹² | 46% |
| Adjusted Diluted EPS | $1.02 |
| YoY Growth | 89% |
| Line item | 2026 |
|---|---|
| Gross Profit | $12.51B |
| YoY Growth | 21% |
| Adjusted Operating Income | $3.47B |
| % Margin | 28% |
| Rule of X | 49% |
| Adjusted Diluted EPS | $4.02 |
| YoY Growth | 70% |
We are raising our full-year guidance to reflect the momentum we are seeing across Block. For 2026, we now expect $12.51 billion in gross profit, up 21% year over year, and Adjusted Operating Income of $3.47 billion, or 28% margin, growing 67% year over year. We also expect Adjusted Diluted EPS to grow 70% to $4.02.
¹⁰ Cash App Commerce Enablement volume includes GPV from Cash App Card, Cash App Pay, BNPL products, and Cash App Business.
¹¹ We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP metrics, including Adjusted Operating Income (Loss) and Adjusted Diluted EPS, or GAAP reconciliations of any of the aforementioned, as a result of the uncertainty regarding, and the potential variability of, reconciling items such as contingencies, restructuring, and other charges. Accordingly, the Company has relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K to exclude such reconciliations, as the reconciliations of these non-GAAP guidance metrics to their corresponding GAAP equivalents are not available without unreasonable effort. However, it is important to note that material changes to reconciling items could have a significant effect on future GAAP results. We have provided reconciliations of other historical GAAP to non-GAAP metrics in tables at the end of this letter, as well as relevant non-GAAP definitions.
¹² Rule of 40 is the sum of our gross profit growth and Adjusted Operating Income margin as a percent of gross profit. We may refer to a “Rule of” number other than 40 to refer to the sum of gross profit growth and Adjusted Operating Income margin as a percent of gross profit for the period given.
Block Financial Metrics
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Revenue ($M) | 6,054 | 6,115 | 6,252 | 6,618 |
| Commerce Enablement | 2,898 | 2,999 | 3,050 | 3,342 |
| Financial Solutions | 985 | 1,095 | 1,222 | 1,382 |
| Bitcoin Ecosystem | 2,172 | 2,021 | 1,980 | 1,894 |
| Gross Profit ($M)¹³ | 2,537 | 2,662 | 2,872 | 3,166 |
| YoY Growth | 14% | 18% | 24% | 25% |
| Commerce Enablement¹⁴ | 1,530 | 1,552 | 1,623 | 1,805 |
| YoY Growth | 11% | 11% | 11% | 18% |
| Financial Solutions | 902 | 1,006 | 1,132 | 1,289 |
| YoY Growth | 20% | 34% | 51% | 43% |
| Bitcoin Ecosystem | 105 | 104 | 118 | 72 |
| YoY Growth | 4% | 8% | 10% | (31)% |
Overall Block gross profit grew 25% year over year in the second quarter, with 31% year-over-year growth in Cash App and 13% year-over-year growth in Square. Commerce Enablement gross profit growth accelerated to 18% year over year, led by strength in Cash App. Financial Solutions gross profit grew 43% year over year, driven by Cash App Consumer Lending. Bitcoin Ecosystem gross profit declined 31% year over year, driven by a strategic decision to reduce the fee we charge on certain bitcoin transactions on Cash App and bitcoin trading dynamics.
¹³ Quarterly gross profit by category may not sum to total gross profit due to rounding.
¹⁴ Commerce Enablement gross profit reflects the impact of amortization of acquired technology assets.
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Gross Profit ($M) | 2,537 | 2,662 | 2,872 | 3,166 |
| YoY Growth | 14% | 18% | 24% | 25% |
| Operating Income (Loss) ($M) | 484 | 409 | 485 | 447 |
| Operating Income (Loss) Margin (%) of gross profit | 19% | 15% | 17% | 14% |
| Adjusted Operating Income ($M) | 550 | 480 | 588 | 864 |
| Adjusted Operating Income Margin (%) of gross profit | 22% | 18% | 20% | 27% |
| Diluted Net Income (Loss) Per Share (“EPS”) ($) | 0.87 | 0.74 | 0.19 | 0.15 |
| Adjusted Diluted EPS ($) | 0.62 | 0.54 | 0.65 | 1.02 |
Our performance in the second quarter demonstrates our ability to drive strong gross profit growth while expanding Adjusted Operating Income margins, which together compounded into meaningful Adjusted Diluted EPS growth. On a GAAP basis, we generated $447 million in operating income in the second quarter of 2026, compared to $484 million in the second quarter of 2025. Adjusted Operating Income grew 57% year over year, supported by strong gross profit growth and disciplined execution. On a GAAP basis, we delivered diluted EPS of $0.15. Adjusted Diluted EPS grew 65% year over year to $1.02.
Cash App
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Cash App Gross Profit ($M) | 1,501 | 1,624 | 1,831 | 1,973 |
| YoY Growth | 16% | 24% | 33% | 31% |
| Cash App Operating Metrics | ||||
| Cash App Monthly Transacting Actives (M) | 57 | 58 | 59 | 59 |
| YoY Growth | 0% | 2% | 3% | 3% |
| Cash App Primary Banking Actives (M) | 8.0 | 8.3 | 9.3 | 9.4 |
| YoY Growth | 16% | 18% | 22% | 17% |
| Commerce Enablement Volume ($B) | 48.3 | 49.7 | 54.7 | 56.5 |
| YoY Growth | 14% | 17% | 17% | 17% |
| Commerce Enablement Monetization Rate¹⁵ | 1.53% | 1.56% | 1.61% | 1.65% |
| Consumer Lending Origination Volume ($B) | 11.9 | 13.6 | 18.5 | 18.9 |
| YoY Growth | 40% | 51% | 69% | 59% |
| Total Cash App Inflows ($B)¹⁶ | 77 | 79 | 83 | 87 |
| YoY Growth | 8% | 12% | 15% | 13% |
| Inflows Per Transacting Active ($)¹⁷ | 1,345 | 1,366 | 1,410 | 1,469 |
| YoY Growth | 8% | 10% | 12% | 9% |
Cash App gross profit grew 31% year over year with strength in both Commerce Enablement and Financial Solutions. Commerce Enablement gross profit growth was broad based across BNPL products and Cash App Card, while Financial Solutions gross profit growth was driven primarily by Cash App Borrow. Commerce Enablement volume grew 17% year over year to $56.5 billion, reflecting strength in Cash App Card and Afterpay BNPL, while the Commerce Enablement monetization rate increased 12 basis points year over year to 1.65% driven by increased Afterpay Post-Purchase attach rates. We’ve also seen strong Cash App Pay growth, driven in part by our continued expansion with enterprise partners like Instacart and Uber. Cash App monthly transacting actives were 59 million in June, and PBAs grew 17% year over year to 9.4 million. Inflows per transacting active grew 9% year over year, driven in part by more customers bringing their paychecks into Cash App. Cash App Consumer Lending origination volume grew 59% year over year to $18.9 billion, driven largely by Cash App Borrow origination volume growth.
¹⁵ Cash App Commerce Enablement Monetization Rate is calculated by dividing Cash App Commerce Enablement gross profit by Cash App Commerce Enablement volume. Cash App Commerce Enablement gross profit is primarily composed of Cash App Card and BNPL products. Cash App Commerce Enablement volume includes GPV from Cash App Card, Cash App Pay, BNPL products, and Cash App Business.
¹⁶ Historically, our Cash App ecosystem has experienced improvements in revenue, gross profit, and inflows related to the distribution of government funds as customers have deposited more funds into Cash App during these times, including during the first quarter when U.S. tax refunds are typically distributed.
¹⁷ Inflows per transacting active refers to total inflows in the quarter divided by monthly actives for the last month of the quarter. Inflows refers to funds entering the Cash App ecosystem. Inflows does not include the movement of funds when funds remain in the Cash App ecosystem or when funds leave the Cash App ecosystem, or inflows related to the Afterpay app.
Square
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Square Gross Profit ($M) | 1,027 | 1,018 | 993 | 1,160 |
| YoY Growth | 11% | 9% | 7% | 13% |
| Total Square GPV ($M) | 64,248 | 67,151 | 64,960 | 72,848 |
| YoY Growth | 10% | 12% | 10% | 13% |
| Constant Currency (“CC”) GPV YoY Growth | 10% | 12% | 10% | 13% |
| Square U.S. GPV | ||||
| YoY Growth | 7.0% | 8.9% | 7.0% | 9.8% |
| % of Total Square GPV | 81% | 79% | 78% | 78% |
| Square International GPV | ||||
| YoY Growth | 25% | 26% | 24% | 28% |
| CC GPV YoY Growth | 24% | 25% | 25% | 25% |
| % of Total Square GPV | 19% | 21% | 22% | 22% |
| Commerce Enablement (excluding Hardware) Monetization Rate¹⁸ | 1.27% | 1.20% | 1.18% | 1.23% |
| Financial Solutions Monetization Rate¹⁹ | 0.38% | 0.38% | 0.41% | 0.41% |
Square GPV grew 13% year over year in the second quarter on a reported and constant currency basis to $72.8 billion, reflecting strong GPV growth from new sellers. GPV from food and beverage sellers was up 20% year over year, driven by U.S. food and beverage GPV accelerating to its strongest growth rate since the first quarter of 2023. GPV from retail sellers and services sellers grew 13% and 7% year over year, respectively. We continued to see the fastest year-over-year growth in our mid-market seller segment (>$500K in annualized GPV) compared to our other seller segments during the second quarter.
Square gross profit grew 13% year over year in the second quarter, both on a reported and excluding hardware basis. Growth was driven primarily by Commerce Enablement, reflecting stronger payments volume and increased software adoption, supported by the simplified pricing and packaging options we introduced last year. We also saw continued momentum in Financial Solutions, driven by Square Loans. In the second quarter we booked a one time tariff reimbursement which contributed approximately two points to Square gross profit growth, roughly offsetting the lapping of a network remediation payment in the prior year. We continue to expect Square gross profit to grow roughly in line with Square GPV in the second half of the year.
¹⁸ Square Commerce Enablement (excluding Hardware) Monetization Rate is calculated by dividing Square Commerce Enablement gross profit excluding hardware by total Square GPV. Square Commerce Enablement Gross Profit is primarily composed of Square Payments and Software.
¹⁹ Square Financial Solutions Monetization Rate is calculated by dividing Square Financial Solutions gross profit by total Square GPV. Square Financial Solutions Gross Profit is primarily composed of Square Loans, Instant Deposit, and Square Card.
Operating Expenses and Non-GAAP Operating Expenses ($M)
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Operating Expenses ($M) | 2,052 | 2,252 | 2,387 | 2,719 |
| Restructuring Share-Based Compensation | 0 | 2 | - | 4 |
| Amortization of Customer and Other Acquired Intangible Assets | 34 | 34 | 34 | 34 |
| Acquisition-Related and Integration Costs | 1 | 0 | 0 | 0 |
| Contingencies, Restructuring and Other Charges | 16 | 21 | 54 | 365 |
| Non-GAAP Operating Expenses ($M) | 2,001 | 2,195 | 2,298 | 2,315 |
In the second quarter, product development expenses decreased 16% year over year on a GAAP basis driven by reduced personnel-related costs associated with the organizational changes we executed in February. Sales and marketing expenses grew 21% year over year on a GAAP basis, driven by an increase in go-to-market investments, with Cash App sales and marketing expenses up 28% and other sales and marketing expenses up 11%. General and administrative expenses were up 84% year over year on a GAAP basis, primarily driven by increased accrued legal contingencies, partially offset by reduced personnel-related costs. General and administrative expenses were up 4% year over year on a non-GAAP basis.
Transaction, loan, and consumer receivable losses increased 99% year over year on a GAAP basis, driven primarily by growth in loan volumes. Cohort level Borrow risk loss rates remained healthy as we shifted more origination volume toward our six-week loan product. Based on our Consumer Lending origination volume forecast and expected mix of new and mature Borrow cohorts, we continue to expect year-over-year growth in transaction, loan, and consumer receivable losses to moderate through the remainder of 2026.
Key Profitability Measures and EPS ($M, except per share figures)
| Line item | Q1’26 | |||
|---|---|---|---|---|
| Operating Income (Loss) | 484 | 409 | 485 | 447) |
| Adjusted Operating Income | 550 | 480 | 588 | 864 |
| Net Income (Loss) | 538 | 462 | 116 | 89) |
| Adjusted Net Income | 385 | 337 | 402 | 620 |
| Adjusted EBITDA | 891 | 833 | 930 | 1,169 |
| Weighted-average shares used to compute Diluted EPS | 619 | 622 | 614 | 609 |
| Weighted-average shares used to compute Adjusted Diluted EPS | 619 | 622 | 616 | 609 |
| Diluted EPS ($) | 0.87 | 0.74 | 0.19 | 0.15) |
| Adjusted Diluted EPS ($) | 0.62 | 0.54 | 0.65 | 1.02 |
Non-GAAP Cash Flow ($M)
| Line item | Q1’26 | ||||
|---|---|---|---|---|---|
| Net cash provided by operating activities | 374 | 1,451 | 621 | 966 | 4,057 |
| Less: Purchase of property and equipment | (31) | (51) | (41) | (31) | (176) |
| Free Cash Flow | 343 | 1,400 | 580 | 935 | 3,882 |
| Reversal of: | |||||
| Changes in settlements receivable | 170 | 33 | 196 | (90) | 374 |
| Changes in customers payable | (151) | 3 | (61) | 122 | (99) |
| Changes in settlements payable | - | - | - | (2) | - |
| Sales, principal payments and forgiveness of PPP loans | (1) | (0) | (0) | (0) | (2) |
| Consumer receivables cash flows included within investing activities in the GAAP statements of cash flows: | |||||
| Payments for originations of consumer receivables | (7,740) | (7,915) | (9,592) | (7,788) | (33,870) |
| Proceeds from principal repayments and sales of consumer receivables | 7,892 | 8,227 | 9,213 | 8,441 | 34,489 |
| Purchases and originations of loans originally classified as held for investment | (1,164) | (6,480) | (9,986) | (10,646) | (38,343) |
| Proceeds from repayments of loans originally classified as held for investment | 457 | 5,172 | 8,451 | 10,232 | 34,397 |
| Warehouse facilities cash flows included within financing activities in the GAAP statement of cash flows: | |||||
| Proceeds from warehouse facilities borrowings | 213 | 13 | 857 | 224 | 1,809 |
| Repayments of warehouse facilities borrowings | (151) | (215) | - | (1,065) | (1,370) |
| Non-GAAP Cash Flow | (131) | 239 | (342) | 363 | 1,267 |
| YoY Change | (128)% | (52)% | (189)% | 357% | 109% |
| Net cash provided by (used in) investing activities | (486) | (1,101) | (2,130) | 300 | (3,237) |
| Net cash provided by (used in) financing activities | (908) | 1,467 | 40 | (252) | (102) |
In the second quarter of 2026, we continued to prudently invest in our lending products, including growing Cash App Borrow given the strong unit economics and returns we have seen. Within our non-GAAP cash flow, we have deployed $1.8 billion in capital to grow our lending products over the last 12 months.²¹ We also remain focused on returning capital to shareholders. In November 2025, our board of directors authorized an increase to our share repurchase program of up to an additional $5 billion of our Class A common stock, and year to date we repurchased 11.6 million shares of our Class A common stock for an aggregate amount of $701 million. As of June 30, 2026, we had $4.6 billion in remaining authorization for repurchases.
We ended the quarter with $8.8 billion of total liquidity, with $7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, and $900 million available to be withdrawn from our revolving credit facility. Additionally, we had $343 million available to be withdrawn under our warehouse funding facilities.
²⁰ Quarterly figures presented may not sum precisely due to rounding.
²¹ Capital deployed to grow lending products is calculated as the trailing twelve month change in our lending product balances (which consists of consumer receivables, net; loans held for sale; and loans held for investment, net), less the net financing provided by our warehouse facilities (i.e. proceeds net of repayments) over the same period.
Earnings Webcast
Block (NYSE:XYZ) will host a conference call and earnings webcast at 2:00 p.m. Pacific time/5:00 p.m. Eastern time, August 5, 2026, to discuss these financial results. To register to participate in the conference call, or to listen to the live audio webcast, please visit the Events & Presentations section of Block’s Investor Relations website at investors.block.xyz. A replay will be available on the same website following the call. We will release financial results for the third quarter of 2026 on November 3, 2026, after the market closes, and will also host a conference call and earnings webcast at 2:00 p.m. Pacific time/5:00 p.m. Eastern time on the same day to discuss those financial results.
Media Contact
press@block.xyz
Investor Relations Contact
ir@block.xyz
- Jack Dorsey Amrita Ahuja
Key Operating Metrics And Non-GAAP
Financial Measures
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), from period to period, we consider and present certain operating and financial measures that we consider key metrics or are not prepared in accordance with GAAP, including Gross Payment Volume (GPV), Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Share (Adjusted EPS), Adjusted Diluted Net Income (Loss) Per Share (Adjusted Diluted EPS), Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) margin, Free Cash Flow, Non-GAAP Cash Flow, constant currency, and non-GAAP operating expenses. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business and to facilitate comparisons of our performance to that of other payments solution providers. GPV includes Square GPV and Cash App Business GPV. Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds. Cash App Business GPV comprises Cash App activity related to peer-to-peer transactions received by business accounts and peer-to-peer payments sent from a credit card. GPV does not include transactions from our BNPL products.
Adjusted Net Income (Loss), Adjusted Net Income (Loss) Per Share (Adjusted EPS), and Adjusted Diluted Net Income (Loss) Per Share (Adjusted Diluted EPS) are non-GAAP financial measures that represent our net income (loss) and net income (loss) per share, adjusted to eliminate the effect of restructuring share-based compensation expense, contingencies, restructuring, and other charges; goodwill and intangible asset impairment; amortization of intangible assets; amortization of debt discount and issuance costs; gain or loss on revaluation of equity investments; remeasurement gain or loss on revaluation of bitcoin investment; the gain or loss on the disposal of property and equipment; acquired deferred revenue and cost adjustments; the discrete benefits from the release of valuation allowances on our deferred tax assets; and the tax effect of non-GAAP net income adjustments, as applicable. Additionally, for purposes of calculating Adjusted Diluted EPS, we add back cash interest expense on convertible senior notes, as if converted at the beginning of the period, if the impact is dilutive. To calculate Adjusted Diluted EPS, we adjust the weighted-average number of shares of common stock outstanding for the dilutive effect of all potential shares of common stock. In periods when we recorded an Adjusted Net Loss, the diluted Adjusted EPS is the same as basic Adjusted EPS because the effects of potentially dilutive items were anti-dilutive given the Adjusted Net Loss position.
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures that represent our net income (loss), adjusted to exclude share-based compensation expense; restructuring share-based compensation expense; depreciation and amortization; contingencies,
restructuring, and other charges; interest income and expense; remeasurement gain or loss on bitcoin investment; other income and expense; provision for (benefit from) income taxes; gain or loss on disposal of property and equipment; and acquired deferred revenue and cost adjustment, as applicable. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by gross profit.
Adjusted Operating Income (Loss) is a non-GAAP financial measure that represents our operating income (loss), adjusted to eliminate the effect of amortization of acquired technology assets; contingencies, restructuring, and other charges; restructuring share-based compensation expenses; goodwill and intangible asset impairment and amortization of customer and other acquired intangible assets. Adjusted Operating Income (Loss) margin is calculated as Adjusted Operating Income (Loss) divided by gross profit.
We also exclude from these measures certain acquisition-related and integration costs associated with business combinations, and various other costs that are not reflective of our core operating performance. We exclude amortization of intangible assets arising from business combinations from Adjusted Net Income (Loss), Adjusted EPS, Adjusted Diluted EPS, Adjusted Operating Income (Loss), and Adjusted Operating Income (Loss) Margin because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our ongoing business operations. Acquisition-related costs include amounts paid to redeem acquirees’ unvested stock-based compensation awards; charges associated with holdback liabilities; and legal, accounting, and due diligence costs. Integration costs include advisory and other professional services or consulting fees necessary to integrate acquired businesses. Other costs that are not reflective of our core business operating expenses may include contingencies, restructuring, and other charges; impairment charges; restructuring share-based compensation expense; and certain litigation and regulatory charges. For Adjusted Net Income (Loss), Adjusted EPS, and Adjusted Diluted EPS we also add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting, and adjust for the tax effect of the non-GAAP net income adjustments.
Non-GAAP Cash Flow is a non-GAAP financial measure that represents our net cash provided by operating activities adjusted for changes in settlements receivable; changes in customers payable; changes in settlements payable; the purchase of property and equipment; payments for originations of consumer receivables; proceeds from principal repayments and sales of consumer receivables; purchases and originations of loans originally classified as held for investment; proceeds from repayments of loans originally classified as held for investment; proceeds from warehouse facilities borrowings; repayments of warehouse facilities borrowings; and sales, and principal payments, and forgiveness of PPP loans. We present Non-GAAP Cash Flow because we use it to understand the cash generated by our business and make strategic decisions related to our balance sheet, and because we are focused on growing our Non-GAAP Cash Flow generation over time. It is not intended to represent amounts available for discretionary purposes. Constant currency growth is calculated by assuming international results in a given period and the comparative prior period are translated from local currencies to the U.S. dollar at rates consistent with the monthly average rates in the comparative prior period. We discuss growth on a constant currency basis because a portion of our business operates in markets outside the U.S. and is subject to changes in foreign exchange rates. Non-GAAP operating expenses is a non-GAAP financial measure that represents operating expenses adjusted to remove the impact of restructuring share-based compensation; amortization of customer and other acquired intangible assets; acquisition-related and integration costs; contingencies, restructuring, and other charges; and goodwill and intangible asset impairment. We have included Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) margin,
Adjusted Net Income (Loss), Adjusted EPS, Adjusted Diluted EPS, and non-GAAP operating expenses because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) margin, Adjusted Net Income, Adjusted EPS, Adjusted Diluted EPS, and non-GAAP operating expenses provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain variable charges that do not vary with our operations. Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted Operating Income (Loss), Adjusted Operating Income (Loss) margin, Adjusted EPS, Adjusted Diluted EPS, and non-GAAP operating expenses, as well as other measures defined in the shareholder letter, have limitations as financial measures, should be considered as supplemental in nature, and are not meant as substitutes for the related financial information prepared in accordance with GAAP. We believe that the aforementioned metrics and measures provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain variable amounts, or they remove amounts that were not repeated across periods and therefore make comparisons more difficult. Our management uses these measures to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP. Other companies, including companies in our industry, may calculate the non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.
Condensed Consolidated Statements of Operations
Unaudited
In thousands, except per share data
| Revenue: | |||
| Commerce enablement revenue | $3,341,571 | $2,898,302 | $5,465,277 |
| Financial solutions revenue | 1,382,368 | 984,553 | 1,859,564 |
| Bitcoin ecosystem revenue | 1,893,748 | 2,171,602 | 4,501,412 |
| Total net revenue | 6,617,687 | 6,054,457 | 11,826,253 |
| Cost of revenue: | |||
| Commerce enablement costs | 1,523,639 | 1,354,370 | 2,506,570 |
| Financial solutions costs | 93,819 | 82,649 | 160,571 |
| Bitcoin ecosystem costs | 1,821,343 | 2,066,504 | 4,303,901 |
| Amortization of acquired technology assets | 12,805 | 14,404 | 29,078 |
| Total cost of revenue | 3,451,606 | 3,517,927 | 7,000,120 |
| Gross profit | 3,166,081 | 2,536,530 | 4,826,133 |
| Operating expenses: | |||
| Product development | 608,660 | 725,288 | 1,485,987 |
| Sales and marketing | 664,955 | 549,731 | 1,054,191 |
| General and administrative | 825,869 | 449,237 | 941,034 |
| Transaction, loan, and consumer receivable losses | 585,450 | 294,090 | 463,779 |
| Amortization of customer and other acquired intangible assets | 34,277 | 33,891 | 67,547 |
| Total operating expenses | 2,719,211 | 2,052,237 | 4,012,538 |
| Operating income | 446,870 | 484,293 | 813,595 |
| Interest expense, net | 55,721 | 23,687 | 40,930 |
| Remeasurement loss (gain) on bitcoin investment | 88,474 | (212,165) | (118,814) |
| Other expense (income), net | 1,199 | 13,389 | 5,047) |
| Income (loss) before income tax | 301,476 | 659,382 | 886,432) |
| Provision for income taxes | 214,407 | 121,048 | 159,376 |
| Net income (loss) | 87,069 | 538,334 | 727,056) |
| Less: Net loss attributable to noncontrolling interests | (1,448) | (124) | (1,274)) |
| Net income (loss) attributable to common stockholders | $88,517 | $538,458 | $728,330) |
| Net income (loss) per share attributable to common stockholders: | |||
| Basic | $0.15 | $0.88 | $1.18) |
| Diluted | $0.15 | $0.87 | $1.17) |
| Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | |||
| Basic | 597,829 | 612,882 | 616,108 |
| Diluted | 608,847 | 618,928 | 627,103 |
Condensed Consolidated Balance Sheets
In thousands, except per share data
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $6,427,331 | $6,564,092 |
| Settlements receivable | 1,385,669 | 1,359,983 |
| Customer funds | 5,530,278 | 4,771,824 |
| Consumer receivables, net | 2,477,706 | 2,670,322 |
| Loans held for investment, net | 3,749,254 | 3,382,957 |
| Other current assets | 3,574,637 | 4,107,702 |
| Total current assets | 23,144,875 | 22,856,880 |
| Goodwill | 11,966,996 | 11,849,018 |
| Acquired intangible assets, net | 1,200,262 | 1,281,670 |
| Deferred tax assets | 1,261,584 | 1,302,776 |
| Bitcoin investment | 533,866 | 777,515 |
| Other non-current assets | 1,049,084 | 1,482,028 |
| Total assets | $39,156,667 | $39,549,887 |
| Liabilities and Stockholders’ Equity | ||
| Current liabilities: | ||
| Customers payable | $7,629,062 | $6,805,366 |
| Accrued expenses and other current liabilities | 2,277,051 | 1,538,893 |
| Current portion of long-term debt | — | 1,573,259 |
| Warehouse funding facilities, current | 572,388 | 466,942 |
| Total current liabilities | 10,478,501 | 10,384,460 |
| Warehouse funding facilities, non-current | 589,556 | 897,941 |
| Long-term debt | 5,720,569 | 5,715,759 |
| Other non-current liabilities | 356,724 | 381,845 |
| Total liabilities | 17,145,350 | 17,380,005 |
| Commitments and contingencies | ||
| Stockholders’ equity: | ||
| Preferred stock, $0.0000001 par value: 100,000 shares authorized at June 30, 2026 and December 31, 2025. None issued and outstanding at June 30, 2026 and December 31, 2025. | — | — |
| Class A common stock, $0.0000001 par value: 1,000,000 shares authorized at June 30, 2026 and December 31, 2025; 540,782 and 542,085 issued and outstanding at June 30, 2026 and December 31, 2025, respectively. | — | — |
| Class B common stock, $0.0000001 par value: 500,000 shares authorized at June 30, 2026 and December 31, 2025; 59,981 and 59,993 issued and outstanding at June 30, 2026 and December 31, 2025, respectively. | — | — |
| Additional paid-in capital | 18,850,561 | 18,895,405 |
| Accumulated other comprehensive loss | (257,576) | (365,381) |
| Retained earnings | 3,454,090 | 3,674,254 |
| Total stockholders’ equity attributable to common stockholders | 22,047,075 | 22,204,278 |
| Noncontrolling interests | (35,758) | (34,396) |
| Total stockholders’ equity | 22,011,317 | 22,169,882 |
| Total liabilities and stockholders’ equity | $39,156,667 | $39,549,887 |
Condensed Consolidated Statements of Cash Flows
In thousands
| Cash flows from operating activities: | ||
| Net income (loss) | $(221,526) | $727,056 |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
| Depreciation and amortization | 191,028 | 181,345 |
| Amortization of discounts and premiums | (603,136) | (548,138) |
| Non-cash lease expense and other non-cash adjustments | 118,256 | 29,950 |
| Share-based compensation | 598,451 | 612,577 |
| Loss (gain) on revaluation of equity investments | 9,805 | (1,456) |
| Remeasurement loss (gain) on bitcoin investment | 261,292 | (118,814) |
| Transaction, loan, and consumer receivable losses | 1,085,575 | 463,779 |
| Change in deferred income taxes | 49,545 | 52,019 |
| Purchases and originations of loans originally classified as held for sale | (3,651,413) | (10,634,603) |
| Proceeds from repayments of loans originally classified as held for sale | 3,665,214 | 10,163,789 |
| Changes in operating assets and liabilities: | ||
| Settlements receivable | (145,045) | (258,566) |
| Customers payable | 41,096 | 315,632 |
| Prepaid expenses | (30,849) | (126,309) |
| Other assets and liabilities | 617,123 | (350,603) |
| Net cash provided by operating activities | 1,985,416 | 507,658 |
| Cash flows from investing activities: | ||
| Purchases of marketable debt securities | (243,338) | (282,149) |
| Proceeds from maturities of marketable debt securities | 370,645 | 278,624 |
| Proceeds from sale of marketable debt securities | 44,352 | 373,759 |
| Payments for originations of consumer receivables | (16,363,722) | (14,638,790) |
| Proceeds from principal repayments and sales of consumer receivables | 17,049,383 | 15,494,483 |
| Purchases and originations of loans originally classified as held for investment | (21,877,108) | (1,164,089) |
| Proceeds from repayments of loans originally classified as held for investment | 20,773,837 | 457,152 |
| Purchases of property and equipment | (83,786) | (63,192) |
| Other investing activities | 323,413 | (26,870) |
| Net cash provided by (used in) investing activities | (6,324) | 428,928 |
| Cash flows from financing activities: | ||
| Repayments of senior notes | (1,000,000) | — |
| Payments to redeem convertible notes | (575,000) | (1,000,624) |
| Proceeds from warehouse facilities borrowings | 939,190 | 435,497 |
| Repayments of warehouse facilities borrowings | (1,155,192) | (1,242,317) |
| Proceeds from the exercise of stock options and purchases under the employee stock purchase plan | 50,276 | 51,082 |
| Net increase in interest-bearing deposits | 89,990 | 54,792 |
| Repurchases of common stock | (700,935) | (1,137,502) |
| Other financing activities | (15,427) | (35,330) |
| Change in customer funds, restricted from use in the Company’s operations | 758,455 | 754,942 |
| Net cash used in financing activities | (1,608,643) | (2,119,460) |
| Effect of foreign exchange rate on cash and cash equivalents | (526) | 94,932 |
| Net increase (decrease) in cash, cash equivalents, restricted cash, and customer funds | 369,923 | (1,087,942) |
| Cash, cash equivalents, restricted cash, and customer funds, beginning of the period | 12,481,276 | 13,230,512 |
| Cash, cash equivalents, restricted cash, and customer funds, end of the period | $12,851,199 | $12,142,570 |
Reportable Segment Disclosures
Information on the reportable segments revenue and segment operating profit, as well as amounts for the “Corporate and Other” category, which includes products and services not assigned to reportable segments and intersegment eliminations:
| (in millions) (i) | SIX MONTHS ENDEDJun. 30, 2026 | ||||
|---|---|---|---|---|---|
| Revenue: | |||||
| Commerce enablement revenue | $1,131 | $2,161 | $3,342 | $2,217 | $6,280 |
| Financial solutions revenue | 1,077 | 305 | 1,382 | 2,117 | 2,704 |
| Bitcoin ecosystem revenue | 1,813 | 37 | 1,894 | 3,557 | 3,690 |
| Segment revenue | $4,021 | $2,504 | $6,618 | $7,891 | $12,675 |
| Cost of revenue: | |||||
| Commerce enablement costs | $187 | $1,300 | $1,524 | $374 | $2,841 |
| Financial solutions costs | 88 | 6 | 94 | 171 | 183 |
| Bitcoin ecosystem costs | 1,760 | 37 | 1,821 | 3,441 | 3,549 |
| Amortization of acquired technology | 12 | 1 | 13 | 23 | 26 |
| Segment cost of revenue | 2,048 | 1,343 | 3,452 | 4,010 | 6,599 |
| Segment gross profit | $1,973 | $1,160 | $3,166 | $3,881 | $6,075 |
(i) Figures presented may not sum precisely due to rounding.
Reportable Segment Disclosures, Continued
| (in millions) (i) | SIX MONTHS ENDEDJun. 30, 2025 | ||||
|---|---|---|---|---|---|
| Revenue: | |||||
| Commerce enablement revenue | $940 | $1,915 | $2,898 | $1,841 | $5,465 |
| Financial solutions revenue | 733 | 251 | 985 | 1,383 | 1,860 |
| Bitcoin ecosystem revenue | 2,171 | — | 2,172 | 4,500 | 4,501 |
| Segment revenue | $3,845 | $2,166 | $6,054 | $7,724 | $11,826 |
| Cost of revenue: | |||||
| Commerce enablement costs | $190 | $1,133 | $1,354 | $366 | $2,507 |
| Financial solutions costs | 78 | 5 | 83 | 150 | 161 |
| Bitcoin ecosystem costs | 2,064 | — | 2,067 | 4,301 | 4,304 |
| Amortization of acquired technology | 13 | 2 | 14 | 26 | 29 |
| Segment cost of revenue | 2,344 | 1,139 | 3,518 | 4,843 | 7,000 |
| Segment gross profit | $1,501 | $1,027 | $2,537 | $2,880 | $4,826 |
(i) Figures presented may not sum precisely due to rounding.
| Cash App (i) (in millions) | |||
|---|---|---|---|
| Revenue: | |||
| Commerce enablement revenue | $1,131 | $940 | $1,086 |
| Financial solutions revenue | 1,077 | 733 | 1,040 |
| Bitcoin ecosystem revenue | 1,813 | 2,171 | 1,744 |
| Segment revenue | $4,021 | $3,845 | $3,871 |
| Cost of revenue: | |||
| Commerce enablement costs | $187 | $190 | $187 |
| Financial solutions costs | 88 | 78 | 83 |
| Bitcoin ecosystem costs | 1,760 | 2,064 | 1,681 |
| Amortization of acquired technology | 12 | 13 | 12 |
| Segment cost of revenue | 2,048 | 2,344 | 1,963 |
| Segment gross profit | $1,973 | $1,501 | $1,908 |
(i) Figures presented may not sum precisely due to rounding.
Reportable Segment Disclosures, Continued
| Cash App (i) (in millions) | Sept. 30, 2024 | ||
|---|---|---|---|
| Revenue: | |||
| Commerce enablement revenue | $940 | $853 | $900 |
| Financial solutions revenue | 733 | 617 | 649 |
| Bitcoin ecosystem revenue | 2,171 | 2,659 | 2,329 |
| Segment revenue | $3,845 | $4,129 | $3,879 |
| Cost of revenue: | |||
| Commerce enablement costs | $190 | $181 | $176 |
| Financial solutions costs | 78 | 78 | 73 |
| Bitcoin ecosystem costs | 2,064 | 2,557 | 2,237 |
| Amortization of acquired technology | 13 | 14 | 13 |
| Segment cost of revenue | 2,344 | 2,830 | 2,499 |
| Segment gross profit | $1,501 | $1,299 | $1,380 |
| Square (i) (in millions) | Sept. 30, 2025 | ||
|---|---|---|---|
| Revenue: | |||
| Commerce enablement revenue | $2,161 | $1,915 | $1,803 |
| Financial solutions revenue | 305 | 251 | 282 |
| Bitcoin ecosystem revenue | 37 | — | 28 |
| Segment revenue | $2,504 | $2,166 | $2,112 |
| Cost of revenue: | |||
| Commerce enablement costs | $1,300 | $1,133 | $1,096 |
| Financial solutions costs | 6 | 5 | 6 |
| Bitcoin ecosystem costs | 37 | — | 28 |
| Amortization of acquired technology | 1 | 2 | 1 |
| Segment cost of revenue | 1,343 | 1,139 | 1,131 |
| Segment gross profit | $1,160 | $1,027 | $982 |
Reportable Segment Disclosures, Continued
| Square (i) (in millions) | Sept. 30, 2024 | Dec. 31, 2024 | ||
|---|---|---|---|---|
| Revenue: | ||||
| Commerce enablement revenue | $1,915 | $1,764 | 1,790 | $1,627 |
| Financial solutions revenue | 251 | 215 | 212 | 226 |
| Bitcoin ecosystem revenue | — | — | — | — |
| Segment revenue | $2,166 | $1,979 | 2,002 | $1,852 |
| Cost of revenue: | ||||
| Commerce enablement costs | $1,133 | $1,050 | 1,063 | $947 |
| Financial solutions costs | 5 | 4 | 5 | 5 |
| Bitcoin ecosystem costs | — | — | — | — |
| Amortization of acquired technology | 2 | 2 | 1 | 2 |
| Segment cost of revenue | 1,139 | 1,057 | 1,069 | 954 |
| Segment gross profit | $1,027 | $923 | 932 | $898 |
Operating Segment Disclosures
A reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands):
| Total segment gross profit | $3,133,239 | $2,527,311 | $4,805,160 |
| Add: Corporate and other gross profit | 32,842 | 9,219 | 20,973 |
| Less: Product development | 608,660 | 725,288 | 1,485,987 |
| Less: Sales and marketing | 664,955 | 549,731 | 1,054,191 |
| Less: General and administrative | 825,869 | 449,237 | 941,034 |
| Less: Transaction, loan, and consumer receivable losses | 585,450 | 294,090 | 463,779 |
| Less: Amortization of customer and other intangible assets | 34,277 | 33,891 | 67,547 |
| Less: Interest expense, net | 55,721 | 23,687 | 40,930 |
| Less: Remeasurement loss (gain) on bitcoin investment | 88,474 | (212,165 | (118,814)) |
| Less: Other expense (income), net | 1,199 | 13,389 | 5,047) |
| Income (loss) before income tax | $301,476 | $659,382 | $886,432) |
Select Operating Metrics and Non-GAAP Financial Measures
| Gross Payment Volume (GPV) (in millions) | $74,734 | $66,615 | $123,412 |
| Adjusted Operating Income (in thousands) | $863,845 | $549,569 | $1,015,838 |
| Adjusted EBITDA (in thousands) | $1,168,597 | $891,422 | $1,704,216 |
| Adjusted Net Income Per Share: | |||
| Basic | $1.04 | $0.63 | $1.20 |
| Diluted | $1.02 | $0.62 | $1.18 |
| (in millions) | |||
|---|---|---|---|
| Square GPV | $72,848 | $64,248 | $118,350 |
| Cash App GPV | 1,886 | 2,367 | 5,062 |
| Total GPV | $74,734 | $66,615 | $123,412 |
| (in millions) | ||||
|---|---|---|---|---|
| Square gross profit | $1,160 | $1,027 | $1,018 | $982 |
| Less: Hardware contribution to Square gross profit | (37 | (34)) | (41 | (41))) |
| Square gross profit excluding Hardware (i) | $1,197 | $1,061 | $1,059 | $1,023 |
(i) Figures presented may not sum precisely due to rounding.
| (in millions) | ||||
|---|---|---|---|---|
| Square commerce enablement gross profit | $860 | $781 | $762 | $706 |
| Less: Hardware contribution to Square commerce enablement gross profit | (37 | (34)) | (41 | (41))) |
| Square commerce enablement gross profit excluding Hardware (i) (ii) | $897 | $814 | $803 | $747 |
(i) Figures presented may not sum precisely due to rounding.
(ii) Square commerce enablement gross profit reflects the impact of amortization of acquired technology assets.
Select Operating Metrics and Non-GAAP Financial Measures, Continued
| Cash App sales and marketing expense | $323 | $610 |
| Other sales and marketing expense (i) | 227 | 445 |
| Total sales and marketing expense (ii) | $550 | $1,054 |
(i) Other sales and marketing expenses include sales and marketing expenses related to Square and Corporate and Other.
(ii) Figures presented may not sum precisely due to rounding.
| Product development expenses | $(725) | $(1,486)) |
| Restructuring share-based compensation | 0 | 8 |
| Contingencies, restructuring and other charges | (1) | 28 |
| Non-GAAP product development expenses (i) | $(726) | $(1,450)) |
| Sales and marketing expenses | $(550) | $(1,054)) |
| Restructuring share-based compensation | 0 | 1 |
| Contingencies, restructuring and other charges | 3 | 14 |
| Non-GAAP sales and marketing expenses (i) | $(546) | $(1,038)) |
| General and administrative expenses | $(449) | $(941)) |
| Restructuring share-based compensation | 0 | 2 |
| Acquisition-related and integration costs | 1 | 1 |
| Contingencies, restructuring and other charges | 14 | 51 |
| Non-GAAP general and administrative expenses (i) | $(434) | $(887)) |
Adjusted Operating Income (Loss) and Margin
In thousands, except for percentages
| Operating income (loss) | $446,870 | $484,293 | $409,440 | $(171,990) |
| Amortization of acquired technology assets | 12,805 | 14,404 | 13,857 | 12,817 |
| Acquisition-related and integration costs | 367 | 1,042 | 345 | 362 |
| Contingencies, restructuring and other charges | 365,118 | 15,844 | 20,752 | 742,812 |
| Restructuring share-based compensation expense | 4,408 | 95 | 1,659 | 109,512 |
| Amortization of customer and other acquired intangible assets | 34,277 | 33,891 | 34,133 | 34,159 |
| Adjusted Operating Income | $863,845 | $549,569 | $480,186 | $727,672 |
| Adjusted Operating Income margin (%) of gross profit | 27 | 22%% | 18% | 25%% |
Adjusted EBITDA
In thousands
| Net income (loss) attributable to common stockholders | $88,517 | $538,458 | $461,544 | $(308,681) |
| Net income (loss) attributable to noncontrolling interests | (1,448 | (124)) | 54 | 86) |
| Net income (loss) | 87,069 | 538,334 | 461,598 | (308,595) |
| Share-based compensation expense | 255,343 | 297,246 | 307,721 | 229,188 |
| Restructuring share-based compensation expense | 4,408 | 95 | 1,659 | 109,512 |
| Depreciation and amortization | 95,051 | 92,397 | 92,119 | 95,977 |
| Acquisition-related and integration costs | 367 | 1,042 | 345 | 362 |
| Contingencies, restructuring and other charges | 365,118 | 15,844 | 20,752 | 742,812 |
| Interest expense, net | 55,721 | 23,687 | 34,652 | 53,195 |
| Remeasurement loss (gain) on bitcoin investment | 88,474 | (212,165) | (59,588) | 172,818 |
| Other expense (income), net | 1,199 | 13,389 | (167,150) | (5,426)) |
| Provision for (benefit from) income taxes | 214,407 | 121,048 | 139,928 | (83,982) |
| Loss on disposal of property and equipment | 1,434 | 495 | 617 | 4,354 |
| Acquired deferred revenue and cost adjustment | 6 | 10 | 9 | 6 |
| Adjusted EBITDA | $1,168,597 | $891,422 | $ 832,662 | $1,010,221 |
| Adjusted EBITDA margin (%) of gross profit | 37 | 35%% | 31% | 35%% |
Adjusted Net Income and Adjusted EPS
In thousands, except per share data
| Line item | Sept. 30, 2025 | |||
|---|---|---|---|---|
| Net income (loss) attributable to common stockholders | $88,517 | $538,458 | $461,544 | $(308,681) |
| Net income (loss) attributable to noncontrolling interests | (1,448 | (124) | 54 | 86) |
| Net income (loss) | 87,069 | 538,334 | 461,598 | (308,595) |
| Acquisition-related and integration costs | 367 | 1,042 | 345 | 362 |
| Contingencies, restructuring and other charges | 365,118 | 15,844 | 20,752 | 742,812 |
| Restructuring share-based compensation expense | 4,408 | 95 | 1,659 | 109,512 |
| Amortization of intangible assets | 47,082 | 48,295 | 47,990 | 46,976 |
| Amortization of debt discount and issuance costs | 3,287 | 2,835 | 3,335 | 3,886 |
| Loss (gain) on revaluation of equity investments | 4,140 | (1,582) | (171,126) | 5,665 |
| Remeasurement loss (gain) on bitcoin investment | 88,474 | (212,165) | (59,588) | 172,818 |
| Loss on disposal of property and equipment | 1,434 | 495 | 617 | 4,354 |
| Acquired deferred revenue and cost adjustment | 6 | 10 | 9 | 6 |
| Income tax expenses (benefits) from deferred tax assets | (113,385 | (52,600) | (8,909) | — |
| Tax effect of non-GAAP net income adjustments | 131,553 | 44,538 | 39,933 | (264,918)) |
| Adjusted Net Income - basic | $619,553 | $385,141 | $336,615 | $512,878 |
| Cash interest expense on convertible notes | 275 | 267 | 273 | 264 |
| Adjusted Net Income - diluted | $619,828 | $385,408 | $336,888 | $513,142 |
| Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||
| Basic | 597,829 | 612,882 | 610,199 | 597,586 |
| Diluted | 608,847 | 618,928 | 621,658 | 597,586 |
| Net income (loss) per share attributable to common stockholders: | ||||
| Basic | $0.15 | $0.88 | $0.76 | $(0.52) |
| Diluted | $0.15 | $0.87 | $0.74 | $(0.52) |
| Weighted-average shares used to compute Adjusted Net Income Per Share: | ||||
| Basic | 597,829 | 612,882 | 610,199 | 597,586 |
| Diluted | 608,847 | 618,928 | 621,658 | 604,181 |
| Adjusted Net Income Per Share: | ||||
| Basic | $1.04 | $0.63 | $0.55 | $0.86 |
| Diluted | $1.02 | $0.62 | $0.54 | $0.85 |
Non-GAAP Cash Flow
In millions
| Net cash provided by operating activities | $519 | $685 | $14 | $1,206 |
| Less: Purchase of property and equipment | (38) | (57 | (27) | (147)) |
| Free Cash Flow | $481 | $628 | $(13) | $1,059 |
| Reversal of: | ||||
| Changes in settlements receivable | 287 | (2,407 | (370) | (2,519) |
| Changes in customers payable | (406) | 2,192 | 534 | 2,410) |
| Changes in settlements payable | 1 | — | — | 0 |
| Sales, principal payments and forgiveness of PPP loans | (1) | (1 | (1) | (3)) |
| Consumer receivables cash flows included within investing activities in the GAAP statements of cash flows: | ||||
| Payments for originations of consumer receivables | (6,772) | (7,331 | (9,121) | (31,090)) |
| Proceeds from principal repayments and sales of consumer receivables | 6,903 | 7,415 | 8,780 | 31,689 |
| Purchases and originations of loans originally classified as held for investment | — | — | — | (1,164) |
| Proceeds from repayments of loans originally classified as held for investment | — | — | — | 457 |
| Warehouse facilities cash flows included within financing activities in the GAAP statements of cash flows: | ||||
| Proceeds from warehouse facilities borrowings | 159 | 87 | 849 | 1,372 |
| Repayments of warehouse facilities borrowings | (177) | (86 | (276) | (1,604)) |
| Non-GAAP Cash Flow (i) | $475 | $497 | $383 | $608) |
| Net cash provided by (used in) investing activities | $(175) | $106 | $(323) | $211 |
| Net cash provided by (used in) financing activities | $1,141 | $72 | $708 | $(1,340)) |
(i) Figures presented may not sum precisely due to rounding.
| (in millions) | |||
|---|---|---|---|
| Consumer receivables, net | $2,478 | $2,203 | $275 |
| Loans held for sale | 701 | 1,412 | (711) |
| Loans held for investment, net | 3,749 | 1,040 | 2,709 |
| Total lending products | $6,928 | $4,655 | $2,273 |
| Less: Proceeds from warehouse facilities borrowings (i) | 1,809 | ||
| Less: Repayments of warehouse facilities borrowings (i) | (1,370) | ||
| Capital deployed to grow lending products | $1,834 |
(i) Proceeds from and repayments of warehouse facilities borrowings represent trailing twelve months cash flows for the period ended June 30, 2026.