Block (SQ) 3 Aug 232023 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Block Second Quarter 2023 Earnings Conference Call.

I would now like to turn the call over to your host, Nikhil Dixit, Head of Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our second quarter 2023 earnings call.

Amrita today. and Jack have with us We

We before your opening this call questions. short remarks with some the will begin call directly to

addition During our call take will to in participants. Q&A, conference questions questions from we customers from

well by any include SEC that would Actual and take deemed will Reported making our results our we targets at we time. These the to and as as uncertainties. All other statements should be not forward-looking risks results results everyone be are goals for historical guidance, of indication statements call. discussion be than this forward-looking. could Please move the also materially statements shift and cause subject like discussions performance. on a away fact filings targets We outlook goals, considered remind of differ differ. decide future statements these our with and may contemplated forward-looking that as our to could of factors to to our an a statements of statements. or could These those our at look priorities long-term forward-looking from from be and to

call that law. to based the note We except required by on to statements as this forward-looking as update statements information obligation Also, available of any on are us disclaim date. today's any forward-looking

are the GMV to performance for month month for we our will we interim auditors. estimates call, finalized not as our by the provide preliminary GPV, subject estimates results for and our this July have financial and review profit July. During our performance monthly gross These of of of not July current represent statements yet growth,

from quarter. results not As may and third performance of these result, may a for the full July estimates actual reflective be differ

by statement information our or been and preliminary our information Moreover, audited of basis has for reviewed has financial information not currently financial the information on the is preliminary is firm. the accounting solely of This been This results by a of quarter. or financial financial prepared comprehensive independent third responsibility public this available management. not July

we we our related to Rule XX, operating the discuss remarks, our sum are of of these investment profit including evaluating With income XX. will growth and Rule of Within framework, gross margins. adjusted metrics also

Also, substitute we Day Reconciliations website. this the historical financial financial measures directly These the for provided GAAP certain spreadsheet, results. to materials and are discuss will intended Investor our GAAP Investor in non-GAAP measures on a our Relations not call. during non-GAAP comparable be to financial shareholder are most letter, information measures

in and website. its will be webcast transcript Finally, this our of Relations on available call website entirety the this replay audio shortly. call Amrita's and opening audio Jack is our for being remarks on An Investor

to it like With turn that, Jack. I would over to

highlighting joining I'll investment for second, you our of Thank today time spend our progress us my and framework, we've two the ecosystems made on today. first, model. ecosystem themes;

You'll find the an the letter else posted shareholder ago. hour everything in quarter we from

to as investment decision-making on demonstrate this gross XX trade-offs ecosystem our a Rule how adjusted of wanted profit to operating and income. share framework forces towards us each guides our to show Today, earlier we As this path target investment we of shared must and our believable and progress I our and the make company. across framework year, XXX% retention over define Block

targeted be of compensation. inclusive management. back of share-based critical on on company the true full-cost of This are to for to businesses, to looking hiring our more their has hiring roles performance our more pull led us across and in now pace Leaders at focus

in Italy. we And operations not more strategic and This the areas returns. past brands areas we we the We've potential pulled spends that Spain, Later proven past may in to on over channels favor return a to an towards ecosystems profitability acquisition several and required decreasing the including focused higher Clearpay have and down across spend. quarter, efficiency on have channels towards and Cash the Pay more We drive while opportunity expected with years. we seen identify and of continue investment our these are For expected had sales and Buy markets our returns. necessary other decided investment. drive to we and growth marketing, on-brand These in in goal, experimental back France, see we the platform, significant our seeing where resources shift App's diverse aren't Now, certain wind EU markets, also to

cost We investments also the and margins. we automation the to improve to manage and like technologies make risk, expand to learning opportunities identifying by to machine ecosystems structural ways optimize our These in finding include of continue our structure each for partnerships. our

share increasing discipline, a profitability which We'll to our are we As our result of towards updates Amrita progress make as you this target. about. with our investment we continue expectations will speak for year,

them. invoices, ability in As and the merchants. Stripe, and our Pay a resilience balance. In we Cash turned with platform, App directly with June, Pay we we pay serving sellers, some our well-known quarter. partnerships In the as a Later Cash the providers payment step-in from ecosystems, Now, outstanding between different Cash and method also an Buy from PayNearMe, second the expanding create company, recently launched diversified App are Afterpay connections second Pay strategic App launched payment connection Adyen, range reaching notable invoices each giving their important several There App quarter, of between and of and wider examples comes audiences customers strength our on for a to the this Square Cash work

our automated App to a complete and [WX] Payroll the tax their partners, into employees global taxes for Cash testing free Payroll, Bitkey's import directly self-custody the and We (ph) receiving buy Coinbase using Square from Bitcoin public to into beta June, And employees by for started of shared file first our App from enabling we notification two Bitkey. their plans simply and Taxes, allow Wallet, we After customers wallet. Square App Cash WX, those Cash log import year, platforms this in transfer custodial securely Bitcoin submit Earlier announced immediately to forms. in Taxes. and

now our pass Amrita financials. to I'll provide details will more it on who

three Jack. topics to I'd There like Thanks, cover. are

First, an overview quarter of our profitability. second across growth and strong results

trends the business Second, at and in look profit the our investment year. across remainder expectations And seeing we're discipline third, a July. for our of

growth strong second scale quarter, $X.XX had up of with the XX% In we billion, profit gross year-over-year. at

profitability a million, leverage quarter a is income, this million stock-based and business. compensation two efficiency million year-over-year. drive in our to operating ability Adjusted related $XXX operating than depreciation as strong includes year and Our of expenses times Adjusted compared our demonstration loss a reminder, a which, was $XXX ago. $XX to more of to was EBITDA

XX% get profit, into and App. generated Let's Square Cash up year-over-year. in million Square gross $XXX

drivers, than point-of-sale XX% profit at an delivering our of vertical Looking million $XXX and annualized was gross from appointments with our the basis year-over-year, of products of each profit products some during quarter. gross on more up restaurants, retail, the

up was compared primary We down saw positive per growth acquisition. components the in been historical since of acquisition year-over-year, and in achieved in GPV GPV and growth since same-store which to growth has existing driver then. retention, measures seller, stability levels. has churn and across quarter the relative sellers XXXX moderation the churn, stepped GPV of Square the of existing third at growth effectively XX% looking of

in in Instant XX% $XXX banking Transfer, PPP, products interest gross were an excluding saw strength of outside the seeing Transfer our and year products XX% Debit The during the in the Square and biggest profit XX% drivers million Square raising Square Square Square recent this products, launches profit gross from We're Savings, Square quarter, on from up Instant Banking U.S. year. four quarter banking banking benefits Loans. our which Square from represented the Savings We increase of of balances. from during on year-over-year. totaled Card, of pricing earlier prior

Lastly, growing larger go-to-market addressable and up market highly believe the efforts with up-market upmarket. strong remained year-over-year. growth our We remains large is the recent XX% mid-market drive for segment for fragmented to profit sellers in total shift gross sellers intended Square, from has further and

year-over-year. and Cash Active, App Inflows basis. inflows per on year-over-year a Actives, in profit, Each of of $XXX grew million an XX% increase Rate Transacting component framework, Monetization generated our gross

year-over-year. sizes. network During the XX monthly actives, XX% million up larger see transacting reached to continued significantly with June, We've we month of actives for attention higher

those transacting quarter, with than more four a the network actives. or During quarterly more represented App of of Cash half

and transactions per functionality Peer-to-peer second in an driven App across $XX an peer-to-peer to In increase all-time which second helped XX% actives has our year-over-year. allowed peer-to-peer drive engagement. quarter, quarter, reached the during of quarterly network scale the high, billion Cash us rapidly volume has

increased first growing increase year-over-year time Cash Transacting from We typically quarter, is more through year-over-year, for Active deposit. the second new product directly and seasonal Transacting per significant season stable $X,XXX Inflows a in in compared a there chose wallet. the This their into quarter, and than tax X% relatively meaningful of Active per driving to App, Inflows to Actives to has growth App Cash over receive Taxes one-third actives benefit tax up believe direct share refunds. adoption refund runway of averaged which

strong rate, BNPL especially profit and growth from direct in our has which Cash Card and our past gross year, volumes. adoption year-over-year, experienced App points up excludes quarter season. and products, was driven Product deposit Monetization for primarily services during X quarter-over-quarter, financial actives basis primarily strong been tax was the the by driven contributions both pricing inflows Monetization up of X.XX%. the over basis by changes XX strong first timing platform points

on to Lastly, quarter. $X.X the our million GMV, quarter, consistent our Losses and relatively with profit receivables of Cash GMV the year-over-year. gross year. increase from consumer prior BNPL in were Square contributed was in platform BNPL second an the XX% each of platform of billion $XX of X.XX% App second

on trends. update an Next, July

growth which would For for quarter year-over-year, and July, of remainder to gross the XXXX. of the we month profit you XX% the orient third total of expect we

month growth quarter through the certain gross to the primarily due margin at economics the third to quarter. benefits second from year. ecosystem, lapse grow we July, for compression gross as be last favorable profit moderation expect consistent we transaction relatively Looking which profit interchange is in to year-over-year, we expect of XX% The each from more Square

through over expected second seen three the months from is as year-over-year, stability XX% be May consistent up with to GPV July. growth past quarter Square in GPV the we've

fourth comparisons. the GPV quarter, quarter third to expect benefits as profit from more the and For Square to improve slightly growth gross compared we favorable

similar App, In Monetization XX% and year-over-year Rate. it growth expect to consistent relatively Actives, gross quarter. through and year-over-year a expect monthly grow in we we expect third XXXX, Inflows Cash For continue to July, from Transacting to Square, on the we basis actives, profit be per to

we and expect Cash be App's profit the more more back expect with rate with the as to second monetization grow We gross to line inflows in year overall the a consistent quarter in result. of the half

the Given we Verse down inflows on to focus going on an expect an the actives will do not have although wind impact of gross efficiency, or profit. monthly forward, impact

Four rate, and growth, monetization the stabilization in we period. moderation Cash quarter year as the we growth expect a slight driven in in prior App's by gross stronger App's profit Cash fourth lapse

For be profit our July mix. similar GMV regional GMV second to gross the we than growing to in platform, BNPL expect with year-over-year growth due to XX%, faster quarter's

for to Turning the and our expectations of year. against the progress XX remainder our of Rule profit

through efficiencies over leverage touched ourselves areas. year. the ambitious and half goal, share hiring, and on framework Jack in progressing on long-term. more the hold critical existing entering efficiencies hiring compared on, prioritizing to we deliver teams we're towards Our to of We'll by among worked an our drove encouraging expectations accountable. what year to you continue it Expanding and first up with investment On we've the focused updates sets the

to We headcount in this XX% out be growth set expect year. the target our XXXX earlier below

office variable overall at mix of and estate and Cash back, we while App. pulled With Square ecosystem App cost locations. we peer-to-peer increase lower across we've namely by And spend each expenses was costs leverage looking up shifted footprint as were down to year-over-year, our year-over-year, Coast on corporate Card efficiency, to savings App's acquisition began spend. ROI sales identify pull driving company across overhead our healthy and our customer of our spend, sales we issuance some channels Despite and downsizing marketing saw across Cash marketing, opportunities back Cash this West acquisition real

facilities of expenses and a basis, restructuring some was million well markets second of on the for GAAP wind these impact Verse certain $XXX which and items the estate expenses, operating the Given items. as Clearpay in for quarter, real in among other amortization loss write-downs down includes acquisition-related certain of as

opportunities leverage these further and time. in We to over other expect find overhead expenses

XXXX Moving to guidance. profit our full-year

increasing expenses billion $XX today and deliver into line-of-sight into for of of and reflects planned income adjusted adjusted As our we guidance profitability and have progressed expectations better EBITDA this. full-year have now to the in We're our updated XXXX we further million year, XXXX. for expect the operating our $X.X

income We of inclusive expect adjusted an to basis compensation share-based achieve for expenses. the operating which profitability is on year,

expect adjusted operating continue expansion basis. We to on income margin an year-over-year EBITDA adjusted and both

Our we to year, This figure quarter on we the in delivered represents second the which first updated compared the for the $XXX million our discipline the prior in to momentum drive in each full-year guidance of represents to during half guidance. expense gross year. continue of a both our focus second the profit business and the of expect step-up half

$X.XX and expect third non-GAAP approximately quarter. million $XX expect third quarter, relative we operating to by of billion increase to expenses the on the Finally, touching second quarter compensation share-based we

mentioned, expect We're compensation work. area about progress quarter which on and leverage XX greater Rule to made of are framework and to continue remains to focused share-based we've our the we this Jack investment and excited eager over drive an are As time. towards

turn now it call. the operator of the the to start I'll that, to portion Q&A With back

Thank JP Instructions] Huang take We'll from first at you. our question [Operator Tien-Tsin Morgan.

Hey, thanks so here. much

given month raised. your and profit quarter your little tracking bit second slower update you than So, which also update a the July

to you versus I Just operating driven hear by bit, or operating about two I second Is that leverage. the love a focus on updated that the talked the expense across operating just first leverage here more to also by going quite be in Thanks. your the thoughts half. top-line know half leverage ecosystems? but asked

Hey, thanks for the questions, Tien-Tsin.

we the expect and to the reflects $XXX each on not which strongly we strong to led with the discipline our as our continued pleased both what the our raises on that's in raising discipline to back the obviously, And our our of in of for in results finding to remainder for we're continuing grow profitability, million, expenses, ability and profitability top-line adjusted while of and see efficiencies So targets second second quarter operating but expenses -- business. year. EBITDA income, across deliver show adjusted year this reflective guidance full-year only the by of the performance strong quarter, half operating

third Block expected third remainder at look year-over-year -- we profit gross as you And profit of XXXX heard July as you -- XX% our from perspective would see full growth forward. July quarter and well gross perspective quarter urge second our growth, to of at some perspective, from level a the a to stability from

As we there Square. Square pricing economics to and related Cash lapping related and Cash some dynamics within within interchange App noted, to is within App effects

half, biggest continue half on of operating around base year our second number that leverage of areas and headcount; an see the first, first is marketing; not as expect but and also out three second, the sales From we hiring opportunities for that call our a executed around we've perspective, third, you and us, in leverage: only in look the of we I'd corporate this forward overhead. Namely three drive longer-term. to into and to to expense

with a acquisition focused healthy customer our spend. across From And more year-over-year was to the proven and remaining was marketing finding optimizing App. App return. sales Square across continue despite as of and this, acquisition see on and you saw more proven oriented Cash channels more we Square What second areas of perspective, overall down Cash and efficiencies towards we and spend our quarter leverage our we're spend in

as expectations, are half to time see teams. on the Secondly, which out expect a teams. of leverage we've first approach more drive drove hiring, to taken as slower year, with and of compared we'd of the efficiencies here encouraging compensation. Over existing stock-based hiring, our we our In our disciplined growing pace to a more well leverage

Rule we doing West data discretionary will a our relatively software plus in we which trade-offs half to noted of other overhead margin T&E whether achieving on so and target our into footprint growth and areas. to a spend estate second of leverage invest some year real of across us operating quarter, Ultimately, an it's meaningful we to important downsized modest real as is for base. and our and help savings, usage longer-term of continue growth From long-term back estate expense with expect professional the facilities, profitable the here, our perspective, make the and these we while framework framework, range drive but in discipline fees, investment of the beyond, a or number prudently areas XX, in quarter, as of this XXXX Coast drive in and

Appreciate Got Thanks. it. it.

our take next Wolfe [indiscernible] question We'll with Research. from

this is Peller Darrin guys, Wolfe. Hey, on from

could July, is XX% holding then, that think X% if up was obviously, had the on expand and you working just to said, you And that to versus obviously mean, then verticalization X% still around with going growth GPV You some growth, efforts I maybe comparison right? I While we're just so the on in segment? Amrita, efforts what's there? into industry, also the And come verticalization share gaining well on your investments. topic though, in is the touch

really view without could on XX but you know us if there, and think of and beyond it's about XXXX? progress the So a XXXX profitability just Rule handicap frame, XXXX time I in how levels hard remind to to just your

the for Hey, Darrin. thanks question,

do upon in July, quarter terms what Square second the we'll for So, efforts first Square into hit and hit the I verticalization think business. the seeing we're in I'll of is I'll GPV what then and

the We've May. July, GPV from seeing XX% also So with through stability at seen consistent May we've of basis, trends with what in XX%. at quarter year-over-year fairly through that July July really coming seen trends in what second was terms consistent we're with in

vertical by and by XX% number sub-sectors, X% grew the that also by of Retail beauty, X%. GPV of year-over-year. encompassing Services, course, year-over-year. quarter, second home fitness, in and unpack you professional drink a food services. Services grew repair, and If TPV by health

We non- really about since the of a number different that's which discretionary verticals. that across moderation broad-based have talked and some discretionary trends timeframe, verticals across have we seen and mid-QX really

seen rate faster a headwinds, see at in markets those quarter, to more some of of month-to-month quarter. the with to year-over-year were from ex-BNPL, From stability business pronounced Australia generally July those in be trends at growth which had in growth international the second growth international continued a we've second albeit for in what again, on XX% the much markets of overall GPV macro-related May perspective, those is, continuing Square. geographic overall base And greater also the through seen perspective, a from for

across on in our Within sellers to the restaurants, larger to prospect, grew -- across I for up-market, the your providing key retail, we about us. gross perspective, platform now, our we acquiring a which verticals knowledge sellers diving up-market This team, us a year-over-year have into where beauty. is we sellers key to outsized think and our in of profit continuing sales us verticals. as key Driving industry and right think second our been with our for on quarter strategic From signals and is for focus reps XX% verticalization onto bringing three a grow continue and as focus tools, the those those question question acquire growth. seen area has our

last sales, and but that completed account inbound, since attach US Let's early take of completion, gross still improvement in inbound executive this verticalizing within we've profit year. rates, in team April encouraging there. an began in inbound year software we sales and We outbound per that added seen and trends our

July, we US verticalizing month. in past just outbound, Now outbound sales for this so our finalized team

those really and gain we've account to account we'll there within them completed be will time. their training QX industry fully account confidence rates knowledge enables see we increase signals which profit as goal continue scale got. on now through execs per processes as the to sales have Our look our and assigned over software with the they've to gross changes, programs, team seen our and team, those the and deepen executives into ramped their added sales And vertical that continue QX. to anticipate account results, to our With ramp is and exec inbound hopefully attach outbound we

to the expect that we is results We'd coming target for of to spend sale growth up-market over a time. our sustained times continue be Ultimately, our with and And paying-off results in vertical drive ROI expect these go go-to-market those this see points over iterating driving to quarters long-term to on and and and into years. four as three overall XXXX. will this to years initiative us

Okay. Thanks, Amrita.

we'll Tim Chiodo And take next Suisse. our question Credit from with

marketing want you a for sales I taking and sales and little seller Great. the to talk Thank about bit. question. Square or marketing

new cohorts seven that a be the to bit year. you benefiting we to last little mentioned, of it's some a and six and actually So so amount towards have more gather of of this the four from expanded investors shift brand, smaller, sometimes annualization that the awareness, a one that periods the dollar year's payback really at the health range, maybe marketing they concern than in more But pullback had point the experimental come is from of that, five expense, and some coming had is in to on but size spent. you the might lower, there because stuff, the efficient

that maybe all and with So in cohort could now the the bringing size you about for health Square. the of talk you're context, that

the that. for Thanks Tim. take question, to happy Sure,

terms with seeing into Let then year in payback spend me first in customer dive acquisition. we periods and start cohort the of we're of on half trends can the and what the

perspective, is which ROI From up cured. approximately So, have cohort in to last investments expectations I XXXX in target the to longer-term higher for seeing marketing we're And XXXX. more XXXX year-over-year cohorts to for growth X XXXX Square as targeting improve to a go-to-market times XX% just compared we're seven-quarter approximately payback a mentioned, in have as our these was five-quarter Square sales as -- remains six our year, our and slightly payback years. XXXX across a compared than toward trends a the impact payback, XXXX. cohort, and over meaningful spend we four to expect

you channels and we've team of year-over-year, the pullback size channels driving Through optimizing pulled meaningfully marketing expect speaking X% on Square our the data is pulled down we meaningfully spend. and our for efficiency, mix to continued across enhancing as first the incentives the as half on this year, we year-over-year look on the the and and and just on we When basis, the so a rest sales back we awareness on we're brand of on team. sales year. the the our back and marketing reorganizing as of focused year, at first was well have sales as half reduced teams focus and of sales, I Again, investments of and

the those quarters, compared slightly seen down growth growth with down second is Square to the in through quarter over half and This acquisition marketing in of year-over-year pullbacks, Despite quarter. sales we've improving the X% strong first the in with in year. the first acquisition quarter the past and two year-over-year second

question we'll take our next And from...

Perfect. Thank you.

take you. question MoffettNathanson. Ellis our Thank from And we'll next with Lisa

some also Business, letter to In to in you XX% I growth effects, us just for maybe to a can of few taking highlights of a kind overall you in kind couple a good have organization, afternoon, initiatives of you. of App saw in you you drill ecosystems. current that Pay prepared called thanks the question. connect maybe and network shareholder strategy and the take I see of my profitability bit in on as little remarks, the your different Block’s for as step was data out ones with some and Thank there, points Cash the a connecting Hey, ecosystems for the other on some update benefits well see. and Cash hoping the underway you back

that. start can I with Yes,

serving audiences, looking talked as we them. and we've believe connect different teams have different lot a fact in we as the multiple about, and opportunities our resilience it focus I've with So been time on ecosystems to our of business is power the my especially do and for spending

remarks Cash and Afterpay we so excited Some the and App one. earlier App, Square now mentioned about between App the part strategy. and on biggest of was a Taxes the through right Square and of Cash the ones I'm Payroll big my focus are mostly is Cash really

for the increases continue and within but network compelling to enables and effects App that Cash experience also opportunities a our really We to us look build effects within network it builds it's more refine have App, people are interesting of checking we app and especially an sellers our to and because there's day, Square network compelling. with balance and something that as that every like Cash even unique more

Cash Bitcoin global Wallet, Bitcoin specifically There a we launch. the in partnership hardware, App and a our be first product. a will announced

Cash especially looking will and connections the local doesn't We a speak continue to we for be in offers Square ones, Square, more and around faster much constantly and for with even we're find Square, merchants And ever its titled launching globally. and around and we would Pay move sell most merchandise lot there's countries App Cash will to we've which both for be other launched forward more in and ones, and believe that to enable especially and local to and App opportunities future in musicians the looking to move TBD, ticketing, start. looking protocol much faster entitled at

that. we're excited about So

shared mix individual the faster is to or and a as using ecosystem. external features a ecosystems an more lot have well. much already a learnings shared peer move two and we because resources able facing products So of stuff the of work ecosystem We're internal as by that connect done

you. Thank

with Ken from Autonomous question next Research. our take will Suchoski We

growth international International many can coming business talk perspective largest verticalized about see believe local the Hi, software I strong just been profit you a company's some to in now growth the growth? these good compared highlighted sustain It's Thanks software penetration have markets. taking afternoon. and recently of the terms markets here the Can you in markets Square available for these are I how GPV its of -- in of yet of US gross verticalized software momentum the the good question. help opportunity again. products products Square's out international guess, the from behind to and that how

for Yes, start. I'll question. the thanks

increases is our across parity all challenges doing we're in Loans we're the the Square that, and There to for cost market various sure it to example, that making so being features each the to right at features does launch And general just always our that globally. an right markets, particular workload. on, markets with picking market different regulatory that Square So have doing we one priority every is product, achieve meaning, the costs any of new us that time. environments, avoiding take some more our we that

made a markets for of XX QX in of lot global strides products Square. We the our across launch with

One to UK, to of and Android outside US, and to States Europe is United notable people Tap in as more Australia, TAP available of Pay dominant especially most using the the big a pay, that's This sellers deal the and Australia. Ireland, on the and more phones, their was way becomes the France, Spain. are and

sellers to extremely as stronger came up the from years profit and this our very in seen the it's also seen Japan, take in the we which ending used we've our the world be to that half UK, from products, payments for Australia, is international continues we've connection, Canada, banking monetized contribute improves Australia ago. than almost less in about Square strong and months two And Square growth well. in one-third products Spain, gross battery from then, profit of and launched performance, Square's Australia XX anywhere, of life, just sellers markets in second-generation June, it some gross allows And secure around NFC the Reader to strong France, affordable. Ireland,

So continue to we push.

to learned We've therefore well. slower. deliberate that and Going as and little faster lot each international bit into be a we faster has every and can we go we more market open, grow much move ideally a as market

as growth. believe outside the a for X% you in, We with in just penetrated And Ken, that than in opportunity noted, we're I'd is add, we're a runway long this us. the less US markets big for opportunity these that that

about additional a the total and second momentum. GPV our excluding it's as XX% Square full rollout work in to that gross profit noted, recently, So, whether software, as now saying, and quarter, outside more BNPL upon profit XX% for XX% really payments, this the was year-over-year got traction across our Jack XX% we're of platform banking products seeing year-over-year to build our with on basis, encompasses, the at now as hardware, products suite, the markets the currency in well as constant where ex-BNPL gross of I up was where we've continue and strong growth Square's US

both. you, Thank Great.

question We Bank. Bryan take Keane from is with Deutsche our next

Q - Keane Bryan

you distribution expansion excited Hi, maybe then for merchant in you. question. to Cash Thank Cash just taking revenue And particular? Pay. for guys, acquirer for the on the base, Cash curious the see were thanks and Pay We over X model go can timeline App just App App use Active million for Pay the

Yes.

We my And opening I with and with grow as Adyen, industries. significant Pay, us and Pay, our flexibility much with also of new see Steve of pursuing merchants, room distribution launched that. actively which broader mentioned we App for and App Afterpay have Cash and range adoption pipeline additional lot helps the partnerships Beauty, some Afterpay our to in customers. a reach a Madden certainly expanded Cash to we're QX, still So and remarks, including recently allows PayNearMe, merchants Stripe, we to of is in a with more merchants Fenty goal provide

App X through and Cash in as processed million $XXX App second During nearly the June. Pay monthly nearly quarter, million volume actives was of Pay, annualized Cash

reach us is Cash demographic. gen-z that beyond it customers audience, amongst App adoption We've Card seen our So really the serving. to younger strong allows those

opportunities and sure make for it. to push still continue looking seen and we promising results to we've see those So, that we're

their Card, merchants these have these over fit And who product add, access million to even our a $X,XXX I'll Cash here just access platform, to really these App base as eager see are monthly the device we second Pay on been that with selling large necessarily who they Bryan, Cash real that a the Cash that are into proposition attractive customers and finding the June, during onboard we're have very signed-up payment merchants -- Cash platform we so have, customer present of that's the transacting Pay. Pay App engaged because quarter, and with being inflows who as and merchants, on highly don't of with actives XX App get by to to App

you. Thank Great.

question We'll from next take our Harshita Bernstein. Rawat with

over Hi, medium-term? seeing AI? but It's about been efficiencies, you this good for you growth potential headcount upon for with year, expand these about teams engineering should talked are you business? growth your know for afternoon. you. How over past few headcount I Amrita, strong Can your example, trajectory the comments And around headcount very years. growth the the Thank think we how in in

we been aware management have leaders making managers think and we've the investment get into looking have taking hiring stock-based -- I the cost and compensation, account of slowed targeted talent hiring business all and as change at well. our the to has more stronger of and biggest more so true and our targeted and we performance in much framework Yes, been teams deeply

model in to and really that see efficiencies to sure having course, cost company that make we each Of sure the their folks head make but of teams we're in the the that table, we decisions there's just we and growth minimize. those the hands with the at really running looking the always to to everyone want at that to want bring are ecosystem the the putting running want investment achieving we to

be framework, this it to So just investment organization. and of working is as the the rolled early something out consciousness it that's we does this but seem in is

you. Thank Great.

Rayna Kumar with our question UBS. We'll from take next

my Afterpay? talk you little for the the integrate question. to you look about Good a you steps as and could broadly, evening. discuss bit Afterpay Thanks more the Could next out next in what are thing integration taking

I magnifying to to want to be daily items, back offers, push merchants -- as find App is work come ecosystem a ecosystem little to them, that the sure Discover lot it's tab, basis We Cash to and deals, going and the to experience. build people is and members benefiting I'm a of compelling Yes, that that team be said, make of daily with and place we're right around differentiated find Square focus meeting the we go this is find glass the a ecosystem to compelling of where my so to A to on a a in model your Cash find that a App. want experience on benefits would up lot App that ecosystem continues to now. also our found interface. within Cash the Square

and So a lot you'll that A has on be see it be deals rank to learning that and do basis, ability probably will really we that's to we highest leads relevant the will look. our we our the merchants deep where that's learning But based this where and applying line, to velocity obviously, and changes. offers highest on of way, and with signals impact do get. believe, the down and to the machine items would opportunities in other ecosystems come I all so many it where together

you. Thank

Ramsey next Barclays. our take from El-Assal question with We'll

larger the smaller then on of move what of proposition just dive evening. services up-market are value maybe than does on How up-market? this questions bit how strategy I use the what's might and sort kind differently my to sort taking and you a utilizing for thanks just move merchants lean Block you of in ask resonating, deeper this merchants. change, comment the into seller, little and and the retailers Hi, to to wanted

the the ones more a commerce. our all within three, think all on the you and dominant So, of working we one lot just effort of -- is, have competitors terms much vertical. we are around that and on focused attracting find more one there these people We're up-market, A I in biggest verticals getting flexibility. maintain verticalization working three of

that be a provide Square aspects big and chain and nail some because, also chain, restaurant of I retail. be might people is or it might retail elements I for the services but So choose a salons have

one competitors So your to and easy Square with all dimensions verticals choose operational well. very offering all to -- between the which we're add your of and it you your all ecosystem connects It's and to easy customers, crossover encourage a utilities they all as new together because to from is ultimately these differentiates these very lot ourselves. and seeing it's

work I their system offer really need the that so customize also marketplace, allows they faster us much custom build externally. us same to their comes if point legacy and to bigger or people that tools, their enables own coming do do customers where that themselves, can enable us they significant, to as It that apart. were for take internally entity that developers or customize because actually is you're our that one work Square platform platform hire bigger we're to the continues to one flexibility exposing get would using you might to flexibility be that so or we to experience a might want flexibility and So, you thing, systems and set to and extends in, we're the have you to as that's as move developer

experience that. same of our are interface make us have on can and on additions and that access that build on can compelling they that merchants larger foundation. all the and developers of same do, allows built tools to so a focus So we the themselves build our compelling it the really And and lot interfaces sure same additions to our tools

you. Thank

who just how sellers if use platform use sellers platform think larger And I'll think answer I more differently is, our smaller of one smaller Ramsey, simple you to way your question sellers, add, from that that our about, to the and times than they last for generally more than attention than adopted who more greater smaller in had one, the stat they of only sellers adopted think adopt those you we the know, XXXX, shared mid-market I sellers. our XX products products and

relationship of jobs merger them. seller to with behalf ability on retentive on that take do that more builds more ultimately So

et mentioned, annualized more $XXX comes now is inventory, only cetera. growth And a and customers, quarter the but which of orders, but each of different just also rate in payments, software through can as or integrations, the offerings, more which at a aspects, not of gross million provides build third-party that running an profit across sellers applications so Jack during not customized second platform vertical developer our number solutions

around outpaced vertical that points our ultimately overall Square our orientation so here quarter and second us of be us helps and attract perspective. We developer the go-to-market sales tracking a approach year-over-year a larger from tracking along in And we're growth real gross also of to from area continue sellers. that to our profit growth profit sale, and greater which our platform key the orientation our being elements tools, a marketing key this growth, on go-to-market as XX% gross with verticalized see for

so much. Thanks Great.

next take Jefferies. from We'll with question Williams our Trevor

but and about but second existing And thinking how of any the integration there that there? on today? update then, Thanks. Taxes, part base line the taking be line to for ask App to give contributors helpful some broader disclosure was see you of to would this Jack, Square Payroll. banking biggest seller Cash to rank opportunity on SNS us wanted if the current that mentioned the your sellers longer-term the to quarter, Thanks cross-sell on in question. of on with the you stack I just you're of within Great. kind Payroll the a into revenue snapshot could remarks

Sorry, ahead, your Amrita. first on. question Go was

Square biggest would I the the which And now orient gross in to part profit Card, products being our our well, disclosures, benefits of Debit areas I first Square banking Square services from Square and Square million Instant contributed four recognizing on within quarter, rank within interest now Trevor, think as largest second there product of sort question the Loans, our well. gross profit was stack helping Savings Transfer, as banking we're as and subscription where Square some in line. of and the $XXX the Square you, that

to from you kind Square. a for perspective growth broadly products four and banking across So biggest are initiative SNS and orient are in I'd of our the meaningful banking that that driving Square those more

had Trevor, Payroll. you on the second was question, think I

Payroll, on exactly. was It yeah,

the Just a Thanks. cross-sell into opportunity merchant existing base.

XX-plus significant across think we we see whether drive attached, with initiatives upmarket into as to those sales other software sellers, Payroll products I relationships or opportunity to see and to as continue our attach deepen the sellers. ecosystem a especially -- its drive any upmarket our of we grow we Square

build And initiatives. attach only early And mentioned, we're our US that I so are sales team, from into having a days, few part but higher software that's we it's key of a verticalized inbound months seeing as our we're process continue now as the with drive sales products to like those we sellers. well, touchpoints of outbound our that ramping in to up-market hope and verticalization products Payroll through as team and other and

our America. Kupferberg with take of We'll next from question Bank Jason

guys. thanks, Hey,

gross Square Thanks. expect inflows you QX, think Just the in side, review I App Cash do you stable per the and about that the QX? profit quickly to in can just then you stay growth said what GPV And active for were on up half? second X% pretty

to happy take Jason, start that one or one. on that

look So was saw the we seller. saw a Generally, let's element or is In already, and that components, churn. start looking with we've the Square acquisition, second of trends same-store growth. growth three across the acquisition we're three moderation elements customer relatively per same-store high-level or GPV Square growth growth stable and and where at some I've at. quarter, moderation of in we unpack GPV in we will churn year-over-year, grow seen as mentioned those

stability kind From same-store XXXX, where existing third we've the seen is quarter in a me customer in and the first a saw From those. kind growth to walk-through unpack improved the year-over-year in second quarter. of of the a relative per things to based quarter, and couple date, compared quarter there let first a churn or standpoint, we sellers, growth there. growth From of material of that the a year-over-year a acquisition unpack So, and changes each trends the since GPV moderation. quarter acquisition on no seen on sellers churn acquisition of perspective both basis, a we've in second for you of perspective,

First, it looks to be consumer-related.

it to looks multiple cross verticals. Second,

dynamic. seller see And that quarter as for majority of data account sort growth third-party the GPV retention [indiscernible] seen well. -- third we year. in on GPV this trend data for us, broader here the to Third, or our that similarity of we've the last per dynamic of since GPV Teams per seller

of elements. those So kind walk-through let each of me

which growth to the quarter while First, are We as the the as spend consumer-related of remains XXXX you're that We that relatively sort I than processing of second third slowdown some element, the gross Square's might helpful growth and GPV seen card cards timeframe is Ultimately, seeing obviously, but GPV per stable. X volumes mentioned lower unique of QX of lower were kind compared it's levels. since an profit similar number levels, believe of again XXXX referencing. churn, October same-store remains noted that at existing dynamics estimate XX% in mid-November, the sellers quarter quarter last growth been growth Since or third from manage quarter we've vast slowdown per third here. trends since or to has of be responsible we same-store global GPV the XX% or so so. of XXXX, We to for illustrate the the the to majority unpacking the business seller of in year. point of the

in an Visa of the point point volumes we've similar nearly verticals impacts X slowdown the US US more slowed all seller and X since slowdown seen the of perhaps quarters US. sellers. well, third-quarter, that that growth and GPV seen we recent broadly It's size Mastercard really growth X we're and seller points growth in sales data, as and our to data retail but pronounced in we've larger and the impacting on third-party tracking And by across the the base in by see amongst has a

that So same-store from to or we're that GPV kind I'd perspective. point of you these trend-line the some are seeing growth elements unpack a what of key

make wanted commentary I XXXX, for just the [indiscernible] sure to right there. I heard

again, Sorry, on XXXX? that say

GP quarter For you're the QX, fourth versus XXXX. on of growth relative expecting XXXX, rate GPV the and

some QX shared QX, we gross profit need rates you the look -- GPV compared yes, as XX% moderation that to QX. growth rate of in at July improvement for see XX% growth we of to we're year. started what more was the the profit to across growth quarter expect in last of see for and to Square, of GPV favorable being sort verticals growth comparisons. time-frame in these fourth mid-QX QX, Square for the see a Again the we remember the urge and for some referenced, we Sure, but I in improvement July slight gross expect to given

and quarter, part of there, per question, sort think the was active, in over growth and second the I how per sustainability just or your inflows second on your X% Jason, active inflows question we see The on time. growth was of the

the this second for Thanks. half year. of Yes,

perspective as quarter-over-quarter even I overall X% from Sure. the noted remarks XXXX growth in from in been Yes, we've as in earlier, per see impact expect active. Ultimately, well, in relative here refunds and greater first saw we tax by a encouraged trends. we quarter. to though healthy stability the the have growth second the inflows We that quarter

more health reasons to drive point As product we customers of consumer more the two consumer of into cross-sell kind question and funds that product One look of onboard forward, dynamics beyond adoption. I'd I levels. is products, think there's we gives out broader adoption and more spend our that Cash If can App.

journey, Also, and Cash opportunities active -- give is our Gen-Z that also, active over financial as to this likely per mix-shift inflows deposits into more demographics more younger mitigating on we the if on they and and encouraging onboard the seen of some couple Pay want Cash strong earlier lower to we leads that us money customers in inflows engage to ways incremental demographics funds customers their quarters, as their trends with demographic past these that example, into attract per App with element we've that to put we for customers App dynamic inflows be also gives demographics younger The that volumes pressure are can through the like have long-term. but products. to growing could in the that is one for

you So as two about kind those active you per over think the share dynamics modeling time. inflows would I of are that with

helpful, Very thanks.

Jamie And with from more take time Susquehanna one we Group. question. We'll our International question have Friedman for last

expectations your on about Hi. due from last is that the more just year, a box? were of essentially credit receivables as overall, perspective? you your how wondering, X.XX%, relative originations How, realize the consumer the but that, losses profitability or I Thank credit same Jack, to perspective. thinking performing the Afterpay credit you. treatment I Amrita are versus was a from is to

in to health consumer that to risk quarter. behavior this loss from as growth rates look what Afterpay disciplined the would I you year-over-year trends receivables This perspective perspective, gross trend half XX% second I the GMV with in continue in profit the whether the from repayment noted a quarter. of stability consumer approach consistent and improvement say on is the on you in can start is that from stability a GMV for to in was the year stable XX% first one. second really with losses up quarter and improving here and and see on and rate loss year-over-year topline is while seen or we've maintained we've overall What first at lines

year-over-year And in up XX% XX% in improving quarter. first similarly, -- the the at quarter, while gross profit from from second improving was

Cash BNPL integration much we pillar our improving across to rates within to So Square seen loss opportunities Afterpay, while ecosystem. ecosystems connecting on we we've products the healthy larger and App the continue on with commerce and stable the on core trends focus while maintain

you. Thank Perfect.

and Ladies program. gentlemen, the you. program. today's you does for participating This Thank thank in conclude

now You may disconnect.