Block (SQ) 2 Nov 232023 Q3 Earnings call transcript

Good day, everyone, and welcome to the Block Third Quarter 2023 Earnings Call. Today's call is being recorded. [Operator Instructions]

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

Hi, everyone. third earnings our joining for quarter call. XXXX Thanks

with have Jack today. Amrita and We us

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

participants. forward everyone well that be historical move as will will from take call. During on forward-looking our fact and looking. deemed goals of include these statements as to we and These also than and to and All Q&A, statements remind are targets time. conference could long-term outlook statements goals risks our be we guidance uncertainties. we other call shift These to discussions targets our away forward-looking and like decide We may statements any subject questions be this priorities making to would at or from of statements

Actual forward-looking forward-looking our the the as Please contemplated any required filings that to to at results of statements. be note factors on from indication statements today's forward-looking our us Reported based differ. take We of differ could considered those discussion of not performance. for a future look an available call should results by by materially a are SEC date. results law. disclaim could that this on any as as Also update information cause statements, our except to obligation with

not preliminary interim performance our estimate monthly the by the for finalized subject are provide of of for month This estimate not we auditors. performance October review and for current month will as represents statements to our our October. During our this we results call, financial October, yet of have

estimate fourth may not results October performance reflective may actual and quarter. for be the result, differ from of a this full As

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

non-GAAP discuss Rule Rule to our also evaluating income will we and including some metrics remarks, during XX. financial discuss are the to investment shareholder With these we growth profit provided Also, framework, our Investor the comparable will operating historical spreadsheet materials our measures call. directly this related financial adjusted most and on gross Reconciliations Within margins. measures letter certain financial XX, we website. information Relations GAAP of investigator are of in

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billion XX of wrote, providing from So we're a of notably portion in repurchase more goal start into our dilution of detail what share-based Rule to going reaching in offset I to Amrita, compensation. XXXX with shares most a $X authorizing

it on read I'm please And details over what that turn going for going all I'm and letter to Amrita. yet, that, to haven't you the focused with If forward.

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

profitability quarter for year. expectations strong the remainder our performance of in and the increased the First, third

demonstrating Second, improvement. and a preliminary drive we're where our view on of to investments XXXX margin discipline

and XX lastly, of path allocation in to value XXXX to achieving our Rule deliver strategy capital for shareholders. our Third,

was related million adjusted $XX or to a which, our operating to $X.XX includes depreciation, on EBITDA highest million and a reminder, income year $XXX compared $XX In ever X% as the profit XX% ago. third year-over-year. quarter, of margin Adjusted and on gross delivered gross million gross profit up margin expenses billion, XX% quarterly profit. stock-based was compensation We

quarter focus during in million improving. Our in compared flow also was quarter demonstrates of the Adjusted pursuit our has in the strong on free strong $XXX period. Cash our efficiency cash been million and profitability flow to the investment generation $XX prior framework.

For cash XX $XX flow months, the in from million was up adjusted the $XXX last free million negative period. prior

million quarter, to Cash products locally strong XX% XX% banking into year-over-year, up year-over-year from through growth get generated vertical Let's up increase XX% with profit year-over-year. million third gross on our experienced and profit, Cash basis. in the banking GPV we a $XXX Square of In generated an committed year-over-year. App up Square and grew gross our constant XX% App. or and our serving Square point-of-sale XX% sellers profit, XX% in $XXX products currency year-over-year. products. gross We're

at the components the Looking inflow of framework.

the up there the X% to compared million peer-to-peer XX% our year-over-year stable Inflows by gross later first rate, with September, which flat profit relatively of X pay pricing were points quarter-over-quarter. As transacting driven year quarter, network. was up our third actives and year-over-year now, XX by primarily over the transacting from up relatively driven and monthly half changes buy of contributions growth past basis excludes active year. X.XX%, averaged in Monetization year-over-year, platform $X,XXX for the

NPL receivables the Square profit the year-over-year. billion contributed platform consumer of BNPL gross third of our an platform, our on $X.X million quarter. improvement year-over-year. Turning which of were third and XX% GMV to X.XX% from quarter-over-quarter Cash an $XX GMV, Losses and in was in each to quarter, App of increase

his Cash financial we consumer in us our others and to and change, commerce. fourth quarter, fourth especially can't, enables quarter. reflect of beginning platform the forward, will our longer XX% provide BNPL will each Cash BNPL organizational no XXX% to platform results, moving combining we platform perspective, As split a From the of include reporting Jack noted Instead, ecosystems X App in restructured moving the recent Casa's into of experiences as our for efforts in Square. the we believe into commerce BNPL letter, App, our

to are working experienced App hard X% our During about Cash impacted than for both of products, the trust. hours quarter, block, by and customers our which crucial and lasted Square estimate during the is it We on across to outage services XX rebuild systems our profit The impacted gross we systems. outage less and quarter. certain reliability the know we an

off-line capabilities App and Cash Square Our time. for some to enable customers process this our during transactions to continue

and Looking won't and capabilities so ahead, building with a we off-line efforts prioritizing, resilience. about technical Square infrastructure our are missing are be greater to expand all products accelerating our redundancy to sale sellers our of worried

Turning now to the quarter XXXX. of fourth

and from favor away in trend We reinstating annual profit quarterly disclosures guidance. are of and shifting gross monthly profit

updated until we and sustain this with continue [indiscernible] achieve XX. to approach expect We

to XX% between in growth We deliver the gross $X.XX billion midpoint. expect billion and $X.XX profit at or

quarter's For quarter pricing to comparisons on XX% rate Square, Square lap first benefit we more in from favorable quarter. invoices changes the we growth the improve growth the expect third as we we third from the prior implemented full year from gross profit get and

up the For Square month of October, X% estimate year-over-year. was we GTV

verticals, per has new of Our discretionary through impacted and per growth GPV in sellers. been macro from contributions to We due cohorts lower seller by trends continued moderated both GPV October. which seller believe has

cohorts acquisition of this. onboarded the contributing go-to-market to customer positive evolving our quarters growth through seller gross X anticipated first from as not profit year, we're achieved strategy are X to the focused as much improve years and over we've the past on Although

gross basis a the stronger year. expect from growth For Cash as quarter's we on third from the profit growth XX% we to prior year-over-year App, lap moderate

components We to of to continue framework all XXXX. X basis in on inflows grow expect the a year-over-year

we've and App to seen perspective, to our and quarter. business GPV. strength product for GPV primarily in business we've Card softness quarter Cash and our impacted experienced by from the platform a App particular accounts to borrow products, growth lesser business in expectations, App continued while growth cash in extent, expect growth fourth was services Cash prior in From the GPV we drive as decline for in spare BNPL and Compared Cash fourth a our expectations financial

at Looking profitability.

full EBITDA We million in year million income expect our adjusted to million $XXX the are $XX raising profit $XX XXXX and $XXX fourth million operating quarter. adjusted deliver in and we guide. to in to

expect $XXX compared million, respectively, our EBITDA to and midpoint $X.XX income and $X.XX million million. to operating billion $XXX billion adjusted million guide. of $XXX These the at $XXX of of increases prior We to adjusted are

profit rule reflecting of margin to year of compared midpoint guidance the XXXX, with full X leading meaningful our of and improvement This our operating this XX% improvement midpoint guide income gross of to adjusted EBITDA adjusted X%, year. the growth implies XX points adjusted reflects the For XXXX. margins X margin points in of of income of XXXX expansion operating margin

Turning XXXX. to Lula now achieving our to in XX path

remain on balancing As and focused a we profitability. company, growth

while how about we to focus more to with going term, all leverage. want provide goal. our to thinking to of addressable today, bringing growth our focusing We reach discipline As critically drive we continue the top more and strong we we renewed line market. beginning framework longer our on we're on also operate how look do this efficiency, we We're the expect expenses our And context exercising to investment a and at to year. of how when capture can introduced

XXXX plan As based of current operating to rule XX in does macro income mid-XX% and business growth is to least environment. letter, mid-teens shareholder factor changes and reach margin. in within on Jack approximately his profit This in the gross trends guidance we our shared adjusted not in at

trends change, our expected change of profitability over well. growth and As may mix we more, time learn and as

we we've of and you're a as ecosystems, total And letter. and long-term We we view. our planning, Square update from disciplined each significant across this believe expand shareholder a we less see X Jack's growth initiatives. profitability our refined penetrated new growth way priorities, captured We monitor In for and commitment to key to one still with long in hearing continue will in us addressable We audiences. are to priorities today a $XXX will Cash efficiency what are market, our our X% for in is App against products which periodically ahead. which than work over our continued trends balance time billion with runway

our the The first teams. area through efficiency is of

number his As implementing company. on Jack cap the letter, at of people are we we our an outlined absolute have in

be compared are today. expect team the smaller XXXX by a We to end where to of we

will quarter. accountability effective enable people size XX,XXX the our performance and over of on as just Our our drive end believe service to compares and constraining we size cap be current XX,XXX our of third in people us of strategies. more business of to how customers team the We of

end to aligned Jack's expect with letter. the our by teams XXXX the strict and the of centralizing year, management, of through scope duplication prioritization and combination this performance reach this reduce in with We functions outlined steps to towards cap of throughout priorities a goal

the of company. come, to the hold greater to team starting business until expect expect at meaningfully people percentage years leverage constraints the XXXX. compensation. firm on We With of we meaningful in XX,XXX the a gross growth in drive the in has of growth to size, stock-based feel as outpaced profit we

also in data, Second, our discretionary find cloud, to the corporate overhead we process spend contractors. spend savings where areas midst and T&E, broad-based automation, consultants as estate, of a are expect reduce certain effort a improvements number such like of real vendor using relationships across areas. software, we We've identified and areas to across

and within scale. ecosystem, unit to leveraging we been the our past, opportunities we Third, our shared our cost partnerships improving structure economics continue as in as identifying we've optimize by

initial our year of yet. we expect XXXX, in Moving profitability our strongest to to be profitability which outlook for

as we year, expansion are constraints. planning next we for in While expect significant implement margin still the we process these

We profitability XXXX to guide. $XXX income, We achieve expect operating in million compared approximately adjusted GAAP Xx XXXX. operating and to a to income basis in deliver on our up

of expectations next to as We our relative to earnings more billion deliver plan strong our share to during for expect about XXXX fourth more in call an free profit February. and gross year than $X.X deliver well. XXXX adjusted flow increase growth adjusted growth in our We EBITDA, to quarter cash guide XX%

allocation I touch wanted to return. capital Lastly, our focus shareholder and on on prioritizing

the believe repurchase which a share-based share-based billion, our share more return margin time. $X XX generation targets turn impact coming ahead the towards compensation as our profile progress of We rule which delivering and initial free our back be today Q&A of call. it shareholders undervalued. And offset program we with value as us we want of are the we our Today, you to XX, and improve, of in managing we to us. hear increased allow responsible the to shares our execute and that, opportunity we on and our years, towards As to cash expect I'll financial Rule consider start dilution from to progress an flow to means to and is customers compensation we as the portion announcing shareholders portion operator we dilution when act over our we are us an to grows. the from What in measure to can of commitment will of company opportunistically

[Operator with question Huang from JPMorgan. Instructions] first Tien-tsin We'll take our

appreciate question Really a Jack, for the discipline you. cost comments here.

Just and some see know with framework outsized and out, come your between there's cost with innovation accelerate from still XXXX. block time, now especially you now to for all thoughts. for we've do Can the love and changes here to room this focus. growth laid hear quite We growth that all we the gross profit think

throughout way be company. more frank, innovation think I I very were believe room there's even Yes, in growth. and invention own To we getting for the our and

found Square of lot redundancy, and lot our a a lack investment of just kind dug As I teams of also to for work both silos, of in lens a framework, lot of desire I together. a the through of

So that then of side. is. building lot back the And our been especially how of We model is had an unclear X decision-making I holding think ecosystem which number company, us powerful slowness, why and to throughout ecosystem cultural structure. in on Square we a led just to around of a and is we're reinvest the what's need lot that

So teams we've our looking to that looking a past just all been intersections more focus lot at all we that much spending and and few counsel teams, approach with foundational financial HR weeks much, making and cash of to and products faster. that can our at so we features on and our and sellers that getting very up lightly the our work customers our of sure

want we're enter our retaining our to looking a on hit believe I goals reacceleration we're that I as focus to XX. So And customer in as maintain to phase of really our look customers really about well. and we

a that and shipping always about be much So on we checkpoint ultimately moves all the experimenting that and think iterating will how we make and more.

structures, teams many is top faster we when if from can ways, higher-performing cap help we release the Tien-tsin, enables and think growth places when make absolute around clearer what size to when it centralizing there I'd these in in growth with cap accountability our I add We're key growth of ecosystems. We'll Jack. number address our on these as hearing of team that customers outstrips redundancies that's reduce today. of and And not constrains stronger teams the constraints enable the feel people constraint number people just have create our decision-making the around meant think the cap, decisions you're our us us or across growth line our to we teams. our or business -- priorities,

without our for areas the think impacting such planning to outside Our to costs on on just we cost focus word touch also of customers, And is me don't And then operations address a our of overhead. streamline finally, personnel here process. experience. opportunity with there's the that corporate lots as customer

to more do. have We

So during a in opportunities I opportunities. we've process, think focused planning of from well. growth outlined ecosystems as strategic on across so But efficiency perspective, our far we cost appropriately our some many perspective have which letter. the from a prioritization Jack been

to as rate run what ability or we'll see our our learn it's XXXX from growth, own far we update macro is you exploring view growth below. on Square's and here current really focus we'll periodically that based growth, whether based appropriate accelerate. trends. what current on So course, of incorporate we've slightly a growth slightly to into expect outlook shared execution with so and more, But And perspective our as mid-teens time. and be we'd those our new And relative growth initiatives over this then is that above at of apps on least to cash

history work. We continue of to innovation that driving across have we'll new here unlocking products and a outsized and on audiences growth, continue new

Timothy Crodo from next UBS. our take We'll question with

you and leverage touch Great room that XX,XXX want Square efforts there In drive the that is sales teams up move feel out to on those in market the to the cap, the the sales of context show product do and ample same seller on but local I meaningful headcount marketing for of some room building the sales again, lean upmarket. local some of to time, into both at development G&A, really and specifically leaving to in-market help in ecosystem.

our can well. the think as Square. to I we've grow within think there's And by utilize that in make areas AI. much experimentation think saw more AI we #X go-to-market do of is lot Yes, there's letter, priority driven a I with I focus, put lacking where been We it's experimentation on the tools as is efficient and do you more and a

For ecosystem efforts is where on service, which us, allows sellers sales to more. increasing that retention means outcomes reaching efficient and us terms of a of more those are. positive make sales, marketing it much to with lot customer focused they for a probability and And lot of all in efficiencies the the those within also experiment

So our local. beverage. We're with verticals, move beauty. sales we They're and to force. verticalization prioritize And services good in a as of really particular, such food made inherently also going X

small Our that relationship. we when in-person seller, upmarket can is we strength, in that our that that we have local. in-person whether strength expand seller have be ecosystem -- when an or And a through

focus And to learn and so good do roll with that can that them can our tried believe really staff we on create from some answers. haven't So and we're our sales strength. with then to things field new such to new iterate staff experiment I marketing. we as sales continue going experiment into we yet, we quickly we'll these those AI that all tools through to that continue efficiencies to out

with Research. Darrin next Wolfe our Peller question Take from

the way going see your But the cross-sell. to the great growth a all square, of see seller of get on XX sustainability questions the Rule and international now, services to hope understanding just the for we XX. outlook double-digit to we of It's the into software drivers really really verticalization, the lot business.

more that, give the to on a know, us up also to to the Just touch you sense then company's you blocks guess alluded you to hear keep the that. potentially to where of what where just about be building kicking And the where see that I ecosystem see we'd to I in, those the add Jack, benefit working ecosystem. can rates? of success. see the you love success culture to on on are on would But

Yes.

think, and foremost, to this I So out. laid back the goes first that prioritization we

building have developers some impact. especially we're on ecosystem so So focused are is around critical, weeks most to features that why make sure so an The that again, and on our with and realizing Square X my out but that well. left we ecosystem working going a and Square upmarket new third-party know ring build only was as can of how most -- that of to that not like significant why first sellers as also organization, the platform us we our running important, what's for strategy stack what continue enabling for and next to we conversation we're and important sellers, doing it's they it's

on of next those going is going then a I local that and into for these efforts, platform unlocks lot a -- be whether the local year to for focus believe I we're to that year. be is And to the seeing huge local going do fruit unlock bear us. be, So sales merchants, believe, next us,

We're into that around can we've and so we sales novel with our the but product, do compelling things past hampered actually that a in very invest learn bit been see deeply a have those faster removing that more more the we in work. much constraints competitors. experimenting to approaches We

those sizes. get from us think of a I still chunk product all are significant holding a a sellers what's back is side lot of from self-serve, onboarding. actually of pretty and We

much for our our And time. Amazon just be we to we're channel, time our is, sellers completely. too that from and instance, hardware going takes flow onboarding or or from Whether taking website away buying flow an it

significant provide to think question. the banking. us over So areas for those last The focus something I sets thing results final really that will I talked I be point about want is and pretty in us out quick year. the that apart will next

out credit a And We banking a as become our sellers it's keep for see a there. have account a the we've into -- or do when this we Square for of our card, And more that or us loan banking one strongest we acquisition an a number a more products seen channel helps future, and or customers. believe card for more And signing ecosystem, them. debit think card will differentiators. of retaining banking the today someone savings as within well. comes I up In

we we'll And pretty cash back as we with also banking have ecosystem how one, that ultimately proud positively the advantages reinforces being the enable I of. up people And ecosystem. most and unique think we some approach and look how how at sellers in and Square our

to going bringing of the retail in want at more unique more, is where for And especially more within our Internet, place is And I That's on to terms and superpower. bear together, of look is. notable really our how be those be ecosystems the people think coming I commerce. will and next fit most world more to in. and lot That we year. And within more the becoming going we early are is connections cash especially bring is commerce in is to comers, the strength experiences. where local A to. local So that's think more these experiences. looking monitor And

And between to intersection -- also and squares may see business cash. start So utilize there them. see next an a on as grow, to smaller graduation you Square with be print. you want and and people potentially that path to grow can will And But something simpler there's early as cash and obvious year. then able they

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

couple ask a consumers wanted little the ones. connecting go sort progress the of with I making bit square the But and This to of on about to you're platform. merchants question dovetails a prior

the kind on making and If what ways of app consumer that about exploring and create within progress other more to you're you demand you're broadly sort the can of ecosystem? talk this theme

this between and mean great up ecosystems this question Yes. up brought thinking is the Cash how you X exactly Square. it's we're crossing I about because

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we're to because discovery and start download seeing it. as as had way such we've and organically, provide get it a people to to it market So

have We intent actually the start, and surprisingly, seen desire. strong the points to a very which

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

about Jack, Square I want ask leadership. to

You forward? you for we Or How going a thinking you [indiscernible] expect replacement be that to over you to should recently that after for of departure. looking a lysis are took leadership Are the continue Lisa? about a business

ecosystems Cash. be Thank return you and with us for lead one, to cash to and the we title, our and just some want question. a between but Square I title be more faces parallels growth. to significant same we just not useful. a Square small also believe a lot to connect us had want BD I to a tools global faster, are there's inventive see to seller a innovative going to out want to see enable Number going I'm more lot I and milestones. going better, of musician starting with what until that is us both do see the go And faces and what

milestone thinking this when time I'm from I'll way a to -- when thinking look in And Square perspective. that and set know find more So about we is up it's a a and work lead. this But company them dedicated not a the of across me very, enabled move Square but just to the fix has see quickly. problems, within lot to very

And ecosystems, So stronger. and a and pace whole built some our quite silos between of that. past, time, deliver our we're much something else will of everything that lack for the to past. to we've be of the had a that is value addressing collaboration lot issues the of may some moving but is that from the the for going thing ignored more are we those in customers immediately All follow

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

profit forward on ask pretty looks it App the quarter-over-quarter pace the big within specifically, Cash rate QX, to out and for just gross think guidance the I gross dollar for it's if path wanted step back monetization like I Afterpay, embedding the profit up of a we in improvements you're share where if on great. then you product the year anything to that able Amrit, we And so? from? monetization And growth pipeline coming next for unpack its there rate, Cash over could or think progression there's would about be how specifically the App. should if on

pricing lapping said which we've last the now reiterated Sure. we are today in rate, some what the past, made On is year. Thanks monetization as we that that for adjustments we've question. of well the

guide a see So some those to QX moderation we're rate QX. difficult in to expect And up third to relative quarter QX year. in we of lapping we fourth comparisons see from rate as we again, the stability to the growth monetization from as perspective, a in cash more expect said greater last relative also the quarter in

growth with results their strong And million year-over-year this back growth year. power the of relatively our in which the the our which able across though X engagement active, in borrow, App's look really we've on with as X% of spending with App were is the App to XX network aspects -- each quarter, you were of year-over-year year-over-year, customers' you inflows, active, the strong up across back factor engagement on if it's up and with and time the inflows peer-to-peer on basis. card in Cash with on been of those well. million $X,XXX is customers [indiscernible] This platform. one Cash Cash stable or quarter framework, build now our it's well see adoption like of a XX% a with Card Cash products as first spend products half grew over with Again, as strong whether awareness our the of continued of that $XX and with our inflows mechanisms both -- per cash products App and Card our and to third deepen

you monetization stable profit know, X our And was that points BNPL the that pricing year. rate the gross which past was do as lap monetization from from in We monetization noted, rate basis as then platform. that earlier, standpoint, the stabilize over you thirdly, year-over-year, X.XX% I expect, noted excludes to up relatively the changes rate, and which, a as quarter-over-quarter as third quarter, we

from Markgraff question with Alex take our KBCM. next We'll

letter provided targets. explicit of more And the financial XX of the Rule shareholder targets the outside all of kind in

a star the the of you've curious that around to the Is letter. follow progress? we in how laid as things product of priorities folks Just evaluate ecosystem the kind there of of you're and tighten should orient to kind side kind with making along of north together out progress some on

look space created moving as value commerce team, especially going local cash both the and that be the integration, I is be think at the going to biggest of looking going through one it's to the commerce, the the is lot e-commerce past to opportunities, of a restructuring, at and be up. up Afterpay We lens months surface. because things spent cash few deeply to there, Internet-based bring right to to we to

So the notable going be ecosystems. that's connecting to terms in most these probably of

both ecosystems X our banking to cash cash units. tools. And one big on obvious watch. before, points And think especially grow be our between upside. business as cases point out is second utilize ecosystem be between the some mentioned Square they going our throughout business cash side both all for business that the and customers the would there, those as I'd will and for around use in There's the I be entire Square a I theme how and But the ecosystem. intersection out the connection Actually

our take from with Deutsche Kane next question Bank. We'll Brian

that the some volume assess guess, market the my slowing just quarter, the guidance? you in maybe do And economic if question better that's from more pressures that's going then guys Jack, at. the is bit slowdown in that discretionary pure do an factor volume volumes, you seller little in comps you can a I of the feel when how spend you job competitive do it's like I forward, fourth a much versus get the as guess, easier, economic of

of by services more will of do our the within believe just take particular restaurants, go-to-market. the will much parity that of focusing that first growth. and with product and locked be a features certain unlock to And I also from we And can and been unlocked the beverage like our on question. soon on lot instance. believe features and food those focus I'll be that us more with or smarter especially out more lot There's the do getting part for platform. verticals, I on conversations efficient a

as verticalization, had looking want sure experimenting that but to to with to more. that make we're also this experiment opportunities things AI, automate through more Most to move we not made smaller I for before, we've importantly, tried scale.

we about investing more what can and them. So decisions then see make fully in better works informed

our to and I not one that -- of a room other to we're came course, no on there. they find a gets something to think lot gets the products them, when the of and offer size board dashboard, for. all find our And match has that of importantly, we there's what most website seller that, doing intuitive just simple, matter the

combination a proud of gets the be us that, very of growth we'll place back think, of. So that to I

QX seeing real help I can in kind Brian, that the in numbers our And of time just some in guide. we're fill of and embedded what's

the from obviously as Square's as international through outage, seen in And grew and the from think is churn But estimate same-store line at customers. estimates, Square we bit impact grow with on of at looking primarily been drivers, at we churn more this growth our the same-store X% our both but excluding third quarter XX% X and third cohorts of the the a has been have October, year-over-year. lower year-over-year. ultimately, due second markets to acquisition, customer new GPV our more we quarter, if GPV growth, period, of rate the quarter's This and looking to And the on moderated than in -- have the again, contribution lower we've stable. So some driven growth look XX%. components growth, XX% about based is high-level we U.S. believe, growth growth stability we from of would

do Now we slowdown customer -- have broader line the and trends work to is there Jack acquisition is to team noted, think shift relatively on. that, has we focused and same-store discretionary growth, the verticals with trends, our macro across as which laser in

moderation lower we quarter volumes prior the were you spend other measure Just per to track recent our mix on is bit when more mix our in macro-related. -- of third-party the compared believe seen results been of where the has GPV verticals third a greater granularity it's that indicators with year. processing to directionally provide this maybe existing at we little at look growth. we given same-store the seller, When discretionary sellers believe macro-driven adjust the as of spend. We recent for we've

For example. or don't grocery instance, as serve we gas an

we drink in broad-based consumer -- a in food trending softness consumer verticals, spending those October, saw retail. and in and trends discretionary And

QX that Ultimately, work is of lot and expect the quickly here move are see our a in future. opportunities our trends iterate experiment where watchful for and feature factored gaps and into guide. the to on these we're So go-to-market we growth we're doing close to

next Faucette with from our Morgan James question We'll Stanley. take

you've et about to follow think And they then you like services cetera. customers other to some intention banking like grow and bank But how particularly products up us with card, through but the and wanted debit own their of cycle or clearly, -- letter, there first peer-to-peer customer, as type spending thing, seems got App increase that Cash can of like typical I them that think products. and then walk life and kind you're a capacity. you the of evolution provide How but easiest how and to you you're deliver need on the do card and the evolve other for those more of the onboarding? able that about a, to

Yes.

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started, and obviously, inherent -- So money of from Fenza we and spending a was receiving families. it peer-to-peer you're effects has network that money lot to what

has get inherently you that you can But word-of-mouth you receive you can a and inherently in and card into money invest can it, incredible is see stocks. it ATM use that also or that So you factor. social you as Bitcoin at get that card this an as

it their and a new case existing seeing And banking means in in that is a a entirely to we that them. it a relationship really activity start goal direct And financial to as financial home seeing is part use and of winning past. to more more they they're what spend because use this that deposit deposit be bigger now, majority your able customers. And as more for your life. our of direct our mentioned, and financial they're ultimately You getting financial win of ways the wouldn't that as indicates able in to with

cases goes where can't or again, or find through Either these new built, this use through entirely that of we've back one another. to retention that elsewhere. ecosystem positively everything tools concept new So an they through features reinforce

And we them. against on and drive that is I helps the fundamentally I we're I said services deliver as really excited this also new that commerce. is it community-based peer-to-peer these transactions really customers helps before think not to new us one think because as And only call, keep around X earlier commerce. us And but about financial

on unique something ecosystems, world other very Square. continues I our notably strength itself build very have in We believe to lends is powerful that and and and to our the add strength very, to most

App, their of bring on that paycheck banking I'd participate up see Bitcoin our a direct which investing, and standpoint. effect to add, them And free deposit investing getting relationship Cash multiplier on see maybe stock into eventually we our just and James, primary customers take from card program within is more a they on amount a significant cash then as as or they products taking they peer-to-peer opportunity then a they ecosystem start on Cash within whether inflows we that the App,

their into more for active growth growth nearly that's the accounts quarter we've a Xx awareness as saw in third inflow drive overall than been approximately received newer And as over third which into services around time the more in quarter is grew greater the year-over-year, third fast the XX% customers across deposits seen bring channels. big commerce in driver we growth the broader of was that and of inflows financial transacting these of quarter, Customers products the set deposits continue and the App. of ecosystem. in billion $X as both Cash we inflows $X money in cash paper billion direct What up than in to

direct to attached that in us for monthly actives opportunity card to see cash more XX% obviously, deposit the of up So here as still do September. sort through we range

Cash App. to deposit for of We Although grow financial have up as this products period we up attach cash attach think of card to time. card ecosystem broadening improve continued this we've our as both well obviously and services direct an through rates opportunity to cash

next take Mizuho. We'll question Dan with from our Dolev

Jack. Maybe more for

the your obviously, of ecosystem, the What of right you're role and your that. having of think talking now cash about hearing prominent in kind renaissance. the is terms of I interested Analyst the bitcoin Bitcoin really I'm and Holy views vision the connecting in at Bitcoin. Day Grail is now on app. a very specifically

for simply Bitcoin reason currency native -- focus The to do enable that's in believe exactly we believe micro We market Internet But using have believe currency. we exchange buy a significant remittance providing Vicki. by Bitcoin. needs an significant payments to And native is we globally. started a And TBD what is on. focused will ultimately, opportunity very people on time, a there is we're Internet and and the a the have because sell we over

much only for Not build enables that developers. Cash really globally it quite out the large. build move is we to as Square on our But that's it business faster App we're other we ecosystem as out and functionality a incredible working primitives and

of will continue native And Bitcoin be. value, believe we future commerce. such currency. will an for be right the set since be But it, for candidate will a big best on will always early now just in value, of that the is to long-term that do going was play, that but I do it the monetary in success. to -- I that still doubt We in lead that will not there's this So have no I up have case in And believe value to world. a there's doubt And it a Bitcoin use the part knew understanding no and them. be increase

on to that. Bitcoin basis. growth add milestones you've around focus business. investment our us for business, increasing our also add to a from we emerging recurring specific not that, initiatives, today our track holding an progress to be will how heard discipline but operate those similarly, and aspirations key a only disciplined initiatives And and And just we'll in just I'll envelope on our the relative obviously, I'll

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

to in sale wanted vertical of the come to point back Square. I

if of could total quick coming of gross make both quarters? year? rate next what then and that percent sustainable stock-based vertical expecting from the next what for you sale? curious You growth point over XX% the expense profit And now gross this of few Is you're Square's comp just a had I'm there. comment And on year is separately, profit

start. can I Jason,

growth. up third the in we growth overall gross strong our and vertical products was outpaced tools gross yes, had in quarter, our developer So developer from point-of-sale and a Square profit where XX% vertical point-of-sale across gross profit from profit also appointments solutions year-over-year in restaurants retail, growth our

last said the we of profit quarter third basis an quarter, As during million annualized on products as each our of $XXX gross vertical well. point-of-sale over delivered

comparisons more that to a question relative Square well onboarding Square specific improve QX, stock-based And compensation. number and growth there give point won't of from experimenting note we will optimize forward, be to improving new gross take for movement full was I invoices favorable quarter. strategy, third key our related pieces of -- of the that with on flows how pricing your we profit channels. And took go-to-market second to we the because during you a partly quarter we a did but going we perspective as as of expect vertical sale the QX

targets? XXXX just AOI XXXX, Right in context of the for and the

Sure.

percentage meaningful and XXXX. expect people So an we gross area on to call stock-based for us. stock-based quarter, in third profit the relatively operational business. we as compensation leverage in a relative the SBC And company is look starting our This fourth drive basis the here, on said across on the to we to the time, have of we relative quarter. implement absolute on that a number be number and of compensation And to absolute expect dollar over flat the as efficiencies we at leverage cap as key focus it measure earlier, as I drive

and intention reason in is mindful buyback watchful our owners the also have of the an employees it's are of one we've be us billion operating included SBC shareholders amount is targets dilution of of That's we're the moving our to and portion of Obviously, as part to $X deliberately dilution. and income business. measuring important and that financial But very an adjusted announced a and that that forward. align incentives of got today how offset our tool we've for

We'll Christiansen take our Citi. next question from Pete with

believe channel bit Do it channel on from needs more few be you've with products. Is ISO a go-to-market Jack, experimented road to embrace Square a against interested to Is that questions, the scale to conversations, Square may dots wanted I more earlier map? to little distribute competitors? something Square on you participating ISO where the like Square something into the connecting sounds that dig the before? that side, the in

with it partnership perspective. have -- experienced financial from We experimented a before we've

it. gave Specifically, JPMorgan at a all we branches had readers out their as and with not Square a of partnership to distribution point. close off Chase

think experiment is most thing the need experiment more we important we to like models. to and need with I different

than the retail. going to that's from and answer I beauty looks a be think It's is specific to and services distribution the not different going vertical. it generalized. of to then different be does This for in for completely terms restaurant

and open think smaller for bit take most on a time then to more of a to experimentation that we point scale a to so see can invest the I important working be in away way. what's much we So that's is want a heavier like lot

we spread, focused we're out to they terms then earliest get harkens into referrals, have sure they more seeing as and our which from there's helps of when some to such some looking campaigns, square back and early in specifically it sellers word-of-mouth success making by which was just the or on are kind website. that experiments more. how some when immediate referrals We the more just push deeply think a And service even which day it, entirely to lot the at contracts our local experience go you're partnerships of

think, drivers. biggest So the are those, I

one take with from Securities. And question, Andrew we'll take Jeffrey and we'll more that Truist question

a changed here Cash over how App. really sneaking always within in at versus how sources and Deposit you monetization that's in interchange the thinking end. App world. the time I'm monetization specifically you helpful. Instant has product, and Could Deposit me the bit appreciate I little particular, about Instant been think a Amrita, you in framework of payments real-time unpack about Cash

Thanks of grown some of are pace for question, outside and Sure. deposits. We've have free which the some Andrew. are Instant monetization a of Deposit products even the across growing and instant had than App Cash of products monetized and some which set of of the of faster

business for over growing that the the and utility. on deposit a has product fact despite So around be to time cases has the relying us of declined that, mix instant continues customer use

products. our our And that's Of as a much App possible, growth where like year-over-year course, things million, where strong a focus is perspective from Cash XX% number monthly the of with Card, value the $XX which you've active delivering ecosystem seen strong as there. with attached growth third within of into active seen XX continues quarter our and per on base growth to we've across million basis spend

a money, money all are the save deposits invest deposit cash to throughout through to the money along around, direct the broader ability the within the lot greater with has ATM, peer-to-peer now the obviously, staying of that these paper within inflows for are to App, So a CashAp receive up -- of and utility provide of to moving ability utility ecosystem these greater ability to ability up. ability the money Cash an Cash And extract ecosystem. within deposit, ecosystem your

rails we seen Now when what available. outside other look are countries we've at where historically instant

as experiences in instance, be what and to meaning an U.S., areas product are as value. also in strong transfer instant For people to the in for that that integrated strong for rate continue see with we Square U.K., the has as those product them attach where product willing generally provide that seamless, pay about the

been of watch. we've App. this Cash pleased growth is the across one Deposit, continue that obviously, of But other with growth continued pleased the So Instant to the with more we'll even but products

that third conclude quarter And you for Thank call. you. your earnings Thank Block's participation. does