Block, Inc. 10-Q

Item 1. Financial Statements BLOCK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share data) March 31, 2024 December 31, 2023 Assets (Unaudited) Current assets: Cash and cash equivalents $ 5,753,436 $ 4,996,465 Investments in short-term debt securities 573,390 851,901 Settlements receivable 3,714,810 3,226,294 Customer funds 4,046,346 3,170,430 Consumer receivables, net 1,914,278 2,444,695 Loans held for sale 892,068 775,424 Safeguarding asset related to bitcoin held for other parties 1,681,111 1,038,585 Other current assets 1,962,865 2,353,488 Total current assets 20,538,304 18,857,282 Goodwill 11,721,329 11,919,720 Acquired intangible assets, net 1,673,618 1,761,521 Other non-current assets 1,679,579 1,531,370 Total assets $ 35,612,830 $ 34,069,893 Liabilities and Stockholders’ Equity Current liabilities: Customers payable $ 8,137,147 $ 6,795,340 Accrued expenses and other current liabilities 1,275,321 1,334,669 Current portion of long-term debt (Note 12) 997,197 — Warehouse funding facilities, current 410,426 753,035 Safeguarding obligation liability related to bitcoin held for other parties 1,681,111 1,038,585 Total current liabilities 12,501,202 9,921,629 Warehouse funding facilities, non-current 543,751 854,882 Long-term debt (Note 12) 3,125,456 4,120,091 Other non-current liabilities 475,225 480,455 Total liabilities 16,645,634 15,377,057 Commitments and contingencies (Note 17) Stockholders’ equity: Preferred stock, $ 0.0000001 par value: 100,000 shares authorized at March 31, 2024 and December 31, 2023. None issued and outstanding at March 31, 2024 and December 31, 2023. — — Class A common stock, $ 0.0000001 par value: 1,000,000 shares authorized at March 31, 2024 and December 31, 2023; 556,563 and 555,306 issued and outstanding at March 31, 2024 and December 31, 2023, respectively. — — Class B common stock, $ 0.0000001 par value: 500,000 shares authorized at March 31, 2024 and December 31, 2023; 60,501 and 60,515 issued and outstanding at March 31, 2024 and December 31, 2023, respectively. — — Additional paid-in capital 19,687,428 19,601,992 Accumulated other comprehensive loss ( 660,203 ) ( 378,307 ) Accumulated deficit ( 56,424 ) ( 528,429 ) Total stockholders’ equity attributable to common stockholders 18,970,801 18,695,256 Noncontrolling interests ( 3,605 ) ( 2,420 ) Total stockholders’ equity 18,967,196 18,692,836 Total liabilities and stockholders’ equity $ 35,612,830 $ 34,069,893 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 BLOCK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended March 31, 2024 2023 Revenue: Transaction-based revenue $ 1,511,209 $ 1,422,705 Subscription and services-based revenue 1,682,294 1,366,224 Hardware revenue 32,501 37,451 Bitcoin revenue 2,731,124 2,163,751 Total net revenue 5,957,128 4,990,131 Cost of revenue: Transaction-based costs 873,165 820,787 Subscription and services-based costs 269,668 264,092 Hardware costs 50,785 58,785 Bitcoin costs 2,651,010 2,113,375 Amortization of acquired technology assets 18,027 18,508 Total cost of revenue 3,862,655 3,275,547 Gross profit 2,094,473 1,714,584 Operating expenses: Product development 720,574 626,937 Sales and marketing 443,885 496,011 General and administrative 471,260 432,825 Transaction, loan, and consumer receivable losses 165,729 127,896 Amortization of customer and other acquired intangible assets 43,282 37,087 Total operating expenses 1,844,730 1,720,756 Operating income (loss) 249,743 ( 6,172 ) Interest income, net ( 18,745 ) ( 3,161 ) Other income, net ( 237,824 ) ( 77,717 ) Income before income tax 506,312 74,706 Provision (benefit) for income taxes 35,492 ( 21,122 ) Net income 470,820 95,828 Less: Net loss attributable to noncontrolling interests ( 1,185 ) ( 2,488 ) Net income attributable to common stockholders $ 472,005 $ 98,316 Net income per share attributable to common stockholders: Basic $ 0.77 $ 0.16 Diluted $ 0.74 $ 0.16 Weighted-average shares used to compute net income per share attributable to common stockholders: Basic 616,401 602,234 Diluted 637,360 623,579 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 BLOCK, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In thousands) Three Months Ended March 31, 2024 2023 Net income $ 470,820 $ 95,828 Net foreign currency translation adjustments (i) ( 284,174 ) ( 63,881 ) Net unrealized gain on marketable debt securities 2,278 14,410 Total comprehensive income $ 188,924 $ 46,357 (i) Includes foreign currency translation adjustments related to goodwill of $ 198.2 million and $ 47.6 million for March 31, 2024 and March 31, 2023, respectively. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 BLOCK, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (In thousands) Class A and B common stock Common stock and additional paid-in Accumulated other comprehensive Accumulated Noncontrolling Total stockholders’ shares capital loss deficit interests equity Balance at December 31, 2023 615,821 $ 19,601,992 $ ( 378,307 ) $ ( 528,429 ) $ ( 2,420 ) $ 18,692,836 Net income — — — 472,005 ( 1,185 ) 470,820 Shares issued in connection with employee stock plans 4,806 19,943 — — — 19,943 Repurchases of common stock ( 3,563 ) ( 252,095 ) — — — ( 252,095 ) Change in other comprehensive loss — — ( 281,896 ) — — ( 281,896 ) Share-based compensation — 317,588 — — — 317,588 Balance at March 31, 2024 617,064 $ 19,687,428 $ ( 660,203 ) $ ( 56,424 ) $ ( 3,605 ) $ 18,967,196 Class A and B common stock Common stock and additional paid-in Accumulated other comprehensive Accumulated Noncontrolling Total stockholders’ shares capital loss deficit interests equity Balance at December 31, 2022 600,060 $ 18,314,681 $ ( 523,090 ) $ ( 568,712 ) $ 28,476 $ 17,251,355 Cumulative adjustment due to adoption of ASU 2023-08 — — — 30,511 — 30,511 Net income — — — 98,316 ( 2,488 ) 95,828 Shares issued in connection with employee stock plans 3,333 6,825 — — — 6,825 Change in other comprehensive loss — — ( 49,471 ) — — ( 49,471 ) Share-based compensation — 285,502 — — — 285,502 Balance at March 31, 2023 603,393 $ 18,607,008 $ ( 572,561 ) $ ( 439,885 ) $ 25,988 $ 17,620,550 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 BLOCK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from operating activities: Net income $ 470,820 $ 95,828 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 97,640 93,173 Amortization of discounts and premiums and other non-cash adjustments ( 266,991 ) ( 85,314 ) Non-cash lease expense 14,512 24,333 Share-based compensation 311,168 279,592 Loss on revaluation of equity investments 1,111 14,885 Bitcoin remeasurement ( 233,404 ) ( 96,088 ) Transaction, loan, and consumer receivable losses 165,729 127,896 Change in deferred income taxes ( 7,984 ) 1,353 Changes in operating assets and liabilities: Settlements receivable ( 542,070 ) 452,868 Purchases and originations of loans ( 3,010,609 ) ( 1,834,442 ) Proceeds from payments and forgiveness of loans 2,824,953 1,753,515 Customers payable 465,891 ( 418,948 ) Settlements payable ( 7,341 ) ( 64,528 ) Other assets and liabilities 205,970 ( 49,722 ) Net cash provided by operating activities 489,395 294,401 Cash flows from investing activities: Purchases of marketable debt securities ( 184,048 ) ( 56,761 ) Proceeds from maturities of marketable debt securities 204,737 273,771 Proceeds from sale of marketable debt securities 327,128 15,697 Payments for originations of consumer receivables ( 6,095,104 ) ( 4,911,509 ) Proceeds from principal repayments and sales of consumer receivables 6,824,596 5,339,800 Purchases of property and equipment ( 31,998 ) ( 32,253 ) Purchases of other investments ( 2,924 ) ( 4,821 ) Net cash provided by investing activities 1,042,387 623,924 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 BLOCK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued (Unaudited) (In thousands) Three Months Ended March 31, 2024 2023 Cash flows from financing activities: Repayments of Paycheck Protection Program Liquidity Facility advances — ( 5,077 ) Proceeds from warehouse facilities borrowings 160,587 47,975 Repayments of warehouse facilities borrowings ( 790,592 ) ( 692,556 ) Proceeds from the exercise of stock options and purchases under the employee stock purchase plan 19,943 6,825 Net increase in interest-bearing deposits 18,650 13,601 Repurchases of common stock ( 252,095 ) — Change in customer funds, restricted from use in the Company's operations 875,916 620,149 Net cash provided by (used in) financing activities 32,409 ( 9,083 ) Effect of foreign exchange rate on cash and cash equivalents ( 41,755 ) 1,033 Net increase in cash, cash equivalents, restricted cash, and customer funds 1,522,436 910,275 Cash, cash equivalents, restricted cash, and customer funds, beginning of the period 9,009,087 8,435,906 Cash, cash equivalents, restricted cash, and customer funds, end of the period $ 10,531,523 $ 9,346,181 Reconciliation of cash, cash equivalents, restricted cash, and customer funds: Cash and cash equivalents $ 5,753,436 $ 5,061,091 Short-term restricted cash 660,153 414,267 Long-term restricted cash 71,588 70,350 Customer funds cash and cash equivalents 4,046,346 3,800,473 Total $ 10,531,523 $ 9,346,181 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 9 BLOCK, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ( Unaudited ) NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Block, Inc. (together with its subsidiaries, "Block" or the "Company") creates tools that empower businesses, sellers, and individuals to participate in the economy. Block is comprised of two reportable segments, Square and Cash App. Square is a cohesive commerce ecosystem that helps sellers start, run, and grow their businesses, including enabling sellers to accept card payments, providing reporting and analytics, and facilitating next-day settlement. Square’s point-of-sale software and other business services help sellers manage inventory, locations, and employees; access financial services; engage buyers; build a website or online store; and grow sales. Cash App is an ecosystem of financial products and services focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, borrow, or save their money. Cash App seeks to redefine the world’s relationship with money by making it more relatable, instantly available, and universally accessible. Block was founded in 2009 and has offices globally. The Company does not designate a headquarters location as it adopted a distributed work model in 2021. Basis of Presentation The accompanying interim condensed consolidated financial statements of the Company are unaudited. These interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The December 31, 2023 condensed consolidated balance sheet was derived from the audited financial statements as of that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to state fairly the Company's consolidated financial position, results of operations, comprehensive income (loss), and cash flows for the interim periods. The condensed consolidated financial statements include the financial statements of Block and its wholly-owned and majority-owned subsidiaries, including variable interest entities for which the Company is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. Minority interests are recorded as a noncontrolling interest, which is reported as a component of stockholders' equity on the condensed consolidated balance sheets. The interim results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024, or for any other future annual or interim period. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and related notes in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Adoption of ASU 2023-08 and Recasting of Prior Period The Company early adopted ASU No. 2023-08, Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), in the fourth quarter of 2023 using a modified retrospective approach. ASU 2023-08 provides guidance on accounting and disclosure of crypto assets and requires an entity to (i) subsequently remeasure crypto assets at fair value at each measurement date with changes recognized in net income, (ii) present the changes in fair value separately from changes in the carrying amount of other intangible assets in the income statement, and (iii) present crypto assets measured at fair value separately from other intangible assets on the balance sheet. Prior to the adoption of ASU 2023-08, the Company's bitcoin investment was subject to impairment losses if the fair value decreased below the carrying value during the assessed period. Impairment losses on the Company's bitcoin investment could not be recovered for any subsequent increases in fair value until the asset was sold. Upon adoption of ASU 2023-08, the Company recognized a cumulative-effect adjustment increasing bitcoin value and retained earnings by $ 30.5 million as of the beginning of fiscal year 2023. 10 The adoption of ASU 2023-08 using a modified retrospective approach requires the Company to adopt the standard as of January 1, 2023. As such, the previously reported condensed consolidated financial statements for the three months ended March 31, 2023 have been revised to reflect the adoption of ASU 2023-08. The following table presents the effects of these changes on the Company’s condensed consolidated statements of operations: Three Months Ended March 31, 2023 As Previously Reported (i) Adjustments (ii) As Adjusted Net income (loss) attributable to common stockholders (iii) $ ( 16,838 ) $ 115,154 $ 98,316 Net income (loss) per share attributable to common stockholders: Basic $ ( 0.03 ) $ 0.19 $ 0.16 Diluted $ ( 0.03 ) $ 0.19 $ 0.16 ___________________ (i) As reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, filed with the SEC on May 4, 2023. (ii) The adjustment had no impact on previously reported cash flows from operating, investing, or financing activities within the Company's condensed consolidated statements of cash flows. (iii) Financial statement lines item impacted within the condensed consolidated statements of operations were "Other expense (income), net" and "Provision (benefit) for income taxes". Use of Estimates The preparation of the Company’s condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosure of contingent assets and liabilities. Actual results could differ from the Company’s estimates. To the extent that there are material differences between these estimates and actual results, the Company’s financial condition or operating results will be materially affected. The Company bases its estimates on current and past experience, to the extent that historical experience is predictive of future performance and other assumptions that the Company believes are reasonable under the circumstances. The Company evaluates these estimates on an ongoing basis. Estimates, judgments, and assumptions in these condensed consolidated financial statements include, but are not limited to, those related to accrued transaction losses, contingencies, including outcomes from claims and disputes, valuation of loans held for sale, valuation of goodwill and acquired intangible assets, determination of goodwill impairment charges, determination of allowance for loan loss reserves for loans held for investment, determination of allowance for credit losses for consumer receivables, allocation of acquired goodwill to reporting units, income and other taxes, operating and financing lease right-of-use assets and related liabilities, and share-based compensation. The Company's estimates of valuation of loans held for sale, allowance for credit losses associated with consumer receivables and loans held for investment, and accrued transaction losses are based on historical experience, adjusted for market data relevant to the current economic environment. The Company will continue to update its estimates as developments occur and additional information is obtained. Refer to Note 5, Fair Value Measurements for further details on amortized cost over fair value of the loans, Note 6, Consumer Receivables, net for further details on consumer receivables, Note 7, Customer Loans for further details on customer loans, and Note 9, Other Consolidated Balance Sheet Components (Current) for further details on transaction losses. Concentration of Credit Risk For the three months ended March 31, 2024 and March 31, 2023, the Company had no customer that accounted for greater than 10% of total net revenue. 11 The Company had two third-party payment processors that represented approximately 42 % and 35 % of settlements receivable as of March 31, 2024. As of December 31, 2023, the Company had two parties that represented approximately 46 % and 35 % of settlements receivable. In both periods, all other third-party payment processors were insignificant. Certain of the Company's products are reliant on third-party service providers such as partner banks, card issuers, and payment service providers. The Company's relationships with third-party service providers may result in operational concentration risks for some of these products. Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, marketable debt securities, settlements receivable, customer funds, consumer receivables, loans held for sale, and loans held for investment. To mitigate the risk of concentration associated with cash and cash equivalents, as well as restricted cash, funds are held with creditworthy institutions and, at certain times, temporarily swept into insured programs overnight to reduce single firm concentration risk. Amounts on deposit may exceed federal deposit insurance limits. The associated risk of concentration for marketable debt securities is mitigated by holding a diversified portfolio of highly rated investments. Settlements receivable are amounts due from well-established payment processing companies and normally take one or two business days to settle, which mitigates the associated risk of concentration. The associated risk of concentration for loans and consumer receivables is partially mitigated by credit evaluations that are performed prior to facilitating the offering of loans and receivables and ongoing performance monitoring of the Company’s loan customers. Sales and Marketing Expenses Advertising costs are expensed as incurred and in cluded in sales and marketing expenses on the condensed consolidated statements of operations. Total advertising costs w ere $ 61.6 million for the three months ended March 31, 2024 compared to $ 89.1 million for the three months ended March 31, 2023. The C ompany also records services, incentives, and other costs to acquire customers that are not directly related to a revenue generating transaction as sales and marketing expenses, as the Company considers these to be marketing costs to encourage the usage of Cash App. These expenses include, but are not limited to, Cash App peer-to-peer processing costs and related transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways. These costs are expensed as incurred. The Company recorded $ 210.9 million for the three months ended March 31, 2024 compared to $ 243.7 million for the three months ended March 31, 2023 for such expenses. Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The amendments expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Company's chief operating decision maker ("CODM"), the amount and description of other segment items, permits companies to disclose more than one measure of segment profit or loss, and requires all annual segment disclosures to be included in the interim periods. The amendments do not change how an entity identifies its operating segments, aggregates those operating segments, or applies quantitative thresholds to determine its reportable segments. The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-07 will impact the Company’s disclosures only and the Company is evaluating the effect of adopting the new disclosure requirements. In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments expand income tax disclosure requirements by requiring an entity to disclose (i) specific categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, and (iii) the amount of taxes paid disaggregated by jurisdiction. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of ASU 2023-09 will impact the Company’s disclosures only and the Company is evaluating the effect of adopting the new disclosure requirements. 12 In March 2024, the SEC adopted rules that require registrants to provide climate-related information in their registration statements and annual reports, such as disclosure of material climate-related risks, Board of Directors’ oversight and risk management activities, material greenhouse gas emissions, and material climate-related targets and goals. The rules will also require registrants to quantify certain effects of severe weather events and other natural conditions in their audited financial statements. As adopted, the new rules will be effective for fiscal years beginning in 2025, except for the greenhouse gas emissions disclosures, which will be effective for fiscal years beginning in 2026. On April 4, 2024, the SEC voluntarily stayed the implementation of the rules pending the judicial review of challenges to the rules in the Eighth Circuit Court of Appeals. The Company is currently evaluating the effect of adopting these new rules. NOTE 2 - REVENUE The following table presents the Company's net revenue disaggregated by revenue source (in thousands): Three Months Ended March 31, 2024 2023 Revenue from contracts with customers: Transaction-based revenue $ 1,511,209 $ 1,422,705 Subscription and services-based revenue 1,212,118 1,038,613 Hardware revenue 32,501 37,451 Bitcoin revenue 2,731,124 2,163,751 Revenue from other sources: Subscription and services-based revenue (i) 470,176 327,611 Total net revenue $ 5,957,128 $ 4,990,131 (i) Subscription and services-based revenue from other sources relates to revenue generated from the Company's Square Loans, revenue generated from consumer receivables originated through our buy now, pay later ("BNPL") platform, interest income earned on customer funds, and interest income earned on funds held by Square Financial Services, Inc. ("Square Financial Services"). 13 NOTE 3 - INVESTMENTS IN DEBT SECURITIES The Company's short-term and long-term investments as of March 31, 2024 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 58,399 $ — $ ( 676 ) $ 57,723 Corporate bonds 135,097 60 ( 626 ) 134,531 Commercial paper 724 — — 724 Municipal securities 9,391 — ( 138 ) 9,253 Certificates of deposit 500 — — 500 U.S. government securities 372,337 43 ( 2,317 ) 370,063 Foreign government securities 600 — ( 4 ) 596 Total $ 577,048 $ 103 $ ( 3,761 ) $ 573,390 Long-term debt securities: Corporate bonds $ 96,206 $ 273 $ ( 95 ) $ 96,384 Municipal securities 2,481 30 ( 119 ) 2,392 U.S. government securities 89,073 151 ( 78 ) 89,146 Total $ 187,760 $ 454 $ ( 292 ) $ 187,922 The Company's short-term and long-term investments as of December 31, 2023 were as follows (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Short-term debt securities: U.S. agency securities $ 68,778 $ — $ ( 1,263 ) $ 67,515 Corporate bonds 216,864 96 ( 1,733 ) 215,227 Commercial paper 15,159 — — 15,159 Municipal securities 9,396 — ( 231 ) 9,165 Certificates of deposit 3,856 — — 3,856 U.S. government securities 544,145 210 ( 4,357 ) 539,998 Foreign government securities 1,000 — ( 19 ) 981 Total $ 859,198 $ 306 $ ( 7,603 ) $ 851,901 Long-term debt securities: Corporate bonds $ 94,564 $ 809 $ ( 45 ) $ 95,328 Municipal securities 2,495 55 ( 138 ) 2,412 U.S. government securities 152,549 875 ( 37 ) 153,387 Total $ 249,608 $ 1,739 $ ( 220 ) $ 251,127 The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. 14 The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of March 31, 2024 and December 31, 2023, aggregated by investment category and the length of time that individual securities have been in a continuous loss position were as follows (in thousands): March 31, 2024 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 400 $ — $ 57,322 $ ( 676 ) $ 57,722 $ ( 676 ) Corporate bonds 44,988 ( 48 ) 52,483 ( 578 ) 97,471 ( 626 ) Municipal securities — — 9,253 ( 138 ) 9,253 ( 138 ) U.S. government securities 92,760 ( 78 ) 162,389 ( 2,239 ) 255,149 ( 2,317 ) Foreign government securities — — 596 ( 4 ) 596 ( 4 ) Total $ 138,148 $ ( 126 ) $ 282,043 $ ( 3,635 ) $ 420,191 $ ( 3,761 ) Long-term debt securities: Corporate bonds $ 45,907 $ ( 87 ) $ 980 $ ( 8 ) $ 46,887 $ ( 95 ) Municipal securities 977 ( 13 ) 385 ( 106 ) 1,362 ( 119 ) U.S. government securities 25,758 ( 78 ) — — 25,758 ( 78 ) Total $ 72,642 $ ( 178 ) $ 1,365 $ ( 114 ) $ 74,007 $ ( 292 ) December 31, 2023 Less than 12 Months Greater than 12 Months Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Short-term debt securities: U.S. agency securities $ 9,770 $ ( 10 ) $ 57,745 $ ( 1,253 ) $ 67,515 $ ( 1,263 ) Corporate bonds 61,054 ( 60 ) 110,706 ( 1,673 ) 171,760 ( 1,733 ) Municipal securities — — 9,165 ( 231 ) 9,165 ( 231 ) U.S. government securities 80,724 ( 113 ) 207,183 ( 4,243 ) 287,907 ( 4,356 ) Foreign government securities — — 981 ( 19 ) 981 ( 19 ) Total $ 151,548 $ ( 183 ) $ 385,780 $ ( 7,419 ) $ 537,328 $ ( 7,602 ) Long-term debt securities: Corporate bonds $ 11,819 $ ( 31 ) $ 2,274 $ ( 14 ) $ 14,093 $ ( 45 ) Municipal securities 976 ( 24 ) 383 ( 112 ) 1,359 ( 136 ) U.S. government securities 28,474 ( 37 ) — — 28,474 ( 37 ) Total $ 41,269 $ ( 92 ) $ 2,657 $ ( 126 ) $ 43,926 $ ( 218 ) 15 The Company does not intend to sell nor anticipate that it will be required to sell these securities before recovery of the amortized cost basis. Unrealized losses on available-for-sale debt securities were determined not to be related to credit related losses, therefore, an allowance for credit losses is not required. The contractual maturities of the Company's short-term and long-term investments as of March 31, 2024 were as follows (in thousands): Amortized Cost Fair Value Due in one year or less $ 577,048 $ 573,390 Due in one to five years 187,760 187,922 Total $ 764,808 $ 761,312 NOTE 4 - CUSTOMER FUNDS The following table presents the assets underlying customer funds (in thousands): March 31, 2024 December 31, 2023 Cash $ 3,109,317 $ 2,137,634 Cash equivalents: Money market funds 4,645 4,042 Reverse repurchase agreement (i) 932,384 1,028,754 Total customer funds $ 4,046,346 $ 3,170,430 (i) The Company has accounted for the reverse repurchase agreement with a third party as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement. The Company classifies the amounts due from the counterparty as cash equivalents due to their short-term nature. The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments. NOTE 5 - FAIR VALUE MEASUREMENTS The Company measures its cash equivalents, customer funds, short-term and long-term marketable debt securities, marketable equity investments, and bitcoin investment at fair value. The Company classifies these investments within Level 1 or Level 2 of the fair value hierarchy because the Company values these investments using quoted market prices or alternative pricing sources and models utilizing market observable inputs. The Company measures its safeguarding obligation liability related to bitcoin held for other parties at the fair value of the bitcoin that the Company holds for other parties and classifies the liability within Level 2 because the Company uses observable market prices of the underlying bitcoin as an input for the valuation. The Company also classifies its safeguarding asset related to bitcoin held for other parties within Level 2, unless the asset's carrying amount is adjusted to reflect any actual or potential safeguarding loss events, in which case it would be classified within Level 3. The Company was not aware of any actual or possible safeguarding loss events as of March 31, 2024 or December 31, 2023. 16 The Company’s assets and liabilities that are measured at fair value on a recurring basis were classified as follows (in thousands): March 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Cash equivalents: Money market funds $ 1,403,811 $ — $ — $ 960,705 $ — $ — U.S. government securities 44,577 — — 29,788 — — Commercial paper — 1,875 — — 4,993 — Corporate bonds — 555 — — 699 — Restricted cash: Money market funds 292,184 — — 291,374 — — Customer funds: Money market funds 4,645 — — 4,042 — — Reverse repurchase agreement 932,384 — — 1,028,754 — — Short-term debt securities: U.S. government securities 370,063 — — 539,998 — — Corporate bonds — 134,532 — — 215,227 — U.S. agency securities — 57,722 — — 67,515 — Certificates of deposit — 500 — — 3,856 — Commercial paper — 724 — — 15,159 — Municipal securities — 9,253 — — 9,165 — Foreign government securities — 596 — — 981 — Long-term debt securities: U.S. government securities 89,146 — — 153,387 — — Corporate bonds — 96,384 — — 95,328 — Municipal securities — 2,392 — — 2,412 — Other: Investment in marketable equity securities 1,610 — — 8,267 — — Bitcoin investment (i) 573,302 — — 339,898 — — Safeguarding asset related to bitcoin held for other parties — 1,681,111 — — 1,038,585 — Safeguarding obligation liability related to bitcoin held for other parties — ( 1,681,111 ) — — ( 1,038,585 ) — Total assets (liabilities) measured at fair value $ 3,711,722 $ 304,533 $ — $ 3,356,213 $ 415,335 $ — (i) The Company holds an immaterial amount of bitcoin for operating purposes and, given the bitcoin is held for a relatively short period of time, typically being purchased and sold within a day, the fair value approximates carrying value. Refer to Note 11, Bitcoin for more details. The carrying amounts of certain financial instruments, including settlements receivable, consumer receivables, loans held for investment, accounts payable, customers payable, accrued expenses, and settlements payable, approximate their fair values due to their short-term nature. The carrying amounts of the Company's warehouse funding facilities approximate their fair values. 17 The Company estimates the fair value of its convertible and senior notes based on their last actively traded prices (Level 1) or market observable inputs (Level 2). The estimated fair value and carrying value of the convertible and senior notes were as follows (in thousands): March 31, 2024 December 31, 2023 Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2) 2031 Senior Notes $ 989,915 $ 862,038 $ 989,567 $ 879,913 2026 Senior Notes 993,905 935,652 993,208 938,105 2027 Convertible Notes 570,197 477,540 569,865 468,475 2026 Convertible Notes 571,439 510,998 571,014 501,910 2025 Convertible Notes 997,197 1,020,472 996,437 979,776 Total $ 4,122,653 $ 3,806,700 $ 4,120,091 $ 3,768,179 The estimated fair value and carrying value of loans held for sale and loans held for investment were as follows (in thousands): March 31, 2024 December 31, 2023 Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3) Loans held for sale $ 892,068 $ 889,427 $ 775,424 $ 783,464 Loans held for investment 246,355 256,285 247,631 258,684 Total $ 1,138,423 $ 1,145,712 $ 1,023,055 $ 1,042,148 If applicable, the Company will recognize transfers into and out of levels within the fair value hierarchy at the end of the reporting period in which the actual event or change in circumstance occurs. During the three months ended March 31, 2024 and March 31, 2023, the Company did not have any transfers in or out of Level 1, Level 2, or Level 3 assets or liabilities. NOTE 6 - CONSUMER RECEIVABLES, NET Consumer receivables represent amounts due from consumers for outstanding installment payments on orders processed on the Company's BNPL platform. Consumer receivables are classified as held for investment. These receivables are typically interest free and are generally due within 14 to 56 days. The Company closely monitors credit quality for consumer receivables to manage and evaluate its related exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its consumer receivables portfolio is primarily based on internal risk assessments, as they provide insight into customer risk profiles and are useful as indicators of potential future credit losses. Consumer receivables are internally rated as "Pass" or "Classified." Pass rated consumer receivables generally consist of consumer receivables that are current or up to 60 days past due. Classified consumer receivables are generally comprised of consumer receivables that are greater than 60 days past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of March 31, 2024, the amortized cost of Pass rated consumer receivables was $ 2.0 billion and the amount of Classified consumer receivables was $ 132.3 million. 18 The following table presents an aging analysis of the amortized cost of consumer receivables by delinquency status (in thousands): March 31, 2024 December 31, 2023 Non-delinquent loans $ 1,555,673 $ 2,074,532 1 - 60 days past due 408,257 453,412 61 - 90 days past due 50,133 26,798 90+ days past due 82,162 75,227 Total amortized cost $ 2,096,225 $ 2,629,969 The amount listed as 1 - 60 days past due in the above table includes $ 336.1 million and $ 365.4 million of cash in transit as of March 31, 2024 and December 31, 2023, respectively, which reflects ongoing repayments from consumers that have been sent from consumers’ bank accounts but have not yet been received at the Company’s bank account as of the date of the financial statements. Consumer receivables are charged off when they are over 180 days past due as the Company has no reasonable expectation of recovery. When consumer receivables are charged off, the Company recognizes the charge against the allowance for credit losses. While the Company expects collections at that point to be unlikely, the Company may recover amounts from the respective consumers. Any subsequent recoveries following charge-off are credited to transaction, loan, and consumer receivable losses on the condensed consolidated statements of operations in the period they were recovered. The amount of recoveries for the three months ended March 31, 2024 and March 31, 2023 were immaterial. The following table summarizes activity in the allowance for credit losses (in thousands): Three Months Ended March 31, 2024 2023 Allowance for credit losses, beginning of the period $ 185,275 $ 151,290 Provision for credit losses 60,979 43,131 Charge-offs and other adjustments ( 62,133 ) ( 52,401 ) Foreign exchange effect ( 2,174 ) ( 486 ) Allowance for credit losses, end of the period $ 181,947 $ 141,534 NOTE 7 - CUSTOMER LOANS Loans Held for Investment The Company originates loans in the U.S. through its wholly-owned subsidiary, Square Financial Services. The Company sells the majority of the loans to institutional investors with a portion retained on its balance sheet. Loans retained by the Company are classified as held for investment as the Company has both the intent and ability to hold them for the foreseeable future, until maturity, or until payoff. The Company’s intent and ability in the future may change based on changes in business strategies, the economic environment, and market conditions. As of March 31, 2024 and December 31, 2023, the Company held $ 246.4 million and $ 247.6 million, respectively, as loans held for investment, net of allowance, included in other current assets on the condensed consolidated balance sheets. Refer to Note 9, Other Consolidated Balance Sheet Components (Current) for more details. Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts. Amortized cost basis represents principal amounts outstanding, net of unearned income, unamortized deferred fees and costs on originated loans, premiums or discounts on purchased loans and charge-offs. The allowance for loan losses, amount of charge offs recorded, and amount of recoveries as of March 31, 2024 and December 31, 2023 were immaterial. 19 The Company considers loans that are greater than 60 days past due to be delinquent, and loans 90 days or more past due to be nonperforming. Loans that are 120 days or more past due are generally considered to be uncollectible and are written off. When a loan is identified as nonperforming, recognition of income is discontinued. Loans are restored to performing status after total overdue unpaid amounts are repaid and the Company has reasonable assurance that performance under the terms of the loan will continue. As of March 31, 2024 and December 31, 2023, the amount of loans that were identified as nonperforming loans was immaterial. The Company closely monitors economic conditions and loan performance trends to assess and manage its exposure to credit risk. The criteria the Company monitors when assessing the credit quality and risk of its loan portfolio is primarily based on internal risk ratings, as they provide insight into borrower risk profiles and are useful as indicators of potential future credit losses. Loans are internally rated as "Pass" or "Classified". Pass rated loans generally consist of loans that are current or up to 60 days past due. Classified loans generally comprise of loans that are 60 days or greater past due and have a higher risk of default. Internal risk ratings are reviewed and, generally, updated at least once a year. As of March 31, 2024 and December 31, 2023, the amortized cost of Pass rated loans was $ 260.1 million and $ 261.4 million, respectively, and the amount of Classified loans was immaterial for both periods. Loans Held for Sale The Company classifies loans as held for sale when there is an available market for such loans and it is the Company’s intent to sell all of its rights, title, and interest in these loans to third-party investors. Loans held for sale primarily include Square Loans and Cash App Borrow products. Square Loans are loans facilitated by Square Financial Services to qualified Square sellers, while Cash App Borrow is a credit product for consumers that allows customers to access short-term loans for a small fee. Loans held for sale are recorded at the lower of amortized cost or fair value. Square Loans that are 120 days or more past due are generally considered to be uncollectible and are written off. As of March 31, 2024 and December 31, 2023, the Company had $ 892.1 million and $ 775.4 million, respectively, of loans held for sale, as disclosed in the Company's condensed consolidated balance sheets. The Company aggregates loans held for sale by the intended customer of the loan product. Commercial loans held for sale include Square Loans, Consumer loans held for sale primarily includes loans initiated through Cash App Borrow, and Other loans held for sale include loans outside of consumer and commercial loans. The following table presents the Company’s loans held for sale aggregated by category (in thousands): March 31, 2024 December 31, 2023 Commercial $ 475,001 $ 478,128 Consumer 385,566 274,630 Other 31,501 22,666 Total $ 892,068 $ 775,424 20 NOTE 8 - ACQUIRED INTANGIBLE ASSETS The following table details acquired intangible assets (in thousands): Balance at March 31, 2024 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 389,262 $ ( 217,765 ) $ 171,497 Customer assets 14 years 1,450,587 ( 265,816 ) 1,184,771 Trade names 9 years 424,203 ( 113,114 ) 311,089 Other 9 years 13,299 ( 7,038 ) 6,261 Total $ 2,277,351 $ ( 603,733 ) $ 1,673,618 Balance at December 31, 2023 Weighted Average Estimated Useful Life Cost Accumulated Amortization Net Technology assets 5 years $ 393,511 $ ( 201,409 ) $ 192,102 Customer assets 14 years 1,473,970 ( 237,316 ) 1,236,654 Trade names 9 years 428,944 ( 102,774 ) 326,170 Other 9 years 13,299 ( 6,704 ) 6,595 Total $ 2,309,724 $ ( 548,203 ) $ 1,761,521 All intangible assets are amortized over their estimated useful lives. The change in the carrying value of intangible assets was as follows (in thousands): Three Months Ended March 31, 2024 2023 Acquired intangible assets, net, beginning of the period $ 1,761,521 $ 2,014,034 Amortization expense ( 61,309 ) ( 55,595 ) Foreign currency translation and other adjustments ( 26,594 ) ( 9,353 ) Acquired intangible assets, net, end of the period $ 1,673,618 $ 1,949,086 The estimated future amortization expense of intangible assets as of March 31, 2024 was as follows (in thousands): Remainder of 2024 $ 163,387 2025 205,317 2026 191,250 2027 144,871 2028 140,740 Thereafter 828,053 Total $ 1,673,618 21 NOTE 9 - OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (CURRENT) Other Current Assets The following table presents the detail of other current assets (in thousands): March 31, 2024 December 31, 2023 Restricted cash (i) $ 660,153 $ 770,380 Processing costs receivable 397,012 365,153 Loans held for investment, net of allowance for loan losses (ii) 246,355 247,631 Accounts receivable, net 148,090 134,824 Prepaid expenses 125,767 100,770 Inventory, net 119,413 110,097 Short term deposits (iii) 41,451 397,630 Other 224,624 227,003 Total $ 1,962,865 $ 2,353,488 (i) Includes a portion invested in money market funds. Refer to Note 5, Fair Value Measurements for further details . (ii) Refer to Note 7, Customer Loans for further details . (iii) As of December 31, 2023, includes a $ 350.0 million deposit held by a processor to meet requirements related to processing volumes under an arrangement that was executed in the fourth quarter of 2023. During the first quarter of 2024, this $ 350.0 million deposit was returned to the Company. Accrued Expenses and Other Current Liabilities The following table presents the detail of accrued expenses and other current liabilities (in thousands): March 31, 2024 December 31, 2023 Accrued expenses $ 480,672 $ 538,812 Customer deposits 185,677 167,028 Accounts payable 91,426 142,554 Accrued royalties 62,306 62,140 Accrued transaction losses (i) 60,016 54,042 Operating lease liabilities, current 53,188 53,721 Other 342,036 316,372 Total $ 1,275,321 $ 1,334,669 (i) The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency. Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations. 22 The following table summarizes the activities of the Company’s reserve for transaction losses (in thousands): Three Months Ended March 31, 2024 2023 Accrued transaction losses, beginning of the period $ 54,042 $ 64,539 Provision for transaction losses 30,819 24,942 Charge-offs to accrued transaction losses ( 24,845 ) ( 27,396 ) Accrued transaction losses, end of the period $ 60,016 $ 62,085 In addition to amounts reflected in the table above, the Company recognized additional provision for transaction losses that was realized and written-off within the same period. Such losses are primarily related to Cash App transactions, such as peer-to-peer transactions, disputes, and negative balances, that are uncertain in nature. The Company recorded $ 47.4 million and $ 105.9 million for the three months ended March 31, 2024 and March 31, 2023, respectively, for such losses. NOTE 10 - OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT) Other Non-Current Assets The following table presents the detail of other non-current assets (in thousands): March 31, 2024 December 31, 2023 Bitcoin investment (i) $ 573,302 $ 339,898 Property and equipment, net 290,715 296,056 Operating lease right-of-use assets 242,858 244,701 Investment in non-marketable equity securities (ii) 209,504 205,268 Investments in long-term debt securities 187,922 251,127 Restricted cash 71,588 71,812 Other 103,690 122,508 Total $ 1,679,579 $ 1,531,370 (i) Refer to Note 11, Bitcoin for further details. (ii) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities. These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer. Adjustments are recorded within other expense (income), net on the condensed consolidated statements of operations. Unrealized gains and losses were immaterial during the three months ended March 31, 2024. Other Non-Current Liabilities The following table presents the detail of other non-current liabilities (in thousands): March 31, 2024 December 31, 2023 Operating lease liabilities, non-current $ 281,836 $ 289,788 Deferred tax liabilities 27,376 35,695 Other 166,013 154,972 Total $ 475,225 $ 480,455 23 NOTE 11 - BITCOIN A) Company Owned Bitcoin The Company holds bitcoin for long term investment purposes ("bitcoin investment") and also holds bitcoin for the facilitation of customer sales and purchases of bitcoin on Cash App ("bitcoin for operating purposes"). The Company accounts for its bitcoin as an indefinite-lived intangible asset in accordance with ASC 350, Intangibles—Goodwill and Other and has ownership of and control over its bitcoin. The Company early adopted ASU No. 2023-08 in the fourth quarter of 2023 using a modified retrospective approach. Refer to Note 1, Description of Business and Summary of Significant Accounting Policies for further details. The Company remeasures its bitcoin investment at fair value at the end of each reporting period with changes recognized in net income through “Other income, net” in the Company’s condensed consolidated statements of operations. As of March 31, 2024 and December 31, 2023, the Company held approximately 8,038 bitcoins for investment purposes with a cost basis of $ 220.0 million and a fair value of $ 573.3 million and $ 339.9 million, respectively, which is included within the Company’s “Other non-current assets” on the condensed consolidated balance sheets. For the three months ended March 31, 2024 and March 31, 2023, the Company recognized a $ 233.4 million and $ 96.1 million gain, respectively, from the remeasurement of the Company's bitcoin investment. The Company’s bitcoin for operating purposes is initially recorded at cost, inclusive of transaction costs. Subsequent to purchase, any sales related to bitcoin occur at its current market price, plus a small margin. As such, any change in fair value of bitcoin purchased and sold for customer orders is captured within bitcoin revenue. Given the small amount of bitcoin for operating purposes held at any time, and that the bitcoin is held for a relatively short period of time, typically being purchased and sold within a day, the changes in fair value are not material to the Company. As of March 31, 2024 and December 31, 2023, the Company held approximately 263 and 384 bitcoins, respectively, for operating purposes with a fair value of $ 18.5 million and $ 16.7 million, respectively, to facilitate the purchases and sales of bitcoin on behalf of Cash App customers. The bitcoin for operating purposes is reflected on the condensed consolidated balance sheets within “Other current assets”. B) Bitcoin Held for Other Parties The Company allows its Cash App customers to store their bitcoin in the Company’s digital wallets free of charge. The Company also holds an immaterial amount of bitcoin from select trading partners to facilitate bitcoin transactions for customers on Cash App. Other than bitcoin, the Company does not hold or store any other types of crypto-assets for customers or trading partners. The Company holds the cryptographic key information and maintains the internal recordkeeping of the bitcoin held for other parties. The Company's contractual arrangements state that its customers and trading partners retain legal ownership of the bitcoin; have the right to sell, pledge, or transfer the bitcoin; and also benefit from the rewards and bear the risks associated with the ownership, including as a result of any bitcoin price fluctuations. The customer also bears the risk of loss as a result of fraud or theft, unless the loss was caused by the Company’s gross negligence or the Company’s willful misconduct. The Company does not use any of the bitcoin custodied for customers or trading partners as collateral for any of the Company’s loans or other financing arrangements; nor does it lend or pledge bitcoin held for others to any third parties. The Company occasionally engages third-party custodians to store and safeguard bitcoin on the Company's behalf. As of March 31, 2024 and December 31, 2023, an immaterial amount of the bitcoin was held by third-party custodians on the Company's behalf. The Company records a bitcoin safeguarding obligation liability and a corresponding bitcoin safeguarding asset based on the fair value of the bitcoin held for other parties at each reporting date in accordance with Staff Accounting Bulletin No. 121 ("SAB 121"). The Company was not aware of any actual or possible safeguarding loss events as of March 31, 2024 or December 31, 2023, and accordingly, the bitcoin safeguarding obligation liability and the associated bitcoin safeguarding asset were recorded at the same value. 24 The following table summarizes the Company’s bitcoin held for other parties (in thousands, except number of bitcoin): March 31, 2024 December 31, 2023 Total approximate number of bitcoin held for other parties 23,570 24,570 Safeguarding obligation liability related to bitcoin held for other parties $ 1,681,111 $ 1,038,585 Safeguarding asset related to bitcoin held for other parties $ 1,681,111 $ 1,038,585 NOTE 12 - INDEBTEDNESS A) Notes The 2025 Convertible Notes, 2026 Convertible Notes, and 2027 Convertible Notes (each, as defined below, and collectively, the “Convertible Notes”), together with the Senior Notes (as defined below), are collectively referred to as the “Notes.” The following table summarizes the Company's Notes as of March 31, 2024 (in thousands): Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value 2031 Senior Notes $ 1,000,000 $ ( 10,085 ) $ 989,915 2026 Senior Notes 1,000,000 ( 6,095 ) 993,905 2027 Convertible Notes 575,000 ( 4,803 ) 570,197 2026 Convertible Notes 575,000 ( 3,561 ) 571,439 2025 Convertible Notes (i) 1,000,000 ( 2,803 ) 997,197 Total $ 4,150,000 $ ( 27,347 ) $ 4,122,653 (i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the condensed consolidated balance sheet. The following table summarizes the Company's Notes as of December 31, 2023 (in thousands): Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value 2031 Senior Notes $ 1,000,000 $ ( 10,433 ) $ 989,567 2026 Senior Notes 1,000,000 ( 6,792 ) 993,208 2027 Convertible Notes 575,000 ( 5,135 ) 569,865 2026 Convertible Notes 575,000 ( 3,986 ) 571,014 2025 Convertible Notes 1,000,000 ( 3,563 ) 996,437 Total $ 4,150,000 $ ( 29,909 ) $ 4,120,091 The Company recognized interest expense on the Notes as follows (in thousands): Three Months Ended March 31, 2024 2023 Contractual interest expense $ 16,130 $ 16,495 Amortization of debt issuance costs 2,562 2,710 Total $ 18,692 $ 19,205 25 Convertible Notes due in 2026 and 2027 On November 13, 2020, the Company issued an aggregate principal amount of $ 1.2 billion of convertible senior notes comprised of $ 575.0 million of convertible senior notes due 2026 ("2026 Convertible Notes") and $ 575.0 million of convertible senior notes due 2027 ("2027 Convertible Notes"). The 2026 Convertible Notes mature on May 1, 2026, unless earlier converted or repurchased, and bear a zero rate of interest. The 2027 Convertible Notes mature on November 1, 2027, unless earlier converted or repurchased, and bear interest at a rate of 0.25 % payable semi-annually on May 1 and November 1 of each year. The circumstances to allow the holders to convert their 2026 Convertible Notes and 2027 Convertible Notes were not met during the three months ended March 31, 2024. As of March 31, 2024, no principal had converted and the if-converted value did not exceed the outstanding principal amount on either the 2026 Convertible Notes or 2027 Convertible Notes. Convertible Notes due in 2025 On March 5, 2020, the Company issued an aggregate principal amount of $ 1.0 billion of convertible senior notes ("2025 Convertible Notes"). The 2025 Convertible Notes mature on March 1, 2025, unless earlier converted or repurchased, and bear interest at a rate of 0.125 % payable semi-annually on March 1 and September 1 of each year. The circumstances to allow the holders to convert their 2025 Convertible Notes were not met during the three months ended March 31, 2024. As of March 31, 2024, certain holders of the 2025 Convertible Notes converted an immaterial aggregate principal amount of their 2025 Convertible Notes. The Company has settled the conversions through the issuance of an immaterial amount of shares of the Company's Class A common stock. As of March 31, 2024, the if-converted value did not exceed the outstanding principal amount of the 2025 Convertible Notes. 26 B) Revolving Credit Facility & Other In May 2020, the Company entered into a revolving credit agreement with certain lenders, which provided a $ 500.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in May 2023. On May 28, 2020, the Company amended the credit agreement for the 2020 Credit Facility (the "Credit Agreement") to permit the Company’s wholly-owned subsidiary, Square Capital, LLC (“Square Capital”), to incur indebtedness in an aggregate principal amount of up to $ 500.0 million pursuant to the Paycheck Protection Program Liquidity Facility (“PPPLF”) authorized under the Federal Reserve Act of 1913. In connection with its convertible debt offerings in November 2020, the Company entered into a second amendment to the Credit Agreement on November 9, 2020 to permit convertible debt in an aggregate principal amount not to exceed $ 3.6 billion. On January 28, 2021, the Company entered into a third amendment to the Credit Agreement to increase the amount of indebtedness that Square Capital is permitted to incur pursuant to the PPPLF from an aggregate principal amount of up to $ 500.0 million to an aggregate principal amount of up to $ 1.0 billion. On May 25, 2021, the Company entered into a fourth amendment to the Credit Agreement to, among other things, extend the maturity date of the loans advanced to May 1, 2024. On January 28, 2022, the Company entered into a fifth amendment to the Credit Agreement to permit certain existing obligations of Afterpay and its subsidiaries to remain outstanding as of and after the completion of the Afterpay acquisition. On February 23, 2022, the Company entered into a sixth amendment to the Credit Agreement to, among other things, provide for a new tranche of unsecured revolving loan commitments in an aggregate principal amount of up to $ 100.0 million. On June 9, 2023, the Company entered into a seventh amendment to the Credit Agreement to, among other things, extend the maturity date of the loans advanced to June 9, 2028 and provide for additional unsecured revolving loan commitments in an aggregate principal amount of up to $ 175.0 million. On March 29, 2024, the Company entered into an eighth amendment to the Credit Agreement to, among other things, provide the Company and its subsidiaries additional flexibility with respect to warehouse facilities, securitization facilities, or receivables financings involving accounts receivable or other rights to payment. The Credit Agreement also contains a financial covenant that requires the Company to maintain a quarterly minimum liquidity amount (consisting of the sum of Unrestricted Cash and Cash Equivalents plus Marketable Securities, each as defined in the Credit Agreement) of at least $ 250.0 million, tested on a quarterly basis. The Company is obligated to pay customary fees for a credit facility of this size and type including a commitment fee of 0.10 % to 0.20 % per annum on the undrawn portion available under the 2020 Credit Facility. To date, no funds have been drawn and no letters of credit have been issued under the 2020 Credit Facility. As of March 31, 2024, $ 775.0 million remained available for draw subject to compliance with our covenants. The Company incurred immaterial unused commitment fees during the three months ended March 31, 2024 and March 31, 2023. As of March 31, 2024, the Company was in compliance with all financial covenants associated with the 2020 Credit Facility. Loans under the 2020 Credit Facility bear interest at the Company's option of (i) an annual rate based on the forward-looking term rate based on the Secured Overnight Financing Rate ("Term SOFR") or (ii) a base rate. Loans based on Term SOFR shall bear interest at a rate equal to Term SOFR plus a margin of between 1.25 % and 1.75 %, depending on the Company's total net leverage ratio. Loans based on the base rate shall bear interest at a rate based on the highest of the prime rate, the federal funds rate plus 0.50 %, and Term SOFR with a tenor of one-month plus 1.00 %, in each case, plus a margin ranging from 0.25 % to 0.75 %, depending on the Company's total net leverage ratio. The Credit Agreement also contains customary affirmative and negative covenants typical for a financing of this type that, among other things, restricts the Company and certain of its subsidiaries’ ability to incur additional indebtedness, create liens, merge or consolidate or make certain dispositions, pay dividends and make distributions, enter into restrictive agreements, enter into agreements with affiliates, and make certain investments and acquisitions. The Company also has uncommitted and unsecured lines of credit with certain third-party banks for short-term liquidity needs, subject to availability of funds, through Square Financial Services. These lines of credit were immaterial in the aggregate and there were no outstanding balances as of March 31, 2024 and December 31, 2023. 27 C) Warehouse Funding Facilities Following the acquisition of Afterpay, the Company assumed Afterpay's existing warehouse funding facilities. The Company has financing arrangements with financial institutions in Australia, New Zealand, the United States, and the United Kingdom (collectively, the “Warehouse Facilities”). The Warehouse Facilities have been arranged utilizing wholly-owned and consolidated entities (collectively, the "Warehouse Special Purpose Entities ("Warehouse SPEs")) formed for the sole purpose of financing the origination of consumer receivables to partly fund the Company's BNPL platform. Borrowings under the Warehouse Facilities are secured against the respective consumer receivables. While the Warehouse SPEs are included in our condensed consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold. The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors. These Warehouse Facilities have maturity dates through June 2026. As of March 31, 2024, the aggregate amount of the Warehouse Facilities, using the respective exchange rates at period-end, was $ 1.5 billion on a revolving basis, of which $ 0.9 billion was drawn and $ 0.6 billion remained available. All Warehouse Facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of March 31, 2024. None of the Warehouse Facilities contain corporate financial covenants. All Warehouse Facilities are on a variable rate basis which aligns closely to the weighted-average life of the consumer receivables they finance. Borrowings under these facilities bear interest at (i) a base rate aligned to either the local risk free rate, such as Term SOFR and the Sterling Overnight Index Average or similar, and (ii) a margin which is set for the term of the availability period. The interest expense incurred on the Company's Warehouse Facilities is included within general and administrative as part of the Company's operating expenses. Interest expense on the Company's Warehouse Facilities was $ 19.7 million and $ 14.7 million for the three months ended March 31, 2024 and March 31, 2023, respectively. In addition, each Warehouse Facility requires payment of immaterial commitment fees. The table below summarizes the future scheduled principal payments of amounts drawn on the Company's Warehouse Facilities (in thousands): March 31, 2024 2024 (i) $ 353,577 2025 (i) 100,600 2026 500,000 Total $ 954,177 (i) Future scheduled principal payments in 2024 as well as a portion of 2025 are disclosed as warehouse funding facilities, current within total current liabilities on the condensed consolidated balance sheet. NOTE 13 - INCOME TAXES The Company recorded an income tax expense of $ 35.5 million for the three months ended March 31, 2024, compared to an income tax benefit of $ 21.1 million for the three months ended March 31, 2023. The difference between income before income tax at the U.S. federal statutory rate and the income tax expense recorded for the three months ended March 31, 2024 is primarily due to a change in the valuation allowance in the U.S. related to the utilization of tax loss carryovers and tax credits. The difference between the income tax expense for the three months ended March 31, 2024, and the income tax benefit for the three months ended March 31, 2023 primarily relates to a change in the mix of income by jurisdiction. In addition, for the three months ended March 31, 2023, Afterpay U.S. was included in the annual effective tax rate and had a current year loss, which generated a partial tax benefit due to the deferred tax liabilities available to recognize those losses. On October 31, 2023, Afterpay U.S. was integrated into Block Inc.’s U.S. federal consolidated filing group. As the Afterpay U.S. integration was a one-time event, there is no corresponding benefit for the three months ended March 31, 2024. 28 The Company is subject to income taxes in the U.S. and certain foreign tax jurisdictions. The tax provision for the three months ended March 31, 2024 and March 31, 2023 is calculated on a jurisdictional basis. The Company estimated the worldwide income tax provision using the estimated annual effective income tax rate expected to be applicable for the full year. The Company’s effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect, among other things, the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, changes in valuation allowances against deferred tax assets, the recognition and de-recognition of tax benefits related to uncertain tax positions, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. As of March 31, 2024, the Company retained a full valuation allowance on its net deferred tax assets in certain jurisdictions. The realization of the Company’s deferred tax assets depends primarily on its ability to generate taxable income in future periods. The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income. NOTE 14 - STOCKHOLDERS' EQUITY Share Repurchase Program In October 2023, the board of directors of the Company authorized the repurchase of up to $ 1 billion of the Company’s Class A common stock. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock and may be suspended at any time at the Company’s discretion. The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. During the three months ended March 31, 2024, we repurchased 3.6 million shares of our Class A common stock for an aggregate amount of $ 252.1 million. As of March 31, 2024, $ 591.1 million remained available and authorized for repurchases. Stock Plans The 2015 Equity Incentive Plan ("2015 Plan") provides that the number of shares available for issuance under the 2015 Plan will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 40.0 million shares, (ii) 5 % of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such other amount as our board of directors may determine. As of March 31, 2024, there were 153.2 million shares available for future issuance under our 2015 Plan. A summary of stock option activity for the three months ended March 31, 2024 is as follows (in thousands, except per share data): Number of Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding, beginning of the year 4,991 $ 47.64 3.80 $ 195,760 Granted — — Exercised ( 987 ) 20.20 Forfeited — — Expired ( 81 ) 158.19 Outstanding, end of the period 3,923 $ 52.27 4.20 $ 163,836 Exercisable, end of the period 3,294 $ 44.89 3.37 $ 155,692 29 Restricted Stock Activity Activity related to RSUs during the three months ended March 31, 2024 is set forth below (in thousands, except per share data): Number of Shares Weighted Average Grant Date Fair Value Unvested, beginning of the year 40,099 $ 74.76 Granted 2,440 65.33 Vested ( 3,820 ) 81.50 Forfeited ( 3,874 ) 76.30 Unvested, end of the period 34,845 $ 73.19 Share-Based Compensation The following table summarizes the effects of share-based compensation on the Company's condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2024 2023 Cost of revenue $ 173 $ 142 Product development 221,954 197,857 Sales and marketing 31,368 29,365 General and administrative 57,673 52,227 Total $ 311,168 $ 279,591 The Company recorded $ 7.0 million and $ 21.1 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three months ended March 31, 2024 and March 31, 2023, respectively, which are included in the table above. The Company capitalized $ 6.5 million and $ 5.9 million of share-based compensation expense related to capitalized software costs during the three months ended March 31, 2024 and March 31, 2023, respectively. As of March 31, 2024, there was $ 2.5 billion of total unrecognized compensation cost related to outstanding stock options and RSUs that are expected to be recognized over a weighted-average period of 2.5 years. 30 NOTE 15 - NET INCOME PER SHARE Basic net income (loss) per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock. In periods when the Company reported a net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data): Three Months Ended March 31, 2024 2023 Numerator: Net income $ 470,820 $ 95,828 Less: Net loss attributable to noncontrolling interests ( 1,185 ) ( 2,488 ) Net income attributable to common stockholders $ 472,005 $ 98,316 Denominator: Basic shares: Weighted-average shares used to compute basic net income per share 616,401 602,234 Diluted shares: Stock options, restricted stock, and employee stock purchase plan 8,851 7,164 Convertible notes 12,108 14,181 Common stock warrants — — Weighted-average shares used to compute diluted net income per share 637,360 623,579 Basic $ 0.77 $ 0.16 Diluted $ 0.74 $ 0.16 The following potential common shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended March 31, 2024 2023 Stock options, restricted stock, and employee stock purchase plan 35,006 29,655 Convertible notes — 3,844 Common stock warrants 12,108 23,188 Total anti-dilutive securities 47,114 56,687 31 NOTE 16 - RELATED PARTY TRANSACTIONS In July 2019, the Company entered into a lease agreement for office space in St. Louis, Missouri, from an affiliate of one of the Company’s co-founders and current member of its board of directors, Mr. Jim McKelvey, for a term of 15.5 years, with options to extend the lease term for two five-year terms. The lease possession date varied by floor, beginning in May 2020. As of March 31, 2024, the Company had recorded right-of-use assets of $ 10.8 million and associated lease liabilities of $ 16.6 million related to this lease arrangement. Under the lease agreement, the Company also has an option to terminate the lease for up to 50 % of the leased space any time between January 1, 2024 and December 31, 2026, as well as an option to terminate the lease for the entire property on January 1, 2034. Termination penalties specified in the lease agreement will apply if the Company exercises any of the options to terminate the lease. On January 2, 2023, the Company notified the lessor of its intention to exercise the early termination option with respect to approximately 48 % of the leased space, effective December 31, 2023. As a result, the Company paid a termination penalty of approximately $ 5.2 million to exercise the option in the first quarter of 2023. NOTE 17 - COMMITMENTS AND CONTINGENCIES Litigation and Regulatory Matters The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, investigations, and regulatory proceedings. The Company received Civil Investigative Demands (“CIDs”) from the Consumer Financial Protection Bureau (“CFPB”), as well as subpoenas from Attorneys General from multiple states, seeking the production of information related to, among other things, Cash App’s handling of customer complaints and disputes. In December 2023, the CFPB notified the Company, pursuant to the CFPB’s discretionary Notice and Opportunity to Respond and Advise (“NORA”) process, that the CFPB’s Office of Enforcement is considering recommending that the CFPB take legal action against the Company related to the topics addressed in its CIDs. The purpose of a NORA is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action may be recommended or commenced. The Company is unable to predict the likely outcome of this matter and cannot provide any assurance that the CFPB will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company. The Company is cooperating with the CFPB and the state Attorneys General in connection with these inquiries. The Company has accrued a liability for an estimated amount in connection with these CIDs in accordance with ASC 450-20, Contingencies: Loss Contingencies . The accrued amount was not material as of March 31, 2024. Given the status of these matters, it is not possible to reliably determine the range of potential liability in excess of the accrued amounts that could result from these investigations. The Company regularly assesses the likelihood of adverse outcomes resulting from litigation and regulatory proceedings and adjusts the financial statements based on such assessments. The eventual outcome of these matters may differ materially from the estimates the Company has currently accrued in the financial statements. In addition, the Company is subject to various legal matters, investigations, subpoenas, inquiries or audits, claims, lawsuits and disputes, including with regulatory bodies and governmental agencies. For example, the Company received inquiries from the SEC and Department of Justice shortly after the publication of a short seller report in March 2023. The Company believes the inquiries primarily relate to the allegations raised in the short seller report. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability, if any, with respect to any of these matters. Although the Company may be subject to an adverse decision or settlement, it does not believe that the final disposition of any of these other matters will have a material adverse effect on its results of operations, financial position, or liquidity. However, the Company cannot give any assurance regarding the ultimate outcome of any of these matters, and their resolution could be material to the Company's operating results. 32 Purchase Commitments From time to time, we may enter into non-cancelable purchase obligations related to cloud computing infrastructure. The commitment amounts in the table below are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, and the approximate timing of the actions under the contracts. As of March 31, 2024, the future minimum payments under the purchase commitments were as follows (in thousands): Payments Due By Period Remainder of 2024 $ 210,294 2025 316,425 2026 263,300 2027 315,100 Total $ 1,105,119 Other Contingencies The Company is under examination, or may be subject to examination, by several tax authorities. These examinations may lead to proposed adjustments to the Company's taxes or net operating losses with respect to years under examination, as well as subsequent periods. The Company regularly assesses the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of the Company's provision for direct and indirect taxes. The Company continues to monitor the progress of ongoing discussions with tax authorities and the effect, if any, on the Company's provision for direct and indirect taxes. Management believes that an adequate provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any issues addressed in the Company's tax audits are resolved in a manner not consistent with the Company’s expectations, the Company could be required to adjust the Company's provision for direct and indirect taxes in the period such resolution occurs. NOTE 18 - SEGMENT AND GEOGRAPHICAL INFORMATION The Company reports its segments to reflect the manner in which the Company's CODM reviews and assesses performance. Accordingly, the Company has two reportable segments, Square and Cash App. In the fourth quarter of 2023, the Company reorganized its business structure and moved the business activities, management, and the financial results of the Company's BNPL platform fully into Cash App. Accordingly, the segment results below include the financial results of the BNPL platform solely within the Cash App segment. Products and services that are not assigned to a specific reportable segment, including but not limited to TIDAL and other emerging ecosystems, are aggregated and presented within a general Corporate and Other category. Square and Cash App are defined as follows: • Cash App includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments. Cash App also includes Cash App Card which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM. Cash App also includes the BNPL platform. • Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App. 33 The primary financial measures used by the CODM to evaluate performance and allocate resources are revenue and gross profit. The CODM does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not included. The following tables present information on the reportable segments revenue and segment gross profit (in thousands): Three Months Ended March 31, 2024 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 109,220 $ 1,401,989 $ — $ 1,511,209 Subscription and services-based revenue 1,332,560 296,218 53,516 1,682,294 Hardware revenue — 31,830 671 32,501 Bitcoin revenue 2,731,124 — — 2,731,124 Segment revenue $ 4,172,904 $ 1,730,037 $ 54,187 $ 5,957,128 Segment gross profit (ii) $ 1,258,527 $ 820,272 $ 15,674 $ 2,094,473 Three Months Ended March 31, 2023 Cash App Square Corporate and Other (i) Total Revenue: Transaction-based revenue $ 134,663 $ 1,288,042 $ — $ 1,422,705 Subscription and services-based revenue 1,085,748 229,884 50,592 1,366,224 Hardware revenue — 37,451 — 37,451 Bitcoin revenue 2,163,751 — — 2,163,751 Segment revenue $ 3,384,162 $ 1,555,377 $ 50,592 $ 4,990,131 Segment gross profit (ii) $ 1,009,953 $ 691,562 $ 13,069 $ 1,714,584 (i) Corporate and Other represents results related to products and services that are not assigned to a specific reportable segment, and intersegment eliminations. (ii) Segment gross profit for Cash App for the three months ended March 31, 2024 and March 31, 2023 included $ 13.7 million and $ 14.4 million of amortization of acquired technology assets expense, respectively. Segment gross profit for Square for the three months ended March 31, 2024 and March 31, 2023 included $ 2.5 million and $ 2.7 million of amortization of acquired technology assets expense, respectively. Amortization of acquired technology assets expense included in Corporate and Other was immaterial for the three months ended March 31, 2024 and March 31, 2023. 34 The following table provides a reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes (in thousands): Three Months Ended March 31, 2024 2023 Total segment gross profit $ 2,094,473 $ 1,714,584 Less: Product development 720,574 626,937 Less: Sales and marketing 443,885 496,011 Less: General and administrative 471,260 432,825 Less: Transaction, loan, and consumer receivable losses 165,729 127,896 Less: Amortization of customer and other intangible assets 43,282 37,087 Less: Interest income, net ( 18,745 ) ( 3,161 ) Less: Other income, net ( 237,824 ) ( 77,717 ) Income before applicable income taxes $ 506,312 $ 74,706 Revenue Revenue by geography is based on the addresses of the sellers or customers. The following table details revenue by geographic area (in thousands): Three Months Ended March 31, 2024 2023 United States $ 5,566,297 $ 4,664,635 International 390,831 325,496 Total $ 5,957,128 $ 4,990,131 No individual country from the international markets contributed more than 10% of total revenue for the three months ended March 31, 2024 and March 31, 2023. Long-Lived Assets The following table details long-lived assets by geography (in thousands): March 31, 2024 December 31, 2023 United States $ 7,512,224 $ 7,570,973 Australia 4,546,350 4,761,535 Other international 1,869,946 1,889,490 Total $ 13,928,520 $ 14,221,998 Assets by reportable segment were not included, as this information is not reviewed by the CODM to make operating decisions or allocate resources and is reviewed on a consolidated basis. 35 NOTE 19 - SUPPLEMENTAL CASH FLOW INFORMATION The supplemental disclosures of cash flow information consist of the following (in thousands): Three Months Ended March 31, 2024 2023 Supplemental cash flow data: Cash paid for interest $ 23,031 $ 16,680 Cash paid for income taxes $ 38,652 $ 18,652 Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for operating lease obligations $ 9,416 $ 518 Purchases of property and equipment in accounts payable and accrued expenses $ 3,577 $ 6,580 36