What changed in this filing

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Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 238 added, 148 removed, 776 unchanged (33% of the section changed)

2 unchanged sentences

(In thousands, except per share data)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Assets (Unaudited)

29 unchanged sentences

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.

100,000 shares authorized at June 30, 2024 and December 31, 2023.

None issued and outstanding at June 30, 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.

1,000,000 shares authorized at June 30, 2024 and December 31, 2023;

557,206 and 555,306 issued and outstanding at June 30, 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.

500,000 shares authorized at June 30, 2024 and December 31, 2023;

60,411 and 60,515 issued and outstanding at June 30, 2024 and December 31, 2023, respectively.

Additional paid-in capital 19,695,521 19,601,992

Accumulated other comprehensive loss ( 532,369 ) ( 378,307 )

Accumulated deficit ( 56,424 ) ( 528,429 )

Retained earnings (accumulated deficit) 138,844 ( 528,429 )

Total stockholders’ equity attributable to common stockholders 19,301,996 18,695,256

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Transaction-based revenue $ 1,712,967 $ 1,637,654 $ 3,224,176 $ 3,060,359

20 unchanged sentences

Interest income, net ( 1,871 ) ( 3,944 ) ( 20,616 ) ( 7,105 )

Other income, net ( 237,824 ) ( 77,717 )

Income before income tax 506,312 74,706

Other expense (income), net 59,532 ( 14,635 ) ( 178,292 ) ( 92,352 )

Income (loss) before income tax 248,901 ( 113,528 ) 755,213 ( 38,822 )

Provision (benefit) for income taxes 59,029 ( 8,150 ) 94,521 ( 29,272 )

Net income 470,820 95,828

Net income (loss) 189,872 ( 105,378 ) 660,692 ( 9,550 )

Net loss attributable to noncontrolling interests ( 5,396 ) ( 3,336 ) ( 6,581 ) ( 5,824 )

Net income attributable to common stockholders $ 472,005 $ 98,316

Net income per share attributable to common stockholders:

Net income (loss) attributable to common stockholders $ 195,268 $ ( 102,042 ) $ 667,273 $ ( 3,726 )

Net income (loss) per share attributable to common stockholders:

Basic $ 0.32 $ ( 0.17 ) $ 1.08 $ ( 0.01 )

Diluted $ 0.31 $ ( 0.17 ) $ 1.05 $ ( 0.01 )

Weighted-average shares used to compute net income per share attributable to common stockholders:

Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:

Basic 617,666 606,692 617,033 604,476

1 unchanged sentence

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

Three Months Ended

Net income $ 470,820 $ 95,828

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 189,872 $ ( 105,378 ) $ 660,692 $ ( 9,550 )

Net foreign currency translation adjustments (i)

1 unchanged sentence

Net unrealized gain on marketable debt securities 1,883 6,467 4,161 20,877

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.

Total comprehensive income (loss) $ 317,706 $ ( 70,195 ) $ 506,630 $ ( 23,838 )

(i) Includes a foreign currency translation gain related to goodwill of $ 100.9 million and loss of $ 97.3 million for the three and six months ended June 30, 2024, respectively.

The three and six months ended June 30, 2023 includes a foreign currency translation gain related to goodwill of $ 24.8 million and loss of $ 22.8 million, respectively.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Class A and B common stock Common stock and additional paid-in Accumulated other comprehensive Accumulated Noncontrolling Total stockholders’

Class A and B common stock Common stock and additional paid-in Accumulated other comprehensive Retained earnings (accumulated Noncontrolling Total stockholders’

shares capital loss deficit) interests equity

6 unchanged sentences

Balance at March 31, 2024 617,064 $ 19,687,428 $ ( 660,203 ) $ ( 56,424 ) $ ( 3,605 ) $ 18,967,196

Net income — — — 195,268 ( 5,396 ) 189,872

Shares issued in connection with employee stock plans 6,295 66,258 — — — 66,258

Repurchases of common stock ( 5,742 ) ( 389,508 ) — — — ( 389,508 )

Change in other comprehensive loss — — 127,834 — — 127,834

Share-based compensation — 331,343 — — — 331,343

Balance at June 30, 2024 617,617 $ 19,695,521 $ ( 532,369 ) $ 138,844 $ ( 9,001 ) $ 19,292,995

Class A and B common stock Common stock and additional paid-in Accumulated other comprehensive Accumulated Noncontrolling Total stockholders’

8 unchanged sentences

Balance at March 31, 2023 603,393 $ 18,607,008 $ ( 572,561 ) $ ( 439,885 ) $ 25,988 $ 17,620,550

Net loss — — — ( 102,042 ) ( 3,336 ) ( 105,378 )

Shares issued in connection with employee stock plans 5,479 59,137 — — — 59,137

Change in other comprehensive loss — — 35,183 — — 35,183

Share-based compensation — 326,445 — — — 326,445

Balance at June 30, 2023 608,872 $ 18,992,590 $ ( 537,378 ) $ ( 541,927 ) $ 22,652 $ 17,935,937

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

Net income $ 470,820 $ 95,828

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ 660,692 $ ( 9,550 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 194,543 187,718

2 unchanged sentences

Share-based compensation 631,791 598,845

Loss on revaluation of equity investments 1,111 14,885

Loss (gain) on revaluation of equity investments ( 2,483 ) 16,255

Bitcoin remeasurement ( 163,288 ) ( 112,102 )

21 unchanged sentences

(In thousands)

Three Months Ended

Six Months Ended

Cash flows from financing activities:

Proceeds from issuance of senior notes 2,000,000 —

Payments of debt issuance costs from issuance of senior notes ( 26,619 ) —

Repayments of Paycheck Protection Program Liquidity Facility advances — ( 16,840 )

Payments to redeem convertible notes — ( 461,761 )

Proceeds from warehouse facilities borrowings 319,634 289,418

3 unchanged sentences

Repurchases of common stock ( 641,603 ) —

Other financing activities ( 18,473 ) ( 4,320 )

Change in customer funds, restricted from use in the Company's operations 380,283 172,332

38 unchanged sentences

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 interim results for the three and six months ended June 30, 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.

7 unchanged sentences

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.

As such, the previously reported condensed consolidated financial statements for the three and six months ended June 30, 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

Three Months Ended June 30, 2023

As Previously Reported (i)

5 unchanged sentences

$ ( 0.20 ) $ 0.03 $ ( 0.17 )

Six Months Ended June 30, 2023

As Previously Reported (i)

Adjustments (ii)

Net income (loss) attributable to common stockholders (iii)

$ ( 139,344 ) $ 135,618 $ ( 3,726 )

(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.

Net income (loss) per share attributable to common stockholders:

$ ( 0.23 ) $ 0.22 $ ( 0.01 )

___________________

(i) As reported in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed with the SEC on August 3, 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.

12 unchanged sentences

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.

The Company had two third-party payment processors that represented approximately 42 % and 35 % of settlements receivable as of March 31, 2024.

For the three and six months ended June 30, 2024 and June 30, 2023, the Company had no customer that accounted for greater than 10% of total net revenue.

The Company had two third-party payment processors that represented approximately 40 % and 38 % of settlements receivable as of June 30, 2024.

As of December 31, 2023, the Company had two parties that represented approximately 46 % and 35 % of settlements receivable.

10 unchanged sentences

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.

Total advertising costs w ere $ 78.3 million and $ 139.9 million for the three and six months ended June 30, 2024, respectively, compared to $ 116.1 million and $ 205.2 million for the three and six months ended June 30, 2023, respectively.

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.

1 unchanged sentence

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.

The Company recorded $ 252.7 million and $ 463.6 million for the three and six months ended June 30, 2024, respectively, compared to $ 235.3 million and $ 479.1 million for the three and six months ended June 30, 2023, respectively, for such expenses.

Recent Accounting Pronouncements

21 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Revenue from contracts with customers:

10 unchanged sentences

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):

The Company's short-term and long-term investments as of June 30, 2024 were as follows (in thousands):

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

6 unchanged sentences

government securities 489,200 9 ( 994 ) 488,215

Foreign government securities 600 — ( 4 ) 596

Total $ 659,416 $ 49 $ ( 1,464 ) $ 658,001

Long-term debt securities:

agency securities $ 17 $ — $ — $ 17

Corporate bonds 142,220 126 ( 328 ) 142,018

19 unchanged sentences

The amortized cost of investments classified as cash equivalents approximated the fair value due to the short-term nature of the investments.

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

The Company's gross unrealized losses and fair values for those investments that were in an unrealized loss position as of June 30, 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):

June 30, 2024

Less than 12 Months Greater than 12 Months Total

5 unchanged sentences

government securities 268,909 ( 106 ) 99,838 ( 888 ) 368,747 ( 994 )

Foreign government securities — — 596 ( 4 ) 596 ( 4 )

Total $ 352,253 $ ( 213 ) $ 158,307 $ ( 1,251 ) $ 510,560 $ ( 1,464 )

21 unchanged sentences

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):

The contractual maturities of the Company's short-term and long-term investments as of June 30, 2024 were as follows (in thousands):

Amortized Cost Fair Value

4 unchanged sentences

The following table presents the assets underlying customer funds (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Cash $ 2,036,394 $ 2,137,634

4 unchanged sentences

Total customer funds $ 3,550,713 $ 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.

(i) The Company has accounted for the reverse repurchase agreement with various third parties as an overnight lending arrangement, collateralized by the securities subject to the repurchase agreement.

The Company classifies the amounts due from the counterparties 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.

4 unchanged sentences

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.

The Company was not aware of any actual or possible safeguarding loss events as of June 30, 2024 or December 31, 2023.

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

June 30, 2024 December 31, 2023

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

20 unchanged sentences

Corporate bonds — 142,018 — — 95,328 —

agency securities — 17 — — — —

Municipal securities — 3,323 — — 2,412 —

12 unchanged sentences

The estimated fair value and carrying value of the convertible and senior notes were as follows (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Carrying Value Fair Value (Level 2) Carrying Value Fair Value (Level 2)

1 unchanged sentence

2031 Senior Notes 990,265 852,757 989,567 879,913

2032 Senior Notes 1,973,761 1,998,291 — —

2025 Convertible Notes 997,958 961,712 996,437 979,776

3 unchanged sentences

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

June 30, 2024 December 31, 2023

Carrying Value Fair Value (Level 3) Carrying Value Fair Value (Level 3)

3 unchanged sentences

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.

During the three and six months ended June 30, 2024 and June 30, 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

7 unchanged sentences

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.

As of June 30, 2024, the amortized cost of Pass rated consumer receivables was $ 2.1 billion and the amount of Classified consumer receivables was $ 121.3 million.

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

June 30, 2024 December 31, 2023

Non-delinquent loans $ 1,676,886 $ 2,074,532

3 unchanged sentences

Total amortized cost $ 2,192,451 $ 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.

The amount listed as 1 - 60 days past due in the above table includes $ 318.9 million and $ 365.4 million of cash in transit as of June 30, 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.

2 unchanged sentences

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 amount of recoveries for the three and six months ended June 30, 2024 and June 30, 2023 were immaterial.

The following table summarizes activity in the allowance for credit losses (in thousands):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Allowance for credit losses, beginning of the period $ 181,947 $ 141,535 $ 185,275 $ 151,290

10 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, the Company held $ 236.4 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.

1 unchanged sentence

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.

The allowance for loan losses, amount of charge offs recorded, and amount of recoveries as of June 30, 2024 and December 31, 2023 were immaterial.

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.

2 unchanged sentences

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.

As of June 30, 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.

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.

As of June 30, 2024 and December 31, 2023, the amortized cost of Pass rated loans was $ 250.1 million and $ 261.4 million, respectively, and the amount of Classified loans was immaterial for both periods.

Loans Held for Sale

4 unchanged sentences

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.

Commercial loans held for sale include Square Loans, Consumer loans held for sale primarily include loans initiated through Cash App Borrow and consumer lending loans, 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

June 30, 2024 December 31, 2023

Commercial $ 435,291 $ 478,128

4 unchanged sentences

The following table details acquired intangible assets (in thousands):

Balance at March 31, 2024

Balance at June 30, 2024

Weighted Average Estimated Useful Life Cost Accumulated Amortization Net

14 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Acquired intangible assets, net, beginning of the period $ 1,673,618 $ 1,949,086 $ 1,761,521 $ 2,014,034

2 unchanged sentences

Acquired intangible assets, net, end of the period $ 1,629,183 $ 1,878,238 $ 1,629,183 $ 1,878,238

The estimated future amortization expense of intangible assets as of March 31, 2024 was as follows (in thousands):

The estimated future amortization expense of intangible assets as of June 30, 2024 was as follows (in thousands):

Remainder of 2024 $ 105,960

4 unchanged sentences

The following table presents the detail of other current assets (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Restricted cash (i)

17 unchanged sentences

The following table presents the detail of accrued expenses and other current liabilities (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Accrued expenses $ 418,039 $ 538,812

1 unchanged sentence

Accounts payable 112,659 142,554

Accrued royalties 62,306 62,140

Accrued transaction losses (i)

81,309 54,042

Accrued royalties 55,937 62,140

Operating lease liabilities, current 51,906 53,721

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Accrued transaction losses, beginning of the period $ 60,016 $ 62,085 $ 54,042 $ 64,539

4 unchanged sentences

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.

The Company recorded $ 84.4 million and $ 131.7 million for the three and six months ended June 30, 2024, respectively, for such losses.

The Company recorded $ 120.4 million and $ 226.2 million for the three and six months ended June 30, 2023, respectively, for such losses.

NOTE 10 - OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT)

1 unchanged sentence

The following table presents the detail of other non-current assets (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Bitcoin investment (i)

$ 514,584 $ 339,898

Investments in long-term debt securities 361,757 251,127

Property and equipment, net 295,741 296,056

2 unchanged sentences

213,315 205,268

Investments in long-term debt securities 187,922 251,127

Restricted cash 71,203 71,812

5 unchanged sentences

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.

Unrealized gains and losses were immaterial during the three and six months ended June 30, 2024.

Other Non-Current Liabilities

The following table presents the detail of other non-current liabilities (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Operating lease liabilities, non-current $ 272,387 $ 289,788

9 unchanged sentences

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 investment, which is included within “Other non-current assets” on the condensed consolidated balance sheets, is remeasured at fair value at the end of each reporting period.

Changes in fair value are recognized in net income through “Other expense (income), net” in the Company’s condensed consolidated statements of operations.

As of June 30, 2024 and December 31, 2023, the Company held approximately 8,211 and 8,038 bitcoins for investment purposes with a cost basis of $ 231.4 million and $ 220.0 million, respectively.

The following table summarizes the changes in the Company’s bitcoin investment in the period (in thousands, except amount of bitcoin):

Amount of bitcoin

Balance at December 31, 2023 8,038 $ 339,898

Remeasurement gain — 233,404

Balance at March 31, 2024 8,038 $ 573,302

Additions 173 11,398

Remeasurement loss — ( 70,116 )

Balance at June 30, 2024 8,211 $ 514,584

Amount of bitcoin

Balance at December 31, 2022 8,038 $ 102,303

Cumulative effect of adoption of ASU 2023-08 — 30,511

Remeasurement gain — 96,088

Balance at March 31, 2023 8,038 $ 228,902

Remeasurement gain — 16,014

Balance at June 30, 2023 8,038 $ 244,916

The Company’s bitcoin for operating purposes is initially recorded at cost, inclusive of transaction costs.

2 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, the Company held approximately 228 and 384 bitcoins, respectively, for operating purposes with a fair value of $ 14.7 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."

11 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, an immaterial amount of the bitcoin was held by a third-party custodian 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.

The Company was not aware of any actual or possible safeguarding loss events as of June 30, 2024 or December 31, 2023, and accordingly, the bitcoin safeguarding obligation liability and the associated bitcoin safeguarding asset were recorded at the same value.

The following table summarizes the Company’s bitcoin held for other parties (in thousands, except number of bitcoin):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Total approximate number of bitcoin held for other parties 22,982 24,570

3 unchanged sentences

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):

The following table summarizes the Company's Notes as of June 30, 2024 (in thousands):

Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value

1 unchanged sentence

2031 Senior Notes 1,000,000 ( 9,735 ) 990,265

2027 Convertible Notes 575,000 ( 4,803 ) 570,197

2026 Convertible Notes 575,000 ( 3,561 ) 571,439

2032 Senior Notes 2,000,000 ( 26,239 ) 1,973,761

2025 Convertible Notes (i)

1,000,000 ( 2,042 ) 997,958

2026 Convertible Notes 575,000 ( 3,137 ) 571,863

2027 Convertible Notes 575,000 ( 4,470 ) 570,530

Total $ 6,150,000 $ ( 51,019 ) $ 6,098,981

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Contractual interest expense $ 34,598 $ 16,437 $ 50,728 $ 32,932

1 unchanged sentence

Total $ 37,521 $ 19,088 $ 56,213 $ 38,292

Senior Unsecured Notes due 2032

On May 9, 2024, the Company issued $ 2.0 billion in aggregate principal amount of senior unsecured notes due 2032 ("2032 Senior Notes").

The 2032 Senior Notes mature on May 15, 2032, unless earlier redeemed or repurchased, and bear interest at a rate of 6.50 % payable semi-annually on May 15 and November 15 of each year, commencing on November 15, 2024.

At any time prior to May 15, 2027, the Company may redeem the 2032 Senior Notes, in whole or part, at a price equal to 100 % of the principal amount of the 2032 Senior Notes to be redeemed plus an applicable premium and accrued and unpaid interest, if any, to but excluding the redemption date.

The applicable premium for the 2032 Senior Notes is the greater of (1) 1.0 % of the principal amount of such note, and (2) the excess, if any, of (a) the sum of the present values at the redemption date of (i) the applicable redemption price of such note that would apply if such note were redeemed on May 15, 2027 plus (ii) the remaining scheduled payments of interest due on such note to, and including, May 15, 2027 (excluding accrued but unpaid interest to the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the indenture governing the 2032 Senior Notes) plus 50 basis points, over (b) the principal amount of such note to be redeemed.

On and after May 15, 2027, the Company may redeem the 2032 Senior Notes at specified prices as set forth in the indenture governing the 2032 Senior Notes plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If the Company experiences a change of control triggering event (as defined in the indenture governing the 2032 Senior Notes), the Company must offer to repurchase the 2032 Senior Notes at a repurchase price equal to 101 % of the principal amount of the applicable 2032 Senior Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The indenture governing the 2032 Senior Notes contains covenants that, among other things, restrict the ability of the Company and/or its domestic restricted subsidiaries to create certain liens and certain indebtedness, enter into sale and leaseback transactions, or to transfer all or substantially all of the Company and its subsidiaries assets to another person.

These covenants are subject to a number of other limitations and exceptions set forth in the indenture governing the 2032 Senior Notes.

The indenture governing the 2032 Senior Notes provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries.

In the case of an event of default arising from specified events of bankruptcy or insolvency involving the Company, all outstanding 2032 Senior Notes will become due and payable immediately without further action or notice.

If any other event of default under the indenture governing the 2032 Senior Notes occurs or is continuing, the trustee or holders of at least 25 % in aggregate principal amount of the outstanding 2032 Senior Notes may declare all the 2032 Senior Notes to be due and payable immediately.

Debt issuance costs related to the 2032 Senior Notes were comprised of commissions payable to the initial purchasers of $ 21.0 million and third party offering costs of $ 5.6 million.

Issuance costs are amortized to interest expense using the effective interest method at an effective interest rate of 6.7 % for the term of the 2032 Senior Notes.

Convertible Notes due in 2026 and 2027

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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.

The circumstances to allow the holders to convert their 2026 Convertible Notes and 2027 Convertible Notes were not met during the six months ended June 30, 2024.

As of June 30, 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

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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 circumstances to allow the holders to convert their 2025 Convertible Notes were not met during the six months ended June 30, 2024.

As of June 30, 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.

As of June 30, 2024, the if-converted value did not exceed the outstanding principal amount of the 2025 Convertible Notes.

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.

In May 2020, the Company entered into a revolving credit agreement (as amended, the “Credit Agreement”) with certain lenders, which provides for a $ 775.0 million senior unsecured revolving credit facility maturing on June 9, 2028.

The Credit Agreement contains a financial covenant requiring the Company to maintain a minimum liquidity amount (consisting of the sum of Unrestricted Cash and Cash Equivalents plus Marketable Securities, each as defined in the Credit Agreement, plus undrawn available commitments under the Credit Agreement) of at least $ 250.0 million, tested on the last day of each fiscal quarter.

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 of the revolving loan commitments available under the Credit Agreement.

To date, no funds have been drawn and no letters of credit have been issued under the Credit Agreement.

As of June 30, 2024, $ 775.0 million remained available for draw subject to compliance with our covenants.

The Company incurred immaterial unused commitment fees during the three and six months ended June 30, 2024 and June 30, 2023.

As of June 30, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.

Loans under the Credit Agreement 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.

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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.

These lines of credit were immaterial in the aggregate and there were no outstanding balances as of June 30, 2024 and December 31, 2023.

C) Warehouse Funding Facilities

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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.

As of June 30, 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 $ 945.8 million was drawn and $ 507.9 million remained available.

All Warehouse Facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of June 30, 2024.

None of the Warehouse Facilities contain corporate financial covenants.

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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.

Interest expense on the Company's Warehouse Facilities was $ 16.1 million and $ 35.9 million for the three and six months ended June 30, 2024, respectively, and $ 13.7 million and $ 28.3 million for the three and six months ended June 30, 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

June 30, 2024

Total $ 945,789

1 unchanged sentence

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 Company recorded an income tax expense of $ 59.0 million and $ 94.5 million for the three and six months ended June 30, 2024, respectively, compared to an income tax benefit of $ 8.2 million and $ 29.3 million for the three and six months ended June 30, 2023, respectively.

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.

federal statutory rate and the income tax expense recorded for the three and six months ended June 30, 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, stock based compensation tax deductions for the six months ended June 30, 2024, and the tax rate differential on the earnings and losses of certain tax jurisdictions.

The difference between the income tax expense for the three and six months ended June 30, 2024, and the income tax benefit for the three and six months ended June 30, 2023 primarily relates to a change in the mix of income by jurisdiction.

In addition, for the three and six months ended June 30, 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.

3 unchanged sentences

As the Afterpay U.S.

integration was a one-time event, there is no corresponding benefit for the three months ended March 31, 2024.

integration was a one-time event, there is no corresponding benefit for the three and six months ended June 30, 2024.

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 tax provision for the three and six months ended June 30, 2024 and June 30, 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.

As of June 30, 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.

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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.

During the six months ended June 30, 2024, the Company repurchased 9.3 million shares of its Class A common stock for an aggregate amount of $ 641.6 million.

As of June 30, 2024, $ 201.6 million remained available and authorized for repurchases under this share repurchase program.

On July 25, 2024, the board of directors of the Company authorized an increase to the Company's share repurchase program to repurchase up to an additional $ 3 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.

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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.

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):

As of June 30, 2024, there were 139.3 million shares available for future issuance under our 2015 Plan.

A summary of stock option activity for the six months ended June 30, 2024 is as follows (in thousands, except per share data):

Number of Stock Options Weighted

2 unchanged sentences

Outstanding, beginning of the year 4,991 $ 47.64 3.80 $ 195,760

Granted 578 74.03

Exercised ( 1,677 ) 18.33

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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):

Activity related to RSUs during the six months ended June 30, 2024 is set forth below (in thousands, except per share data):

Shares Weighted

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Cost of revenue $ 181 $ 142 $ 354 $ 284

3 unchanged sentences

Total $ 320,368 $ 319,248 $ 631,536 $ 598,839

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.

The Company recorded $ 10.4 million and $ 17.3 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the three and six months ended June 30, 2024, respectively, compared to $ 11.4 million and $ 32.5 million during the three and six months ended June 30, 2023, respectively, which are included in the table above.

The Company capitalized $ 10.6 million and $ 17.1 million of share-based compensation expense related to software costs during the three and six months ended June 30, 2024, respectively, compared to $ 7.2 million and $ 13.1 million during the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, there was $ 3.1 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 three years .

NOTE 15 - NET INCOME PER SHARE

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Three Months Ended

Net income $ 470,820 $ 95,828

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 189,872 $ ( 105,378 ) $ 660,692 $ ( 9,550 )

Net loss attributable to noncontrolling interests ( 5,396 ) ( 3,336 ) ( 6,581 ) ( 5,824 )

Net income attributable to common stockholders $ 472,005 $ 98,316

Net income (loss) attributable to common stockholders $ 195,268 $ ( 102,042 ) $ 667,273 $ ( 3,726 )

Basic shares:

Weighted-average shares used to compute basic net income per share 616,401 602,234

Weighted-average shares used to compute basic net income (loss) per share 617,666 606,692 617,033 604,476

Diluted shares:

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Convertible notes 10,186 — 12,108 —

Common stock warrants — —

Weighted-average shares used to compute diluted net income per share 637,360 623,579

Weighted-average shares used to compute diluted net income (loss) per share 634,221 606,692 636,751 604,476

Basic $ 0.32 $ ( 0.17 ) $ 1.08 $ ( 0.01 )

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Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Stock options, restricted stock, and employee stock purchase plan 40,759 47,477 37,883 42,180

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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.

As of June 30, 2024, the Company had recorded right-of-use assets of $ 10.7 million and associated lease liabilities of $ 16.3 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.

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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:

The Company promptly responded to the CFPB.

In July 2024, the CFPB's Enforcement Division advised the Company that it had obtained authority to either settle this matter or pursue an enforcement action.

The Company continues to cooperate and intends to engage in conversations with the CFPB to determine if this matter can be settled on acceptable terms.

Additionally, in June 2024, the state Attorneys General presented the Company with the results of their investigations.

The Company responded and continues to cooperate with the state Attorneys General.

The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the CFPB or state Attorneys General will not ultimately take legal action against the Company or that the outcome of these matters will not have a material adverse effect on the Company.

The Company has accrued a liability for an estimated amount in connection with the CFPB 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 accrued amount was not material as of June 30, 2024.

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.

The Company also received inquiries from the SEC and Department of Justice (“DOJ”) shortly after the publication of a short seller report in March 2023.

In July 2024, the Company received a follow-on inquiry from the SEC.

The Company believes these inquiries primarily relate to the allegations raised in the short seller report, the Company’s compliance and risk practices, and related disclosures.

The Company continues to cooperate with both agencies.

The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ 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.

In June 2024, the Office of the Treasurer and Tax Collector of the City and County of San Francisco (the "Tax Collector") finalized its audit and issued an assessment of San Francisco’s gross receipts tax, including interest and penalties, following its gross receipt tax audit for fiscal years 2020, 2021 and 2022.

The Tax Collector has asserted that incremental taxes are owed on a portion of the receipts generated by the Company related to sales of Bitcoin.

The Company strongly disagrees with the Tax Collector’s assessment and plans to vigorously pursue all available remedies.

The Company will be required to pay such assessment prior to pursuing litigation on this matter.

Should the Company not reach a settlement or prevail in its legal challenge, the Tax Collector may challenge the Company’s gross receipts tax position going forward, including for 2023 and 2024.

The Company estimates that it could incur losses associated with taxes, interest, and penalties that range from approximately $ 0 to $ 76 million in the aggregate for the fiscal years 2020, 2021, 2022, 2023 and 2024.

Additional taxes, interest, and penalties for future periods could be material as well.

Given the Company has currently concluded that a loss for this matter is not probable, the Company has not recorded a liability for the exposure related to the dispute with the Tax Collector on San Francisco’s gross receipts tax.

In addition, the Company is subject to various legal matters, investigations, subpoenas, inquiries, audits, claims, lawsuits and disputes, including with regulatory bodies and governmental agencies.

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 other 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.

3 unchanged sentences

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):

As of June 30, 2024, the future minimum payments under the purchase commitments were as follows (in thousands):

Payments Due By Period

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Three Months Ended

March 31, 2024

June 30, 2024 Six Months Ended

June 30, 2024

Cash App Square Corporate and Other (i)

Total Cash App Square Corporate and Other (i)

Transaction-based revenue $ 98,912 $ 1,614,055 $ — $ 1,712,967 $ 208,131 $ 3,016,045 $ — $ 3,224,176

6 unchanged sentences

Three Months Ended

March 31, 2023

June 30, 2023 Six Months Ended

June 30, 2023

Cash App Square Corporate and Other (i)

Total Cash App Square Corporate and Other (i)

Transaction-based revenue $ 133,741 $ 1,503,913 $ — $ 1,637,654 $ 268,404 $ 2,791,955 $ — $ 3,060,359

6 unchanged sentences

(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.

(ii) Segment gross profit for Cash App for the three and six months ended June 30, 2024 included $ 13.6 million and $ 27.4 million of amortization of acquired technology assets expense, respectively.

Segment gross profit for Cash App for the three and six months ended June 30, 2023 included $ 14.3 million and $ 28.6 million of amortization of acquired technology assets expense, respectively.

Segment gross profit for Square for the three and six months ended June 30, 2024 included $ 2.2 million and $ 4.7 million of amortization of acquired technology assets expense, respectively.

Segment gross profit for Square for the three and six months ended June 30, 2023 included $ 2.7 million and $ 5.4 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 and six months ended June 30, 2024 and June 30, 2023.

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

June 30, Six Months Ended

2024 2023 2024 2023

Total segment gross profit $ 2,233,480 $ 1,866,101 $ 4,327,953 $ 3,580,685

6 unchanged sentences

( 1,871 ) ( 3,944 ) ( 20,616 ) ( 7,105 )

Other income, net ( 237,824 ) ( 77,717 )

Income before applicable income taxes $ 506,312 $ 74,706

Other expense (income), net 59,532 ( 14,635 ) ( 178,292 ) ( 92,352 )

Income (loss) before applicable income taxes $ 248,901 $ ( 113,528 ) $ 755,213 $ ( 38,822 )

Revenue by geography is based on the addresses of the sellers or customers.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

United States $ 5,731,874 $ 5,171,558 $ 11,298,171 $ 9,836,193

1 unchanged sentence

Total $ 6,155,563 $ 5,534,957 $ 12,112,691 $ 10,525,088

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.

No individual country from the international markets contributed more than 10% of total revenue for the three and six months ended June 30, 2024 and June 30, 2023.

Long-Lived Assets

The following table details long-lived assets by geography (in thousands):

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

United States $ 7,462,022 $ 7,570,973

5 unchanged sentences

The supplemental disclosures of cash flow information consist of the following (in thousands):

Three Months Ended

Six Months Ended

Supplemental cash flow data:

5 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements