What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-01 · 136 added, 106 removed, 277 unchanged (47% of the section changed)

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In addition, our nascent businesses include TIDAL and two bitcoin businesses, Bitkey and Proto.

In the first quarter of 2025, we generated gross profit of $2.3 billion, up 9% year over year, delivering strong growth across our primary ecosystems.

Cash App generated gross profit of $1.4 billion in the first quarter of 2025, up 10% year over year, driven by strength across our financial services products.

Square generated gross profit of $897.9 million in the first quarter of 2025, up 9% year over year, driven by strength in our banking products and software and integrated payments.

In the first quarter of 2025, operating income was $329.3 million and Adjusted Operating Income was $466.3 million, compared to operating income of $249.7 million and Adjusted Operating Income of $364.3 million in the first quarter of 2024.

Net income attributable to common stockholders was $189.9 million for the first quarter of 2025, compared to net income attributable to common stockholders of $472.0 million, and Adjusted EBITDA was $812.8 million, compared to $705.1 million for the same period in 2024.

Net income for the first quarter of 2025 and first quarter of 2024 included a loss of $93.4 million and gain of $233.4 million, respectively, from the remeasurement of our bitcoin investment.

In the second quarter of 2025, we generated gross profit of $2.5 billion, up 14% year over year.

Cash App generated gross profit of $1.5 billion in the second quarter of 2025, up 16% year over year, driven by growth in Cash App Borrow.

Square generated gross profit of $1.0 billion in the second quarter of 2025, up 11% year over year, driven by strength in our banking products and software and integrated payments.

In the second quarter of 2025, operating income was $484.3 million and Adjusted Operating Income was $549.6 million, compared to operating income of $306.6 million and Adjusted Operating Income of $399.1 million in the second quarter of 2024.

Net income attributable to common stockholders was $538.5 million for the second quarter of 2025, compared to net income attributable to common stockholders of $195.3 million, and Adjusted EBITDA was $891.4 million for the second quarter of 2025, compared to $759.5 million for the same period in 2024.

Net income for the second quarter of 2025 and 2024 included a gain of $212.2 million and a loss of $70.1 million, respectively, from the remeasurement of our bitcoin investment.

Refer to the Key Operating Metrics and Non-GAAP Financial Measures section below for reconciliations of non-GAAP financial measures to their nearest generally accepted accounting principles ("GAAP") equivalents.

Starting in 2023, we sharpened our focus on our organizational structure and expenditures with a view to identifying areas where we can be more cost efficient as we focus on disciplined growth and pursuing cost efficiencies.

Starting in 2023, we sharpened our focus on our organizational structure and expenditures with a view to identifying areas where we can be more cost efficient as we focus on disciplined growth.

In 2023, we also announced we would implement an absolute cap of 12,000 on the number of employees we have at our company, which we achieved in 2024, and plan to continue to operate below this cap through a combination of performance management, centralization of teams and functions to reduce duplication, and prioritization of our scope.

Through 2024 and the first quarter of 2025, we continued to make progress on cost efficiency goals, and we expect to continue these efforts.

During the three months ended March 31, 2025, we recorded $66.9 million of severance and other expenses related to these efforts.

Through 2024 and the second quarter of 2025, we continued to make progress on cost efficiency goals, and we expect to continue these efforts.

During the three and six months ended June 30, 2025, we recorded $2.6 million and $69.5 million of severance and other expenses related to these efforts, respectively.

We may continue to incur expenses, including additional restructuring costs, in the short term to implement our initiatives.

We continue to realize benefits related to our focus on disciplined growth and cost efficiencies, and we expect to continue to benefit from these actions in future periods.

We ended the first quarter of 2025 with $9.2 billion in available liquidity, with $8.5 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility.

This represents a decrease of $1.5 billion from our available liquidity as of December 31, 2024, primarily as a result of a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025 and $445.3 million of share repurchases in the first quarter of 2025.

We ended the second quarter of 2025 with $8.5 billion in available liquidity, with $7.7 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility.

This represents a decrease of $2.2 billion from our available liquidity as of December 31, 2024, primarily as a result of a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025 and $1.1 billion of share repurchases in 2025.

In October 2023, our board of directors authorized the repurchase of up to $1 billion of our Class A common stock.

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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.

As of March 31, 2025, we have repurchased $1.8 billion of our Class A common stock under the program, of which $445.3 million was purchased in the first quarter of 2025.

As of June 30, 2025, we have repurchased $2.5 billion of our Class A common stock under the program, of which $692.2 million was purchased in the second quarter of 2025.

Results of Operations

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Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Transaction-based revenue $ 1,817,398 $ 1,712,967 $ 104,431 6 % $ 3,368,129 $ 3,224,176 $ 143,953 4 %

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Hardware revenue 40,423 42,960 (2,537) NM (i)

69,113 75,461 (6,348) NM (i)

Bitcoin revenue 2,144,032 2,611,743 (467,711) (18) % 4,445,434 5,342,867 (897,433) (17) %

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(i) Not meaningful ("NM")

Total net revenue for the three months ended March 31, 2025 decreased by $185.3 million compared to the three months ended March 31, 2024.

Bitcoin revenue decreased by $429.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Excluding bitcoin revenue, total net revenue increased by $244.4 million, or 8%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Transaction-based revenue for the three months ended March 31, 2025 increased by $39.5 million, or 3% compared to the three months ended March 31, 2024, driven primarily by growth in Gross Payment Volume ("GPV"), which grew by 4% in the same period.

The growth in Square GPV was driven by improvements in both card-present and card-not-present volumes including strength in online channels.

Total net revenue for the three and six months ended June 30, 2025 decreased by $101.1 million, or 2%, and $286.4 million, or 2% compared to the three and six months ended June 30, 2024, respectively.

Bitcoin revenue decreased by $467.7 million and $897.4 million for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively.

Excluding bitcoin revenue, total net revenue increased by $366.6 million, or 10%, and $611.0 million, or 9%, in the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively.

Transaction-based revenue for the three and six months ended June 30, 2025 increased by $104.4 million, or 6%, and $144.0 million, or 4%, compared to the three and six months ended June 30, 2024, respectively.

Gross Payment Volume ("GPV") increased by 8% and 6% in the same periods, primarily due to growth in Square GPV, which was partially offset by a decrease in Cash App GPV.

The growth in Square GPV of 10% and 9% for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, was driven by strength in food and beverage and retail sellers.

See below in Key Operating Metrics and Non-GAAP Financial Measures for further discussion of GPV.

Subscription and services-based revenue for the three months ended March 31, 2025 increased by $208.7 million, or 12%, compared to the three months ended March 31, 2024.

This increase was primarily due to growth in Cash App's financial service-related products, including Cash App Card usage, Cash App Borrow, Cash App Instant Deposit volumes, and Cash App Pay, as well as revenue from our BNPL platform.

Revenue generated from our BNPL platform was $312.9 million and $283.5 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

Growth in Square's financial services-related products, primarily Square Lending, also contributed to the increase in revenue in the first quarter of 2025.

Bitcoin revenue for the three months ended March 31, 2025 decreased by $429.7 million, or 16%, compared to the three months ended March 31, 2024.

Subscription and services-based revenue for the three and six months ended June 30, 2025 increased by $264.7 million, or 15%, and $473.4 million, or 14%, compared to the three and six months ended June 30, 2024, respectively.

This increase was primarily due to growth in Cash App's financial service-related products, including Cash App Borrow, Cash App Card usage, and Cash App Pay, as well as revenue from our BNPL platform.

Revenue generated from our BNPL platform was $343.8 million and $656.7 million for the three and six months ended June 30, 2025, respectively.

Revenue generated from our BNPL platform was $294.0 million and $577.5 million for the three and six months ended June 30, 2024, respectively.

Growth in Square's financial services-related products, primarily Square Loans, also contributed to the increase in revenue in the three and six months ended June 30, 2025.

Bitcoin revenue for the three and six months ended June 30, 2025 decreased by $467.7 million, or 18%, and $897.4 million, or 17%, compared to the three and six months ended June 30, 2024, respectively.

As bitcoin revenue is the total sale amount of bitcoin to customers, the amount of bitcoin revenue recognized will fluctuate depending on customer demand as well as changes in the market price of bitcoin.

The decrease in the three months ended March 31, 2025 was driven by a decrease in the quantity of bitcoin sold to customers, partially offset by an increase in the average market price of bitcoin, compared to the three months ended March 31, 2024.

While bitcoin contributed 40% and 46% of the total revenue for the three months ended March 31, 2025 and March 31, 2024, respectively, gross profit generated from bitcoin was only 3% and 4% of the total gross profit for the three months ended March 31, 2025 and March 31, 2024, respectively.

The decrease in the three and six months ended June 30, 2025 was driven by a decrease in trading volume, partially offset by an increase in the average market price of bitcoin, compared to the three and six months ended June 30, 2024.

While bitcoin contributed 35% and 38% of the total revenue for the three and six months ended June 30, 2025, respectively, gross profit generated from bitcoin was only 3% of the total gross profit for both the three and six months ended June 30, 2025 as well as for both the three and six months ended June 30, 2024.

Cost of Revenue (in thousands, except for percentages)

Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Transaction-based costs $ 1,066,028 $ 1,000,055 $ 65,973 7 % $ 1,969,850 $ 1,873,220 $ 96,630 5 %

Subscription and services-based costs 298,069 291,801 6,268 2 % 573,117 561,469 11,648 2 %

Hardware costs 52,534 50,785 1,749 NM

Hardware costs 76,548 68,309 8,239 NM 129,082 119,094 9,988 NM

Bitcoin costs 2,062,878 2,544,329 (481,451) (19) % 4,298,993 5,195,339 (896,346) (17) %

Amortization of acquired technology assets 14,674 18,027 (3,353) NM

Amortization of acquired technology assets 14,404 17,589 (3,185) NM 29,078 35,616 (6,538) NM

Total cost of revenue $ 3,517,927 $ 3,922,083 $ (404,156) (10) % $ 7,000,120 $ 7,784,738 $ (784,618) (10) %

Total cost of revenue for the three months ended March 31, 2025 decreased by $380.5 million, or 10%, compared to the three months ended March 31, 2024.

Bitcoin costs of revenue, which decreased by $414.9 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was the primary driver of the decrease in total cost of revenue.

Excluding bitcoin costs of revenue, total cost of revenue increased by approximately $34.4 million, or 3%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, largely related to an increase in Square GPV.

Transaction-based costs for the three months ended March 31, 2025 increased by $30.7 million, or 4%, compared to the three months ended March 31, 2024, largely in line with GPV growth of 4% in the same period.

Subscription and services-based costs for the three months ended March 31, 2025 had no significant change, compared to the three months ended March 31, 2024.

While subscription and services-based revenue increased by 12% compared to the three months ended March 31, 2024, the costs of revenues increased by 2% for the same comparative period due to the growth in Cash App's financial services-related products, including Cash App Card and related processing services, which have more favorable gross margin economics.

Bitcoin costs for the three months ended March 31, 2025 decreased by $414.9 million, or 16%, compared to the three months ended March 31, 2024.

Total cost of revenue for the three and six months ended June 30, 2025 decreased by $404.2 million, or 10%, and $784.6 million, or 10%, compared to the three and six months ended June 30, 2024, respectively.

Bitcoin costs of revenue, which decreased by $481.5 million and $896.3 million for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, was the primary driver of the decrease in total cost of revenue.

Excluding bitcoin costs of revenue, total cost of revenue increased by approximately $77.3 million, or 6%, and $111.7 million, or 4%, in the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively, largely related to an increase in Square GPV.

Transaction-based costs for the three and six months ended June 30, 2025 increased by $66.0 million, or 7%, and $96.6 million, or 5%, compared to the three and six months ended June 30, 2024, respectively.

While the increase was largely in line with GPV growth of 8% and 6% in the same periods, transaction-based costs for the three and six months ended June 30, 2025 were partially offset by a processing vendor settlement of $20.4 million.

Subscription and services-based costs for the three and six months ended June 30, 2025 had no significant change compared to the three and six months ended June 30, 2024.

While subscription and services-based revenue increased by 15% and 14% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, the costs of revenues increased by 2% for the same comparative periods due to the growth in Cash App's financial services-related products, including Cash App Borrow and Cash App Card and related processing services, which have more favorable gross margin economics.

Bitcoin costs for the three and six months ended June 30, 2025 decreased by $481.5 million, or 19%, and $896.3 million, or 17%, compared to the three and six months ended June 30, 2024, respectively.

Bitcoin costs are comprised of the total amount we pay to purchase bitcoin, which fluctuates in line with bitcoin revenue.

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Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Product development $ 725,288 $ 713,163 $ 12,125 2 % $ 1,485,987 $ 1,433,737 $ 52,250 4 %

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% of total gross profit 22 % 23 % 22 % 22 %

General and administrative $ 491,797 $ 471,260 $ 20,537 4 %

General and administrative $ 449,237 $ 473,568 $ (24,331) (5) % $ 941,034 $ 944,828 $ (3,794) NM

% of total net revenue 7 % 8 % 8 % 8 %

% of total gross profit 18 % 21 % 19 % 22 %

Transaction, loan, and consumer receivable losses $ 169,689 $ 165,729 $ 3,960 NM

Transaction, loan, and consumer receivable losses $ 294,090 $ 191,812 $ 102,278 53 % $ 463,779 $ 357,541 $ 106,238 30 %

% of total net revenue 5 % 3 % 4 % 3 %

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Total operating expenses $ 2,052,237 $ 1,926,918 $ 125,319 7 % $ 4,012,538 $ 3,771,648 $ 240,890 6 %

Product development expenses increased by $40.1 million, or 6%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The increase in product development expenses for the three months ended March 31, 2025 was driven by an increase in personnel costs of $16.4 million arising from restructuring costs, including severance and other related expenses, as well as an increase of $15.0 million in software and cloud computing infrastructure fees as a result of increased capacity needs and expansion of our cloud-based services.

Sales and marketing expenses increased by $60.6 million, or 14%, for the three months ended March 31, 2025, compared to the three months ended March 31, 2024.

The increase in sales and marketing expenses for the three months ended March 31, 2025 was driven by an increase in marketing, other advertising, and related personnel costs of $50.8 million as we prioritize marketing investments to support the growth of Cash App and Square, as well as $12.6 million of incremental personnel costs arising from restructuring initiatives, including severance and other related expenses.

These expenses for the three months ended March 31, 2025 were partially offset by a decrease in Cash App peer-to-peer processing costs and related transaction losses of $8.9 million.

General and administrative expenses for the three months ended March 31, 2025 increased by $20.5 million, or 4%, compared to the three months ended March 31, 2024.

The increase was primarily due to higher professional fees of $24.2 million related to the implementation and continuation of our cost efficiency goals as well as an increase in personnel costs of $7.3 million, driven by restructuring costs, including severance and other related expenses.

The increase in expenses for the three months ended March 31, 2025 was partially offset by a decrease in software, subscription costs and other administrative expenses.

Transaction, loan, and consumer receivable losses for the three months ended March 31, 2025 had no significant change compared to the three months ended March 31, 2024.

While loan volumes increased, primarily related to Cash Borrow, compared to the three months ended March 31, 2024, loan losses have decreased due to better performance of the loan portfolio in the three months ended March 31, 2025.

Amortization of customer and other acquired intangible assets for the three months ended March 31, 2025 decreased $9.6 million, or 22%, compared to the three months ended March 31, 2024, primarily due to the impairment of certain assets in the fourth quarter of 2024, which resulted in no related amortization in the first quarter of 2025.

Product development expenses increased by $12.1 million, or 2%, and $52.3 million, or 4%, for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively.

The increase in product development expenses for the three months ended June 30, 2025 was driven by an increase in allocated facilities, human resources, and IT expenses of $16.7 million, partially offset by reductions in software and cloud computing infrastructure fees.

During this period, personnel costs decreased from cost efficiencies realized from the ongoing efforts to reduce headcount and expenditures.

For the six months ended June 30, 2025, the increase in expenses were driven by an increase in allocated facilities, human resources, and IT expenses of $22.3 million, personnel costs of $14.0 million arising from restructuring costs, including severance and other related expenses, as well as an increase of $9.7 million in software and cloud computing infrastructure fees as a result of increased capacity needs and expansion of our cloud-based services.

Sales and marketing expenses increased by $42.2 million, or 8%, and $102.7 million, or 11%, for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively.

The increase for the three and six months ended June 30, 2025 was driven by an increase in marketing and advertising costs of $71.7 million and $114.4 million, respectively, as we prioritize marketing investments to support the growth of Cash App and Square, as well as an increase in personnel costs of $8.2 million and $29.0 million, respectively, for the same periods.

The increase in personnel costs was impacted by restructuring costs, including severance and other related expenses, in the first quarter of 2025.

These expenses for the three and six months ended June 30, 2025 were partially offset by a decrease in Cash App peer-to-peer processing costs and related transaction losses of $35.0 million and $43.9 million, respectively.

General and administrative expenses decreased by $24.3 million, or 5%, and $3.8 million, or less than 1%, for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024, respectively.

The decrease for the three months ended June 30, 2025 was primarily due to a decrease in personnel costs of $20.6 million arising from cost efficiencies realized from the ongoing efforts to reduce headcount and expenditures.

The decrease in personnel costs of $13.4 million for the six months ended June 30, 2025 was impacted by restructuring costs, including severance and other related expenses, in the first quarter of 2025.

Transaction, loan, and consumer receivable losses increased by $102.3 million, or 53%, and $106.2 million, or 30%, for the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024.

The primary driver for both periods was growth in loan volumes, particularly from Cash App Borrow.

Amortization of customer and other acquired intangible assets for the three and six months ended June 30, 2025 decreased $6.9 million, or 17%, and $16.5 million, or 20%, compared to the three and six months ended June 30, 2024, respectively, primarily due to the impairment of certain assets in the fourth quarter of 2024, which resulted in no related amortization in the first and second quarters of 2025.

Refer to Note 8, Acquired Intangible Assets within Notes to the Condensed Consolidated Financial Statements for more details.

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Three Months Ended

2025 2024 $ Change % Change

Interest expense (income), net $ 17,243 $ (18,745) $ 35,988 192 %

Interest expense, net, of $17.2 million for the three months ended March 31, 2025 was primarily due to interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, which more than offset interest income received on invested funds.

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Interest expense (income), net $ 23,687 $ (1,871) $ 25,558 NM $ 40,930 $ (20,616) $ 61,546 299 %

Interest expense, net, of $23.7 million and $40.9 million for the three and six months ended June 30, 2025, respectively, was primarily due to interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, which more than offset interest income received on invested funds.

Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details.

Interest income, net, of $18.7 million for the three months ended March 31, 2024 was primarily due to interest income received on invested funds, which more than offset interest expense in the period.

Interest income, net, of $1.9 million and $20.6 million for the three and six months ended June 30, 2024, respectively, was primarily due to interest income received on invested funds, which more than offset interest expense in the period.

Remeasurement Loss (Gain) on Bitcoin Investment (in thousands, except for percentages)

Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Remeasurement loss (gain) on bitcoin investment $ (212,165) $ 70,116 $ (282,281) (403) % $ (118,814) $ (163,288) $ 44,474 (27) %

Remeasurement loss on bitcoin investment of $93.4 million and gain on bitcoin investment of $233.4 million for the three months ended March 31, 2025 and 2024, respectively, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date.

Remeasurement gain on bitcoin investment of $212.2 million and $118.8 million for the three and six months ended June 30, 2025, respectively, compared to a loss on bitcoin investment of $70.1 million for the three months ended June 30, 2024 and gain on bitcoin investment of $163.3 million for the six months ended June 30, 2024, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date.

Refer to Note 11, Bitcoin within Notes to the Condensed Consolidated Financial Statements for further details regarding the remeasurement of our bitcoin investment.

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Three Months Ended

2025 2024 $ Change % Change

Other income, net $ (8,342) $ (4,420) $ (3,922) 89 %

Other income, net, of $8.3 million and $4.4 million for the three months ended March 31, 2025 and March 31, 2024, respectively, was primarily due to accretion on investments and foreign exchange rate impacts.

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Other expense (income), net $ 13,389 $ (10,584) $ 23,973 227 % $ 5,047 $ (15,004) $ 20,051 134 %

Other expense, net, of $13.4 million and $5.0 million for the three and six months ended June 30, 2025, respectively, was primarily due to losses from the currency revaluation of intercompany loans, partially offset by accretion on investments.

Other income, net, of $10.6 million and $15.0 million for the three and six months ended June 30, 2024, respectively, was primarily due to accretion on investments and foreign exchange rate impacts.

Segment Results

Square Results

The following table provides a summary of the revenue and gross profit for our Square segment for the three months ended March 31, 2025 and March 31, 2024 (in thousands, except for percentages):

The following table provides a summary of the revenue and gross profit for our Square segment for the three and six months ended June 30, 2025 and June 30, 2024 (in thousands, except for percentages):

Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Segment net revenue $ 2,166,275 $ 1,979,490 $ 186,785 9 % $ 4,018,435 $ 3,709,528 $ 308,907 8 %

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Segment gross profit $ 1,026,811 $ 922,584 $ 104,227 11 % $ 1,924,709 $ 1,742,857 $ 181,852 10 %

Revenue for the Square segment for the three months ended March 31, 2025 increased by $122.1 million, or 7%, compared to the three months ended March 31, 2024.

Revenue for the Square segment for the three and six months ended June 30, 2025 increased by $186.8 million, or 9%, and $308.9 million, or 8%, compared to the three and six months ended June 30, 2024, respectively.

The increase was primarily due to the Square items referenced within our overall revenue discussion.

Cost of Revenue

Cost of revenue for the Square segment for the three months ended March 31, 2025 increased by $44.5 million, or 5%, compared to the three months ended March 31, 2024.

Cost of revenue for the Square segment for the three and six months ended June 30, 2025 increased by $82.6 million, or 8%, and $127.1 million, or 6%, compared to the three and six months ended June 30, 2024, respectively.

The increase was primarily due to the Square items referenced within our overall cost of revenue discussion.

Cash App Results

The following table provides a summary of the revenue and gross profit for our Cash App segment for the three months ended March 31, 2025 and March 31, 2024 (in thousands, except for percentages):

The following table provides a summary of the revenue and gross profit for our Cash App segment for the three and six months ended June 30, 2025 and June 30, 2024 (in thousands, except for percentages):

Three Months Ended

2025 2024 $ Change % Change

June 30, Six Months Ended

2025 2024 $ Change % Change 2025 2024 $ Change % Change

Segment net revenue $ 3,844,928 $ 4,128,827 $ (283,899) (7) % $ 7,723,942 $ 8,301,730 $ (577,788) (7) %

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Segment gross profit $ 1,500,500 $ 1,298,944 $ 201,556 16 % $ 2,880,451 $ 2,557,470 $ 322,981 13 %

Revenue for the Cash App segment for the three months ended March 31, 2025 decreased by $293.9 million, or 7%, compared to the three months ended March 31, 2024.

Revenue for the Cash App segment for the three and six months ended June 30, 2025 decreased by $283.9 million, or 7%, and $577.8 million, or 7%, compared to the three and six months ended June 30, 2024, respectively.

The decrease was driven by lower bitcoin revenue, partially offset by the Cash App items referenced within our overall revenue discussion.

While bitcoin revenue contributed 59% and 65% of Cash App revenue for three months ended March 31, 2025 and March 31, 2024, respectively, gross profit generated from bitcoin was only 5% and 6% of Cash App gross profit for the three months ended March 31, 2025 and March 31, 2024, respectively.

Excluding $2.3 billion in bitcoin revenue for the three months ended March 31, 2025, Cash App revenue increased by $135.8 million, or 9%, compared to the three months ended March 31, 2024.

While bitcoin revenue contributed 56% and 58% of Cash App revenue for three and six months ended June 30, 2025, respectively, gross profit generated from bitcoin was only 5% of Cash App gross profit for both the three and six months ended June 30, 2025.

Excluding $2.1 billion and $4.4 billion in bitcoin revenue for the three and six months ended June 30, 2025, respectively, Cash App revenue increased by $183.8 million, or 12%, and $319.6 million, or 11%, compared to the three and six months ended June 30, 2024, respectively.

Cost of Revenue

Cost of revenue for the Cash App segment for the three months ended March 31, 2025 decreased by $415.3 million compared to the three months ended March 31, 2024.

The decrease for the three months ended March 31, 2025 was driven by lower bitcoin costs, partially offset by the other Cash App items referenced within our overall cost of revenue discussion.

Excluding $2.2 billion in bitcoin cost of revenue for the three months ended March 31, 2025, Cash App cost of revenue remained flat compared to the three months ended March 31, 2024.

Cost of revenue for the Cash App segment for the three and six months ended June 30, 2025 decreased by $485.5 million, or 17%, and $900.8 million, or 16%, compared to the three and six months ended June 30, 2024, respectively.

The decrease for the three months ended June 30, 2025 was driven by lower bitcoin costs, partially offset by the other Cash App items referenced within our overall cost of revenue discussion.

Excluding $2.1 billion and $4.3 billion in bitcoin cost of revenue for the three and six months ended June 30, 2025, respectively, Cash App cost of revenue remained flat compared to the three and six months ended June 30, 2024.

Key Operating Metrics and Non-GAAP Financial Measures

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Gross Payment Volume (GPV) (in millions)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Operating income

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income attributable to common stockholders $ 538,458 $ 195,268 $ 728,330 $ 667,273

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Remeasurement loss (gain) on bitcoin investment (212,165) 70,116 (118,814) (163,288)

Other income, net (8,342) (4,420)

Other expense (income), net 13,389 (10,584) 5,047 (15,004)

Provision for income taxes 121,048 59,029 159,376 94,521

Loss (gain) on disposal of property and equipment 1,164 (71)

Loss on disposal of property and equipment 495 1,471 1,659 1,400

Acquired deferred revenue and cost adjustment 10 18 23 37

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net income attributable to common stockholders $ 538,458 $ 195,268 $ 728,330 $ 667,273

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Amortization of debt discount and issuance costs 2,835 3,432 6,134 6,503

Loss on revaluation of equity investments

Gain on revaluation of equity investments

(1,582) (3,594) (1,456) (2,483)

Remeasurement loss (gain) on bitcoin investment (212,165) 70,116 (118,814) (163,288)

Loss (gain) on disposal of property and equipment 1,164 (71)

Loss on disposal of property and equipment 495 1,471 1,659 1,400

Acquired deferred revenue and cost adjustment 10 18 23 37

Tax effect of one-time income tax benefits from deferred tax assets (52,600) — (52,600) —

Tax effect of non-GAAP net income adjustments 44,538 (53,442) (24,833) (108,590)

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Provision for income taxes, as reported

$ 121,048 $ 59,029 $ 159,376 $ 94,521

Tax effect of one-time income tax benefits from deferred tax assets 52,600 — 52,600 —

Tax effect of non-GAAP net income adjustments (44,538) 53,442 24,833 108,590

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Liquidity Sources

As of March 31, 2025, we had approximately $9.2 billion in available liquidity, with $8.5 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility.

As of June 30, 2025, we had approximately $8.5 billion in available liquidity, with $7.7 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility.

Additionally, we had $785.1 million available to be withdrawn under our warehouse funding facilities.

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We intend to continue focusing on our long-term business initiatives and believe that our available funds are sufficient to meet our liquidity needs for the foreseeable future, including our share repurchase program.

As of March 31, 2025, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes.

As of June 30, 2025, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes.

None of our warehouse funding facilities contain financial covenants.

The following table summarizes our available liquidity (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 6,384,224 $ 8,075,247

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Total liquidity $ 8,489,739 $ 10,698,043

(i) As of March 31, 2025, we have invested $89.0 million of restricted cash into a money market fund.

(i) As of June 30, 2025, we have invested $94.8 million of restricted cash into a money market fund.

See Note 5, Fair Value Measurements.

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Our investments in marketable debt securities are classified as available-for-sale.

As of March 31, 2025, we held approximately 8,584 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $708.5 million based on observable market prices, which is included within “Other non-current assets” on the condensed consolidated balance sheets.

As of June 30, 2025, we held approximately 8,692 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $931.7 million based on observable market prices, which is included within “Other non-current assets” on the condensed consolidated balance sheets.

We believe cryptocurrency is an instrument of economic empowerment that aligns with our corporate purpose.

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2023-08, Accounting for and Disclosure of Crypto Assets , effective January 1, 2023, our bitcoin investment is remeasured at fair value at each reporting date with changes recognized in net income through "Remeasurement loss (gain) on bitcoin investment" within the condensed consolidated statements of operations.

We purchased approximately 99 bitcoins with a cost basis of $9.5 million during the three months ended March 31, 2025, for investment purposes.

We did not purchase any bitcoins for investment purposes during the three months ended March 31, 2024.

We did not sell any of our bitcoin investment during the three months ended March 31, 2025 and March 31, 2024.

We recognized a loss of $93.4 million and gain of $233.4 million from the remeasurement of our bitcoin investment during the three months ended March 31, 2025 and March 31, 2024, respectively.

We purchased approximately 108 and 207 bitcoins with a cost basis of $11.0 million and $20.6 million during the three and six months ended June 30, 2025, respectively, for investment purposes.

We purchased approximately 173 bitcoins with a cost basis of $11.4 million during the three and six months ended June 30, 2024 for investment purposes.

We did not sell any of our bitcoin investment during the three and six months ended June 30, 2025 and June 30, 2024.

We recognized gains of $212.2 million and $118.8 million from the remeasurement of our bitcoin investment during the three and six months ended June 30, 2025, respectively.

We recognized a loss of $70.1 million and a gain of $163.3 million from the remeasurement of our bitcoin investment during the three and six months ended June 30, 2024, respectively.

Our principal commitments consist of convertible notes, senior notes, revolving credit facility, warehouse funding facilities, operating leases, capital leases, and purchase commitments.

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Senior Notes and Convertible Notes

As of March 31, 2025, we held $5.2 billion in aggregate principal amount of debt, comprised of $575.0 million in aggregate amount of convertible senior notes that mature on May 1, 2026 ("2026 Convertible Notes"), and $575.0 million in aggregate amount of convertible senior notes that mature on November 1, 2027 ("2027 Convertible Notes," collectively referred to as the “Convertible Notes”), as well as an outstanding $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2026 ("2026 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), and $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes" and, together with the 2026 Senior Notes and 2031 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”).

As of June 30, 2025, we held $5.2 billion in aggregate principal amount of debt, comprised of $575.0 million in aggregate amount of convertible senior notes that mature on May 1, 2026 ("2026 Convertible Notes"), and $575.0 million in aggregate amount of convertible senior notes that mature on November 1, 2027 ("2027 Convertible Notes," collectively referred to as the “Convertible Notes”), as well as an outstanding $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2026 ("2026 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), and $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes" and, together with the 2026 Senior Notes and 2031 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”).

Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details.

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Revolving Credit Facility

We have entered into a revolving credit agreement with certain lenders, as subsequently amended, which provides a $775.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in June 2028.

We have entered into a revolving credit agreement with certain lenders, as subsequently amended, which provides a $775.0 million senior unsecured revolving credit facility maturing in June 2028.

Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details.

Warehouse Funding Facilities

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.4 billion on a revolving basis, of which $619.0 million was drawn as of March 31, 2025.

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.5 billion on a revolving basis, of which $703.9 million was drawn as of June 30, 2025.

The Warehouse Facilities have been arranged utilizing wholly-owned and consolidated entities (collectively, the "Warehouse Special Purpose Entities (SPEs)") formed for the sole purpose of financing the origination of consumer receivables to partly fund our BNPL platform.

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However, such funding may not be available on terms acceptable to us or at all.

When we were last rated during 2024, we received a non-investment grade rating by S&P Global Ratings (BB+), Fitch Ratings, Inc.

(BB+), and Moody's Corporation (Ba2).

In the second quarter of 2025, we received an investment grade rating by Fitch Ratings, Inc.

During 2024, we received non-investment grade ratings by S&P Global Ratings (BB+) and Moody's Corporation (Ba2).

We expect that these credit rating agencies will continue to monitor our performance, including our capital structure and results of operations.

Our liquidity, access to capital, and borrowing costs could be adversely impacted by declines in our credit rating.

Short-term restricted cash of $681.8 million as of March 31, 2025 primarily includes cash held by the Warehouse SPEs used in the Warehouse Facilities funding arrangements that will be used to pay the borrowings under the Warehouse Facilities or will be distributed to us.

Short-term restricted cash of $745.5 million as of June 30, 2025 primarily includes cash held by the Warehouse SPEs used in the Warehouse Facilities funding arrangements that will be used to pay the borrowings under the Warehouse Facilities or will be distributed to us.

It also includes pledged cash deposits in accounts at the financial institutions that process our sellers' payment transactions and collateral pursuant to various agreements with banks relating to our products.

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We have recorded these amounts as current assets on our condensed consolidated balance sheet given the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted.

Long-term restricted cash of $69.8 million as of March 31, 2025 is primarily related to cash held as collateral as required by the Federal Deposit Insurance Corporation ("FDIC") for Square Financial Services.

Long-term restricted cash of $75.0 million as of June 30, 2025 is primarily related to cash held as collateral as required by the Federal Deposit Insurance Corporation ("FDIC") for Square Financial Services.

We have recorded these amounts as non-current assets on our condensed consolidated balance sheet as the requirement by the FDIC specifies a time frame of 12 months or longer during which the cash must remain restricted.

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The following table summarizes our cash flow activities (in thousands):

Three Months Ended

Six Months Ended

Net cash provided by operating activities $ 507,658 $ 1,008,787

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Cash Flows from Operating Activities

For the three months ended March 31, 2025, cash provided by operating activities was $133.3 million, comprised of net income of $188.7 million, adjusted for non-cash expenses of $689.3 million, consisting primarily of share-based compensation;

For the six months ended June 30, 2025, cash provided by operating activities was $507.7 million, comprised of net income of $727.1 million, adjusted for non-cash expenses of $1.2 billion, consisting primarily of share-based compensation;

transaction, loan, and consumer receivable losses;

bitcoin remeasurement;

and depreciation and amortization, all of which contributed positively to operating activities.

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net outflows from loan products of $470.8 million;

bitcoin remeasurement of $118.8 million;

and net outflows related to changes in other assets and liabilities, including customers payable and settlements receivable, of $419.8 million due to the timing of period end.

For the three months ended March 31, 2024, cash provided by operating activities was $489.4 million, comprised of net income of $470.8 million, adjusted for non-cash expenses of $590.2 million, consisting primarily of share-based compensation;

For the six months ended June 30, 2024, cash provided by operating activities was $1.0 billion, comprised of net income of $660.7 million, adjusted for non-cash expenses of $1.2 billion, consisting primarily of share-based compensation;

transaction, loan, and consumer receivable losses;

depreciation and amortization;

non-cash lease expense;

and losses on revaluation of equity investments, all of which contributed positively to operating activities.

and non-cash lease expense, all of which contributed positively to operating activities.

These were partially offset by the amortization of discounts and other non-cash adjustments on consumer receivables of $537.8 million;

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net outflows from loan products of $326.1 million.

and a change in deferred income taxes of $8.0 million.

Changes in other assets and liabilities, including settlements receivable and customers payable of $158.9 million contributed positively and was primarily due to the timing of period end.

Cash Flows from Investing Activities

For the three months ended March 31, 2025, cash provided by investing activities was $914.7 million, primarily due to a net inflow related to consumer receivables of $703.6 million and net proceeds from investments of marketable securities of $250.5 million.

These were partially offset by the purchases of property and equipment of $31.9 million.

For the three months ended March 31, 2024, cash provided by investing activities was $1.0 billion, primarily due to a net inflow related to consumer receivables of $729.5 million and net proceeds from investments of marketable securities of $347.8 million.

Beginning in the second quarter of 2025, we began originating Cash App Borrow loans through Square Financial Services, which are classified as loans held for investment.

Cash flows associated with Cash App Borrow loans originated through Square Financial Services, including originations and principal repayments, are included within cash flows from investing activities.

For the six months ended June 30, 2025, cash provided by investing activities was $428.9 million, primarily due to a net inflow related to consumer receivables of $855.7 million and net proceeds from investments of marketable securities of $370.2 million.

These were partially offset by net outflows of $706.9 million primarily related to Cash App Borrow loans originated through Square Financial Services and the purchases of property and equipment of $63.2 million.

For the six months ended June 30, 2024, cash provided by investing activities was $867.4 million, primarily due to a net inflow related to consumer receivables of $860.7 million and net proceeds from investments of marketable securities of $96.1 million.

These were partially offset by the purchases of property and equipment and other investments of $70.4 million and $19.1 million, respectively.

Cash Flows from Financing Activities

For the three months ended March 31, 2025, cash used in financing activities was $1.2 billion, driven by a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025;

net repayments under Warehouse Facilities borrowings of $868.3 million;

and $445.3 million of share repurchases in the first quarter of 2025.

These were partially offset by increases in customer funds of $1.1 billion, and interest-bearing deposits of $34.5 million.

For the three months ended March 31, 2024, cash provided by financing activities was $32.4 million primarily as a result of a change in customer funds of $875.9 million, proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $19.9 million, and a net increase in interest-bearing deposits of $18.7 million.

For the six months ended June 30, 2025, cash used in financing activities was $2.1 billion, driven by $1.1 billion of share repurchases in the first and second quarters of 2025;

a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025;

and net repayments under Warehouse Facilities borrowings of $806.8 million.

These were partially offset by increases in customer funds of $754.9 million and interest-bearing deposits of $54.8 million.

For the six months ended June 30, 2024, cash provided by financing activities was $1.2 billion primarily due to approximately $2.0 billion of net proceeds related to the issuance of the 2032 Senior Notes in the second quarter of 2024, a change in customer funds of $380.3 million, and proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $86.2 million.

These were partially offset by net repayments under Warehouse Facilities borrowings of $648.4 million as well as repurchases of common stock of $641.6 million.

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Because these accounting estimates require significant judgment, our actual results may differ materially from our estimates.

There were no significant changes in our critical accounting estimates during the quarter ended March 31, 2025 compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There were no significant changes in our critical accounting estimates during the quarter ended June 30, 2025 compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

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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 2. Management’s Discussion and Analysis