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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-24 · 231 added, 215 removed, 332 unchanged (57% of the section changed)

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Our actual results may differ materially from those contained in or implied by any forward-looking statements.

We launched the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, an important capability that was previously inaccessible to many businesses.

We have expanded to provide sellers additional products and services and to give them access to a cohesive ecosystem of tools to help them manage and grow their businesses.

Similarly, with Cash App, we have built an ecosystem of financial products and services to help individuals manage their money.

In January 2022, we completed the acquisition of Afterpay, a buy now, pay later ("BNPL") platform that facilitates commerce between retail merchants and consumers by allowing retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis.

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

We delivered strong growth across our primary ecosystems in 2024, with gross profit of $8.9 billion, up 18% year over year.

Cash App generated gross profit of $5.2 billion in 2024, up 21% year over year.

Performance was driven by growth in inflows per active as we execute on our Bank Our Base strategy, which prioritizes engaging customers with more products across our ecosystem and increasing paycheck deposit actives.

Square generated gross profit of $3.6 billion in 2024, up 15% year over year, as we continued to increase product velocity and optimize our go-to-market strategies.

In 2024, operating income was $892.3 million and Adjusted Operating Income was $1.6 billion, compared to an operating loss of $278.8 million and Adjusted Operating Income of $351.4 million in 2023.

For the same period, net income attributable to common stockholders was $2.9 billion compared to $9.8 million, and Adjusted EBITDA was $3.0 billion, an increase of 69% year over year.

Net income for 2024 and 2023 included a gain of $420.9 million and $207.1 million, respectively, from the remeasurement of our bitcoin investment.

Additionally, as a result of our improved profitability in the United States, we released our valuation allowance associated with certain federal and state deferred tax assets, as well as recognized deferred tax assets as part of internal legal entity restructuring efforts, which resulted in one-time benefits to net income for 2024 of $1.9 billion.

These one-time tax benefits had a corresponding impact of $3.10 and $3.00 per share on our basic and diluted net income per share, respectively, for the year ended December 31, 2024.

We launched the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, a critical capability that had previously been inaccessible to many businesses.

We have since expanded to provide sellers additional products and services and to give them access to a cohesive ecosystem of tools to help them start, run, and grow their businesses.

Similarly, with Cash App, we have built an ecosystem of financial products and services to help consumers manage their money.

Cash App now provides an ecosystem of commerce solutions, financial services, and bitcoin capabilities focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, BNPL, borrow, or save their money.

In addition, our nascent ecosystems include TIDAL as well as Bitcoin, which includes businesses such as Proto and Bitkey.

In 2025, we generated gross profit of $10.4 billion, up 17% year over year.

Cash App generated gross profit of $6.3 billion in 2025, up 21% year over year, primarily driven by growth in Cash App Borrow.

Square generated gross profit of $3.9 billion in 2025, up 9% year over year, driven by financial solutions, most notably Square Loans.

In 2025, operating income was $1.7 billion and Adjusted Operating Income was $2.1 billion, compared to operating income of $892.3 million and Adjusted Operating Income of $1.6 billion in 2024.

Net income attributable to common stockholders was $1.3 billion compared to net income attributable to common stockholders of $2.9 billion for the same period in 2024, and Adjusted EBITDA was $3.5 billion, an increase of 14% year over year.

Net income for 2025 and 2024 included a loss of $55.9 million and gain of $420.9 million, respectively, from the remeasurement of our bitcoin investment.

In 2024, we released our valuation allowance associated with certain federal and state deferred tax assets, as well as recognized deferred tax assets as part of internal legal entity restructuring efforts, which resulted in benefits to net income for 2024 of $1.9 billion.

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.

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 have achieved in 2024, and we 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.

In 2024, we continued to make progress on cost efficiency goals and we expect to continue these efforts, including implementing greater expense discipline and reassessing certain contractual vendor arrangements.

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

During the second quarter of 2024, we issued $2.0 billion in aggregate principal amount of senior unsecured notes due 2032 ("2032 Senior Notes").

We ended 2024 with $10.7 billion in available liquidity, with $9.9 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 an increase of $3.0 billion from the end of 2023.

On October 26, 2023, our board of directors authorized the repurchase of up to $1 billion of the Company’s Class A common stock.

On July 25, 2024, our board of directors authorized an increase to this share repurchase program to repurchase up to an additional $3 billion of our Class A common stock, for a total overall authorization of $4 billion.

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.

We made progress on our cost efficiency goals in 2025, and we expect to continue these efforts.

For the year ended December 31, 2025 and 2024, we recorded $78.6 million and $26.8 million of severance and other expenses related to these efforts, respectively.

In February 2026, we announced a workforce reduction restructuring plan (the “Workforce Plan”) designed to better align our organizational structure with our operating model and strategic priorities.

As part of the Workforce Plan, we expect to reduce our current workforce by more than 40%.

We expect that the execution of the Workforce Plan will be substantially complete by the end of the second quarter of fiscal 2026.

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

We expect 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 plan to continue to operate at this smaller size and are continuing to look at ways to improve our efficiency through a combination of AI automation, prioritization of our scope, performance management, and centralization of teams and functions to reduce duplication.

During the third quarter of 2025, we issued $2.2 billion in aggregate principal amount of senior unsecured notes comprised of $1.2 billion in aggregate principal amount of senior notes due 2030 ("2030 Senior Notes") and $1.0 billion in aggregate principal amount due 2033 ("2033 Senior Notes").

We ended 2025 with $9.2 billion in available liquidity, with $8.4 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, which was amended on January 14, 2026 to, among other things, increase the unsecured revolving loan facility to $900 million.

This represents a decrease of $1.5 billion from the end of 2024, primarily due to a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025 and $2.3 billion of share repurchases in 2025, partially offset by $2.2 billion cash received related to the issuance of the 2030 Senior Notes and 2033 Senior Notes.

In November 2025, the board of directors of the Company authorized an increase to the Company's share repurchase program to repurchase up to an additional $5 billion of the Company's Class A common stock, for a total authorization of $9 billion.

The goal of the program is to return capital to shareholders.

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Components of Results of Operations

Transaction-based Revenue

We charge our sellers a transaction fee that is generally calculated based on a percentage of the total transaction amount processed.

Commerce Enablement Revenue

Commerce enablement revenue is primarily comprised of revenue generated from Square payments, software, and hardware, Cash App Card, Cash App Pay, the Company’s BNPL products, Cash App Business accounts, and TIDAL.

Commerce enablement revenue also includes various other software as a service (“SaaS”) products offered through Square.

Our other SaaS products include subscription fees on our vertical software solutions, operational tool products (including Square Team Management and Square Payroll), and other products.

We charge our sellers a transaction fee that is generally calculated as a percentage of the total transaction amount processed.

We also selectively offer custom pricing for certain larger sellers.

Transaction-based revenue also includes amounts we charge our Cash App customers for peer-to-peer transactions to business accounts and payments sent from a credit card.

Subscription and Services-based Revenue

Subscription and services-based revenue is primarily comprised of revenue we generate from Cash App, Square Loans (formerly known as Square Capital), our BNPL platform, TIDAL, and various other software as a service (“SaaS”) products that we offer through Square.

Cash App subscription and services-based revenue is primarily comprised of transaction fees from Cash App Instant Deposit, Cash App Card, bitcoin withdrawal fees, and other Cash App financial services offerings.

Our other SaaS products include subscription fees on our vertical software solutions (including Square for Restaurants, Square Appointments, and Square for Retail), Customer Engagement products (including Square Loyalty, Square Marketing, Square Gift Cards), staff management products (including Square Team Management and Square Payroll), website hosting and domain name registration services, and other products.

Instant Deposit is a functionality within the Cash App and our managed payment solutions that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts.

We also charge transaction fees to Cash App Business customers for peer-to-peer transactions or funding transactions with a credit card.

Cash App Card offers Cash App customers the ability to use their stored funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App.

We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM.

We also earn interchange fees when a Cash App Card is used to make a purchase.

These transaction and interchange fees are treated as revenue when charged.

Square Loans originates loans to sellers that are generally repaid through withholding a percentage of the collections of the seller's receivables processed by us or a specified monthly amount.

In April 2021, we began originating loans in the U.S.

through our wholly-owned subsidiary bank, Square Financial Services.

We also originate loans to the customers of certain sellers, which are generally repaid via ACH.

For some of the loans, it is our intention to sell the rights, title, and interest to third-party investors for an upfront fee.

We are retained by the third-party investors to service the loans and earn a servicing fee for facilitating the repayment of these loans through our payments solutions.

Certain loans, for which we have the intention and ability to hold through maturity, are not immediately sold to third-party investors, in which case, interest and fees earned are recognized as revenue using the effective interest method.

Cash App Borrow, the first credit product for Cash App customers, allows customers to access short-term loans for a small fee.

The loans are repaid at the end of the loan term and customers may elect to prepay all or a part of the outstanding balance.

If the outstanding balance is not paid when due, late fees in the form of interest may be charged.

The short-term loans are facilitated through a partnership with an industrial bank.

The loans are originated by the bank partner, from whom the Company purchases the loans obtaining all rights, title, and interest.

Net amounts paid to the bank are recorded as the cost of the loans purchased, and amounts collected in excess of the carrying value are recognized as revenue over the life of the loans.

Revenue from our BNPL platform includes fees generated from consumer receivables, late fees, and certain affiliate and advertising fees.

Through the use of our BNPL platform, consumers can pay for their purchases over time by splitting their purchase price generally into three or four installments, typically due in two-week increments, without paying fees (if payments are made on time).

Revenue from our BNPL products include merchant fees generated from consumer receivables, late fees, gift cards, and certain affiliate and advertising fees.

Through the use of our BNPL products, consumers can pay for their purchases over time by splitting their purchase price generally into three or four installments, typically due in two-week increments, without paying fees (if payments are made on time).

For the majority of our BNPL products, we do not charge consumers interest or fees, other than late fees, which may be charged in certain regions as an incentive to encourage consumers to pay their outstanding balances as and when they fall due.

We also offer the ability for consumers to pay for larger transaction sizes over a six- or twelve-month period using a monthly payment option, which includes no late fees and no compounding interest with a cap on total interest owed.

For some of the loans, it is our intention to sell the rights, title, and interest to a third-party investor for an upfront fee.

We also offer the ability for consumers to pay for larger transaction sizes over a three-, six-, twelve-, or twenty-four-month period using a monthly payment option, which includes no late fees and no compounding interest with a cap on total interest owed.

We may sell the rights, title, and interest to a third-party investor for an upfront consideration subsequent to origination of some of the loans.

We are retained by the third-party investor to service the loans and earn a servicing fee for facilitating the repayment of these loans through our payments solutions.

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For both subscription channels, we charge customers a monthly fee for those subscription services.

Hardware Revenue

Hardware revenue includes revenue from sales of magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals.

Revenue from Square hardware includes revenue from sales of magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals.

Third-party peripherals include cash drawers, receipt printers, scales, and barcode scanners, all of which can be integrated with Square Stand, Square Register, or Square Terminal to provide a comprehensive point-of-sale solution.

Bitcoin Revenue

Our Cash App customers have the ability to purchase bitcoin, a cryptocurrency.

Financial Solutions Revenue

Financial solutions revenue is primarily comprised of revenue the Company generates from Cash App Borrow, Cash App Instant Deposit, ATM withdrawal fees, interest earned on customer funds, and Square Loans.

Cash App Borrow allows customers to access short-term loans for a fee.

The loans are repaid at the end of the loan term and customers may elect to prepay all or a part of the outstanding balance.

If the outstanding balance is not paid when due, late fees in the form of interest may be charged.

Historically, all Cash App Borrow loans were facilitated through a partnership with a third-party industrial bank.

Beginning in the second quarter of 2025, the Company also began originating Cash App Borrow loans through our wholly-owned subsidiary bank, Square Financial Services.

For loans originated by the bank partner, the Company purchases the loans obtaining all rights, title, and interest.

Net amounts paid to the bank partner are recorded as the cost of the loans purchased, and amounts collected in excess of the carrying value are recognized as revenue over the life of the loans.

For loans originated through our wholly-owned subsidiary bank, Square Financial Services, the Company records the loans at the amount originated and amounts collected in excess of the originated amount are recognized as revenue over the life of the loans.

Instant Deposit is a functionality within Cash App and our managed payment solutions that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts.

We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM.

Square Loans to sellers that are originated by Square Financial Services are generally repaid through withholding a percentage of the seller's receivables collected and processed by us or a specified monthly amount.

We also originate loans to the customers of certain sellers, which are generally repaid via ACH.

For some of the loans, it is our intention to sell the rights, title, and interest to third-party investors for an upfront consideration.

We are retained by the third-party investors to service the loans and earn a servicing fee for facilitating the repayment of these loans through our payments solutions.

Certain loans, for which we have the intention and ability to hold through maturity, are not immediately sold to third-party investors.

Interest and fees earned on these loans are recognized as revenue using the effective interest method.

The Company records the amounts advanced to the customers or the net amounts paid to purchase the loans as cost of the loans.

Bitcoin Ecosystem Revenue

Bitcoin ecosystem revenue is primarily comprised of revenue the Company generates from customer purchases of bitcoin within Cash App, Proto, and bitcoin withdrawal fees.

We recognize revenue when customers purchase bitcoin and it is transferred to the customer's account.

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Bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin.

Bitcoin withdrawal is a functionality within Cash App that enables customers to withdraw bitcoin stored on Cash App to a third-party wallet.

We charge customers a fee for the option of faster withdrawal speeds.

Cost of Revenue

Transaction-based Costs

Transaction-based costs consist primarily of interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions.

Subscription and Services-based Costs

Subscription and services-based costs consist primarily of processing and partnership fees related to Cash App including Instant Deposit and Cash App Card, and our BNPL platform, as well as costs associated with TIDAL.

Hardware Costs

Hardware costs consist primarily of product costs associated with magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals.

Product costs include manufacturing-related overhead and personnel-related costs, certain royalties, packaging, and fulfillment costs.

Hardware is sold primarily as a means to grow our transaction-based revenue and, as a result, generating positive gross margins from hardware sales is not the primary goal of the hardware business.

Bitcoin Costs

Bitcoin costs consist of the amounts we pay to purchase bitcoin that is sold to customers.

These costs fluctuate in line with bitcoin revenue.

Commerce Enablement Costs

Commerce enablement costs consist primarily of interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions, as well as costs associated with the Company’s BNPL products, TIDAL, and Square hardware and software.

Financial Solutions Costs

Financial solutions costs consist primarily of partnership fees related to Cash App including ATM withdrawals and Instant Deposit.

Bitcoin Ecosystem Costs

Bitcoin ecosystem costs consist primarily of the amounts we pay to purchase bitcoin that is sold to customers, which fluctuate in line with bitcoin revenue, as well as costs associated with Proto.

Amortization of Acquired Technology Assets

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transaction, loan, and consumer receivable losses;

bitcoin impairment losses;

and amortization of customer and other acquired intangible assets.

For product development and general and administrative expenses, the largest single component is personnel-related expenses, including salaries, commissions and bonuses, employee benefit costs, and share-based compensation.

In the case of sales and marketing expenses, a significant portion is related to the Cash App peer-to-peer transactions and Cash App Card issuance costs, in addition to paid advertising and personnel-related expenses.

In the case of sales and marketing expenses, a significant portion is related to Cash App peer-to-peer transactions and Cash App Card issuance costs, in addition to paid advertising and personnel-related expenses.

Operating expenses also include allocated overhead costs for facilities, human resources, and IT.

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fees and supply costs related to maintenance at third-party data center facilities;

hardware related development and tooling costs;

Square hardware related development and tooling costs;

software and cloud computing infrastructure fees;

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Transaction, Loan, and Consumer Receivable Losses

Transaction losses include chargebacks for unauthorized credit card use and the inability to collect on disputes between buyers and sellers over the delivery of goods or services, as well as losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash for Business, and Cash App Card.

We base our reserve estimates on prior chargeback history and current period data points indicative of transaction loss.

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We regularly update our reserve estimates as new facts become known and events occur that may affect the settlement or recovery of losses.

Loan losses relate to Square Loans and Cash App Borrow and are recorded whenever the amortized cost of a loan exceeds its fair value.

Loan losses primarily relate to Square Loans, Cash App Borrow, and BNPL products.

For loans classified as held for sale, losses are recorded whenever the amortized cost of a loan exceeds its fair value.

Such charges are reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value.

Losses on consumer receivables relate to management's estimate of expected credit losses in the outstanding portfolio of consumer receivables.

For loans classified as held for investment and consumer receivables, losses relate to management's estimate of expected credit losses in the outstanding portfolios.

We reflect additions to the reserve in current operating results, while realized losses are offset against the reserve.

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2025 2024 $ Change % Change

Transaction-based revenue $ 6,613,680 $ 6,315,301 $ 298,379 5 %

Subscription and services-based revenue 7,164,799 5,944,842 1,219,957 21 %

Hardware revenue 143,369 157,178 (13,809) NM (i)

Bitcoin revenue 10,199,205 9,498,302 700,903 7 %

Commerce enablement revenue $ 11,514,162 $ 10,512,453 $ 1,001,709 10 %

Financial solutions revenue 4,176,734 3,250,817 925,917 28 %

Bitcoin ecosystem revenue 8,502,787 10,357,783 (1,854,996) (18) %

Total net revenue $ 24,193,683 $ 24,121,053 $ 72,630 — %

(i) Not meaningful ("NM")

Total net revenue for the year ended December 31, 2024, increased by $2.2 billion, or 10%, compared to the year ended December 31, 2023.

Bitcoin revenue increased by $700.9 million compared to the year ended December 31, 2023.

Excluding bitcoin revenue, total net revenue increased by $1.5 billion, or 12%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.

Transaction-based revenue for the year ended December 31, 2024 increased by $298.4 million, or 5%, compared to the year ended December 31, 2023.

This increase in revenue was largely in line with the increase in Gross Payment Volume ("GPV") of 6% for the year ended December 31, 2024, compared to the year ended December 31, 2023.

GPV increased due to overall Square GPV growth.

Square GPV growth was driven by improvements in both card-present and card-not-present volumes as a result of growth from in-person and online channels, as well as growth in our international markets.

Total net revenue for the year ended December 31, 2025, increased by $72.6 million, compared to the year ended December 31, 2024.

Bitcoin ecosystem revenue decreased by $1.9 billion compared to the year ended December 31, 2024.

Excluding bitcoin ecosystem revenue, total net revenue increased by $1.9 billion, or 14%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.

Commerce enablement revenue for the year ended December 31, 2025 increased by $1.0 billion, or 10%, compared to the year ended December 31, 2024.

This increase in revenue was driven by growth in Square processing, which increased by $541.2 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, as well as growth in Cash App Card usage and revenue from Afterpay Post-Purchase of $278.0 million and $88.0 million, respectively.

The growth in Square processing was in line with Square GPV growth of 10%, driven primarily by strength in Food and Beverage sellers.

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

Subscription and services-based revenue for the year ended December 31, 2024 increased by $1.2 billion, or 21%, compared to the year ended December 31, 2023.

The 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 the BNPL platform.

Revenue generated from the BNPL platform was $1.3 billion for the year ended December 31, 2024 compared to $1.0 billion for the year ended December 31, 2023.

Growth in Square's financial services-related products, primarily Square Lending, also contributed to the increase in revenue in 2024.

Bitcoin revenue for the year ended December 31, 2024 increased by $700.9 million, or 7%, compared to the year ended December 31, 2023.

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

This increase for the year ended December 31, 2024 was driven by an increase in the average market price of bitcoin, partially offset by a decrease in the quantity of bitcoin sold to customers, compared to the year ended December 31, 2023.

While bitcoin contributed 42% and 43% of the total revenue in 2024 and 2023, respectively, gross profit generated from bitcoin was only 3% of the total gross profit in both 2024 and 2023.

Financial solutions revenue for the year ended December 31, 2025 increased by $925.9 million, or 28%, compared to the year ended December 31, 2024.

The increase was primarily due to growth in Cash App's financial service-related products, specifically Cash App Borrow volumes.

For the year ended December 31, 2025 compared to the year ended December 31, 2024, Cash App Borrow revenue increased by $686.8 million as we continue to expand access to the product.

Growth in Square's financial services-related products of $169.7 million, primarily related to Square Lending, also contributed to the increase in revenue in 2025.

Bitcoin ecosystem revenue for the year ended December 31, 2025 decreased by $1.9 billion, or 18%, compared to the year ended December 31, 2024.

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

For the year ended December 31, 2025, the decrease in the total sale amount of bitcoin sold to customers was driven by a decrease in trading volume, partially offset by an increase in the average market price of bitcoin, compared to the year ended December 31, 2024.

While the bitcoin ecosystem contributed 35% and 43% of the total revenue in 2025 and 2024, respectively, gross profit generated from the bitcoin ecosystem was only 4% and 5% of the total gross profit in 2025 and 2024, respectively.

Cost of Revenue (in thousands, except for percentages)

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2025 2024 $ Change % Change

Transaction-based costs $ 3,881,013 $ 3,702,016 $ 178,997 5 %

Subscription and services-based costs 1,135,813 1,075,129 60,684 6 %

Hardware costs 236,441 267,650 (31,209) NM

Bitcoin costs 9,910,386 9,293,113 617,273 7 %

Amortization of acquired technology assets 68,364 72,829 (4,465) NM

Commerce enablement costs $ 5,353,254 $ 4,913,124 $ 440,130 9 %

Financial solutions costs 339,878 311,209 28,669 9 %

Bitcoin ecosystem costs 8,083,772 9,939,320 (1,855,548) (19) %

Amortization of acquired technology assets 56,850 68,364 (11,514) NM (i)

Total cost of revenue $ 13,833,754 $ 15,232,017 $ (1,398,263) (9) %

Total cost of revenue for the year ended December 31, 2024 increased by $821.3 million, or 6%, compared to the year ended December 31, 2023.

Bitcoin costs of revenue, which increased by $617.3 million, was the primary driver of the increase in total cost of revenue, with the remaining increase related to an increase in GPV.

Excluding bitcoin costs of revenue, total cost of revenue increased by approximately $204.0 million, or 4%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.

Transaction-based costs for the year ended December 31, 2024 increased by $179.0 million, or 5%, compared to the year ended December 31, 2023.

Transaction-based costs were largely in line with the growth of GPV of 6%, partially offset by more favorable interchange economics for the year ended December 31, 2024.

Subscription and services-based costs for the year ended December 31, 2024 increased by $60.7 million, or 6%, compared to the year ended December 31, 2023.

The increase was driven by growth in Cash App's financial service-related products, including Cash App Card and related processing costs and fees as well as the cost of revenues associated with the BNPL platform.

Cost of revenues associated with the BNPL platform were $311.6 million and $286.6 million for the years ended December 31, 2024 and December 31, 2023, respectively.

Bitcoin costs for the year ended December 31, 2024 increased by $617.3 million, or 7%, compared to the year ended December 31, 2023.

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

(i) Not meaningful ("NM")

Total cost of revenue for the year ended December 31, 2025 decreased by $1.4 billion, or 9%, compared to the year ended December 31, 2024.

Bitcoin ecosystem costs of revenue, which decreased by $1.9 billion, was the primary driver of the decrease in total cost of revenue.

Excluding bitcoin ecosystem costs of revenue, total cost of revenue increased by approximately $457.3 million, or 9%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, largely related to an increase in Square GPV.

Commerce enablement costs for the year ended December 31, 2025 increased by $440.1 million, or 9%, compared to the year ended December 31, 2024.

Commerce enablement costs for the year ended December 31, 2025 were primarily driven by growth in Square processing costs, which were in line with the growth of Square GPV of 10%, as well as an increase in Square hardware costs.

Financial solutions costs for the year ended December 31, 2025 increased by $28.7 million, or 9%, compared to the year ended December 31, 2024.

The increase was primarily driven by growth in Cash App's financial service-related products on Cash App Card, including Instant Deposit, ATM, and related processing costs.

While financial solutions revenue increased by 28% for the year ended December 31, 2025, compared to the year ended December 31, 2024, the costs of revenues increased by 9% for the same comparative period.

This gross margin expansion is primarily due to more favorable economics in Cash App's financial services-related products.

Bitcoin ecosystem costs for the year ended December 31, 2025 decreased by $1.9 billion, or 19%, compared to the year ended December 31, 2024.

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

The decrease in bitcoin ecosystem costs in the year ended December 31, 2025 was partially offset by costs related to Proto.

Operating Expenses (in thousands, except for percentages)

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Total operating expenses $ 8,651,523 $ 7,996,709 $ 654,814 8 %

Product development expenses for the year ended December 31, 2024, increased by $193.6 million, or 7%, compared to the year ended December 31, 2023, primarily due to an increase of $154.1 million in software and cloud computing infrastructure fees for the year ended December 31, 2024, as a result of increased capacity needs and expansion of our cloud-based services.

Impairment charges of certain assets related to TIDAL of $60.3 million were also recognized in the fourth quarter of 2024.

The increase in product development expenses was partially offset by a decrease of $87.9 million in personnel costs primarily due to a decrease in headcount, which is a result of executing on our cost efficiency goals and employee headcount cap.

Sales and marketing expenses for the year ended December 31, 2024, decreased by $34.7 million, or 2%, compared to the year ended December 31, 2023, primarily due to a decrease of $49.5 million in marketing and other advertising costs from decreased online campaigns as we focused on expense discipline as well as a release of estimated chargeback losses of $27.3 million in the first quarter of 2024.

The decrease was partially offset by charges related to changes to certain contractual arrangements as well as inventory write-offs during the third quarter of 2024.

Product development expenses for the year ended December 31, 2025, decreased by $6.5 million compared to the year ended December 31, 2024.

The decrease in expenses was driven by impairment charges of certain assets related to our TIDAL reporting unit of $60.3 million recognized in the fourth quarter of 2024 that did not recur during the year ended December 31, 2025, as well as a decrease of $21.7 million in personnel expenses due to a decrease in headcount, which is a result of executing on our cost efficiency goals and employee headcount cap.

These decreases in expenses were partially offset by an increase in allocated facilities, human resources, and IT expenses of $43.5 million as well as an increase of $32.1 million, primarily related to amortization of internally developed software and Proto hardware development.

Sales and marketing expenses for the year ended December 31, 2025, increased by $288.8 million, or 15%, compared to the year ended December 31, 2024, primarily driven by higher marketing and advertising costs of $249.7 million as we prioritize marketing investments to support the growth of Cash App and Square.

Further, for the year ended December 31, 2025, personnel costs increased by $27.7 million, which were impacted by restructuring costs, including severance and other related expenses.

General and administrative expenses for the year ended December 31, 2025, decreased by $151.5 million, or 7%, compared to the year ended December 31, 2024, primarily due to the following:

• a decrease in personnel costs of $169.4 million due to a decrease in headcount as well as a reduction of facilities and other expenses of $59.5 million for the year ended December 31, 2024;

• a decrease in certain impairment charges related to TIDAL of $58.8 million compared to the year ended December 31, 2023.

Refer to Note 9, Goodwill within Notes to the Consolidated Financial Statements for more details;

partially offset by

• an increase in accrued expenses for estimated and settled amounts in connection with certain litigation and regulatory matters of $231.9 million.

Refer to Note 19, Commitments and Contingencies within Notes to the Consolidated Financial Statements for more details;

• a charge of $32.2 million related to adjustments of certain TIDAL acquisition deferred purchase consideration during the first quarter of 2024, as well as a derecognition of $15.1 million during the second quarter of 2024 of certain indemnification assets related to the TIDAL acquisition which were deemed no longer recoverable.

Transaction, loan, and consumer receivable losses for the year ended December 31, 2024, increased by $133.6 million, or 20%, compared to the year ended December 31, 2023, primarily due to the following:

• an increase in loan losses of $221.3 million compared to the year ended December 31, 2023, primarily due to increased loan volumes;

• a decrease in expenses related to litigation and regulatory matters for the year ended December 31, 2025.

These expenses during the year ended December 31, 2024 were primarily driven by estimated and settled amounts in connection with certain litigation and regulatory matters that did not recur during the year ended December 31, 2025;

• impairment charges recognized during the year ended December 31, 2024 related to our TIDAL reporting unit that did not recur during the year ended December 31, 2025;

partially offset by

• a decrease in transaction losses of $87.7 million for the year ended December 31, 2024.

The decrease in transaction losses is attributable to both an operational outage in the third quarter of 2023, which resulted in higher transaction losses incurred, as well as a release of previously established risk loss provisions in the second quarter of 2024 related to prior periods.

Amortization of customer and other acquired intangible assets decreased $19.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily as a result of the revision of certain intangibles' useful lives in the third quarter of 2023.

Interest Expense (Income), Net (in thousands, except for percentages)

• an increase in personnel costs of $71.4 million, primarily driven by increased employee travel as well as restructuring costs, including severance and other related expenses, recognized during the year ended December 31, 2025.

Transaction, loan, and consumer receivable losses for the year ended December 31, 2025, increased by $543.0 million, or 68%, compared to the year ended December 31, 2024, as detailed below:

Year Ended December 31,

2025 2024 $ Change % Change

Interest expense (income), net

Loan losses $ 820,810 $ 322,962 $ 497,848 154 %

Consumer receivable losses (i)

314,422 273,249 41,173 15 %

Interest expense, net, of $9.3 million for the year ended December 31, 2024 was primarily due to an increase in interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, which more than offset an increase in interest income received as a result of higher investment balances.

Transaction losses 202,014 198,010 4,004 NM

Total transaction, loan, and consumer receivable losses $ 1,337,246 $ 794,221 $ 543,025 68 %

(i) Amounts do not include reserves for certain receivables, such as late fees.

Consumer receivables losses also includes provision for charge-back losses that are realized and written-off within the same period, rather than through the allowance for consumer receivable losses.

• Loan losses increased by $497.8 million, or 154%, compared to the year ended December 31, 2024.

The increase in loan losses was driven by significant growth in loan volumes, particularly from Cash App Borrow, which increased 143% compared to the year ended December 31, 2024, as well as Square Loans, while loan loss rates remained stable.

Additionally, beginning in the second quarter of 2025, Cash App Borrow, along with certain other loan products, were retained on our balance sheet and classified as held for investment, resulting in upfront recognition of expected credit losses upon origination.

• Consumer receivable losses increased by $41.2 million, or 15%, compared to the year ended December 31, 2024, aligning with growth of our BNPL products, while loss rates remained stable.

Amortization of customer and other acquired intangible assets decreased $19.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the impairment of certain assets in the fourth quarter of 2024, which resulted in no corresponding amortization in 2025.

Refer to Note 10, Acquired Intangible Assets within Notes to the Consolidated Financial Statements for further details.

Interest Expense (Income), Net (in thousands, except for percentages)

Year Ended December 31,

2025 2024 $ Change % Change

Interest expense, net $ 129,363 $ 9,302 $ 120,061 1,291 %

Interest expense, net, of $129.4 million for the year ended December 31, 2025 was primarily due to interest expense related our 2030 and 2033 Senior Notes issued in the third quarter of 2025, which more than offset interest income received on invested funds.

Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.

Interest income, net, of $47.2 million for the year ended December 31, 2023 was primarily due to an increase in interest income received as a result of both higher interest rates and investment balances, which more than offset interest expense in the period.

Interest expense, net, of $9.3 million for the year ended December 31, 2024 was primarily due to interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, offset by interest income received on invested funds.

Remeasurement Loss (Gain) on bitcoin investment (in thousands, except for percentages)

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2025 2024 $ Change % Change

Remeasurement gain on bitcoin investment

$ (420,918) $ (207,084) $ (213,834) 103 %

Remeasurement gain on bitcoin investment of $420.9 million and $207.1 million for the year ended December 31, 2024 and 2023, respectively, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date.

Remeasurement loss (gain) on bitcoin investment $ 55,900 $ (420,918) $ 476,818 (113) %

Remeasurement loss on bitcoin investment of $55.9 million for the year ended December 31, 2025 and gain of $420.9 million for the year ended December 31, 2024, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date.

Refer to Note 13, Bitcoin within Notes to the Consolidated Financial Statements for further details regarding the remeasurement of our bitcoin investment.

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2025 2024 $ Change % Change

Other expense (income), net

$ (53,211) $ 4,609 $ (57,820) NM

Other income, net

$ (166,768) $ (53,211) $ (113,557) 213 %

Other income, net, of $166.8 million for the year ended December 31, 2025 was primarily due to the revaluation of certain equity investments, partially offset by losses from the currency revaluation of intercompany loans.

In the third quarter of 2025, one of the Company's investments closed on an additional financing round, which the Company assessed as an observable price change.

The Company recorded a $171.6 million upward adjustment to the carrying value of this investment.

Other income, net, of $53.2 million for the year ended December 31, 2024 was comprised of unrealized gains of $37.7 million arising from the revaluation of certain equity investments as well as accretion of investments in marketable debt securities.

Other expense, net, of $4.6 million for the year ended December 31, 2023 was due to unrealized losses on certain marketable and non-marketable investments, partially offset by accretion of investments in marketable debt securities.

Provision for (Benefit from) Income Taxes (in thousands, except for percentages)

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2025 2024 $ Change % Change

Benefit from income taxes

$ (1,509,343) $ (8,019) $ (1,501,324) NM

Benefit from income taxes of $1.5 billion for the year ended December 31, 2024, compared to a benefit from income taxes of $8.0 million for the year ended December 31, 2023, was primarily due to one-time benefits of $1.9 billion related to both the release of the valuation allowance associated with certain federal and state deferred tax assets as well as the recognition of deferred tax assets as part of internal legal entity restructuring efforts in the fourth quarter of 2024.

These benefits were partially offset by $487.7 million related to our current and deferred tax provisions associated with 2024 activity.

Provision for (benefit from) income taxes $ 385,701 $ (1,509,343) $ 1,895,044 (126) %

Provision for income taxes of $385.7 million for the year ended December 31, 2025, compared to a benefit from income taxes of $1.5 billion for the year ended December 31, 2024, was primarily due to a benefit of $1.9 billion related to both the release of the valuation allowance associated with certain federal and state deferred tax assets as well as the recognition of deferred tax assets as part of internal legal entity restructuring efforts in the fourth quarter of 2024.

These benefits were partially offset by $487.7 million related to current and deferred tax provisions associated with 2024 activity.

Refer to Note 15, Income Taxes within Notes to the Consolidated Financial Statements for further details.

Segment Results

Square Results

The following tables provide a summary of the revenue and gross profit for our Square segment for the year ended December 31, 2025 and 2024 (in thousands, except for percentages):

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

Cash App Results

The following tables provide a summary of the revenue and gross profit for our Cash App segment for the year ended December 31, 2025 and 2024 (in thousands, except for percentages):

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Segment gross profit $ 6,335,543 $ 5,239,011 $ 1,096,532 21 %

Revenue for the Cash App segment for the year ended December 31, 2024 increased by $1.6 billion compared to the year ended December 31, 2023.

The increase was due to the Cash App items referenced within the Company's overall revenue discussion.

While bitcoin revenue contributed 63% and 65% of Cash App revenue in 2024 and 2023, respectively, gross profit generated from bitcoin was only 6% and 5% of Cash App gross profit in both 2024 and 2023.

Excluding bitcoin revenue, Cash App net revenue increased $865.3 million, or 17%, compared to the year ended December 31, 2023.

Revenue for the Cash App segment for the year ended December 31, 2025 decreased by $822.8 million compared to the year ended December 31, 2024.

The decrease was due to the Cash App items referenced within the Company's overall revenue discussion.

While bitcoin ecosystem revenue contributed 54% and 64% of Cash App revenue in 2025 and 2024, respectively, gross profit generated from bitcoin ecosystem was only 6% and 8% of Cash App gross profit in 2025 and 2024, respectively.

Excluding bitcoin ecosystem revenue, Cash App net revenue increased $1.2 billion, or 20%, compared to the year ended December 31, 2024.

Cost of Revenue

Cost of revenue for the Cash App segment for the year ended December 31, 2024 increased by $650.6 million compared to the year ended December 31, 2023.

The increase was due to the items referenced within the Company's overall revenue and cost of revenue discussion.

Excluding bitcoin cost of revenue, Cash App cost of revenue increased $33.4 million, or 3%.

Cost of revenue for the Cash App segment for the year ended December 31, 2025 decreased by $1.9 billion compared to the year ended December 31, 2024.

The decrease was due to the items referenced within the Company's overall revenue and cost of revenue discussion.

Excluding bitcoin ecosystem cost of revenue, Cash App cost of revenue increased $48.4 million, or 5%.

Key Operating Metrics and Non-GAAP Financial Measures

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Gross Payment Volume (GPV) (in millions) $ 259,631 $ 240,812 $ 227,699

Adjusted Operating Income (Loss) (in thousands)

Adjusted Operating Income (in thousands)

$ 2,083,813 $ 1,608,790 $ 351,351

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Diluted $ 2.37 $ 1.95 $ 0.42

Gross Payment Volume ("GPV")

GPV includes Square GPV and Cash App Business GPV.

Change in Non-GAAP Financial Measures

Beginning in fiscal 2025, we revised our definition of Adjusted Net Income Per Share ("Adjusted EPS") to include share-based compensation.

We believe this change provides a more comprehensive view of our operating performance and also aligns with our non-GAAP measure of Adjusted Operating Income.

Prior period amounts have been recast to reflect the updated presentation.

Gross Payment Volume

GPV includes Square GPV and Cash App GPV.

Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds.

Cash App Business GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card.

GPV does not include transactions from our BNPL platform because GPV is related only to transaction-based revenue and not to subscription and services-based revenue.

Adjusted EBITDA, Adjusted Net Income Per Share ("Adjusted EPS") and Adjusted Operating Income

Cash App GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card.

GPV does not include transactions related to our BNPL products.

Adjusted EBITDA, Adjusted EPS, and Adjusted Operating Income

Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per share, adjusted to eliminate the effect of items as described below.

Adjusted Operating Income is a non-GAAP financial measure that represents our operating income (loss), adjusted to eliminate the effect of items as described below.

We have included these non-GAAP financial measures in this Annual Report on Form 10-K because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources.

We have included these non-GAAP financial measures in this Form 10-K because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources.

Accordingly, we believe these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain variable charges that do not vary with our operations.

• We believe it is useful to exclude certain non-cash charges, such as amortization of intangible assets, and share-based compensation expenses, from our non-GAAP financial measures because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

• We believe it is useful to exclude certain non-cash charges, such as amortization of intangible assets, from our non-GAAP financial measures because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

• We believe that excluding the expense related to amortization of debt discount and issuance costs from our non-GAAP measures is useful to investors because such incremental non-cash interest expense does not represent a current or future cash outflow for the Company and is therefore not indicative of our continuing operations or meaningful when comparing current results to past results.

Additionally, for purposes of calculating diluted Adjusted EPS, we add back cash interest expense on convertible notes, as if converted at the beginning of the period, if the impact is dilutive.

Additionally, for purposes of calculating diluted Adjusted EPS, we add back cash interest expense on convertible notes, as if converted at the beginning of the period, if the impact of the note conversion is dilutive.

• We exclude the following from non-GAAP financial measures because we do not believe that these items are reflective of our ongoing business operations:

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gain or loss on revaluation of equity investments;

remeasurement gain or loss of our bitcoin investment, bitcoin impairment losses on our bitcoin investment (prior to the adoption of ASU 2023-08), and one-time income tax impacts from deferred taxes, as applicable.

gain or loss from the remeasurement of our bitcoin investment;

and discrete benefits from the release of valuation allowances on our deferred tax assets, as applicable.

• To aid in comparability of our results across periods, we also exclude certain acquisition-related and integration costs associated with business combinations, various restructuring and other costs, and goodwill and intangible asset impairment charges, each of which are not normal operating expenses.

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We also add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting.

In addition to the items above, Adjusted EBITDA as a non-GAAP financial measure also excludes depreciation and amortization, other cash interest income and expense, and other income and expense.

In addition to the items above, Adjusted EBITDA also excludes depreciation and amortization, other cash interest income and expense, and other income and expense.

Non-GAAP financial measures have limitations, should be considered as supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with GAAP.

These limitations include the following:

• share-based compensation expense has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy;

• the intangible assets being amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments;

• non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs.

In addition to the limitations above, Adjusted EBITDA as a non-GAAP financial measure does not reflect the effect of depreciation and amortization expense and related cash capital requirements, income taxes that may represent a reduction in cash available to us, and the effect of foreign currency exchange gains or losses, which is included in other income and expense.

In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, bitcoin investment impairment losses (prior to the adoption of ASU 2023-08), acquisition-related accelerated share-based compensation expenses, acquisition-related and integration costs, contingencies, restructuring and other costs, and goodwill and intangible asset impairment charges.

Adjusted Operating Income (Loss) does however include the effect of share-based compensation expense, which is a significant recurring expense in our business and an important part of our compensation strategy, as well as depreciation expense.

In addition to the limitations above, Adjusted EBITDA does not reflect the effect of share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy, depreciation and amortization expense and related cash capital requirements, income taxes that may represent a reduction in cash available to us, and the effect of foreign currency exchange gains or losses, which is included in other income and expense.

In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, acquisition-related accelerated share-based compensation expenses, and acquisition-related, integration, and other costs, and goodwill and intangible asset impairment charges.

Adjusted Operating Income (Loss) and Adjusted EPS include the effect of share-based compensation expense, as well as depreciation expense.

Other companies, including companies in our industry, may calculate the non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

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Goodwill and intangible asset impairment — 133,854 132,313

Bitcoin impairment losses — — 46,571

Amortization of customer and other acquired intangible assets 135,729 154,709 174,044

Acquisition-related share based acceleration costs — — 66,337

Adjusted Operating Income (Loss) $ 1,608,790 $ 351,351 $ (145,408)

Adjusted Operating Income $ 2,083,813 $ 1,608,790 $ 351,351

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (in thousands):

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2025 2024 2023

Net income (loss) attributable to common stockholders $ 2,897,047 $ 9,772 $ (540,747)

Net income attributable to common stockholders $ 1,305,636 $ 2,897,047 $ 9,772

Net loss attributable to noncontrolling interests (1,426) (30,550) (30,896)

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Interest expense (income), net 129,363 9,302 (47,221)

Remeasurement gain on bitcoin investment (420,918) (207,084) —

Remeasurement loss (gain) on bitcoin investment 55,900 (420,918) (207,084)

Other expense (income), net (166,768) (53,211) 4,609

Bitcoin impairment losses — — 46,571

Benefit from income taxes (1,509,343) (8,019) (12,312)

Provision for (benefit from) income taxes

385,701 (1,509,343) (8,019)

Loss on disposal of property and equipment 2,546 2,634 3,186

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2025 2024 2023

Net income (loss) attributable to common stockholders $ 2,897,047 $ 9,772 $ (540,747)

Net income attributable to common stockholders $ 1,305,636 $ 2,897,047 $ 9,772

Net loss attributable to noncontrolling interests (1,426) (30,550) (30,896)

Net income (loss) 1,304,210 2,866,497 (21,124)

Share-based compensation expense 1,264,486 1,276,097 1,069,289

Restructuring share-based compensation expense 8,071 — —

Acquisition-related and integration costs 2,059 49,019 11,422

Contingencies, restructuring and other charges 168,509 302,446 239,582

Restructuring share-based compensation expense 12,260 8,071 —

Goodwill and intangible asset impairment — 133,854 132,313

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Loss (gain) on revaluation of equity investments (172,256) (32,245) 16,523

Remeasurement gain on bitcoin investment (420,918) (207,084) —

Bitcoin impairment losses — — 46,571

Remeasurement loss (gain) on bitcoin investment 55,900 (420,918) (207,084)

Loss on disposal of property and equipment 2,546 2,634 3,186

Acquired deferred revenue and cost adjustment 39 67 99

Tax effect of one-time income tax benefits from deferred tax assets (1,909,848) — —

Income tax benefits from deferred tax assets (58,196) (1,909,848) —

Tax effect of non-GAAP net income adjustments (43,761) 2,854 (173,748)

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2025 2024 2023

Benefit from income taxes, as reported $ (1,509,343) $ (8,019) $ (12,312)

Tax effect of one-time income tax benefits from deferred tax assets 1,909,848 — —

Provision for (benefit from) income taxes, as reported $ 385,701 $ (1,509,343) $ (8,019)

Income tax benefits from deferred tax assets 58,196 1,909,848 —

Tax effect of other non-GAAP net income adjustments 43,761 (2,854) 173,748

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Liquidity and Capital Resources

As of December 31, 2024, we had approximately $10.7 billion in available liquidity, with $9.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, which includes net proceeds of approximately $2.0 billion from the issuance of our 2032 Senior Notes in the second quarter of 2024, as well as an undrawn amount of $775.0 million available under our revolving credit facility subject to compliance with the terms of the credit facility, including our covenants.

As of December 31, 2025, we had approximately $9.2 billion in available liquidity, with $8.4 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 $323.9 million available to be withdrawn under our warehouse funding facilities.

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

As of December 31, 2024, we held approximately 8,485 bitcoins for investment purposes ("bitcoin investment") with a fair value of $792.3 million based on observable market prices, which is included within “Other non-current assets” on the consolidated balance sheets.

As of December 31, 2025, we held approximately 8,883 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $777.5 million based on observable market prices, which is included within “Bitcoin investment” on the consolidated balance sheets.

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

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Bitcoin is considered an indefinite-lived intangible asset, and upon adoption of Accounting Standards Update No.

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 the consolidated statements of operations.

We purchased approximately 398 bitcoins with a cost basis of $41.1 million during the year ended December 31, 2025 for investment purposes.

We did not sell any of our bitcoin investment during the year ended December 31, 2025 and 2024.

We recognized gains of $420.9 million and $207.1 million from the remeasurement of our bitcoin investment during the year ended December 31, 2024 and 2023, respectively.

We recognized a loss of $55.9 million and gain of $420.9 million from the remeasurement of our bitcoin investment during the year ended December 31, 2025 and 2024, respectively.

In September 2020, we announced our intent to invest $100.0 million towards impact investments that further our purpose of economic empowerment.

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Refer to Note 14, Indebtedness and Note 19, Commitments and Contingencies within Notes to the Consolidated Financial Statements for more details on these commitments.

In February 2026 we announced the Workforce Plan designed to better align our organizational structure with our operating model and strategic priorities.

We currently expect to incur charges of $450 million to $500 million in connection with the Workforce Plan, consisting primarily of cash expenditures for notice period and severance payments, employee benefits, and related costs as well as non-cash expenses related to vesting of share-based awards.

We expect that the majority of the restructuring charges will be incurred in the first quarter of fiscal 2026, and that the execution of the Workforce Plan will be substantially complete by the end of the second quarter of fiscal 2026.

The Company’s estimates are subject to a number of assumptions, and the actual costs incurred may differ materially from those initial estimates.

Senior Notes and Convertible Notes

As of December 31, 2024, we held $6.2 billion in aggregate principal amount of debt, comprised of, $1.0 billion in aggregate amount of convertible senior notes that mature on March 1, 2025 ("2025 Convertible Notes"), $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 December 31, 2025, we held $7.4 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"), $1.2 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2030 ("2030 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes), and $1.0 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2033 ("2033 Senior Notes" and, together with the 2026 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, and 2032 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”).

Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.

On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes ("2023 Convertible Notes").

On May 15, 2023, we paid $461.8 million in cash to settle the outstanding principal balance and interest on the 2023 Convertible Notes upon maturity.

On March 5, 2020, we issued an aggregate principal amount of $1.0 billion of convertible senior notes ("2025 Convertible Notes").

On March 1, 2025, we paid $1.0 billion in cash to settle the outstanding principal balance and interest on the 2025 Convertible Notes upon maturity.

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 (as amended, the "Credit Agreement") maturing in June 2028.

On January 14, 2026, we amended and restated its Credit Agreement (the "Restated Credit Agreement") to, among other things, increase the unsecured revolving loan facility to $900 million.

The Restated Credit Agreement matures on January 14, 2031, provided that if on the date that is 91 days prior to the maturity date of any of our existing convertible notes or senior notes, the aggregate amount of liquidity (as defined in the Restated Credit Agreement) would be less than $250 million after giving pro forma effect to the repayment of such existing convertible notes or such senior notes at maturity, then the maturity date of the revolving loan facility shall be modified to be such date.

Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.

Warehouse Funding Facilities

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate commitment amount of $1.7 billion on a revolving basis, of which $1.5 billion was drawn as of December 31, 2024.

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.

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.7 billion on a revolving basis, of which $1.4 billion was drawn as of December 31, 2025.

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

Borrowings under the Warehouse Facilities are secured against the respective consumer receivables.

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Cash, Restricted Cash, and Working Capital

We believe that our existing cash and cash equivalents, investment in marketable debt securities, and availability under our line of credit will be sufficient to meet our working capital needs, including any expenditures related to strategic transactions and investment commitments that we may from time to time enter into, and planned capital expenditures for at least the next 12 months.

We believe that our existing cash and cash equivalents, investment in marketable debt securities, and availability under our line of credit and warehouse funding facilities will be sufficient to meet our working capital needs, including any expenditures related to strategic transactions and investment commitments that we may from time to time enter into, short-term debt repayments, shares repurchased through our share repurchase program, and planned capital expenditures for at least the next 12 months.

From time to time, we have raised capital by issuing equity, equity-linked, or debt securities such as our Convertible Notes and Senior Notes;

and we may do so in the future, however, such funding may not be available on terms acceptable to us or at all.

During 2024, we received a non-investment grade rating by S&P Global Ratings (BB+), Fitch Ratings, Inc.

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

and we may do so in the future.

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

During 2025, we received an investment grade rating by Fitch Ratings, Inc.

(BBB-) and a non-investment grade rating from Moody's Corporation (Ba1), and our non-investment grade rating from S&P Global Ratings (BB+) was affirmed.

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 $902.5 million as of December 31, 2024 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 $1.1 billion as of December 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.

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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Net cash provided by operating activities $ 2,579,714 $ 1,707,350

Net cash provided by investing activities 649,952 683,201

Net cash provided by (used in) investing activities (2,801,932) 649,952

Net cash provided by (used in) financing activities (613,099) 1,952,662

Effect of foreign exchange rate on cash and cash equivalents 86,081 (88,539)

Net increase in cash, cash equivalents, restricted cash, and customer funds $ 4,221,425 $ 573,181

Net increase (decrease) in cash, cash equivalents, restricted cash, and customer funds $ (749,236) $ 4,221,425

Cash Flows from Operating Activities

For the year ended December 31, 2025, cash provided by operating activities was $2.6 billion, primarily due to net income of $1.3 billion, adjusted for non-cash expenses of $3.4 billion consisting primarily of transaction, loan, and consumer receivable losses;

share-based compensation;

depreciation and amortization;

changes in deferred income taxes;

non-cash lease expense;

and losses on bitcoin remeasurement, each of which contributed positively to cash provided by operating activities.

Additionally, there were net inflows from loans originally classified as held for sale of $57.3 million.

These were partially offset by amortization of discounts and premiums and other non-cash adjustments on consumer receivables of $1.1 billion;

gains on the revaluation of certain equity investments of $172.3 million;

and net outflows related to changes in other assets and liabilities, including settlements receivable, customers payable, and prepaid expenses, of $841.5 million due to timing of period end.

For the year ended December 31, 2024, cash provided by operating activities was $1.7 billion, primarily due to net income of $2.9 billion, adjusted for non-cash expenses of $2.6 billion, consisting primarily of share-based compensation;

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and non-cash lease expense, each of which contributed positively to cash provided by operating activities.

Additionally, there were net inflows related to changes in other assets and liabilities, including settlements receivable and customers payable, of $207.3 million due to timing of period end.

Additionally, there were net inflows related to changes in other assets and liabilities, including settlements receivables, customers payable, and prepaid expenses, of $207.3 million due to timing of period end.

These were partially offset by a change in deferred income taxes of $1.7 billion;

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and gains on the revaluation of certain equity investments of $32.2 million.

For the year ended December 31, 2023, cash provided by operating activities was $101.0 million, comprised of net loss of $21.1 million, adjusted for non-cash expenses of $2.6 billion, consisting primarily of share-based compensation;

transaction, loan, and consumer receivable losses;

depreciation and amortization;

non-cash lease expense;

and goodwill impairment, all of which contributed positively to operating activities.

These were partially offset by the amortization of discounts and premiums and other non-cash adjustments of $984.4 million;

net outflows from loan products of $553.6 million;

bitcoin remeasurement of $207.1 million;

a change in deferred income taxes of $85.9 million;

as well as changes in other assets and liabilities, including settlements receivable and customers payable, of $685.3 million due to timing of period end, including a $350.0 million deposit held by a processor to meet requirements related to processing volumes.

Cash Flows from Investing Activities

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.

Additionally, beginning July 1, 2025, Cash App Borrow loans and certain other customer loan products purchased from our bank partner, along with customer loan products originated through Square Financial Services, are retained on the Company's balance sheet and classified as held for investment.

Cash flows associated with these loans, including originations and principal repayments, are included within cash flows from investing activities.

For the year ended December 31, 2025, cash used in investing activities was $2.8 billion, primarily due to net outflows of $3.5 billion related to loans originally classified as held for investment, particularly Cash App Borrow, as well as purchases of property and equipment of $155.0 million.

These were partially offset by net inflows of consumer receivables of $789.0 million and proceeds from investments of marketable securities of $177.6 million.

For the year ended December 31, 2024, cash provided by investing activities was $650.0 million, primarily due to a net inflow related to consumer receivables of $604.0 million and net proceeds from investments of marketable securities of $253.9 million.

These were partially offset by the purchase of property and equipment of $153.9 million and purchases of other investments of $53.9 million.

For the year ended December 31, 2023, cash provided by investing activities was $683.2 million, primarily due to the net proceeds from investments of marketable securities of $600.3 million and a net inflow related to consumer receivables of $272.9 million.

These were partially offset by the purchase of property and equipment of $151.2 million and purchases of other investments of $38.8 million.

Cash Flows from Financing Activities

For the year ended December 31, 2025, cash used in financing activities was $613.1 million, primarily due to $2.3 billion of share repurchases;

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

net repayments under Warehouse Facility borrowings of $151.6 million;

and a net outflow for other financing activities of $35.3 million.

These were partially offset by approximately $2.2 billion of net proceeds related to the issuance of the 2030 and 2033 Senior Notes in the third quarter of 2025;

an increase in customer funds of $589.0 million;

proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $88.9 million;

and an increase in interest-bearing deposits of $55.5 million.

For the year ended December 31, 2024, cash provided by financing activities was $2.0 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 $1.0 billion, and proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $154.8 million.

These were partially offset by repurchases of common stock of $1.2 billion, a net outflow from warehouse facilities borrowings of $74.0 million, and a net outflow for other financing activities of $18.5 million.

For the year ended December 31, 2023, cash used in financing activities was $240.1 million, primarily as a result of a cash payment of $461.8 million to settle the 2023 Convertible Notes in May 2023, stock repurchases of $156.8 million, a net outflow for other financing activities of $20.0 million, and the repayment and forgiveness of Paycheck Protection Program loans of $16.8 million.

These were partially offset by net proceeds from warehouse facilities borrowings of $269.6 million and proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $130.4 million.

Critical Accounting Estimates

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This evaluation requires significant judgment and involves the consideration of all available positive and negative evidence, including our historical operating results, the existence of cumulative losses in recent years, ongoing prudent and feasible tax planning strategies, and projections of future taxable income.

In the fourth quarter of 2024, based on the relative weight of positive and negative evidence, including the amount of our taxable income in 2024, and consideration of our expected future taxable earnings, we concluded that it is more likely than not that a material portion of our U.S.

federal and certain state deferred tax assets are realizable.

Therefore, we released the valuation allowance associated with a material portion of our U.S.

federal and certain states' deferred tax assets, resulting in a $1.3 billion non-cash benefit to the provision for income taxes.

We have retained a full valuation allowance against California deferred tax assets which primarily consists of tax loss carryovers and tax credit carryovers.

We do not have sufficient evidence of future income to realize the California deferred tax assets on a more likely than not basis.

The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying business.

Actual operating results in future years could differ from our current assumptions, judgments and estimates.

Refer to Note 15, Income Taxes within the Notes to the Consolidated Financial Statements for further details.

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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-K

Item 7. Management’s Discussion and Analysis