What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-26 compared with 2025-02-24 · 506 added, 485 removed, 1257 unchanged (44% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Income

Consolidated Statements of Stockholders' Equity

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We have audited the accompanying consolidated balance sheets of Block, Inc.

(the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 26, 2026 expressed an unqualified opinion thereon.

Adoption of SAB 122

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for obligations to safeguard crypto-assets held in custody on behalf of its users in 2024 due to the adoption of SAB 122.

Basis for Opinion

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(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated February 24, 2025 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated February 26, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

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Consumer receivables, net 2,670,322 2,504,879

Loans held for sale 1,111,107 775,424

Loans held for investment, net 3,382,957 365,062

Other current assets 3,589,925 3,287,749

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Investments in long-term debt securities 188,887 471,977

Bitcoin investment 777,515 792,282

Operating lease right-of-use assets 214,929 219,954

Deferred tax assets (Note 15)

Deferred tax assets

1,302,776 1,800,994

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Current portion of long-term debt (Note 14)

1,573,259 999,497

Warehouse funding facilities, current 466,942 185,000

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Accumulated other comprehensive loss ( 365,381 ) ( 1,001,065 )

Retained earnings (accumulated deficit) 2,368,618 ( 528,429 )

Retained earnings 3,674,254 2,368,618

Total stockholders’ equity attributable to common stockholders 22,204,278 21,267,932

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2025 2024 2023

Transaction-based revenue $ 6,613,680 $ 6,315,301 $ 5,701,540

Subscription and services-based revenue 7,164,799 5,944,842 4,552,773

Hardware revenue 143,369 157,178 164,418

Bitcoin revenue 10,199,205 9,498,302 7,112,856

Commerce enablement revenue $ 11,514,162 $ 10,512,453 $ 9,530,040

Financial solutions revenue 4,176,734 3,250,817 2,717,261

Bitcoin ecosystem revenue 8,502,787 10,357,783 9,668,322

Total net revenue

24,193,683 24,121,053 21,915,623

Cost of revenue:

Transaction-based costs 3,881,013 3,702,016 3,364,028

Subscription and services-based costs 1,135,813 1,075,129 861,745

Hardware costs 236,441 267,650 286,995

Bitcoin costs 9,910,386 9,293,113 6,956,733

Commerce enablement costs 5,353,254 4,913,124 4,692,094

Financial solutions costs 339,878 311,209 292,017

Bitcoin ecosystem costs 8,083,772 9,939,320 9,353,797

Amortization of acquired technology assets 56,850 68,364 72,829

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Transaction, loan, and consumer receivable losses 1,337,246 794,221 660,663

Bitcoin impairment losses — — 46,571

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

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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

Income (loss) before income tax 1,689,911 1,357,154 ( 29,143 )

Benefit from income taxes (i)

Provision for (benefit from) income taxes (i)

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

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

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

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

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

Net income per share attributable to common stockholders:

Basic $ 2.13 $ 4.70 $ 0.02

Diluted $ 2.10 $ 4.56 $ 0.02

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

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

Basic 612,243 616,993 608,856

Diluted 622,838 636,390 614,024

(i) Includes one-time benefits from income taxes of $ 1.9 billion in fiscal 2024 related to both the release of the Company's 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.

(i) Includes benefits from income taxes of $ 1.9 billion in fiscal 2024 related to both the release of the Company's 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.

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

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

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Net unrealized gain (loss) on marketable debt securities, net of tax ( 490 ) 5,749 40,055

Total comprehensive income (loss) $ 2,243,739 $ 123,659 $ ( 1,059,660 )

Total comprehensive income $ 1,939,894 $ 2,243,739 $ 123,659

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except for number of shares)

(In thousands)

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

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Balance at December 31, 2022 600,060 $ 18,314,681 $ ( 523,090 ) $ ( 568,712 ) $ 28,476 $ 17,251,355

Net loss — — — ( 540,747 ) ( 12,258 ) ( 553,005 )

Cumulative adjustment due to adoption of ASU 2023-08 — — — 30,511 — 30,511

Net income (loss) — — — 9,772 ( 30,896 ) ( 21,124 )

Shares issued in connection with employee stock plans 18,055 130,433 — — 130,433

Issuance of common stock in connection with business combination 113,617 13,827,929 — — — 13,827,929

Repurchases of common stock ( 2,466 ) ( 156,812 ) — — — ( 156,812 )

Change in other comprehensive loss — — 144,783 — — 144,783

Share-based compensation — 1,307,032 — — — 1,307,032

Tax withholding related to vesting of restricted stock units ( 37 ) ( 4,735 ) — — — ( 4,735 )

Issuance of common stock in conjunction with the conversion of convertible notes 20 454 — — — 454

Exercise of bond hedges in conjunction with the conversion of convertible notes ( 1,189 ) — — — — —

Issuance of common stock in connection with the exercise of common stock warrants 10,881 — — — — —

Issuance of common stock in connection with business combinations 172 6,658 — — — 6,658

Balance at December 31, 2023 615,821 $ 19,601,992 $ ( 378,307 ) $ ( 528,429 ) $ ( 2,420 ) $ 18,692,836

Cumulative adjustment due to adoption of ASU 2023-08 — — — 30,511 — 30,511

Net income (loss) — — — 2,897,047 ( 30,550 ) 2,866,497

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Repurchases of common stock ( 16,944 ) ( 1,170,339 ) — — — ( 1,170,339 )

Change in other comprehensive income — — 144,783 — — 144,783

Change in other comprehensive loss — — ( 622,758 ) — — ( 622,758 )

Share-based compensation — 1,313,947 — — — 1,313,947

Issuance of common stock in connection with business combination 172 6,658 — — — 6,658

Balance at December 31, 2024 619,676 $ 19,900,379 $ ( 1,001,065 ) $ 2,368,618 $ ( 32,970 ) $ 21,234,962

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Shares issued in connection with employee stock plans 18,904 88,943 — — — 88,943

Repurchases of common stock ( 16,944 ) ( 1,170,339 ) — — — ( 1,170,339 )

Repurchases of common stock, including excise tax ( 36,502 ) ( 2,341,161 ) — — — ( 2,341,161 )

Change in other comprehensive loss — — 635,684 — — 635,684

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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 ) —

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

Transaction, loan, and consumer receivable losses 1,337,246 794,221 660,663

Bitcoin impairment losses — — 46,571

Change in deferred income taxes 335,038 ( 1,665,812 ) ( 85,879 )

Goodwill and intangible asset impairment — 133,853 132,313

Purchases and originations of loans originally classified as held for sale ( 14,191,399 ) ( 15,210,746 ) ( 8,586,293 )

Proceeds from repayments of loans originally classified as held for sale 14,248,689 14,413,277 8,032,687

Changes in operating assets and liabilities:

Settlements receivable ( 487,316 ) 1,947,849 ( 1,108,529 )

Purchases and originations of loans ( 15,210,746 ) ( 8,586,293 ) ( 6,114,847 )

Proceeds from payments and forgiveness of loans 14,413,277 8,032,687 6,040,369

Customers payable 373,925 ( 1,853,872 ) 1,256,578

Settlements payable ( 330 ) ( 8,139 ) ( 454,036 )

Prepaid expenses ( 159,364 ) ( 28,573 ) 40,492

Other assets and liabilities ( 568,419 ) 150,021 ( 419,763 )

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Proceeds from sale of marketable debt securities 409,387 446,076 339,095

Proceeds from maturities of marketable debt securities from customer funds — — 73,000

Proceeds from sale of marketable debt securities from customer funds — — 316,576

Payments for originations of consumer receivables ( 32,145,232 ) ( 29,318,390 ) ( 23,968,787 )

Proceeds from principal repayments and sales of consumer receivables 32,934,204 29,922,371 24,241,651

Purchases and originations of loans originally classified as held for investment

( 17,629,689 ) — —

Proceeds from repayments of loans originally classified as held for investment 14,080,787 — —

Purchases of property and equipment ( 155,038 ) ( 153,947 ) ( 151,151 )

Purchases of other investments ( 64,554 ) ( 53,934 ) ( 38,822 )

Business combinations, net of cash acquired — — 539,453

Net cash provided by investing activities 649,952 683,201 1,225,696

Net cash provided by (used in) investing activities ( 2,801,932 ) 649,952 683,201

The accompanying Notes to the Consolidated Financial Statements are an integral part of this statement.

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Payments of debt issuance costs from issuance of senior notes ( 28,346 ) ( 26,619 ) —

Repayments of Paycheck Protection Program Liquidity Facility advances — ( 16,840 ) ( 480,694 )

Payments to redeem convertible notes ( 1,000,624 ) — ( 461,761 )

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Proceeds from the exercise of stock options and purchases under the employee stock purchase plan 88,943 154,779 130,433

Payments for tax withholding related to vesting of restricted stock units — — ( 4,735 )

Net increase in interest-bearing deposits 55,548 74,856 25,135

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Effect of foreign exchange rate on cash and cash equivalents 86,081 ( 88,539 ) 29,156

Net increase in cash, cash equivalents, restricted cash, and customer funds 4,221,425 573,181 1,460,816

Net increase (decrease) in cash, cash equivalents, restricted cash, and customer funds ( 749,236 ) 4,221,425 573,181

Cash, cash equivalents, restricted cash, and customer funds, beginning of the period 13,230,512 9,009,087 8,435,906

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Block was founded in 2009 and has offices globally.

The Company does not designate a headquarters location as it adopted a distributed work model in 2021.

The Company operates under a distributed work model and does not designate a headquarters location.

Basis of Presentation

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Minority interests are recorded as a noncontrolling interest, which is reported as a component of stockholders' equity on the consolidated balance sheets.

Reclassifications

Certain prior period amounts reported in our consolidated statements of operations and notes thereto have been reclassified to conform to the current year presentation.

The reclassifications in the consolidated statements of operations primarily represent changes to present revenue line items consisting of Commerce enablement, Financial solutions, and Bitcoin ecosystem.

The Company believes this updated presentation will improve the usefulness of the financial information for the reader and is more reflective of the business today.

The presentation of cost of revenues has been conformed to reflect the changes related to the presentation of revenues.

Such reclassifications related to the presentation of revenues and cost of revenues had no impact on total revenues, gross profit, operating income, or net income previously reported.

Refer to Significant Accounting Policies below for further details on the Company’s revenue recognition and cost of revenue.

Use of Estimates

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The Company evaluates these estimates on an ongoing basis.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to accrued transaction losses, contingencies, including outcomes from claims and disputes, valuation of loans held for sale, valuation of goodwill and acquired intangible assets, determination of goodwill and intangible asset impairment charges, determination of allowance for loan loss reserves for loans held for investment, determination of allowance for credit losses for consumer receivables, allocation of acquired goodwill to reporting units, income and other taxes, operating and financing lease right-of-use assets and related liabilities, and share-based compensation.

The Company's estimates of valuation of loans held for sale and investment, allowance for credit losses associated with consumer receivables and loans held for investment, and accrued transaction losses are based on historical experience, adjusted for market data relevant to the current economic environment.

Estimates, judgments, and assumptions in these consolidated financial statements include, but are not limited to, those related to accrued transaction losses, contingencies, including outcomes from claims and disputes, valuation of loans held for sale, valuation of goodwill and acquired intangible assets, determination of goodwill and intangible asset impairment charges, determination of allowance for credit losses for loans held for investment, determination of allowance for credit losses for consumer receivables, allocation of acquired goodwill to reporting units, income and other taxes, operating lease right-of-use assets and related liabilities, severance and restructuring charges, and share-based compensation.

The Company's estimates of valuation of loans held for sale, allowance for credit losses associated with consumer receivables and loans held for investment, and accrued transaction losses are based on historical experience, adjusted for market data relevant to the current economic environment.

The Company will continue to update its estimates as developments occur and additional information is obtained.

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Note 6, Consumer Receivables, net for further details on consumer receivables;

and Note 11, Other Consolidated Balance Sheet Components (Current) for further details on transaction losses.

Note 7, Customer Loans for further details on customer loans, and Note 11, Other Consolidated Balance Sheet Components (Current) for further details on transaction losses.

Concentration of Credit Risk

For the years ended December 31, 2025, 2024, and 2023, the Company had no customer that accounted for greater than 10% of total net revenue.

As of December 31, 2024, the Compa ny had three third-party payment processors that represented approximately 42 %, 17 % and 13 % of settlements receivable.

As of December 31, 2023, the company had two third-party payment processors that represented approximately 46 % and 35 % of settlements receivable.

As of December 31, 2025, the Compa ny had four third-party payment processors that represented approximately 36 %, 25 %, 11 % and 10 % of settlements receivable, respectively.

As of December 31, 2024, the Company had three third-party payment processors that represented approximately 42 %, 17 %, and 13 % of settlements receivable, respectively.

In both years, all other third-party processors were insignificant.

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Revenue is recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

Transaction-based Revenue

The Company has elected a policy to exclude from the transaction price all sales taxes assessed by governmental authorities and, as a result, revenue is presented net of tax.

For the Company's lending products, revenue is recognized over the life of the loan or receivable.

Commerce Enablement Revenue

Commerce enablement revenue is primarily comprised of revenue the Company generates from transaction fees related to Square payments, software, and hardware, Cash App Card, Cash App Pay, the Company’s BNPL products, Cash App Business accounts, TIDAL, and various other software as a service (“SaaS”) products.

The Company charges its sellers a transaction fee for managed payments solutions that is generally calculated as a percentage of the total transaction amount processed.

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As the merchant of record, Square is liable for the costs of processing the transactions for its sellers, and records such costs within cost of revenue.

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.

The Company generates revenue through the sale of Square hardware through e-commerce and through its retail distribution channels.

The Company satisfies its performance obligation upon delivery of Square hardware to its customers which include end user customers, distributors, and retailers.

The Company allows for customer returns, which are accounted for as variable consideration.

The Company estimates these amounts based on historical experience and reduces revenue recognized.

The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing.

Distributors and retailers have payment terms that range from 30 to 90 days after delivery.

SaaS represents software products and solutions that provide customers with access to various technologies for a fee, which is recognized as revenue ratably as the service is provided.

The Company's contracts with customers are generally for a term of one month and renew automatically each month.

The Company invoices its customers monthly.

The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month.

The Company also charges certain Cash App customers making peer-to-peer transactions using business accounts, or funding transactions with a credit card, a transaction fee that is generally calculated as a percentage of the total transaction amount processed.

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The Company retains its fees and remits the net amount to the customers.

Subscription and Services-based Revenue

Subscription and services-based revenue is primarily comprised of revenue the Company generates from Cash App Instant Deposit, Cash App Card, interest earned on customer funds, bitcoin withdrawal fees, Square Loans, Cash App Borrow, the Company's BNPL platform, TIDAL, and various other software as a service ("SaaS") products.

Instant Deposit is a functionality within the Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts for a percentage-based fee of the amounts deposited.

The Cash App Card offers customers the ability to store funds in the Cash App and subsequently use these funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App.

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

The Company also earns interchange fees when a Cash App Card is used to make a purchase.

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

The Company satisfies its performance obligation upon settlement of the transaction to the customer.

Cash App Card offers customers the ability to store funds in Cash App and subsequently use these funds via a Visa debit card that is linked to the balance the customer stores in Cash App.

The Company earns interchange fees when a Cash App Card is used to make a purchase, which are paid by the merchant's bank and subsequently passed through to the Company by its third-party partners.

Revenue is recognized for a Cash App Card transaction when charged and the Company has successfully authorized the transaction.

The Company recognizes interchange revenue as a principal in the arrangement based on its control over the transaction authorization and third-party partners used to fulfill the transaction settlement.

Cash App Pay offers Cash App customers the ability to make payments, without a physical card, using their stored funds directly to eligible merchants that have enabled Cash App as a checkout option.

The Company earns processing fees directly from merchants or its integrated third-party payment service provider, typically calculated as a percentage of the transaction volume plus a fixed fee per transaction.

The Company recognizes processing revenues as the principal in the arrangement to complete the payment transaction.

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

The Company generally pays the seller the full order value upfront, less taxes, if applicable, and less a merchant fee, which consists of fixed and variable rates as contracted with the sellers.

The Company also incurs other costs such as fees paid to third-party partners and processing fees to complete the consumer purchase transaction.

The Company generally assumes non-repayment risk from the consumers.

The Company initially recognizes a consumer receivable equal to net amounts paid to the seller plus any costs incurred to originate the consumer receivable.

The Company recognizes the merchant fee less costs incurred to originate the consumer receivables as revenue using the effective interest method over the life of the consumer receivable.

The effective interest rate is determined based on estimated future cash receipts over the expected life of the consumer receivable, having consideration for the historical repayment pattern of the consumer receivables on a portfolio basis.

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

The Company also offers 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.

The Company sells certain consumer receivables to a third-party investor and records the gain or loss on sale as revenue within commerce enablement revenue.

Additionally, the Company is retained to service the consumer receivables and earns a servicing fee, which is recorded within commerce enablement revenue as the services are delivered.

Additionally, the Company offers a post-purchase option ("Afterpay Post-Purchase"), which allows Cash App users to retroactively convert purchases into installment payments, typically due over a three to four week period, for which the Company charges a flat finance fee that is recognized as revenue over the life of the loan.

Through its BNPL products, the Company also has an ads and affiliate program for its merchants.

For affiliate relationships, the Company receives a commission when a consumer completes a purchase using its BNPL products, which is recognized as a fee earned in connection with the origination of a consumer receivable and recognized as revenue using the effective interest method.

The Company may also receive digital advertising revenue on clicks, typically earned on a cost per click (“CPC”) basis, to merchant sites through its BNPL products, in addition to flat fees for premium ad placements.

Revenue from CPC arrangements are generally recognized in the period the user click is delivered.

TIDAL primarily generates revenue from subscriptions to its customers, and such subscriptions allow access to the song library, video library, and improved sound quality.

Customers can subscribe to services directly from the TIDAL website, through the Apple store, or through Google Play.

With both offerings, the Company charges customers a monthly fee for those subscription services, which is recognized ratably as revenue as the service is provided.

Financial Solutions Revenue

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

Instant Deposit is a functionality within Cash App and the Company's managed payments solution that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts for a percentage-based fee of the amounts deposited.

Additionally, the Company charges the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM.

Revenue related to Instant Deposit and ATM withdrawal fees is recognized upon settlement of the transaction.

While the Company is restricted from using the stored funds in the Company's operations, the Company may invest a portion of these funds in short-term marketable debt securities to generate interest income which is reported as revenue.

Interest earned on customer funds related to Cash App Card was $ 185.2 million and $ 142.2 million for the years ended December 31, 2024 and December 31, 2023, respectively.

Interest earned on customer funds was immaterial for the year ended December 31, 2022.

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

The Company charges customers a fee for the option of faster withdrawal speeds.

Square Loans facilitates loans to qualified Square sellers through the Company's subsidiary, Square Financial Services, Inc.

Interest earned on customer funds related to Cash App Card was $ 192.1 million, $ 185.2 million, and $ 142.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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, these short-term loans were facilitated through a partnership with a third-party industrial bank.

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

Beginning in the second quarter of 2025, the Company also began originating Cash App Borrow loans through the Company's subsidiary, Square Financial Services, Inc.

("Square Financial Services"), which is an industrial loan company.

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.

Square Loans facilitates loans to qualified Square sellers through Square Financial Services.

The loans are either repaid through withholding a percentage of the collections of the seller's receivables processed by the Company ("flex loans") or a specified monthly amount ("term loans").

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For some of the loans, it is the Company’s intent to sell all of its rights, title, and interest of these loans to third-party investors for an upfront fee when the loans are sold.

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

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

Subsequently, the Company records a gain on sale of the loans to the third-party investors as revenue upon transfer of title.

The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these receivables through its managed payments solutions.

The Company is retained by the third-party investors to service the loans and earns a servicing fee for facilitating the repayment of these loans through its managed payments solutions.

The Company records servicing revenue as servicing is delivered.

For the loans which are not immediately sold to third-party investors or for which the Company has the intent and ability to hold through maturity, 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.

The loan fee and late fees are recorded within subscription and services-based revenue on the consolidated statement of operations.

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

The Company generally pays the seller the full order value upfront, less taxes, if applicable, and a merchant fee, which consists of fixed and variable rates as contracted with the sellers.

The Company also incurs other costs such as fees paid to third-party partners and processing fees to complete the consumer purchase transaction.

The Company generally assumes non-repayment risk from the consumers.

The Company initially recognizes a consumer receivable equal to net amounts paid to the seller plus any costs incurred to originate the consumer receivable.

The Company recognizes the merchant fee less costs incurred to originate the consumer receivables as revenue using the effective interest method.

This revenue is included within subscription and services-based revenue on the consolidated statement of operations.

The Company also offers 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.

The Company sells certain consumer receivables to a third party investor and records the gain or loss on sale as revenue within subscription and services-based revenue.

Additionally, the Company is retained to service the consumer receivables and earns a servicing fee, which is recorded within subscription and services-based revenue as the services are delivered.

Through the BNPL platform, the Company also has an ads and affiliate program for its merchants.

For affiliate relationships, the Company receives a commission when a consumer completes a purchase from within the BNPL platform, which is recognized as a fee earned in connection with the origination of a consumer receivable and recognized as revenue using the effective interest method.

The Company may also receive digital advertising revenue on clicks, typically earned on a cost per click (“CPC”) basis, to merchant sites from the BNPL platform, in addition to flat fees for premium ad placements.

Revenue from CPC arrangements are generally recognized in the period the user click is delivered.

This revenue is included within subscription and services-based revenue on the consolidated statement of operations.

TIDAL primarily generates revenue from subscriptions to its customers, and such subscriptions allow access to the song library, video library, and improved sound quality.

Customers can subscribe to services directly from the TIDAL website or through the Apple store.

With both offerings, the Company charges customers a monthly fee for those subscription services, which is recognized ratably as revenue as the service is provided.

SaaS represents software products and solutions that provide customers with access to various technologies for a fee which is recognized as revenue ratably as the service is provided.

The Company's contracts with customers are generally for a term of one month and renew automatically each month.

The Company invoices its customers monthly.

The Company considers that it satisfies its performance obligations over time each month as it provides the SaaS services to customers and hence recognizes revenue ratably over the month.

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.

The Company generates revenue through the sale of hardware through e-commerce and through its retail distribution channels.

The Company satisfies its performance obligation upon delivery of hardware to its customers which include end user customers, distributors, and retailers.

The Company allows for customer returns which are accounted for as variable consideration.

The Company estimates these amounts based on historical experience and reduces revenue recognized.

The Company invoices end user customers upon delivery of the products to customers, and payments from such customers are due upon invoicing.

Distributors and retailers have payment terms that range from 30 to 90 days after delivery.

Bitcoin Revenue

Bitcoin Ecosystem Revenue

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

The Company offers its Cash App customers the ability to purchase bitcoin, a cryptocurrency denominated asset, from the Company.

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The Company has concluded it is the principal because it controls the bitcoin before delivery to the customers, it is primarily responsible for the delivery of the bitcoin to the customers, it is exposed to risks arising from fluctuations of the market price of bitcoin before delivery to customers, and has discretion in setting prices charged to customers.

Proto revenue is primarily from the sale of mining systems to a customer engaged in bitcoin mining activities.

A mining system comprises a chassis unit with a 6- or 9-hashboard configuration containing Company-developed mining chips.

The Company recognizes revenue from mining system sales when control of the completed system transfers to the customer, which is at the point in time the system is delivered to the customer.

The majority of the transaction price is due prior to shipment, and the sale of mining systems is not subject to a return policy.

The Company offers a standard product warranty that the product will operate under normal use for a period of one year.

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

The Company charges 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

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

Hardware Costs

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

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

Bitcoin Costs

Bitcoin costs consist of the total amount the Company pays 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 Instant Deposit and ATM withdrawals.

Bitcoin Ecosystem Costs

Bitcoin ecosystem costs primarily consist of the total amount the Company pays to purchase bitcoin that is sold to customers, which fluctuate in line with revenue related to customer purchases of bitcoin, as well as costs associated with Proto.

Amortization of Acquired Technology Assets

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One-time involuntary benefit arrangements and other costs are generally recognized in the period in which the liability is incurred.

The Company recorded $ 26.8 million and $ 104.0 million of severance and other related expenses for the years ended December 31, 2024 and 2023, respectively, as part of product development, sales and marketing, and general and administrative within the Company's operating expenses.

The Company recorded $ 78.6 million, $ 26.8 million, and $ 104.0 million of severance and other related expenses for the years ended December 31, 2025, 2024, and 2023, respectively, as part of product development, sales and marketing, and general and administrative within the Company's operating expenses.

The Company also assesses its assets for impairment in connection with restructuring and other exit activities when the carrying amount of the related assets may not be fully recoverable, in accordance with the appropriate accounting guidance.

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Total advertising costs for the years ended December 31, 2025, 2024, and 2023 were $ 478.4 million, $ 338.1 million, a nd $ 360.1 million, respectively.

The Company also records services, incentives, and other costs to customers that are not directly related to a revenue generating transaction as sales and marketing expenses, as the Company considers these to be marketing costs to encourage the usage of Cash App.

The Company also records services, incentives, and other costs to acquire customers that are not directly related to a revenue generating transaction as sales and marketing expenses, as the Company considers these to be marketing costs to encourage the usage of Cash App.

These expenses include, but are not limited to, Cash App peer-to-peer processing costs and related transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways.

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Share-based Compensation

Share-based compensation expense relates to stock options, restricted stock units ("RSUs"), and purchases under the Company’s 2015 Employee Stock Purchase Plan ("ESPP"), which is measured based on the grant-date fair value.

Share-based compensation expense relates to stock options, restricted stock units ("RSUs"), and purchases under the Company’s Amended and Restated 2015 Employee Stock Purchase Plan ("ESPP"), which is measured based on the grant-date fair value.

The fair value of RSUs is determined by the closing price of the Company’s common stock on each grant date.

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These variables include the expected term (weighted-average period of time that the options granted are expected to be outstanding), the expected volatility of the Company’s stock, expected risk-free interest rate, and expected dividends.

The Company uses the simplified calculation of expected term, defined as an average of the vesting term and the contractual term to maturity.

Expected volatility is based on a weighted-average of the historical volatilities of the Company's common stock.

The Company uses historical exercise information and contractual terms of options to estimate the expected term.

Expected volatility is a blend of implied volatility based on publicly traded options on our common stock and historical volatility based on a weighted-average of the historical volatilities of the Company's common stock.

The expected risk-free rate is based on the U.S.

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Interest Income and Expense

Interest income consists of interest income from the Company's investment in marketable debt securities and was $ 156.2 million and $ 126.6 million for the year ended December 31, 2024 and 2023, respectively.

Interest income was immaterial for the year ended December 31, 2022.

Interest expense consists primarily of the Company's long-term debt and was $ 165.5 million for the year ended December 31, 2024.

Interest expense was immaterial for the years ended December 31, 2023 and December 31, 2022.

Interest income consists of interest income from the Company's investment in marketable debt securities and was $ 127.1 million, $ 156.2 million, and $ 126.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Interest expense consists primarily of the Company's long-term debt and was $ 256.4 million and $ 165.5 million for the years ended December 31, 2025 and 2024, respectively.

Interest expense was immaterial for the year ended December 31, 2023.

Foreign Currency

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dollars using average exchange rates for each period.

Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as a component of other income, net on the consolidated statements of operations.

Income and Other Taxes

Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as a component of Other expense (income), net on the consolidated statements of operations.

The Company reports income taxes under the asset and liability approach.

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If there is no minimum time frame during which the cash must remain restricted, the nature of the transactions related to the restriction determine the classification.

The Company's short-term restricted cash was $ 902.5 million and $ 770.4 million as of December 31, 2024 and 2023, respectively.

The majority of the balance as of December 31, 2024 was comprised of the wholly-owned consolidated entities used in the warehouse funding facility arrangements.

The Company's short-term restricted cash was $ 1.1 billion and $ 902.5 million as of December 31, 2025 and 2024, respectively.

The majority of the balance as of December 31, 2025 was comprised of cash at the wholly-owned consolidated entities used in the warehouse funding facility arrangements.

This restricted cash will be used to pay the borrowings under the warehouse funding facilities or will be distributed to the Company.

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Customer funds represent customers' stored balances that customers would later use to send money or make payments, or customers cash in transit.

As discussed under section titled Subscription and Services-based Revenue accounting policy above, under the terms of service associated with these funds, the Company is restricted from using the funds in the Company's operations, but may invest these funds in short-term marketable debt securities to earn interest.

As discussed under section titled Financial Solutions Revenue accounting policy above, under the terms of service associated with these funds, the Company is restricted from using the funds in the Company's operations, but may invest these funds in short-term marketable debt securities to earn interest.

Refer to Note 4, Customer Funds for more details.

Investments in Marketable Debt Securities

The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper, and municipal securities.

The Company's short-term and long-term investments include marketable debt securities such as government and agency securities, corporate bonds, commercial paper, certificates of deposit, and municipal securities.

The Company determines the appropriate classification of its investments in marketable debt securities at the time of purchase and reevaluates such designation at each balance sheet date.

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Non-marketable equity investments, which have no readily determinable fair values, are measured using the measurement alternative, which is defined as cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer.

Adjustments are recorded in other income, net on the consolidated statements of operations.

Adjustments are recorded in other expense (income), net on the consolidated statements of operations.

Non-marketable equity investments are valued using significant unobservable inputs or data in an inactive market and the valuation requires judgment due to the absence of market prices and inherent lack of liquidity.

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The impairment analysis encompasses an assessment of the severity and duration of the impairment and a qualitative and quantitative analysis of other key factors including the investee’s financial metrics, market acceptance of the investee’s product or technology, other competitive products or technology in the market, general market conditions, and the rate at which the investee is using its cash.

If the investment is considered to be impaired, the Company will record an impairment in other income, net on the consolidated statements of operations and establish a new carrying value for the investment.

If the investment is considered to be impaired, the Company will record an impairment in other expense (income), net on the consolidated statements of operations and establish a new carrying value for the investment.

Fair Value Measurements

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Customer Loans

Loan products consist primarily of flex loans, term loans and Cash App Borrow which are described in detail under the section titled Subscription and Services-based Revenue above.

Loan products consist primarily of Square Loans and Cash App Borrow products, which are described in detail under the sections titled Financial Solutions Revenue and Commerce Enablement Revenue, respectively, above.

The Company classifies customer loans as loans held for sale when the Company has the intent to sell all of its rights, title, and interest in these loans to third-party investors, and there is an available market for such loans.

The Company classifies customer loans as loans held for investment when the Company has both the intent and ability to hold for the foreseeable future, or until maturity or payoff.

The Company designates all its loans as held for sale upon origination, of which the majority are sold.

Loans held by Square Financial Services that are not sold within one to two business days from origination are reclassified as held for investment, while all the other loans continue to be classified as held for sale.

For the year ended December 31, 2024, $ 903.8 million of total loan balances was reclassified from loans held for sale to loans held for investment.

Loans held for sale by Square Financial Services that are not sold after two business days from origination are reclassified as held for investment.

For the year ended December 31, 2025, $ 1.1 billion of total loan balances was reclassified from loans held for sale to loans held for investment.

For the years ended December 31, 2025, 2024 and 2023, net gains on sales of loans were $ 255.8 million, $ 236.8 million, and $ 196.1 million respectively.

Since the loans are classified as held for sale at origination, all the cash flows associated with these loans are disclosed as a component of cash flows from operating activities.

Loans classified as held for sale at origination are disclosed as a component of cash flows from operating activities, while loans classified as held for investment at origination are disclosed as a component of cash flows from investing activities.

Loans Held for Sale

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The Company recognizes a charge within transaction, loan, and consumer receivable losses on the consolidated statement of operations whenever the amortized cost of a loan exceeds its fair value, with such charges being 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.

Loans are charged-off in accordance with our charge-off policies.

Square Loans that are 120 days or more past due, and Cash Borrow loans that are 90 days or more past due, are generally considered to be uncollectible and are charged off.

Past due status is based on the contractual terms of the loans.

A loan that is initially designated as held for sale may be reclassified to held for investment if and when the Company's intent for that loan changes.

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No valuation allowances have been established for settlements receivable, as funds are due from large, well-established financial institutions with no historical collections issue.

Inventory consists of contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal, and third-party peripherals, as well as component parts that are used to manufacture these products.

Inventory consists of contactless and chip readers, chip card readers, Square Stand, Square Register, Square Terminal, third-party peripherals, Bitkey hardware devices, and bitcoin mining systems related to Proto, as well as component parts that are used to manufacture these products.

Inventory is stated at the lower of cost (generally on a first-in, first-out basis) or net realizable value.

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The Company’s bitcoin investment is initially recorded at cost, inclusive of transaction costs, and the Company uses the ‘first-in, first-out’ method to determine the cost basis.

Subsequently, the Company remeasures its bitcoin investment at fair value at the end of each reporting period with changes recognized in net income through the Company’s consolidated statements of operations.

Subsequently, the Company remeasures its bitcoin investment at fair value at the end of each reporting period.

Changes in fair value are recognized in net income through "Remeasurement loss (gain) on bitcoin investment" in the Company’s consolidated statements of operations.

For the year ended December 31, 2025, the Company has purchased an approximate cumulative $ 41.1 million in bitcoin for investment purposes.

For the years ended December 31, 2024 and 2023, the Company recognized gains of $ 420.9 million and $ 207.1 million from the remeasurement of the Company's bitcoin investment.

For the years ended December 31, 2025 and 2024, the Company recognized a loss of $ 55.9 million and gain of $ 420.9 million, respectively, from the remeasurement of the Company's bitcoin investment.

The Company’s bitcoin for operating purposes is initially recorded at cost, inclusive of transaction costs, and the Company uses ‘first-in, first-out’ as its method of determining the cost basis.

Subsequent to purchase, any sales related to bitcoin occur at its current market price, plus a small margin.

As such, any change in fair value of bitcoin purchased and sold for customer orders is captured within bitcoin revenue.

As such, any change in fair value of bitcoin purchased and sold for customer orders is captured within bitcoin ecosystem revenue.

Given the small amount of bitcoin for operating purposes held at any time, and that the bitcoin is held for a relatively short period of time, typically being purchased and sold within a day, the changes in fair value are not material to the Company.

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Capitalized software 18 months

Computer equipment, data center equipment, and computer software

Computer and data center equipment Three years

Furniture and fixtures Seven years

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The payable amount consists of amounts owed to customers due to timing differences as the Company typically settles within one business day, amounts held by the Company in accordance with its risk management policies, and amounts held for customers who have not yet linked a bank account.

This balance also includes the Company's liability for customer funds held on deposit in the Cash App and balances related to Square Card.

This balance also includes the Company's liability for customer funds held on deposit in Cash App and balances related to Square Card.

Accrued Transaction Losses

The Company is exposed to potential credit losses related to transactions processed by sellers that are subsequently subject to chargebacks when the Company is unable to collect from the sellers primarily due to insolvency, disputes between a seller and their customer, or due to fraudulent transactions.

Accrued transaction losses also include estimated losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash for Business, and Cash App Card.

Accrued transaction losses also include estimated losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash App Business, and Cash App Card.

Generally, the Company estimates the potential loss rates based on historical experience that is continuously adjusted for new information and incorporates, where applicable, reasonable and supportable forecasts about future expectations.

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The Company has two reportable segments, Square and Cash App.

Products and services that are not assigned to a specific reportable segment, including TIDAL and other emerging ecosystems, are aggregated and presented within a general corporate and other category.

Products and services that are not assigned to a specific reportable segment, including, but not limited to, TIDAL and other emerging ecosystems, are aggregated and presented within a general corporate and other category.

Square and Cash App are defined as follows:

• Cash App includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments.

Cash App also includes Cash App Card, which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM.

Cash App also includes the BNPL platform.

Cash App also includes Cash App Card, which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM, as well as Cash App Borrow.

Cash App also includes all BNPL products.

• Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App.

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Recent Accounting Pronouncements

In June 2022, the Company adopted Staff Accounting Bulletin No.

121 (“SAB 121”), which required accounting for obligations to safeguard crypto-assets an entity holds for users of its crypto platform.

The guidance required entities that hold crypto-assets on behalf of platform users to recognize a liability, and corresponding asset, to reflect the entity’s obligation to safeguard the crypto-assets held for its platform users and measure at the fair value at each reporting date.

Subsequently, in January 2025, the SEC staff released Staff Accounting Bulletin No.

122 (“SAB 122”), which rescinded SAB 121.

SAB 122 allows entities to apply existing accounting principles to determine the appropriate accounting treatment for obligations related to the safeguarding of crypto-assets, considering the risks and uncertainties associated with those obligations.

Existing requirements to provide disclosures that allow investors to understand an entity’s obligation to safeguard crypto-assets held for others continue to apply.

The Company early adopted SAB 122 as of December 31, 2024 and applied the guidance retrospectively, resulting in the reversal of $ 1.0 billion of the Company's safeguarding liability and corresponding asset as of December 31, 2023.

The adoption had no impact on previously reported consolidated statements of operations, statements of comprehensive income (loss), statements of stockholders' equity, or statements of cash flows.

In November 2023, the FASB issued ASU No.

2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

The amendments expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the CODM, the amount and description of other segment items, permits companies to disclose more than one measure of segment profit or loss, and requires all annual segment disclosures to be included in the interim periods.

The amendments do not change how an entity identifies its operating segments, aggregates those operating segments, or applies quantitative thresholds to determine its reportable segments.

The Company adopted this guidance effective for the annual reporting period beginning January 1, 2024, and has applied the guidance retrospectively.

The adoption of this guidance did not have a material impact on the Company's financial statements and related disclosures.

Refer to Note 20, Segment and Geographical Information for further details .

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

In December 2023, the FASB issued Accounting Standards Update ("ASU") No.

2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

The amendments expand income tax disclosure requirements by requiring an entity to disclose (i) specific categories in the rate reconciliation, (ii) additional information for reconciling items that meet a quantitative threshold, and (iii) the amount of taxes paid disaggregated by jurisdiction.

The amendments are effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The adoption of ASU 2023-09 will impact the Company’s disclosures only and the Company is evaluating the effect of adopting the new disclosure requirements.

In March 2024, the SEC adopted rules that require registrants to provide climate-related information in their registration statements and annual reports, such as disclosure of material climate-related risks, Board of Directors’ oversight and risk management activities, material greenhouse gas emissions, and material climate-related targets and goals.

The rules will also require registrants to quantify certain effects of severe weather events and other natural conditions in their audited financial statements.

On April 4, 2024, the SEC voluntarily stayed the implementation of the rules pending the judicial review of challenges to the rules in the Eighth Circuit Court of Appeals.

As proposed, the new rules would have been effective for fiscal years beginning in 2025, except for the greenhouse gas emissions disclosures, which would have been effective for fiscal years beginning in 2026.

The Company is currently monitoring the development of whether and if these rules will become effective.

The Company adopted this guidance effective for the annual reporting period beginning January 1, 2025.

The adoption of ASU 2023-09 impacts the Company’s annual disclosures only, which are reflected in herein.

Refer to Note 15, Income Taxes for further details.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No.

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The Company is evaluating the effect of adopting the new disclosure requirements.

In September 2025, the FASB issued ASU No.

2025-06, Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06").

The amendments are intended to clarify and modernize the accounting for costs related to internal-use software.

The guidance removes all references to project stages and clarifies the threshold entities apply to begin capitalizing costs.

The amendments are effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

The Company does not expect the adoption to have a material impact on the Company's financial statements.

In July 2025, the FASB issued ASU No.

2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

The amendments allow an entity to apply a practical expedient when estimating expected credit losses, which assumes that the current conditions as of the balance sheet date will not change for the remaining life of the accounts receivable and contract assets arising from contracts with customers.

The amendments are effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years, with early adoption permitted.

If the practical expedient is elected, the amendments should be applied prospectively.

The Company does not expect the adoption to have a material impact on the Company's financial statements.

NOTE 2 - REVENUE

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Revenue from contracts with customers:

Transaction-based revenue $ 6,613,680 $ 6,315,301 $ 5,701,540

Subscription and services-based revenue 4,865,389 4,319,825 3,385,784

Hardware revenue 143,369 157,178 164,418

Bitcoin revenue 10,199,205 9,498,302 7,112,856

Commerce enablement revenue $ 10,100,198 $ 9,298,307 $ 8,618,519

Financial solutions revenue 2,260,121 2,165,553 2,003,765

Bitcoin ecosystem revenue 8,502,787 10,357,783 9,668,322

Revenue from other sources:

Subscription and services-based revenue (i)

2,299,410 1,625,017 1,166,989

Commerce enablement revenue 1,413,964 1,214,146 911,521

Financial solutions revenue 1,916,613 1,085,264 713,496

Total net revenue $ 24,193,683 $ 24,121,053 $ 21,915,623

(i) Subscription and services-based revenue from other sources relates to revenue generated from the Company's Square Loans, revenue generated from consumer receivables originated through our BNPL platform, interest income earned on customer funds, and interest income earned on funds held by Square Financial Services.

(i) Revenue from other sources relates to revenue generated from the Company's Square Loans, Cash App Borrow loans, consumer receivables originated through, and affiliate relationship revenue from, our BNPL products, interest income earned on customer funds, and interest income earned on funds held by Square Financial Services, Inc., which is a Utah state-chartered industrial loan company ("Square Financial Services").

NOTE 3 - INVESTMENTS IN DEBT SECURITIES

The Company's short-term and long-term investments as of December 31, 2024 were as follows (in thousands):

The Company's short-term and long-term investments in debt securities as of December 31, 2025 and December 31, 2024 were as follows (in thousands):

December 31, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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Long-term debt securities:

agency securities $ 49,017 $ 23 $ ( 10 ) $ 49,030

Corporate bonds $ 81,332 $ 139 $ ( 2 ) $ 81,469

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Total $ 188,480 $ 653 $ ( 246 ) $ 188,887

The Company's short-term and long-term investments as of December 31, 2023 are as follows (in thousands):

December 31, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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government securities 206,340 449 ( 4 ) 206,785

Foreign government securities 1,000 — ( 19 ) 981

Total $ 402,814 $ 713 $ ( 101 ) $ 403,426

Long-term debt securities:

agency securities $ 49,017 $ 23 $ ( 10 ) $ 49,030

Corporate bonds 195,035 693 ( 384 ) 195,344

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Long-term debt securities:

agency securities $ 9,990 $ ( 10 ) $ — $ — $ 9,990 $ ( 10 )

Corporate bonds $ 4,539 $ ( 2 ) $ — $ — $ 4,539 $ ( 2 )

Municipal securities 3,274 ( 98 ) 1,235 ( 146 ) 4,509 ( 244 )

government securities 58,681 ( 124 ) — — 58,681 ( 124 )

Total $ 7,813 $ ( 100 ) $ 1,235 $ ( 146 ) $ 9,048 $ ( 246 )

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Corporate bonds 50,905 ( 93 ) 1,995 ( 3 ) 52,900 ( 96 )

Municipal securities — — 9,165 ( 231 ) 9,165 ( 231 )

government securities — — 3,994 ( 4 ) 3,994 ( 4 )

Foreign government securities — — 981 ( 19 ) 981 ( 19 )

Total $ 69,859 $ ( 94 ) $ 5,989 $ ( 7 ) $ 75,848 $ ( 101 )

Long-term debt securities:

agency securities $ 9,990 $ ( 10 ) $ — $ — $ 9,990 $ ( 10 )

Corporate bonds 80,550 ( 384 ) — — 80,550 ( 384 )

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Due in one year or less $ 516,890 $ 517,777

Due in one to five years 470,808 471,977

Due after one year to five years 181,313 181,936

Due after five years

Total $ 705,370 $ 706,664

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Total customer funds $ 4,771,824 $ 4,182,872

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

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

The Company classifies the amounts due from the counterparty as cash equivalents due to their short term nature.

The Company does not have any available-for-sale debt securities for which the Company has recorded credit related losses.

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

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Certificates of deposit — 2,211 — — 1,051 —

Foreign government securities — — — — 981 —

Long-term debt securities:

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Municipal securities — 6,951 — — 4,345 —

Bitcoin investment (i)

Bitcoin investment

777,515 — — 792,282 — —

Investment in marketable equity securities 5,225 — — 5,407 — —

Total assets (liabilities) measured at fair value $ 3,419,298 $ 445,869 $ — $ 3,356,213 $ 415,335 $ —

(i) The Company holds an immaterial amount of bitcoin for operating purposes and, given the bitcoin is held for a relatively short period of time, typically being purchased and sold within a day, the fair value approximates carrying value.

Refer to Note 1, Description of Business and Summary of Significant Accounting Policies and Note 13, Bitcoin for more details.

Total $ 3,243,215 $ 326,651 $ — $ 3,419,298 $ 445,869 $ —

The carrying amounts of certain financial instruments, including settlements receivable, consumer receivables, accounts payable, customers payable, accrued expenses, and settlements payable, approximate their fair values due to their short-term nature.

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2031 Senior Notes 992,372 932,095 990,971 873,868

2032 Senior Notes 1,977,734 2,057,081 1,975,026 1,999,220

2033 Senior Notes 987,581 1,013,732 — —

2025 Convertible Notes — — 999,497 991,941

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NOTE 6 - CONSUMER RECEIVABLES, NET

Consumer receivables represent amounts due from consumers for outstanding installment payments on orders processed on the Company's BNPL platform.

Consumer receivables represent amounts due from consumers for outstanding installment payments on orders processed using the Company's BNPL products.

Further discussed in Note 1, Description of Business and Summary of Significant Accounting Policies , consumer receivables are classified as held for investment.

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Consumer receivables are internally rated as "Pass" or "Classified." Pass rated consumer receivables generally consist of consumer receivables that are current or up to 60 days past due.

Classified consumer receivables are generally comprised of consumer receivables that are greater than 60 days past due and have a higher risk of default.

Classified rated consumer receivables are generally comprised of consumer receivables that are greater than 60 days past due and have a higher risk of default.

Internal risk ratings are reviewed and, generally, updated at least once a year.

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The amount of recoveries for the year ended December 31, 2025 and December 31, 2024 were immaterial.

The following table summarizes activity in the allowance for credit losses subsequent to the acquisition of Afterpay (in thousands):

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

Year Ended December 31,

Allowance for credit losses, beginning of the period

$ 201,793 $ 185,275

Provision for credit losses 333,845 293,921

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NOTE 7 - CUSTOMER LOANS

Customer loans primarily consist of Square Loans, Cash App Borrow, and Afterpay Post-Purchase products.

Square Loans are originated by the Company’s wholly-owned subsidiary, Square Financial Services, to qualified Square sellers.

The majority of Square Loans are sold to third-party investors with a portion retained on the Company’s balance sheet.

Cash App Borrow and Afterpay Post-Purchase are credit products for consumers that allow customers to access short-term loans for a fee.

Historically, these loans were originated through a partnership with a third-party industrial bank, from whom the Company purchased the loans obtaining all rights, title, and interest, and were classified as held for sale on the Company’s balance sheet.

Beginning in the second quarter of 2025, the Company also began originating Cash App Borrow and Afterpay Post-Purchase loans through Square Financial Services, which are retained on the Company’s balance sheet and classified as held for investment.

Beginning July 1, 2025, Cash App Borrow loans, Afterpay Post-Purchase loans, and certain other customer loan products purchased from the partnership with the third party, along with all customer loan products originated through Square Financial Services, are retained on the Company's balance sheet and classified as held for investment.

The Company classifies customer loans as held for investment when the Company has both the intent and ability to hold them for the foreseeable future, until maturity, or until payoff.

Customer loans are classified as held for sale when there is an available market for such loans and it is the Company’s intent to sell all of its rights, title, and interest in these loans to third-party investors.

The Company’s intent and ability in the future may change based on changes in the business strategies, the economic environment, and market conditions.

The Company categorizes loans held for investment and loans held for sale by the intended customer of the loan product.

Commercial loans primarily include Square Loans;

Consumer loans include Cash App Borrow, Afterpay Post-Purchase and Pay Monthly loans;

and Other loans include those outside of consumer and commercial loans such as Square credit card.

Loans Held for Investment

The Company originates loans in the U.S.

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

The Company sells the majority of the loans to institutional investors with a portion retained on its balance sheet.

Loans retained by the Company are classified as held for investment as the Company has both the intent and ability to hold them for the foreseeable future, until maturity, or until payoff.

The Company’s intent and ability in the future may change based on changes in business strategies, the economic environment, and market conditions.

As of December 31, 2024 and 2023, the Company held $ 365.1 million and $ 247.6 million, respectively, as loans held for investment, net of allowance, included in other current assets on the consolidated balance sheets.

Refer to Note 11, Other Consolidated Balance Sheet Components (Current) for more details.

Loans held for investment are recorded at amortized cost, less an allowance for potential uncollectible amounts.

Amortized cost basis represents principal amounts outstanding, net of unearned income, unamortized deferred fees and costs on originated loans, premiums or discounts on purchased loans, and charge-offs.

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

The Company considers loans that are greater than 60 days past due to be delinquent, and loans 90 days or more past due to be nonperforming.

Loans that are 120 days or more past due are generally considered to be uncollectible and are written off.

When a loan is identified as nonperforming, recognition of income is discontinued.

Loans are restored to performing status after total overdue unpaid amounts are repaid and the Company has reasonable assurance that performance under the terms of the loan will continue.

When loans are charged off, the related accrued interest receivable is recognized as a credit loss expense.

The following table presents the Company's loans held for investment by category (in thousands):

Year Ended December 31, 2025

Consumer Commercial Other Total

Amortized cost basis $ 3,182,624 $ 481,757 $ 101,437 $ 3,765,818

Allowance for credit losses ( 340,117 ) ( 33,602 ) ( 9,142 ) ( 382,861 )

Total loans held for investment, net of allowance $ 2,842,507 $ 448,155 $ 92,295 $ 3,382,957

The following table presents the Company's loans held for investment allowance for credit losses by category (in thousands):

Year Ended December 31, 2025

Consumer Commercial Other Total

Beginning balance of the allowance for credit losses

$ — $ 23,143 $ — $ 23,143

Current period provisions for expected credit losses

515,326 36,580 9,446 561,352

Write-offs charged against the allowance

( 182,497 ) ( 33,625 ) ( 333 ) ( 216,455 )

Recoveries of amounts previously written off

7,288 7,504 29 14,821

Ending balance of the allowance for credit losses

$ 340,117 $ 33,602 $ 9,142 $ 382,861

As of December 31, 2024, the Company held $ 365.1 million of Commercial loans held for investment, net of allowance of $ 23.1 million.

The amount of charge-offs recorded and amount of recoveries for the year ended December 31, 2024 were immaterial.

The Company considers Square Loans that are greater than 60 days past due to be delinquent, and Square Loans 90 days or more past due to be nonperforming.

Square Loans that are 120 days or more past due are generally considered to be uncollectible and are written off.

When a Square Loan is identified as nonperforming, recognition of income is discontinued.

Square Loans are restored to performing status after total overdue unpaid amounts are repaid and the Company has reasonable assurance that performance under the terms of the loan will continue.

Cash App Borrow and Afterpay Post-Purchase loans that are 1 day or greater past due are considered delinquent, and those that are 90 days or more past due are generally considered to be uncollectible and written off.

As of December 31, 2025 and December 31, 2024, the amount of loans that were identified as nonperforming loans was immaterial.

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Loans are internally rated as "Pass" or "Classified".

Pass rated loans generally consist of loans that are current or up to 60 days past due.

Classified loans generally comprise of loans that are 60 days or greater past due and have a higher risk of default.

Internal risk ratings are reviewed and, generally, updated at least once a year.

As of December 31, 2024 and 2023, the amortized cost of Pass rated loans was $ 385.2 million and $ 261.4 million, respectively, and the amount of Classified loans was immaterial for both periods.

Pass rated Square Loans generally consist of loans that are current or up to 60 days past due.

Classified Square Loans generally comprise of loans that are greater than 60 days past due and have a higher risk of default.

Pass rated Cash App Borrow and Afterpay Post-Purchase loans generally consist of loans that are current.

Classified rated Cash App Borrow and Afterpay Post-Purchase loans are comprised of loans that are 1 day or greater past due, due to their short-term nature and repayment period, and have a higher risk of default.

Internal risk ratings are reviewed and, generally, updated at least annually.

As of December 31, 2025 and 2024, the amortized cost of Pass rated loans was $ 3.4 billion and $ 385.2 million, respectively.

As of December 31, 2025, the amortized cost of Classified rated loans was $ 381.0 million.

The amount of Classified rated loans was immaterial as of December 31, 2024.

Loans Held For Sale

The Company classifies loans as held for sale when there is an available market for such loans and it is the Company’s intent to sell all of its rights, title, and interest in these loans to third-party investors.

Loans held for sale primarily include Square Loans and Cash App Borrow products.

Square Loans are loans facilitated by Square Financial Services to qualified Square sellers, while Cash App Borrow is a credit product for consumers that allows customers to access short-term loans for a small fee.

Loans held for sale are recorded at the lower of amortized cost or fair value.

Square Loans that are 120 days or more past due, and Cash Borrow loans that are 90 days or more past due, are generally considered to be uncollectible and are written off.

Past due status is based on the contractual terms of the loans.

The Company aggregates loans held for sale by the intended customer of the loan product.

Commercial loans held for sale include Square Loans, Consumer loans held for sale include loans initiated through Cash App Borrow and consumer lending loans, and Other loans held for sale include loans outside of consumer and commercial loans.

The following table presents the Company’s loans held for sale aggregated by category (in thousands):

The following table presents the Company’s loans held for sale by category (in thousands):

December 31, 2025 December 31, 2024

Consumer $ 652,489 $ 274,630

Commercial $ 708,512 $ 404,844

Consumer 40,735 652,489

Other 33,719 53,774

Total $ 782,966 $ 1,111,107

Loans held for sale are recorded at the lower of amortized cost or fair value.

Square Loans that are 120 days or more past due, and Cash App Borrow and Afterpay Post-Purchase loans that are 90 days or more past due, are generally considered to be uncollectible and are written off.

Past due status is based on the contractual terms of the loans.

For the years ended December 31, 2025 and 2024, $ 4.5 billion and $ 4.2 billion of Square Loans were sold to third-party investors, respectively, and the Company recognized net gains on the sales of loans of $ 255.8 million and $ 236.8 million for the same periods.

The net gains on sales of loans are recognized in net income through “Financial solutions revenue” in the Company’s consolidated statements of operations.

NOTE 8 - PROPERTY AND EQUIPMENT, NET

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Balance at December 31, 2023 $ 11,919,720

Acquisitions 7,921

Foreign currency translation adjustments ( 428,790 )

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Foreign currency translation adjustments 431,596

Impairment charge ( 73,508 )

Balance at December 31, 2025 $ 11,849,018

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For purposes of completing its goodwill impairment tests, the Company performs either a qualitative or a quantitative analysis on a reporting unit basis.

In the fourth quarter of 2024 and 2023, the Company performed quantitative goodwill impairment testing of its reporting units and recognized impairment charges of $ 73.5 million and $ 132.3 million, respectively, related to the TIDAL reporting unit.

In the fourth quarter of 2024, the Company performed quantitative goodwill impairment testing of its reporting units and recognized impairment charges of $ 73.5 million, related to the TIDAL reporting unit.

The impairment charges were as a result of changes in TIDAL's strategic focus, including terminations of certain revenue arrangements and investment into new product areas.

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The fair value of the TIDAL reporting unit was estimated by evaluating the cost approach, based on the value of the reporting unit's net assets, and the income approach, which was based upon the present value of estimated future cash flows.

The Company performed its annual goodwill impairment assessment as of December 31, 2024 and concluded no additional goodwill impairment should be recognized.

The Company performed its annual goodwill impairment assessment as of December 31, 2025 and concluded no goodwill impairment should be recognized.

The change in the carrying value of goodwill allocated to the reportable segments was as follows (in thousands):

1 unchanged sentence

Balance at December 31, 2023 $ 6,651,128 $ 5,195,099 $ 73,493 $ 11,919,720

Acquisitions — — 7,921 7,921

Foreign currency translation adjustments ( 236,041 ) ( 192,764 ) 15 ( 428,790 )

Reallocation between segments 720,847 ( 720,847 ) — —

Impairment charge — — ( 73,508 ) ( 73,508 )

1 unchanged sentence

Foreign currency translation adjustments 237,784 193,812 — 431,596

Impairment charge — — ( 73,508 ) ( 73,508 )

Balance at December 31, 2025 $ 6,652,871 $ 5,196,147 $ — $ 11,849,018

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Customer assets 15 years 1,401,701 ( 391,100 ) 1,010,601

Trade names 9 years 383,838 ( 132,590 ) 251,248

Other 7 years 5,299 ( 5,110 ) 189

Trade names and other 9 years 389,137 ( 179,116 ) 210,021

Total $ 2,149,846 $ ( 868,176 ) $ 1,281,670

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Customer assets 15 years 1,401,102 ( 332,153 ) 1,068,949

Trade names 9 years 428,944 ( 102,774 ) 326,170

Other 9 years 13,299 ( 6,704 ) 6,595

Trade names and other 9 years 389,137 ( 137,700 ) 251,437

Total $ 2,144,030 $ ( 710,963 ) $ 1,433,067

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$ 1,071,574 $ 902,478

Processing costs receivable 478,767 365,153

Loans held for investment, net of allowance for loan losses (ii)

Loans held for sale (ii)

782,966 1,111,107

Accounts receivable, net 148,898 134,824

Processing costs receivable 448,406 478,767

Prepaid expenses 288,707 129,343

Accounts receivable, net 238,207 148,898

Inventory, net 158,319 104,990

Short term deposits (iii)

87,968 397,630

Short term deposits 110,236 87,968

Other 491,510 324,198

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(ii) Refer to Note 7, Customer Loans for further details.

(iii) As of December 31, 2023, includes a $ 350.0 million deposit held by a processor to meet requirements related to processing volumes under an arrangement that was executed in the fourth quarter of 2023.

During the first quarter of 2024, this $ 350.0 million deposit was returned to the Company.

This activity is included within cash flows from operating activities within the Company's consolidated statements of cash flows.

The following table presents the detail of inventory, net (in thousands):

2025 December 31,

Raw materials

$ 16,054 $ 16,168

Work in process

Finished goods

95,474 85,038

Total inventory, net

$ 158,319 $ 104,990

Accrued Expenses and Other Current Liabilities

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Accounts payable 114,572 117,963

Operating lease liabilities, current 55,349 52,880

Accrued royalties 51,596 57,605

Accrued transaction losses (i)

49,250 58,580

Accrued royalties 57,605 62,140

Operating lease liabilities, current 52,880 53,721

Other 301,642 270,898

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The Company recorded $ 265.8 million and $ 274.8 million for the years ended December 31, 2025 and 2024, respectively, for such losses.

Losses from peer-to-peer activity are classified within sales and marketing expenses, while all other transaction losses, including negative balances, are presented within transaction, loan, and consumer receivable losses on the consolidated statements of operations.

NOTE 12 - OTHER CONSOLIDATED BALANCE SHEET COMPONENTS (NON-CURRENT)

2 unchanged sentences

2025 December 31,

Bitcoin investment (i)

$ 792,282 $ 339,898

Investment in non-marketable equity securities (ii)

Investment in non-marketable equity securities (i)

$ 423,198 $ 245,557

2 unchanged sentences

Total $ 754,837 $ 447,266

(i) Refer to Note 13, Bitcoin for further details.

(ii) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities.

(i) Investment in non-marketable equity securities represents the Company's investments in equity of non-public entities.

These investments are measured using the measurement alternative and are therefore carried at cost, less impairment, adjusted for observable price changes from orderly transactions for identical or similar investments of the same issuer.

During the year ended December 31, 2025, one of the Company's investments closed on an additional financing round, which the Company assessed as an observable price change in an orderly transaction.

The Company recorded a $ 171.6 million upward adjustment to the carrying value of this investment, resulting in a carrying value of $ 329.8 million as of December 31, 2025.

Adjustments are recorded within other expense (income), net on the consolidated statements of operations.

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Bitcoin investment

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

The Company's bitcoin investment is initially recorded at cost, inclusive of transaction costs, and remeasured at fair value at the end of each reporting period.

As of December 31, 2025 and 2024, the Company held approximately 8,883 and 8,485 bitcoins for investment purposes with a cost basis of $ 292.6 million and $ 251.5 million, respectively.

2 unchanged sentences

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

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

Remeasurement — 207,084

Additions (i)

Remeasurement gain — 420,918

Balance at December 31, 2024 8,485 $ 792,282

Additions 447 31,466

Remeasurement — 420,918

Additions (i)

Remeasurement loss — ( 55,900 )

Balance at December 31, 2025 8,883 $ 777,515

(i) Additions primarily represent the Company's purchases of bitcoin for investment purposes.

Bitcoin for operating purposes

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The bitcoin for operating purposes is reflected on the consolidated balance sheets within “Other current assets”.

The following table summarizes the changes in the Company's bitcoin for operating purposes (in thousands, except number of bitcoin):

Amount of bitcoin

Balance at December 31, 2022 638 $ 10,941

Additions 335,213 9,369,762

Dispositions ( 335,467 ) ( 9,364,010 )

Balance at December 31, 2023 384 $ 16,693

Additions 158,775 9,940,634

Dispositions ( 159,001 ) ( 9,941,995 )

Balance at December 31, 2024 158 $ 15,332

As of December 31, 2025 and 2024, the Company held approximately 238 and 158 bitcoins for operating purposes with a fair value of $ 20.0 million and $ 15.3 million, respectively.

Given the Company holds a small amount of bitcoin for operating purposes and such bitcoin is held for only a short period, typically less than a day, any remeasurement gains or losses on the Company's bitcoin for operating purposes were immaterial.

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NOTE 14 - INDEBTEDNESS

A) Revolving Credit Facility

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

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

The Company is obligated to pay customary fees for a credit facility of this size and type including a commitment fee of 0.10 % to 0.20 % per annum on the undrawn portion of the revolving loan commitments available under the Credit Agreement.

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

As of December 31, 2024, $ 775.0 million remained available for draw subject to compliance with our covenants.

The Company incurred immaterial unused commitment fees during the years ended December 31, 2024, 2023, and 2022.

As of December 31, 2024, the Company was in compliance with all financial covenants under the Credit Agreement.

Loans under the Credit Agreement bear interest at the Company's option of (i) an annual rate based on the forward-looking term rate based on the Secured Overnight Financing Rate ("Term SOFR") or (ii) a base rate.

Loans based on Term SOFR shall bear interest at a rate equal to Term SOFR plus a margin of between 1.25 % and 1.75 %, depending on the Company's total net leverage ratio.

Loans based on the base rate shall bear interest at a rate based on the highest of the prime rate, the federal funds rate plus 0.50 %, and Term SOFR with a tenor of one-month plus 1.00 %, in each case, plus a margin ranging from 0.25 % to 0.75 %, depending on the Company's total net leverage ratio.

The Credit Agreement also contains customary affirmative and negative covenants typical for a financing of this type that, among other things, restricts the Company and certain of its subsidiaries’ ability to incur additional indebtedness, create liens, merge or consolidate or make certain dispositions, pay dividends and make distributions, enter into restrictive agreements, enter into agreements with affiliates, and make certain investments and acquisitions.

The Company also has uncommitted and unsecured lines of credit with certain third-party banks for short-term liquidity needs, subject to availability of funds, through Square Financial Services.

There were no outstanding balances as of December 31, 2024 and 2023.

B) Warehouse Funding Facilities

Following the acquisition of Afterpay, the Company assumed Afterpay's existing warehouse funding facilities.

The Company has financing arrangements with financial institutions in Australia, New Zealand, the United States, and the United Kingdom (collectively, the “Warehouse Facilities”).

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

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

While the Warehouse SPEs are included in our consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold.

The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors.

These Warehouse Facilities have maturity dates through September 2027.

As of December 31, 2024, the aggregate amount of the Warehouse Facilities, using the respective exchange rates at perio d-end , was $ 1.7 billion on a revolving basis, of which $ 1.5 billion was drawn and $ 253.9 million remained available .

All Warehouse Facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of December 31, 2024.

None of the Warehouse Facilities contain corporate financial covenants.

All Warehouse Facilities are on a variable rate basis which aligns closely to the weighted-average life of the consumer receivables they finance.

Borrowings under these facilities bear interest at (i) a base rate aligned to either the local risk free rate, such as Term SOFR and the Sterling Overnight Index Average or similar, and (ii) a margin which is set for the term of the availability period.

The interest expense incurred on the Company's Warehouse Facilities is included within general and administrative as part of the Company's operating expenses.

Interest expense on the Company's Warehouse Facilities was $ 72.0 million, $ 65.9 million, and $ 16.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.

In addition, each Warehouse Facility requires payment of immaterial commitment fees.

The table below summarizes the future scheduled principal payments of amounts drawn on the Company's Warehouse Facilities (in thousands):

The 2025 Convertible Notes, 2026 Convertible Notes, and 2027 Convertible Notes (collectively, the “Convertible Notes”), together with the 2026 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, 2032 Senior Notes, and 2033 Senior Notes (collectively, the "Senior Notes") are collectively referred to as the “Notes".

The following tables summarize the Company's Notes as of December 31, 2025 and December 31, 2024 (in thousands):

December 31, 2025

Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value

2026 Senior Notes (i)

$ 1,000,000 $ ( 1,173 ) $ 998,827

2030 Senior Notes 1,200,000 ( 14,467 ) 1,185,533

2031 Senior Notes 1,000,000 ( 7,628 ) 992,372

2032 Senior Notes 2,000,000 ( 22,266 ) 1,977,734

2033 Senior Notes 1,000,000 ( 12,419 ) 987,581

2026 Convertible Notes (i)

575,000 ( 568 ) 574,432

2027 Convertible Notes 575,000 ( 2,461 ) 572,539

Total $ 7,350,000 $ ( 60,982 ) $ 7,289,018

(i) Future scheduled principal payments in 2025 are disclosed as warehouse funding facilities, current portion within total current liabilities on the consolidated balance sheet.

December 31, 2024

Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value

2026 Senior Notes $ 1,000,000 $ ( 3,983 ) $ 996,017

2031 Senior Notes 1,000,000 ( 9,029 ) 990,971

2032 Senior Notes 2,000,000 ( 24,974 ) 1,975,026

2025 Convertible Notes (i)

1,000,000 ( 503 ) 999,497

2026 Convertible Notes 575,000 ( 2,277 ) 572,723

2027 Convertible Notes 575,000 ( 3,798 ) 571,202

Total $ 6,150,000 $ ( 44,564 ) $ 6,105,436

(i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the consolidated balance sheet.

The Company recognized interest expense on the Notes as follows (in thousands):

Year Ended December 31,

2025 2024 2023

Contractual interest expense $ 241,003 $ 148,425 $ 65,566

Amortization of debt issuance costs

11,927 11,964 10,538

Total $ 252,930 $ 160,389 $ 76,104

Senior Unsecured Notes due in 2026 and 2031

13 unchanged sentences

Issuance costs are amortized to interest expense using the effective interest method at an effective interest rate of 3.06 % and 3.69 % for each of the respective terms of the 2026 Senior Notes and 2031 Senior Notes, respectively.

Senior Unsecured Notes due in 2030 and 2033

On August 18, 2025, the Company 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 of senior notes due 2033 ("2033 Senior Notes").

The 2030 Senior Notes mature on August 15, 2030, unless earlier redeemed or repurchased, and bear interest at a rate of 5.625 % payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2026.

The 2033 Senior Notes mature on August 15, 2033, unless earlier redeemed or repurchased, and bear interest at a rate of 6.000 % payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2026.

At any time prior to August 15, 2027, in the case of the 2030 Senior Notes, and at any time prior to August 15, 2028, in the case of the 2033 Senior Notes, the Company may redeem the applicable series, in whole or part, at a price equal to 100 % of the principal amount of the notes to be redeemed plus an applicable premium and accrued and unpaid interest, if any, to but excluding the redemption date.

The applicable premium for the 2030 Senior Notes and the 2033 Senior Notes, respectively, is the greater of (1) 1.0 % of the principal amount of such series of notes, and (2) the excess, if any, of (a) the sum of the present values at the redemption date of (i) the applicable redemption price of such note that would apply if such note were redeemed on August 15, 2027, in the case of the 2030 Senior Notes, and August 15, 2028, in the case of the 2033 Senior Notes, plus (ii) the remaining scheduled payments of interest due on such note to, and including, August 15, 2027, in the case of the 2030 Senior Notes, and August 15, 2028, in the case of the 2033 Senior Notes, (excluding accrued but unpaid interest to the redemption date) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate (as defined in the applicable indenture) plus 50 basis points, over (b) the principal amount of such note to be redeemed.

On and after August 15, 2027, in the case of the 2030 Senior Notes, and August 15, 2028, in the case of the 2033 Senior Notes, the Company may redeem the notes of the applicable series at specified prices as set forth in the applicable indenture plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

If the Company experiences a change of control triggering event (as defined in the applicable indenture), the Company must offer to repurchase the 2030 Senior Notes or 2033 Senior Notes, as applicable, at a repurchase price equal to 101 % of the principal amount of the applicable notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.

The indentures governing the 2030 Senior Notes and 2033 Senior Notes each contain covenants that, among other things, restrict the ability of the Company and/or its domestic restricted subsidiaries to create certain liens and certain indebtedness, enter into sale and leaseback transactions, or to transfer all or substantially all of the Company and its subsidiaries assets to another person.

These covenants are subject to a number of other limitations and exceptions, each as set forth in the applicable indenture governing the 2030 Senior Notes and 2033 Senior Notes.

The indentures governing the 2030 Senior Notes and 2033 Senior Notes, as applicable, each provide for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency involving the Company and its significant subsidiaries.

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

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

Aggregate debt issuance costs related to the 2030 Senior Notes and 2033 Senior Notes were comprised of commissions payable to the initial purchasers of $ 22.0 million and third-party offering costs of $ 6.3 million.

Issuance costs are amortized to interest expense using the effective interest method at effective interest rates of 5.9 % and 6.2 % for the terms of the 2030 Senior Notes and 2033 Senior Notes, respectively.

Senior Unsecured Notes due 2032

15 unchanged sentences

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

Convertible Notes due in 2025

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

As of the maturity date on March 1, 2025, certain holders of the 2025 Convertible Notes had converted an immaterial aggregate principal amount of their 2025 Convertible Notes, which were settled through the issuance of an immaterial amount of shares of the Company's Class A common stock.

The Company paid a total of $ 1.0 billion in cash to settle the remaining unconverted principal balance, and interest, as of March 1, 2025.

Convertible Notes due in 2026 and 2027

14 unchanged sentences

As of December 31, 2025, no principal had converted and the if-converted value did not exceed the outstanding principal amount of either the 2026 Convertible Notes or 2027 Convertible Notes.

Convertible Notes due in 2025

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

The 2025 Convertible Notes mature on March 1, 2025, unless earlier converted or repurchased, and bear interest at a rate of 0.125 % payable semi-annually on March 1 and September 1 of each year.

The 2025 Convertible Notes are convertible at an initial conversion rate of 8.2641 shares of the Company's Class A common stock per $1,000 principal amount of 2025 Convertible Notes, which is equivalent to an initial conversion price of approximately $ 121.01 per share of Class A common stock.

Holders may convert their 2025 Convertible Notes at any time prior to the close of business on the business day immediately preceding December 1, 2024 only under the following circumstances:

(i) during any calendar quarter, commencing after the calendar quarter ending on June 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day;

(ii) during the five business day period after any five consecutive trading day period (the "measurement period") in which the trading price (as defined in the indenture governing the 2025 Convertible Notes) per $1,000 principal amount of 2025 Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate on each such trading day;

(iii) if the Company calls any or all of the 2025 Convertible Notes for redemption, such 2025 Convertible Notes called for redemption may be converted at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date;

or (iv) upon the occurrence of specified corporate events, including certain distributions, the occurrence of a fundamental change (as defined in the indenture governing the 2025 Convertible Notes) or a transaction resulting in the Company’s Class A common stock converting into other securities or property or assets.

In addition, upon occurrence of the specified corporate events prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert their 2025 Convertible Notes in connection with such an event in certain circumstances.

On or after December 1, 2024, up until the close of business on the second scheduled trading day immediately preceding the maturity date, a holder may convert all or any portion of its 2025 Convertible Notes regardless of the foregoing circumstances.

Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its Class A common stock, or a combination of cash and shares of its Class A common stock, at the Company’s election.

The Company may redeem for cash all or any part of the 2025 Convertible Notes, at its option, on or after March 5, 2023, if the last reported sale price of the Company's Class A common stock has been at least 130 % of the conversion price for the 2025 Convertible Notes then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

The circumstances to allow the holders to convert their 2025 Convertible Notes were met in the first quarter of 2021 through the first quarter of 2022.

The circumstances were not met in the subsequent periods through the year ended December 31, 2024.

As of December 31, 2024, certain holders of the 2025 Convertible Notes converted an immaterial aggregate principal amount of their 2025 Convertible Notes.

The Company has settled the conversions through the issuance of an immaterial amount of shares of the Company's Class A common stock.

As of December 31, 2024, the if-converted value did not exceed the outstanding principal amount of the 2025 Convertible Notes.

The 2025 Convertible Notes, 2026 Convertible Notes, and 2027 Convertible Notes (collectively, the “Convertible Notes”), together with the 2026 Senior Notes, 2031 Senior Notes, and 2032 Senior Notes (collectively, the "Senior Notes") are collectively referred to as the “Notes.”

The following table summarizes the Company's Notes as of December 31, 2024 (in thousands):

Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value

2026 Senior Notes $ 1,000,000 $ ( 3,983 ) $ 996,017

2031 Senior Notes 1,000,000 ( 9,029 ) 990,971

2032 Senior Notes 2,000,000 ( 24,974 ) 1,975,026

2025 Convertible Notes (i)

1,000,000 ( 503 ) 999,497

2026 Convertible Notes 575,000 ( 2,277 ) 572,723

2027 Convertible Notes 575,000 ( 3,798 ) 571,202

Total $ 6,150,000 $ ( 44,564 ) $ 6,105,436

(i) Net carrying value disclosed as current portion of long-term debt within total current liabilities on the consolidated balance sheet.

The following table summarizes the Company's Notes as of December 31, 2023 (in thousands):

Principal Outstanding Unamortized Debt Issuance Costs Net Carrying Value

2031 Senior Notes $ 1,000,000 $ ( 10,433 ) $ 989,567

2026 Senior Notes 1,000,000 ( 6,792 ) 993,208

2027 Convertible Notes 575,000 ( 5,135 ) 569,865

2026 Convertible Notes 575,000 ( 3,986 ) 571,014

2025 Convertible Notes 1,000,000 ( 3,563 ) 996,437

Total $ 4,150,000 $ ( 29,909 ) $ 4,120,091

The Company recognized interest expense on the Notes as follows (in thousands):

Year Ended December 31,

2024 2023 2022

Contractual interest expense $ 148,425 $ 65,566 $ 66,910

Amortization of debt issuance costs

11,964 10,538 10,979

Total $ 160,389 $ 76,104 $ 77,889

Convertible Note Hedge and Warrant Transactions

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The net costs incurred in connection with the 2026 Convertible Note Hedges and 2026 Warrants were recorded as a reduction to additional paid-in capital on the consolidated balance sheets.

In connection with the offering of the 2025 Convertible Notes, the Company entered into convertible note hedge transactions ("2025 Convertible Note Hedges") with certain financial institution counterparties ("2025 Note Hedge Counterparties") whereby the Company has the option to purchase a total of approximately 8.3 million shares of its Class A common stock at a price of approximately $ 121.01 per share.

The total cost of the 2025 Convertible Note Hedges was $ 149.2 million.

In addition, the Company sold warrants ("2025 Warrants") to the 2025 Note Hedge Counterparties whereby the 2025 Note Hedge Counterparties have the option to purchase a total of 8.26 million shares of the Company’s Class A common stock at a price of approximately $ 161.34 per share.

The Company received $ 99.5 million in cash proceeds from the sale of the 2025 Warrants.

Taken together, the purchase of the 2025 Convertible Note Hedges and sale of the 2025 Warrants are intended to reduce dilution from the conversion of the 2025 Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted 2025 Convertible Notes, as the case may be, and to effectively increase the overall conversion price from approximately $ 121.01 per share to approximately $ 161.34 per share.

As these instruments are considered indexed to the Company's own stock and are considered equity classified, the 2025 Convertible Note Hedges and 2025 Warrants are recorded in stockholders’ equity, are not accounted for as derivatives, and are not remeasured each reporting period.

The net costs incurred in connection with the 2025 Convertible Note Hedges and 2025 Warrants were recorded as a reduction to additional paid-in capital on the consolidated balance sheets.

In connection with the offering of the 2025 Convertible Notes, the Company entered into convertible note hedge transactions ("2025 Convertible Note Hedges").

As of December 31, 2025, the 2025 Convertible Note Hedges were completely settled and no longer outstanding and did not result in the receipt of common stock shares.

In addition, the warrants entered into in connection with the issuance of the 2025 Convertible Notes expired evenly over a 60 trading day period starting on June 2, 2025 and ending on August 26, 2025.

None of the warrants were exercised over the trading day period.

B) Revolving Credit Facility

As of December 31, 2025, no funds have been drawn and no letters of credit have been issued under the Credit Agreement.

As of December 31, 2025, $ 775.0 million remained available for draw subject to compliance with our covenants.

The Company incurred immaterial unused commitment fees during the years ended December 31, 2025, 2024, and 2023.

As of December 31, 2025, the Company was in compliance with all financial covenants under the Credit Agreement.

Loans based on Term SOFR shall bear interest at a rate equal to Term SOFR plus a margin of between 1.25 % and 1.75 %, depending on the Company's total net leverage ratio.

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

The Restated Credit Agreement extends the maturity date to January 14, 2031, provided that if on the date that is 91 days prior to the maturity date of any of the Company's 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.

The Restated Credit Agreement replaces the financial covenant with a maximum total net leverage ratio covenant, determined as set forth in the Restated Credit Agreement, to be tested on the last day of each fiscal quarter.

The Restated Credit Agreement also contains customary affirmative and negative covenants typical for a facility of this type that, among other things, restrict the Company's domestic restricted subsidiaries from incurring debt for borrowed money, the Company and its domestic restricted subsidiaries from granting liens to secure debt for borrowed money and entering into sale and leaseback transactions, and the Company from making certain investments and certain restricted payments.

C) Square Financial Services Lines of Credit

The Company also has uncommitted and unsecured lines of credit with certain third-party banks for short-term liquidity needs, subject to availability of funds, through Square Financial Services.

There were no outstanding balances as of December 31, 2025 and 2024.

D) Warehouse Funding Facilities

The Company has financing arrangements with financial institutions in Australia, New Zealand, the United States, and the United Kingdom (collectively, the “Warehouse Facilities”) in connection with certain of its BNPL products.

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

While the Warehouse SPEs are included in our consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold.

The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors.

These Warehouse Facilities have maturity dates through September 2028.

As of December 31, 2025, the aggregate amount of the Warehouse Facilities, using the respective exchange rates at perio d-end , was $ 1.7 billion on a revolving basis, of which $ 1.4 billion was drawn and $ 323.9 million remained available .

All Warehouse Facilities contain portfolio parameters based on performance of the underlying consumer receivables, which each respective region has satisfied as of December 31, 2025.

None of the Warehouse Facilities contain corporate financial covenants.

All Warehouse Facilities are on a variable rate basis which aligns closely to the weighted-average life of the consumer receivables they finance.

The interest expense incurred on the Company's Warehouse Facilities is included within general and administrative as part of the Company's operating expenses.

Interest expense on the Company's Warehouse Facilities was $ 49.4 million, $ 72.0 million, and $ 65.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.

In addition, each Warehouse Facility requires payment of immaterial commitment fees.

The table below summarizes the future scheduled principal payments of amounts drawn on the Company's Warehouse Facilities (in thousands):

Total $ 1,364,883

(i) Future scheduled principal payments in 2026 are disclosed as warehouse funding facilities, current, within total current liabilities on the consolidated balance sheet.

NOTE 15 - INCOME TAXES

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Foreign ( 53,718 ) 5,592 ( 2,275 )

Total deferred benefit from income taxes ( 1,665,812 ) ( 85,879 ) ( 69,593 )

Total benefit from income taxes $ ( 1,509,343 ) $ ( 8,019 ) $ ( 12,312 )

The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate:

Total deferred tax provision for (benefit from) income taxes 335,038 ( 1,665,812 ) ( 85,879 )

Total provision for (benefit from) income taxes $ 385,701 $ ( 1,509,343 ) $ ( 8,019 )

The effective income tax rate for the year ended December 31, 2025 differs from the statutory federal income tax rate as follows (in thousands, except percentages):

Year Ended December 31, 2025

Tax at federal statutory rate $ 357,813 21.2 %

State and local taxes, net of federal benefit (i)

Foreign tax effects

Change in valuation allowance ( 55,904 ) ( 3.3 )

Other 4,958 0.3

Other foreign jurisdictions 27,402 1.6

Effect of cross border tax laws

Subpart F inclusion

Research and development credits ( 55,885 ) ( 3.3 )

Changes in valuation allowance ( 2,160 ) ( 0.1 )

Non-taxable or non-deductible items

Share-based compensation 13,371 0.8

Other 18,975 1.1

Changes in unrecognized tax benefits

( 13,605 ) ( 0.8 )

Other ( 7,185 ) ( 0.5 )

Total $ 385,701 22.8 %

(i) A multitude of states contribute to the majority (greater than 50%) of the tax effect in this category, however there is no single jurisdiction that is individually material to the state tax expense.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

2024 December 31,

Tax at federal statutory rate 21.0 % 21.0 %

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Non-deductible acquisition-related costs — ( 15.0 )

Foreign exchange gain/loss 0.1 174.1 ( 0.2 )

Foreign exchange gain 0.1 174.1

Impairment loss 2.1 ( 60.8 )

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Total ( 111.2 ) % 27.5 %

The following is a summary of income taxes paid for the year ended December 31, 2025 (in thousands):

Year Ended December 31, 2025

Federal $ 35,000

State and local

California 19,465

Other state and local 31,869

United Kingdom 33,665

Other foreign 9,391

Total income taxes, net of amounts refunded $ 129,390

The tax effects of temporary differences and related deferred tax assets and liabilities were as follows (in thousands):

2025 December 31,

Deferred tax assets:

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Tax credit carryforwards 530,468 485,266

Share-based compensation 34,979 45,153

Intangible and other assets 291,363 375,316

Other 213,070 250,371

Operating lease liability 81,885 85,154

Cryptocurrency investment — —

Deferred consideration 9,192 6,943

Convertible notes 18,339 33,952

Total deferred tax assets 2,112,827 2,508,096

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Deferred tax liabilities:

Intangible and other assets — ( 332,512 )

Unrealized gain on investments ( 80,433 ) ( 36,582 )

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Total deferred tax liabilities ( 254,161 ) ( 223,314 )

Net deferred tax assets (liabilities)

Net deferred tax assets

$ 1,301,603 $ 1,638,559

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Deferred tax liabilities ( 1,173 ) ( 162,435 )

Net deferred tax assets (liabilities) $ 1,638,559 $ ( 26,298 )

On December 31, 2024, the Company completed certain internal restructuring steps resulting in the internal transfer of rest of world intellectual property from certain international subsidiaries into the U.S.

The result of the intellectual property integration is the generation of an Internal Revenue Code ("IRC") Section IRC 197 tax amortizable intangible for the Block, Inc.

consolidated federal tax filing.

The IRC 197 intangible is amortizable over 15 years and a deferred tax asset of $ 376 million is recognized as of December 31, 2024.

In addition, as part of the internal restructuring steps, the Company integrated into the Block, Inc.

federal consolidated tax filing group several international subsidiaries:

Clearpay S.A.U.

(Spain), Clearpay Technology SL (Spain)., Clearpay Finance Limited (UK), and Squareup Pte Ltd.

The result of the integration is the generation of additional tax amortizable IRC 197 intangibles and IRC 174 tax amortization for the Block Inc.

US consolidated federal tax filing, resulting in a deferred tax asset of $ 226 million.

Net deferred tax assets $ 1,301,603 $ 1,638,559

Realization of deferred tax assets is dependent upon the generation of future taxable income, the timing and amount of which are uncertain.

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In 2025, the Company's U.S.

consolidated group generated a current tax provision resulting from, among other factors, increased net earnings, the requirement to capitalize research and development expenses under Internal Revenue Code ("IRC") Section 174, and a decline in stock-based compensation deductions.

consolidated group generated a current tax benefit resulting from, among other factors, the One Big Beautiful Bill Act (H.R.

1), which no longer requires the capitalization of certain research and development expenses under Internal Revenue Code ("IRC") Section 174.

The Company's U.S.

consolidated group has significant deferred tax assets in the form of net operating loss carryovers, tax credit carryovers, capitalized costs resulting from the IRC Section 174 capitalization requirement, and other tax deductible temporary differences.

In the fourth quarter of 2024, based on the relative weight of positive and negative evidence, 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 due to the following forms of positive evidence:

our emergence into a three year cumulative income position, a history of U.S.

federal and state taxable income on recent tax return filings, continued utilization and net reduction of federal and state tax attribute carryovers, reversal of deferred tax liabilities, and forecasts of worldwide and U.S.

pre-tax earnings.

Therefore, we released the valuation allowance associated with a significant 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.

Additionally, the Company has maintained a valuation allowance on certain federal deferred tax assets in the form of loss carryovers that have federal limits or restrictions on utilization, foreign tax credit carryovers, and capital losses which do not have sufficient evidence of future income of the appropriate character to recognize.

The Company has maintained a valuation allowance on certain federal deferred tax assets in the form of loss carryovers that have federal limits or restrictions on utilization, foreign tax credit carryovers, and capital losses which do not have sufficient evidence of future income of the appropriate character to recognize.

Further, the Company has maintained a full valuation allowance against its California deferred tax assets, which consist primarily of tax loss carryovers and tax credit carryovers.

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The amount of deferred tax assets considered realizable in future periods may change as management continues to reassess the underlying factors it uses in estimating future taxable income.

The valuation allowance decreased by approximately $ 1.4 billion and decreased by $ 98.9 million during the years ended December 31, 2024, and 2023, respectively.

Further, in the fourth quarter of 2024, we reached a settlement with the Singapore tax authorities in relation to historical tax losses incurred by our Singapore subsidiary.

The result is a reduction to our tax loss carryover asset of $ 140 million and a corresponding release of the uncertain tax positions and valuation allowance against the tax loss carryover asset.

As of December 31, 2024, the Company had $ 669.0 million of federal, $ 3.8 billion of state, and $ 767.5 million of foreign net operating loss carryforwards.

The remaining federal net operating loss carryforwards have no expiration date.

The valuation allowance decreased by approximately $ 89.2 million and $ 1.4 billion during the years ended December 31, 2025 and 2024, respectively.

The year ended December 31, 2024 included one-time benefits from income taxes of $ 1.9 billion related to both the release of the Company's 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.

As of December 31, 2025, the Company had $ 1.4 billion of federal, $ 3.9 billion of state, and $ 755.7 million of foreign net operating loss carryforwards.

Th e remaining federal net operating loss carryforwards have no expiration date.

The state operating losses will begin to expire in 2030 and the foreign net operating loss carryforwards will begin to expire in 2026.

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Unrecognized tax benefit, beginning of the period $ 633,589 $ 465,103 $ 506,512

Gross increases and decreases related to prior period tax positions 34,050 ( 7,348 ) 5,431

Gross increases and decreases related to current period tax positions 139,217 ( 30,063 ) 30,988

Gross increases (decreases) related to prior period tax positions ( 24,004 ) 34,050 ( 7,348 )

Gross increases (decreases) related to current period tax positions 27,221 139,217 ( 30,063 )

Reductions related to lapse of statute of limitations ( 10,051 ) ( 4,781 ) ( 3,998 )

Gross increases related to acquisitions — — 24,651

Unrecognized tax benefit, end of the period $ 626,755 $ 633,589 $ 465,103

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The Company had total accrued interest and penalties of $ 22.0 million, $ 23.8 million, and $ 22.1 million related to uncertain tax positions for the years ended December 31, 2025, 2024, and 2023, respectively.

It is reasonably possible that over the next 12-month period the Company may experience a decrease in its unrecognized tax benefits as a result of tax examinations or lapses of statute of limitations.

The estimated decrease in unrecognized tax benefits may range up to $ 23.8 million.

The Company is subject to taxation in the United States and various state and foreign jurisdictions.

The Company is currently under examination in California for tax years 2013, 2014, and 2016 and in Texas for tax years 2015 to 2019.

The Company is currently under examination in California for tax years 2013, 2014, and 2016 and in Texas for tax years 2015 to 2019 and Illinois for tax years 2022 and 2023.

The Company’s various tax years starting with 2009 to 2024 remain open in various taxing jurisdictions.

As of December 31, 2024, the Company has not provided deferred U.S.

income taxes or foreign withholding taxes on temporary differences resulting from earnings for certain non-U.S.

subsidiaries, which are permanently reinvested outside the U.S.

cumulative undistributed earnings for these non-U.S.

subsidiaries as of December 31, 2024 are $ 125.4 million.

NOTE 16 - STOCKHOLDERS' EQUITY

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The holders of Class A common stock and Class B common stock have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

In conjunction with the 2025 Convertible Notes offering, the Company sold the 2025 Warrants whereby the counterparties have the option to purchase a total of approximately 8.3 million shares of the Company’s Class A common stock at a price of $ 161.34 per share.

The 2025 Warrants expire evenly over a 60 trading day period starting on June 1, 2025.

None of the warrants were exercised as of December 31, 2024.

Conversion of Convertible Notes and Exercise of Convertible Note Hedges

As of the maturity date on March 1, 2025, certain holders of the 2025 Convertible Notes had converted an immaterial aggregate principal amount of their 2025 Convertible Notes.

The Company settled the conversions through the issuance of an immaterial amount of shares of the Company's Class A common stock and paid a total of $ 1.0 billion in cash to settle the remaining unconverted principal balance, and interest, as of March 1, 2025.

Additionally, there were no convertible note hedges exercised, and no shares were received as of December 31, 2025.

In conjunction with the 2025 Convertible Notes offering, the Company sold the 2025 Warrants whereby the counterparties had the option to purchase a total of approximately 8.3 million shares of the Company’s Class A common stock at a price of $ 161.34 per share.

The 2025 Warrants expired evenly over a 60 trading day period starting on June 1, 2025 and ending on August 26, 2025.

None of the warrants were exercised.

In conjunction with the 2026 Convertible Notes offering, the Company sold the 2026 Warrants whereby the counterparties have the option to purchase a total of approximately 1.9 million shares of the Company’s Class A common stock at a price of $ 368.16 per share.

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Share Repurchase Program

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

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

During the year ended December 31, 2024, the Company repurchased 16.9 million shares of its Class A common stock for an aggregate amount of $ 1.2 billion.

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.

During the year ended December 31, 2025, the Company repurchased 36.5 million shares of its Class A common stock for an aggregate amount of $ 2.3 billion, excluding excise tax, which were immaterial.

As of December 31, 2025, $ 5.3 billion remained available and authorized for repurchases under this share repurchase program.

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The Company maintains two share-based employee compensation plans:

the 2009 Stock Plan ("2009 Plan") and the 2015 Equity Incentive Plan ("2015 Plan").

The 2015 Plan serves as the successor to the 2009 Plan.

The 2015 Plan became effective as of November 17, 2015.

Outstanding awards under the 2009 Plan continue to be subject to the terms and conditions of the 2009 Plan.

Since November 17, 2015, no additional awards have been nor will be granted in the future under the 2009 Plan.

As of December 31, 2024, the total number of shares subject to stock options ("ISOs" and "NSOs", respectively), restricted stock awards ("RSAs"), and restricted stock units ("RSUs") outstanding under the 2009 Plan was 0.3 million shares.

Under the 2015 Plan, shares of the Company's Class A common stock are reserved for the ISOs and NSOs, RSAs, RSUs, performance shares, and stock bonuses to qualified employees, directors, and consultants.

the 2015 Equity Incentive Plan ("2015 Plan") and the 2025 Equity Incentive Plan ("2025 Plan").

The 2025 Plan became effective as of June 17, 2025 and replaced the 2015 Plan as of such date, such that no further awards will be granted under the 2015 Plan.

Any awards outstanding under the 2015 Plan as of the date the 2025 Plan became effective will remain outstanding under the 2015 Plan in accordance with their existing terms.

Under the 2025 Plan, shares of the Company's Class A common stock are reserved for the issuance of incentive and nonstatutory stock options (ISOs and NSOs, respectively), stock appreciation rights ("SARs"), restricted stock awards, restricted stock units ("RSUs"), performance awards, and other stock and cash-based awards to eligible employees, directors, and consultants.

The awards must be granted at a price per share not less than the fair market value at the date of grant.

Initially, 30 million shares were reserved under the 2015 Plan and any shares subject to options or other similar awards granted under the 2009 Plan that expire, are forfeited, are repurchased by the Company or otherwise terminate unexercised will become available under the 2015 Plan.

The number of shares available for issuance under the 2015 Plan has been and will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 40 million shares, (ii) 5 % of the outstanding shares on the last day of the immediately preceding fiscal year, or (iii) such number of shares determined by the administrator of the Plan.

The administrator consists of the Board of Directors who then delegates the responsibilities to the Compensation Committee.

As of December 31, 2024, the total number of shares subject to stock options, RSAs, and RSUs outstanding under the 2015 Plan was 39 million shares, and 138 million shares were available for future issuance.

A maximum aggregate of 80,000,000 shares were reserved for issuance pursuant to awards under the 2025 Plan.

As of December 31, 2025, there were 31.7 million shares outstanding under the 2015 Plan and 76.2 million shares available for future issuance under our 2025 Plan.

A summary of stock option activity for the year ended December 31, 2025 is as follows (in thousands, except share and per share data):

22 unchanged sentences

Unvested, end of the period 31,287 $ 66.31

The total fair value of shares vested was $ 1.2 billion, $ 873.0 million, and $ 724.2 million in the years ended December 31, 2024, 2023, and 2022, respectively.

The total fair value of shares vested was $ 1.2 billion, $ 1.2 billion, and $ 873.0 million in the years ended December 31, 2025, 2024, and 2023, respectively.

Employee Stock Purchase Plan

On November 17, 2015, the Company’s 2015 Employee Stock Purchase Plan ("ESPP") became effective.

The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 25 %, subject to any plan limitations.

The ESPP provides for 12 -month offering periods.

The offering periods are scheduled to start on the first trading day on or after May 15 and November 15 of each year.

Each offering period includes two purchase periods, which begin on the first trading day on or after November 15 and May 15, and ending on the last trading day on or before May 15 and November 15, respectively.

Employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or the last trading day of the purchase period.

The number of shares available for sale under the ESPP will be increased annually on the first day of each fiscal year, equal to the least of (i) 8.4 million shares, (ii) 1 % of the outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year, or (iii) such other amount as determined by the administrator.

As of December 31, 2024, 11 million shares had been purchased under the ESPP and 34 million shares were available for future issuance under the ESPP.

The Block, Inc.

Amended and Restated 2015 Employee Stock Purchase Plan ("ESPP") was approved by stockholders on June 17, 2025.

The ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 25 % of eligible compensation, subject to any plan limitations.

The ESPP provides for 12 -month offering periods that commence on the first trading day on or after May 15 and November 15 of each year.

Each offering period includes two purchase periods, which commence on the first trading day on or after November 15 and May 15, and terminate on the last trading day on or before May 15 and November 15, respectively.

A maximum aggregate of 34,000,000 shares of the Company's Class A common stock are available for purchase under the ESPP.

As of December 31, 2025, 12.5 million shares had been purchased under the ESPP and 21.5 million shares remained available for future purchase under the ESPP.

Share-Based Compensation

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Total $ 1,215,480 $ 1,272,557 $ 1,276,097

The Company recorded tax benefits related to stock-based compensation expense of $ 322.0 million, $ 228.2 million and $ 218.9 million, during the years ended December 31, 2024, 2023, and 2022, respectively.

The Company recorded $ 25.0 million, $ 63.3 million, and $ 61.4 million of share-based compensation expense related to the Company's 2015 Employee Stock Purchase Plan during the years ended December 31, 2024, 2023 and 2022, respectively.

The total share-based compensation expense for the year ended December 31, 2022 includes a $ 66.3 million one-time charge related to the acceleration of various share-based arrangements associated with the acquisition of Afterpay.

The Company recorded a tax expense related to stock-based compensation of $ 26.5 million during the year ended December 31, 2025 and a tax benefit related to stock-based compensation of $ 322.0 million and $ 228.2 million during the years ended December 31, 2024 and 2023, respectively.

The Company recorded $ 38.3 million, $ 25.0 million, and $ 63.3 million of share-based compensation expense related to the Company's Amended and Restated 2015 Employee Stock Purchase Plan during the years ended December 31, 2025, 2024 and 2023, respectively.

The Company capitalized $ 31.8 million, $ 41.2 million, and $ 30.9 million of share-based compensation expense related to capitalized software during the years ended December 31, 2025, 2024, and 2023, respectively.

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Basic net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding during the period.

Diluted net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.

Diluted net income (loss) per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.

In periods when the Company reported a net loss, diluted net loss per share is the same as basic net loss per share because the effects of potentially dilutive items were anti-dilutive.

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2025 2024 2023

Basic net income (loss) per share:

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

Shares used to compute basic net income (loss) per share 616,993 608,856 578,949

Basic net income (loss) per share $ 4.70 $ 0.02 $ ( 0.93 )

Diluted net income (loss) per share:

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

Basic net income per share:

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

Shares used to compute basic net income per share 612,243 616,993 608,856

Basic net income per share $ 2.13 $ 4.70 $ 0.02

Diluted net income per share:

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

Interest expense on convertible notes 4,016 6,216 —

Net income (loss) used to compute diluted net income (loss) per share $ 2,903,263 $ 9,772 $ ( 540,747 )

Shares used to compute basic net income (loss) per share 616,993 608,856 578,949

Net income used to compute diluted net income (loss) per share $ 1,309,652 $ 2,903,263 $ 9,772

Shares used to compute basic net income per share 612,243 616,993 608,856

Stock options, restricted stock, and employee stock purchase plan 5,392 7,289 5,168

Convertible notes 5,203 12,108 —

Shares used to compute diluted net income (loss) per share 636,390 614,024 578,949

Diluted net income (loss) per share $ 4.56 $ 0.02 $ ( 0.93 )

Shares used to compute diluted net income per share 622,838 636,390 614,024

Diluted net income per share $ 2.10 $ 4.56 $ 0.02

The following potential common shares were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive for the periods presented (in thousands):

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The Company’s operating leases are primarily comprised of office facilities.

The Company's leases have remaining lease terms of one year to 12 years, some of which include options to extend up to five year terms, or include options to terminate the leases with advanced notice.

The Company's leases have remaining lease terms of one year to eleven years , some of which include options to extend up to five year terms, or include options to terminate the leases with advanced notice.

None of the options to extend the leases have been included in the measurement of the right-of-use asset or the associated lease liability.

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2026 $ 419,504

Thereafter 392,000

Total $ 2,351,008

1 unchanged sentence

The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, investigations, and regulatory proceedings.

In January 2025, the Company entered into a consent order with the Consumer Financial Protection Bureau (“CFPB”) to settle claims from the CFPB related to, among other things, Cash App's handling of customer complaints and disputes.

Pursuant to the consent order, the Company paid a $ 55 million civil monetary penalty in January 2025 and agreed to pay between $ 75 million and $ 120 million in restitution to certain Cash App customers.

The settlement amounts are reflected in the financial statements as of and for the year ended December 31, 2024.

In January 2025, the Company entered into a settlement agreement and consent order (the “settlement agreement”) with various state money transmission license regulators (the “MTL regulators”) related to aspects of its Bank Secrecy Act/anti-money laundering program.

Pursuant to the settlement agreement, the Company agreed to pay $ 80 million in administrative penalties and costs, with payments expected to be completed in or around February 2025.

The settlement amount is reflected in the financial statements as of and for the year ended December 31, 2024.

The Company is continuing negotiations with the New York State Department of Financial Services ("NYDFS"), one of its MTL and virtual currency regulators, related to, among other things, aspects of its Bank Secrecy Act/anti-money laundering and bitcoin programs.

In January 2025, NYDFS presented the Company with potential terms for resolving this matter, and the Company is engaging in conversations with NYDFS to determine whether this matter can be settled on acceptable terms.

The Company has accrued a liability for an estimated amount in connection with this matter in accordance with ASC 450.

The accrued amount was not material to the financial statements as of December 31, 2024.

Regulatory and Governmental Matters

The Company received subpoenas from Attorneys General from multiple states, seeking the production of information related to, among other things, Cash App’s handling of customer complaints and disputes.

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

In December 2024, the state Attorneys General presented the Company with potential terms for resolving this matter and the Company is engaging in conversations with the state Attorneys General to determine if this matter can be settled on acceptable terms.

The Company is unable to predict the likely outcome of this matter, which may include one or more public orders, and cannot provide any assurance that the state Attorneys General will not ultimately take legal action against the Company or that the outcome of these matters will not have a material adverse effect on the Company.

It is probable that the Company will incur a loss in connection with this matter, and the loss could be material;

however, the Company cannot estimate the amount of possible loss or range of loss at this time.

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

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The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company.

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

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

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

In January 2025, the Tax Collector rejected the Company’s request for redetermination, and the Company paid the assessed amount of $ 71.4 million and plans to file a claim for a refund.

Given the amount must be paid to initiate the dispute process and will be returned in full or used to settle any final amount due to the Tax Collector, the Company views the amount as a deposit asset in the period the payment is made.

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

The Company estimates that it could incur losses associated with taxes, interest, and penalties that range from approximately $ 0 to $ 97 million in the aggregate for the fiscal years 2020, 2021, 2022, 2023 and 2024.

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

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

Litigation Matters

On January 17, 2025, a putative federal securities class action was filed in the U.S.

District Court for the Northern District of California against the Company and certain of its officers alleging violations of Sections 10(b) and 20(a) of the Exchange Act on behalf of a putative class of persons who purchased or otherwise acquired the Company’s Class A common stock between February 26, 2020 and August 1, 2024.

The plaintiff alleges, among other things, that the Company made materially false or misleading statements regarding its anti-money laundering (“AML”) and compliance programs and seeks unspecified damages, attorneys’ fees and other costs.

On June 18, 2025, plaintiffs filed an amended consolidated complaint.

On January 6, 2026, the court denied the Company’s motion to dismiss.

In addition, between February 5, 2025 and April 24, 2025, multiple shareholder derivative actions were filed in the U.S.

District Court for the Northern District of California against certain of the Company’s current and former directors and officers based on allegations substantially similar to the securities class action.

The plaintiffs seek unspecified damages, attorneys' fees and other costs.

On May 7, 2025, the Court ordered that the actions were related and renamed the related cases as “In re Block, Inc.

Shareholder Derivative Litigation.” On January 6, 2026, the court denied the Company’s motions to dismiss in the derivative actions.

A separate derivative action making similar claims and requesting similar damages was filed on October 9, 2025 in the U.S.

District Court for the Northern District of California that has not been consolidated.

It is reasonably possible that the Company will incur a loss in connection with these federal securities and derivative matters, and the loss could be material;

however, the Company cannot estimate the amount of loss or range of loss at this time.

In June 2024, the Office of the Treasurer and Tax Collector of the City and County of San Francisco (the "Tax Collector") issued an assessment of San Francisco gross receipts tax, including interest and penalties, for fiscal years 2020 through 2022, asserting the Company owes incremental taxes on a portion of the receipts generated by the Company related to sales of bitcoin.

The Company paid the assessed amount of $ 71.4 million in January 2025.

In September 2025, the Tax Collector issued an assessment of gross receipt tax, including tax, interest, and penalties, of $ 42.7 million for fiscal years 2023 and 2024, which the Company paid in October 2025.

In both cases, the Company paid the assessment in order to preserve its rights to dispute the assessments and initiate the dispute process.

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

Given the assessed amounts must be paid to initiate the dispute process and will be returned in full or used to settle any final amount due to the Tax Collector, the Company views the amounts as deposit assets.

The Company estimates its aggregate exposure for fiscal years 2020 through 2024 could be up to $ 114 million, which is the full amount of the assessments already paid.

The Tax Collector may continue to challenge the Company's gross receipts tax positions.

The Company has currently concluded that a loss for this matter is not probable.

The Company regularly assesses the likelihood of adverse outcomes resulting from litigation and regulatory proceedings and adjusts the financial statements based on such assessments.

The eventual outcome of these matters may differ materially from the estimates the Company has currently accrued in the financial statements.

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

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

The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability, if any, with respect to any of these other matters.

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• Cash App includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments.

Cash App also includes Cash App Card which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM.

Cash App also includes the BNPL platform.

Cash App also includes Cash App Card, which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM, as well as Cash App Borrow, which is a credit product that allows eligible customers to access short-term loans for a fee.

Cash App also includes all BNPL products.

• Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App.

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Cash App Square Corporate and Other

Transaction-based revenue $ 352,699 $ 6,260,981 $ — $ 6,613,680

Subscription and services-based revenue 5,695,976 1,278,933 189,890 7,164,799

Hardware revenue — 141,742 1,627 143,369

Bitcoin revenue 10,199,205 — — 10,199,205

Commerce enablement revenue $ 3,912,171 $ 7,425,962 $ 176,029 $ 11,514,162

Financial solutions revenue 3,165,594 1,011,140 — 4,176,734

Bitcoin ecosystem revenue 8,347,278 14,809 140,700 8,502,787

Segment revenue

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Cash App Square Corporate and Other

Transaction-based revenue $ 498,176 $ 5,817,125 $ — $ 6,315,301

Subscription and services-based revenue 4,685,208 1,059,081 200,553 5,944,842

Hardware revenue — 157,178 — 157,178

Bitcoin revenue 9,498,302 — — 9,498,302

Commerce enablement revenue $ 3,482,648 $ 6,840,133 $ 189,672 $ 10,512,453

Financial solutions revenue 2,409,294 841,523 — 3,250,817

Bitcoin ecosystem revenue 10,355,938 — 1,845 10,357,783

Segment revenue $ 16,247,880 $ 7,681,656 $ 191,517 $ 24,121,053

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Cash App Square Corporate and Other

Transaction-based revenue $ 466,171 $ 5,235,369 $ — $ 5,701,540

Subscription and services-based revenue 3,452,777 894,350 205,646 4,552,773

Hardware revenue — 164,418 — 164,418

Bitcoin revenue 7,112,856 — — 7,112,856

Commerce enablement revenue $ 2,986,409 $ 6,343,078 $ 200,553 $ 9,530,040

Financial solutions revenue 2,026,955 690,306 — 2,717,261

Bitcoin ecosystem revenue 9,668,322 — — 9,668,322

Segment revenue $ 14,681,686 $ 7,033,384 $ 200,553 $ 21,915,623

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Total segment gross profit $ 10,270,584 $ 8,837,923 $ 7,452,117

Corporate and other gross profit 89,345 51,113 52,769

Product development 2,907,889 2,914,415 2,720,819

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Transaction, loan, and consumer receivable losses 1,337,246 794,221 660,663

Bitcoin impairment losses — — 46,571

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

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

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Fair value of common stock issued related to business combinations — — ( 6,658 )

Fair value of common stock issued to settle the conversion of convertible notes — — ( 2,523 )

Fair value of shares received to settle convertible note hedges — — 133,144

Fair value of common stock issued in connection with the exercise of common stock warrants — — ( 806,446 )

Bitcoin lent to third-party borrowers — — 5,934

NOTE 22 - SUBSEQUENT EVENTS

On February 26, 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 currently estimate that we will incur charges of approximately $ 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.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data