Earnings call transcript: Block’s Q2 2025 sees stock surge despite earnings miss

Block Inc. (symbol:XYZ), with a market capitalization of $46.86 billion, reported its second quarter 2025 earnings, revealing a mixed financial performance. The company missed analyst expectations with earnings per share (EPS) of $0.62 compared to the forecasted $0.67, a 7.46% shortfall. Revenue also fell short at $6.05 billion against an anticipated $6.27 billion. Despite these misses, Block’s stock price surged by 9.07% in pre-market trading, reaching $83.82, driven by strong operational updates and future growth prospects. According to InvestingPro analysis, Block currently appears undervalued based on its Fair Value assessment.

Key Takeaways

• Block’s EPS and revenue missed forecasts by 7.46% and 3.51%, respectively.
• Stock surged 9.07% in pre-market trading, indicating positive investor sentiment.
• Gross profit increased by 14% year-over-year to $2.5 billion.
• Block raised its full-year gross profit guidance to $10.17 billion.
• New product launches include Square AI and Bitcoin payments on Square.

Company Performance

Block demonstrated robust operational performance in Q2 2025, with gross profit rising by 14% year-over-year to $2.5 billion. The company also achieved its highest quarterly adjusted operating income margin at 22%, highlighting efficient cost management. With a healthy current ratio of 2.27 and revenue growth of 4.6% over the last twelve months, Block maintains strong financial fundamentals. InvestingPro analysis reveals 10+ additional investment tips for Block, including insights on profitability trends and market positioning.

Financial Highlights

• Revenue: $6.05 billion, down from the forecasted $6.27 billion.
• Earnings per share: $0.62, below the expected $0.67.
• Adjusted operating income: $550 million, up 38% year-over-year.
• Cash App peer-to-peer volume: $218 billion over the last 12 months.
• International gross payment volume growth accelerated to 25%.

Earnings vs. Forecast

Block’s Q2 2025 earnings fell short of expectations, with a 7.46% EPS miss and a 3.51% revenue shortfall. This marks a deviation from previous quarters where the company met or exceeded forecasts. The shortfall is attributed to slower-than-expected revenue growth, although operational efficiencies partially offset this impact.

Market Reaction

Despite missing earnings expectations, Block’s stock rose 9.07% in pre-market trading to $83.82. This positive reaction aligns with the strong analyst consensus, with analyst targets ranging from $35 to $105 per share. Block’s P/E ratio of 18.06 suggests reasonable valuation metrics relative to its peers. InvestingPro’s comprehensive Research Report offers detailed analysis of Block’s valuation metrics and growth potential, part of its coverage of 1,400+ top US stocks.

Outlook & Guidance

Looking ahead, Block has raised its full-year gross profit guidance to $10.17 billion, reflecting a 14% year-over-year growth. The company anticipates a Q3 gross profit of $2.6 billion, representing a 16% increase. Key strategic initiatives include expanding the Cash App network and launching innovative products like Square AI and Bitcoin payments.

Executive Commentary

• Jack Dorsey stated, "We’re back to growth mode across the company," signaling a renewed focus on expansion.
• Amrita Ahuja emphasized, "We believe we have the best combination of assets in the industry to deliver on our purpose of economic empowerment."
• Dorsey also highlighted the company’s commitment to cryptocurrency, stating, "Our intention is to make sure that Bitcoin becomes a native currency of the Internet."

Risks and Challenges

• Potential revenue volatility due to macroeconomic pressures.
• Increasing competition in the fintech sector.
• Regulatory challenges associated with cryptocurrency integration.
• Dependence on continued innovation to drive growth.
• Risks related to international expansion and market penetration.

Q&A

During the earnings call, analysts questioned Block’s strategies for expanding the Cash App network and the potential for stablecoin integrations. Executives expressed confidence in the strong unit economics of the Borrow product and reiterated their focus on product innovation and market expansion.

Full transcript - Block Inc (XYZ) Q2 2025:

Conference Call Operator: Good day, ladies and gentlemen, and welcome to the Block Second Quarter twenty twenty Earnings Conference Call. Today’s call will be forty five minutes. Would now like to turn the call over to your host, Matt Ross, Head of Investor Relations. Please go ahead.

Jack Dorsey, Co-Founder and CEO, Block: Hi, everyone. Thanks for joining our second quarter twenty twenty five earnings call. You all for joining us. As you all know, we’ve been talking for several quarters about our focus on increasing product velocity and ramping up our go to market investment. This quarter, continue to work paying off.

We’re back to growth mode across the company. And our strategy to continue growing by helping our customers manage their financial lives better. We believe the capabilities in Cash App are unique and that everyone else can deliver the money we’re building for consumers. I hope you take a look. And with that, I’ll turn it over to Camilla.

Amrita Ahuja, Chief Financial Officer, Block: Thanks, Jack. We delivered strong results in the second quarter, exceeding our gross profit and adjusted operating income guidance. Gross profit was $2,500,000,000 up 14% year over year, accelerating from 9% growth last quarter. Adjusted operating income was $550,000,000 up 38% year over year as we expanded margins to our highest quarterly adjusted OI margin at 22%. Product innovation and go to market investments are accelerating across the block.

We’re delivering more value faster and more efficiently. In the second quarter alone, we launched Square AI, Square handheld and an updated version of Square online. We showcased Bitcoin payments on Square, introduced Taxpay for Cash App business powered by Square, and we’ll have Cashbot, our AI powered customer support agent. We released payments in The US, new features for sponsored accounts, a new more personalized offers platform, and we took Cash App pulls from development to pilot in just a few months. In Cash App, gross profit growth reaccelerated to 16% year over year in the second quarter.

Quarter. Cash App Card delivered healthy gross profit growth at scale, and BNPL gross profit reaccelerated, driven in part by the increasing attach rates for post purchase BNPL on Cash App Card, which crossed 1,000,000 monthly actives in July. We began to meaningfully ramp borrow on Square Financial Services during the second quarter. Our bank, SFS, now originates the majority of borrow loans for our customers, and we plan to continue expanding SFS originations throughout the second half of the year. We’re also exploring more ways to deepen engagement, including higher borrow limits for paycheck deposit actives.

We believe the combination of assets we have in Cash App is unique and positions us for attractive, sustainable long term growth as an enduring ecosystem. Our strategy is oriented around driving strength in the four pillars of our business. First, we have a scaled peer to peer platform network that drives community connection and Cash App customer acquisition with $218,000,000,000 in peer to peer volume in the last twelve months. Second, our broad commerce capabilities generated $183,000,000,000 in volume in the last twelve months, growing 16% year over year or 21% excluding Cash App business. Third, our banking solutions help millions manage their money.

In June, 8,000,000 actives either deposited a paycheck or spent at least $500 across Cash App, and borrow reached $18,000,000,000 in annualized originations. And fourth, we’ve enabled millions of actives to buy and sell $58,000,000,000 in Bitcoin. For paycheck deposit actives who receive some of their paycheck in Bitcoin, we provide what we believe is the only way to buy Bitcoin with no fees and no spread. Cash App is resonating with the next generation at scale. In June, we had 5,000,000 sponsored teen actives and 1,700,000 actives that had graduated from a sponsored account to an individual Cash App account.

Engagement with sponsored teen actives is strong with nearly 80% attach rate to Cash App Card and over 25% attach rate to Cash App Pay. Simply put, Cash App meets the needs of this generation and delivers tools to help them run their financial lives. Turning to Square. Year over year GPV growth accelerated to 10% in the second quarter, and we delivered 11% gross profit growth, which included a network remediation payment we had previously discussed at the end of last year. We observed strong GPV growth in food and beverage and retail, up 1510%, respectively.

International GPV growth accelerated to 25% year over year as we continue to expand distribution across sales and partnerships. We are changing perceptions of Square among new and existing customers, a testament to the products we’ve launched in the past year and the investments we’re making across marketing, field sales, and partnerships. We’re focused on winning the quick serve restaurant market, and we’re delivering with customer wins like Collectivo Coffee, Shane’s Rib Shack, and Ben’s soft pretzels, a 60 location seller that we’re thrilled to welcome back to Square. These amazing sellers are category leaders in their communities, and we’re honored they choose to partner with us. Beyond winning QSR, we continue to see strong performance from our field sales team.

With an estimated five six quarter payback on recent sales cohorts. In the second quarter, we delivered our highest ever new volume added and our strongest growth in new volume added since the 2021. Year to date, forecasted new gross profit added outpaced forecasted new GPV added as we grew upmarket in The U. S, signaling healthy pricing and product attach rates. We’ve continued to see high ROIs as we scale field sales, and we expect to continue to ramp sales personnel aggressively to broaden our distribution footprint further.

We’re also seeing early traction with our independent sales organization investments and expect to continue to scale that distribution channel further in the quarters ahead. Turning to guidance. We’re raising our full year guidance and our expectations for the back half of the year. Our Q3 guidance and implied Q4 guidance call for continued acceleration in gross profit growth. For Q3, we expect gross profit of $2,600,000,000 growing 16% year over year.

We expect adjusted operating income of $460,000,000 or 18% margin. We expect to exit the year with gross profit growth of 19% and over 20% adjusted operating income margin, positioning us well for 2026. As we look at Q3, there are two nuances to call out. First, we expect to see an adjusted operating income margin of 18% in the third quarter compared to 20% plus margins in the other quarters this year. This is due primarily to risk loss growth as we expand borrow.

We are investing behind a product that has strong unit economics on incremental growth, and we expect loss rates to stay within historical ranges. The timing of our expanded go to market initiatives also contribute to Q3 margin dynamics. Second, for Square, we expect to deliver low double digit GPV growth in the third and fourth quarters, accelerating modestly from the 10% growth we delivered in the second quarter. We expect third quarter gross profit in the high single digit range and fourth quarter growth to track roughly in line with GPV growth. Square’s third quarter gross profit growth is impacted by a few dynamics, including our decision to increase operational flexibility at a processing partner, which modestly increases processing costs and further investments in hardware as a successful go to market driver for Square.

We continue to be encouraged by the strong results we see in our go to market efforts for Square with profitable volume growth and a return to share gains in recent quarters. For the full year, we’re raising gross profit and adjusted operating income guidance to reflect our strong execution. We expect full year gross profit of $10,170,000,000 or over 14% year over year growth. We expect adjusted operating income of $2,030,000,000 or 20% margin, expanding margins two percentage points year over year despite the meaningful go to market investments we’re making to grow our business. Our financial results and our updated guidance are a reflection of our ability to deliver value to our customers.

We’re honored to have been added to the S and P 500 this quarter, and we want to welcome new investors joining us on this journey. We believe we have the best combination of assets in the industry to deliver on our purpose of economic empowerment, And we’re excited to share more about our long term roadmap at our Investor Day on November 19. I’ll now turn it back to the operator to start the Q and A portion of the call.

Conference Call Operator: Thank you. We will now begin the question and answer Your first question comes from the line of Tien Tsin Huang from JPMorgan. Your line is open.

Tien Tsin Huang, Analyst, JPMorgan: Hey, thanks. Yes, really impressive growth here in the quarter and the outlook. So I just want to maybe check on conviction and visibility, of course, into the second half acceleration that you’re talking about. I think, Jack, you mentioned you’re shipping product faster. So given what you’ve seen observed, I’m curious, are you more bullish in certain areas versus what we last talked about?

And where might you be a little bit more cautious with more work to do than, say, ninety days ago?

Jack Dorsey, Co-Founder and CEO, Block: Yeah. I I think this is all a function of our our shipping velocity. And I I think the biggest indicator of this is the the recent pools launch. This is a pretty complicated feature, just to do on network, and the team did an amazing job not just doing that, within ideation to execution and and shipping to customers within, three months, but also made it possible for us to go out of network as well. Meaning that you can create a pool, and, you can invite friends who don’t are not on Cash App currently, and they can use Apple Pay or Google Pay to contribute to the pool and, ideally, see that functionality in the utility and then sign up themselves.

So these are the sorts of features that we’re now able to ship much faster, and it directly contributes to our overall network growth, which contributes to our overall virality and really, really strengthens what made Cash App Cash App in the first place, which is this inherent network effect that we have. The products we can build on top of that just gets stronger because of it. And it’s and then it’s all a function of us being able to show our customers everything that Cash App has to offer in the ecosystem. But I’ve never been more confident of our ability to do that better than I am today. It’s a function of our focus, but also the the tools we have access to today with all of our AI coding tools.

Goose is being used by nearly everyone in the company. It’s accelerating our developers. It’s accelerating our designers. It’s allowing us to experiment at near zero cost so that we can actually get to the right answer much faster. And, we can get the customer feedback, much faster too, so we can double down and and pull the thread on on what, what resonates with people.

So I’m super excited and super bullish on our ability to chip faster, which will make every single thing about Cash App and also Square, that much better and and more usable.

Amrita Ahuja, Chief Financial Officer, Block: Yeah. And I just add tension. You know, we saw a lot in the second quarter that gave us, some healthy signs, some real encouragement around the products, that are the key drivers of growth for us and the key drivers of acceleration in the second half. And that’s what gave us the conviction to raise our guidance by more than the the beat in two q to raise the back half of the year across both, you know, gross profit and NOI. You know, what our guidance calls for is two points of sequential acceleration to q into q three and three points further sequential acceleration into q four.

And that’s really on the back of four key things where, again, we saw strong data points in the second quarter. First, on the strength of borrow. We now have 6,000,000 monthly actives on borrow. We’re expanding eligibility, increasing limits in a responsible way with healthy loss rates, and seeing enhanced unit economics as we transition, that migration from a partner bank to our own bank, SFS. Secondly, we’re seeing some of the newer products in Cash App, like post purchase BNPL and Cash App Card, which is, you know, the first real integration of Afterpay into Cash App.

And Cash App Pay, you know, two important commerce products for us really resonate, and start to compound more meaningfully. Post purchase BNPL as of July crossed the 1,000,000 active milestone, which and we’re really excited, you know, again, about what we’re seeing in terms of growth. If you compare post purchase BNPL to borrow at similar points in time, the newer products, which gets to learn from from borrow is outpacing in terms of attach rates and in terms of loss rates. And cash at pay now at 7,000,000 monthly active as of June. Third key driver is Proto.

You’ll see a lot more at next week’s launch event, but we expect Proto to be begin contributing to gross profit growth in the second half of the year. And then finally Square, we’re seeing some nice acceleration in the Square business and we’d expect to exit the year in Q4 with faster GPV growth, which ultimately will compound the gross profit growth over time as well.

Conference Call Operator: Your next question comes from the line of Tim Scioto from UBS. Your line is open.

Tim Scioto, Analyst, UBS: Great. Thank you. I want to dig in a little bit more on Cash Card post purchase BNPL. So this topic comes up a lot because investors are now very confident in the ramp and borrow in the second half. And the lapping dynamics, those are supportive of gross profit growth heading into at least the 2026 as well.

So we’re often asked what’s the next big product that can help drive the growth in the 2026 and beyond. Of course, there’s a long list of items and many of them are highlighted in the shareholder letter. But one that stands out is Cash Card post purchase BNPL. You just mentioned some of the stats, the 1,000,000, the attach rates, the loss rates. I was hoping you could just elaborate a little bit more on this product in terms of those attach rates and just anything else that can help us to better quantify that opportunity in 2026 and beyond.

Amrita Ahuja, Chief Financial Officer, Block: Sure. Thanks for the question, Tim. So we released the product in March, and it’s been one of the key drivers of growth acceleration for Cash App and also what you saw overall for the BNPL platform. If you look across the second quarter, GMV for BNPL accelerated to 17% on a reported basis, 18% constant currency, up from 1316%, respectively, in the first quarter. We also saw gross profit accelerate to 22% year over year growth.

So part of, you know, an accelerating story for BNPL overall. The early signs that we’ve seen for post purchase BNPL have been really strong. Strong conversion, strong adoption. As I mentioned, we crossed the 1,000,000 monthly active mark. We also crossed the 2,000,000,000 originations run rate mark in July and expect to continue to expand eligibility and increase attach rates as we look at the back half of the year.

As I noted earlier, we’re really taking the learnings from Borrow. And as we stack up post purchase BNPL against Borrow’s early trajectory, both in terms of origination volume and margin profile, Because we’re able to leverage our infrastructure around the Cash App credit score, we’ve been able, to track ahead of where Borrow is, and we know that that’s become a successful product for us. So we’re encouraged about these early signs that we’re seeing on BNPL. If I step back, and if I think about 2026, obviously, we’ll have a lot more to say, later in the year and at Investor Day. But I think about, you know, the nascent products that are still ramping, like post purchase BNPL, which we’d expect to contribute more in ’26.

You know, our traditional paying for bringing that more into Cash App and seeing that ramp into ’26 Cash App pay, some of the newer products that we’ve talked about, like tap to pay on cash for business, all these newer products continuing to ramp, into the into 2026 for Cash App. I I’d expect Borrow to continue to be a growth driver for us as well. It’s not just about the back half of this year. And there’s also, as we look ahead into 2026, compounding effects of these go to market investments we’re making across each of Cash App and Square. So there are a number of drivers of growth as we look at ’26 that we get excited about.

And then most importantly, the key takeaways, you know, from this call, as you heard from Jack, is really around product velocity, increasing. And so there’s even more coming than what we have, today.

Jack Dorsey, Co-Founder and CEO, Block: Great. Thank you, Amrita.

Conference Call Operator: Your next question comes from the line of Darrin Peller from Wolfe Research. Your line is open.

Darrin Peller, Analyst, Wolfe Research: Guys, thanks and nice job. Just one more follow-up on Cash App. I mean, was obviously strong and accelerated well. Borrow was strong at $18,000,000 of originations. But we really appreciate the new disclosure you’re giving.

I saw $8,000,000 banking actives you define as either one of the 2,500,000.0 or $2,700,000 direct deposit users or I think someone spending $500 per month across Cash App. So that number was up 16%. Can you just touch on that metric a little bit more? It’s a new I haven’t seen that disclosure before. And how you see that trending driving Cash App gross profit even into next year we’re thinking about that the right way?

And then I also love to call it on new areas for potential MAU growth on Cash App. So just how’s that been trending too? Thanks, guys.

Amrita Ahuja, Chief Financial Officer, Block: Hey, Darren. I can get started on this one. So first, what I would say is what you saw in the letter is that we continued to, experience strong growth on paycheck deposit actives with the 2,700,000.0 that we reported in June. We also added another 100,000 in July, so we’re now over 2,800,000. So we continue to compound growth there.

But as we have done extensive research to inform our banking strategy, how we think about incentives, how we think about, marketing to this customer base, as we did that customer research, we observed that many more people look at Cash App as their primary banking partner than the ones who we are recording in the paycheck composite active metric. So that caused us to analyze inflows. We looked at spend levels. We looked at transaction metrics to either better understand how our customers are using Cash App. And based on that analysis, we put forward some of the new metrics that you noted in the letter.

In particular, you know, looking at a spend threshold as, the primacy of a banking relationship. And that $500 per month threshold we thought was important. The average debit card spend in The US is about $900 a month. So that would reflect really someone who’s, you know, by and large making Cash App card top of wallet. And when we look further at the ARPU of these 8,000,000, banking actives who are either depositing a paycheck or spending $500.

First of all, they’re growing quickly, up 16% year over year over year. Second of all, they’re deeply engaged. They generated more than $250 in gross profit per active on an annualized basis in the second quarter, which is obviously three times, Cash App’s blended $87 ARPU. And on average, they transacted more more than 40 times across Cash App in June. So we’re pretty encouraged about our traction, with, our banking strategy.

We know that there’s millions of people who place their trust in Cash App to be their banking platform. We’re gonna be doing more. You mentioned testing higher borrow limits for paycheck deposit active. You’ll also see us testing expanding our banking benefits based on the spend thresholds. So we’ll be doing more to bring awareness and incentives around our banking platform.

Conference Call Operator: Thanks, Amarita. Your next question comes from the line of Rayna Kumar from Oppenheimer. Your line is open.

Amrita Ahuja, Chief Financial Officer, Block: Good afternoon. Thanks for taking my question. Last year, you started to lean a bit more into a Square sales effort. And of course, you’ve launched a number of new products. Can you talk a little bit about some of the returns you’re seeing investments and if it’s scaling as you expected?

Hey, Reyna. Yeah. We’re very excited about what we’re seeing in the early results of our expanded go to market playbook. We are getting ourselves in front of a much wider set of sellers now, and we’re starting to see that accrete in terms of market share gains. You know, in particular, from a sales perspective, what we’re seeing is, you know, strong growth in the first half of this year on new volume added, 20% plus growth rates on new volume added.

And we actually expect that growth to more than double in the fourth quarter just on the back of how we’re ramping our sales team across both field sales and telesales. Field sales, which is a newer motion for us, we’re seeing an LTV to CAC, which is, you know, how we measure returns on investment, at extremely strong rates and and payback, as I noted earlier, in that five to six quarter range. So that’s what’s given us the confidence to continue to ramp both the field sales teams as well as our telesales teams both in The US and internationally. And the marginal returns of these new hires are very strong, which gives us conviction to to continue investing here. So it’s that sales motion, in concert with our partner motion where we are seeing you know, exceeding our expectations from a partner driven lead perspective in the second quarter and also newer channels of growth within the partnership world, you know, around our first US ISO partnerships.

That’s what’s driving very strong momentum across our sales channels. And I would also just note the strong growth that we’re seeing from an international perspective. That’s another place where we think international at 25% GPV growth, 19% gross profit growth in the second quarter is really benefiting from the investments that we’ve made on the ground with our sales motions. And I would say even you know, the final thing I’ll say is that while we’ve seen really strong sales enabled growth through both field sales, telesales and partnerships. It hasn’t come at the detriment of self onboarding from what we’ve seen.

We continue to see really strong volumes, with our already healthy sort of self onboard motion as well.

Conference Call Operator: Your next question comes from the line of Trevor Williams from Jefferies. Your line is open.

Trevor Williams, Analyst, Jefferies: Great. Thanks a lot. I wanted to go

Analyst, Jefferies: back to the spread between gross profit and GPV growth in Square. That was a bit narrower than where it was in the first quarter. If you could talk through some of the moving pieces there, I think you had pricing that went in at the March, the network incentives Amrita mentioned, just what the offsets to those were? And then for the rest of the year, it sounded like gross profit a bit below GPV in Q3 and in line in Q4. Just the moving pieces within those two quarters and if longer term we should be thinking about a pretty tight spread between those two growth rates?

Thanks.

Amrita Ahuja, Chief Financial Officer, Block: Sure. I think the main thing that’s going on here is a few nuance near term dynamics, impacting Square gross profit that aren’t really a reflection of the underlying strength of the business. Ultimately, what we’re focused on is compounding, you know, sustainable GPV growth, and we know that that will accrete to to gross profit growth. The key one of the key things that we’re looking at, we just talked about our sales motion, is that our new profit added from new cohorts of customers is even stronger than new volume added in The US, which tells us that our pricing and, attach to to, to additional products across our ecosystem continue to be strong as we onboard these new customers. And, again, that will compound over time as we get into ’26 and beyond.

In the near term, there are a couple dynamics to point out. So as I mentioned in the intro remarks, we made some changes that increased our operational flexibility at a processing partner. That modestly increased Square’s processing costs. So in the second quarter, we absorbed approximately two points of gross profit growth headwind from this shift, which basically offset that network remediation payment that we had talked about earlier. And that’s something that we would also expect, as I noted earlier, to impact the third quarter, but will is it sort of a couple of quarter impact?

And we will lap that as we head into 2026. The second key thing I’d point out is hardware costs. Hard you know, some of our newer hardware with handheld has has seen strong adoption, and it continues to be a a great go to market new customer acquisition channel for us. So that’s one that we wanna lean into as we bring new customers into the platform. So that’s another impact from a q three perspective.

Ultimately, though, we expect to exit the year with gross profit and GPV growth roughly in line with each other and to continue to focus on that cross sell of more of our products to customers to help them run and grow their business.

Conference Call Operator: Your next question comes from the line of Harshita Rawat from Bernstein. Your line is open.

Harshita Rawat, Analyst, Bernstein: Okay. Good afternoon. I want to ask about Cash App user growth. Jack, you talked about focusing more on network density, including the focus on families and teams, and nice to see some of the product like pools that have come through this quarter. You’ve also had some marketing campaigns.

I guess my question is, what other things can you grow can you do to grow the network and users at Cash App, the growth of which is stalled in recent quarters? And then just as a quick follow-up, any comments on Bitcoin mining initiatives in light of the recent deals from CoreScientific? Thank you.

Jack Dorsey, Co-Founder and CEO, Block: Yeah. I’ll start on, Proto and mining. We’re gonna have some news, very, very soon. As Amrita said, we we, this will be as soon as next week. So we’re really excited about, everything happening with Proto.

I think we’ve built the best miner out there, and the market is about to to see that. We’ll we’ll be able to prove it. It’s the most flexible and the most customizable, and we built this entirely with customer feedback all online. So we’re gonna have some really happy customers, and we’re gonna grow the market and and take a lot of market share, I think, in I think in mining. In terms of cash up, it’s just looking deeply at our customer base and our future customer base, we we believe that we’re building the money up for the next generation, and we think it’s a a huge opportunity for us.

It’s fairly untapped. There’s not a lot of folks out there doing it very well. Cash App resonates naturally with a younger crowd. It’s cool. It works.

It’s easy. It has absolutely everything people need. Our parents are often giving their kids access to it very early, and we we plan to to really leverage that and and make make something that is even cooler and even more usable. And pools is a, you know, a result of that. You know, we looked at what people are trying to do with their money, and we came up with this concept of multiplayer money.

How do you make money, work in a way for multiple people at once? And and just one incredible stat is that sixty percent of adults adults in The US pull money for something. So we wanted to make something that that works flawlessly, but also allowed people to not have to get people to necessarily sign up for good sign up for Cash App, but they can actually contribute to the pool using a method they already have, which is Apple Pay or Google Pay, and then see the full utility of Cash App and and then sign up themselves because they see it’s so easy. So we’re looking very deeply at our customers, our future customers, and this goes into, you know, the products and the features that we build, but also how we market it. We have some super creative marketing, and that’s only gonna get stronger and stronger as the year goes on.

And the number of features and the number of products that we’re going to be able to launch over this year is more than anything we’ve been we’ve been able to do in the past because of the technology we have available to us and and also the focus and all the reorganization that we that we did, in the recent past. So now it’s finally clicking, and we’re seeing in the results as well. And the team, is very fired up to just get as much excellent product out there as we can to to our customers. And, you know, we’re we’re reviewing a bunch of really cool stuff, and all of it has has felt like the early days of Cash App when we’re building something that felt a little bit impossible. But we made it possible, we made it really cool, and it resonated right away.

So that that focus will pay off. And I think, you know, the days of not shipping are are over. We’re we’re only as good and only a function of of how quickly we can ship and how quickly we can experiment and and how much we can put in customers’ hands. And and, you know, it’s it’s never been faster.

Amrita Ahuja, Chief Financial Officer, Block: Can I just add, Harshita, that, you know, what we’re seeing a lot of what Jack just talked about, we launched relatively recently, you know, between Cash App pools just over this past week as we continue to ramp that to more customers, you know, tap to pay for Cash App business? Also, very recently, our marketing campaign, which, you know, is a pretty buzzy and innovative way to to get the message out to the next generation. Also, it sort of over the past month, all of this is is is our execution is speeding up. It’s all relatively recent. The earliest times that we’re seeing on it, maybe not even fully reflective in the February results, but have been extremely encouraging in terms of the metrics that we look at from an actives and an an active engagement perspective.

So, clearly, some early signs of success in re reinvigorating network growth in Cash App, and we expect that to start showing results as we head into ’26. But that’s part of the conviction that we had as we thought about, raising guidance in the back half of the year as well just on the execution for some of the very recent, recent product and go to market initiatives from a Cash App perspective.

Harshita Rawat, Analyst, Bernstein: Very helpful. Thank you.

Conference Call Operator: Your next question comes from the line of Dan Dola from Mizuho. Your line is open.

Dan Dola, Analyst, Mizuho: Hey, guys. Really good results. Great job on growing everything including the Boro product. I do have a question, we’re getting a lot of inbounds on it this afternoon on this topic. So I did want to understand a little bit better how the Boro thing is evolving as it gets bigger as part of the business.

Maybe, Marita, can you opine on the gross margin profile in terms of like what percent is it? Is it 100%? And maybe touch on like quantifying the puts and takes on the step up in losses, again, because we’re getting a lot of questions about this. But overall, job on growing this and making a big business. So thank you.

Amrita Ahuja, Chief Financial Officer, Block: Hey, Dan. Yes, sure. Happy to talk more about Borrow. Obviously, performance very strong Origination volume doubled almost doubled year over year to $18,000,000,000 on an annualized basis in the second quarter and now at the $6,000,000 monthly actives in June.

We expect that strength to continue as we roll out borrow to more states now under the SFS originations. We also published, I’d point you towards our investor slides, which outline our annualized net margin or A and M. This is a big metric that we look at to measure the successful performance of the product and the unit economics of the product. What we see there are the strong economics at 24% margins the second quarter, which is above our 20% margin threshold. Then you see multiple quarters really in that mid 20% range even as we’ve continued to, as we continue to ramp, borrow meaningfully.

We also see Borrow, you know, first and foremost, as a strong product on its own, but also a key part of the engagement strategy for the Cash App banking strategy that we we noted earlier. Because we know, our customers really value access fast access to liquidity. So as we noted, we’re gonna be testing higher borrow limits, for our paycheck deposit actives and and explore other ways that we can use borrow to drive engagement across Cash App. On the last point, you know, taking a step back, from Borrow specifically, the core asset that we’re leveraging to power Borrow and also, you know, post purchase on, BNPL on Cash App Card is Cash App’s internal credit score. If if our internal, custom credit scoring mechanism incorporating data across our customers in how they’re using Cash App to inform an underwriting decision and eligibility for our customers.

It continuously updated, absorbed the data across Cash App’s, you know, ecosystem to assess basically where we can underwrite our customers, whether we can, and then at at what credit limit we can. And we put out a white paper recently that talks to this, but as we look at our credit model, our internal credit model can approve 38% more customers compared to VantageScore at the same loss threshold, which means that we can effectively expand access to people who are sort of left out of or underserved by the traditional, you know, financial ecosystem. So we’re pretty excited about what Borrow has been able to do and all while maintaining loss rates in that sort of 3% or less range, with strong unit economics.

Dan Dola, Analyst, Mizuho: Great. Thank you, Amrita, and really nice to see, you know, how this business is evolving. Great job.

Harshita Rawat, Analyst, Bernstein: Thank you.

Conference Call Operator: Your next question comes from the line of Matthew O’Neill from Feet Partners. Your line is open.

Trevor Williams, Analyst, Jefferies: Yes. Hi. Thanks, Jack and Amrita for taking the question. I just wanted to drill in and hear some early observations, particularly around the rollout of new hardware and seller, notably the handheld. Curious if you’re seeing anything around TAM expansion, win rates, improved retention, or or anything else that would be would be good to share here.

Thanks.

Jack Dorsey, Co-Founder and CEO, Block: Yeah. We we’ve been we’ve been super excited about Square Handheld. It’s definitely our best form factor yet. We packed a lot in and, again, like, we listen to our customers on on what their needs are and made something that’s super portable, super affordable, and and extremely durable. But what’s most interesting about it is that it scales to multiple types of commerce, not just for the restaurants, but it can be used in a retail setting or a service setting.

So it’s by far in a way our our most flexible, and I I think one of the most flexible in the industry. We launched it in The US in Q2, and we’re starting to roll it out internationally right now. So super excited about Hardware has always been a big driver for us, and we think it will continue to be it makes for a very easy sale, especially to our newer customers or winning sellers away from others. But, of course, it’s it’s not, you know, it’s not the only driver. The the other thing that I think is gonna be quite powerful over the next next year or so is gonna be Square AI.

This is getting more and more sophisticated. We we started with, you know, just the ability for our customers to quickly get more customized reports. But as we said a few earnings calls ago, we want this to effectively act as a virtual COO, virtual manager, if you will, to help folks manage their business of any type, whether it be a restaurant, retail, or or service, and at any scale. And the the team has been, you know, working super hard and and fast on making sure that it really lives up to that promise. We’re starting in the dashboard because that’s where all of our sellers spend the majority of their time.

It’s also our one opportunity to introduce them to the entire Square ecosystem so that we can, introduce them to a lot of our other services, including banking and customer relationship management. So it’s a really good flywheel for us, and it allows us to put a natural intuitive, language first option on all the complexity, of our ecosystem that we can we can offer sellers in a in a much simpler way. And then, of course, the the other big feature that we announced recently was enabling Bitcoin, acceptance on Square. And this is early, but we think it’s a big one. We think it’s a good complement to everything that we’re doing.

There’s also been a lot of talk about stablecoins. Our philosophy at Square has always been to accept every form of payment that comes across the counter. And we’re certainly going to enable our sellers to accept every form of payment, including Bitcoin or Tether or Circle. Any anything that people are actually using to pay for goods and services, we’re going to enable our sellers to accept because it means they always they always make the sale, and that’s really critical to us. So those three, the hardware, our AI efforts, within the dashboard and and the app itself, and then new forms of payments set all of our sellers up for a much more a much more comprehensive and flexible offering and operation.

And we pair that with just a much stronger go to market and sales. Our our marketing releases, our last marketing release, we’re we’re doing this twice a year, was a hit, and we can’t wait for the next one. And everything that Nick and team has been doing with field sales and and just really refining our approach is starting to show the effect, and that’s from all scale of our sellers from the very small to the very large. So I think it’s a perfect formation such that we can like really compete on the merit of our offerings, which I think are immense.

Analyst, Jefferies: Thanks, Zach. Appreciate it.

Jack Dorsey, Co-Founder and CEO, Block: Thank you.

Conference Call Operator: We will now take our last question from the line of David Koning from Baird. Your line is open.

Trevor Williams, Analyst, Jefferies: Yes. Hey, guys. Great job. Thank you. I guess you touched on the willingness to accept stablecoins at your sellers.

I was just thinking more broadly, you focus so much on Bitcoin historically. Kind of what’s your philosophical thought around stablecoins? Where do you think it’s going to be most useful, and how might you guys play within the broader stablecoin ecosystem?

Jack Dorsey, Co-Founder and CEO, Block: I think the most important thing is if people wanna use it to purchase or if they want to use it to transact or transmit money through Cash App, we’re going to support it. So you should expect Square and Cash App to support these things if if, you know, people are using them and we’re we would focus on on the major ones in use. We do have a bank, and we do we we can offer our own stablecoin. And there are a lot of stablecoins being, generated right now. And I don’t necessarily always see the product market fit for all of them.

I don’t see the differentiator. It really comes down to what are people using and why they’re using it. And right now, stablecoins are predominantly used in a remittance use case. If they do become more payments oriented, we’ll be there. I don’t think right now that it makes sense for us to offer our own because I just don’t think there’s a huge differentiator above and beyond what exists and, in my view, above and beyond what Bitcoin provides.

Bitcoin still stands alone in it being entirely net new, and it has properties that none of these stablecoins have, which make it a better form of currency than the rest of them. It’s certainly proven the case over sixteen years as a store of value, but our intention is to make sure that Bitcoin becomes a native currency of the Internet, and that’s used as everyday money. And we think it can get there very quickly. And the reason to focus on that is because it’s independent of any one particular corporation or any government, and it allows us to move much faster with our business as it does become more and more of a standard, not only at store value, but remittance and also payment that allows Square to go to every single market almost instantly. And the same is true for Cash App as well.

So we’re huge believers in it. We know it’s gonna be a long road. It’s a protocol. Protocols move a lot slower than products companies tend to do, but they tend to last longer as well. And that’s why we believe in it so much and we think it massively accelerates our business when it does hit and we intend on making it hit as soon as possible.

Trevor Williams, Analyst, Jefferies: Great. Thank you.

Conference Call Operator: Ladies and gentlemen, thank you for your participation in today’s program. This does conclude the program. You may all disconnect.

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