Block (SQ) Q1 2024 Shareholder Letter

block q1 2024 1

Q1 2024 Shareholder Letter

investors.block.xyz

block q1 2024 2

“Why the hell are you all spending so much time on bitcoin?”

We get this question a lot. We’ll use this quarter’s letter to answer it.

First, some facts. Less than 3% of company resources are dedicated to

bitcoin-related projects. All of which have been more than fully covered by the

profits from our bitcoin exchange, which is Cash App’s fourth largest gross

profit stream.

But why spend time on bitcoin at all? We believe the world needs an open

protocol for money, one that’s not owned or controlled by any single entity.

We believe bitcoin is the best and only candidate to be that protocol, and to

ultimately become the native currency of the internet.

How does this benefit Block? An open protocol for money helps us serve

more people around the world faster. We could build an amazing product

experience once and ship it globally to any market in the world, without needing

to customize for hundreds of different payment schemes. This creates the

opportunity to accelerate our growth potential and improve our cost structure

at the same time. It truly levels the playing field for a company like ours, and for

everyone in the world.

Why bitcoin versus all the other “cryptos?” Satoshi designed bitcoin to solve a

very specific problem around payments, which the world has since found to be

immensely valuable. The majority of other projects are either solving different

problems or attempting to be a speculative trading asset. We benefit from an

open protocol for money, and that’s what we’re focused on building upon.

In 2018, Block became the first publicly listed company to offer a bitcoin

product. Our strategy since then follows 3 core directives:

• Make it accessible.

• Make it more secure.

• Make it usable every day.

To make bitcoin more accessible, we started with the greatest need: “how do I

get bitcoin?” We built a simple platform right into Cash App where one can buy,

hold, withdraw, or sell bitcoin. It was a hit. Since launch, Cash App has had over 21

million actives use bitcoin. Cash App bitcoin products generated 3.3% and 4.2% of

Block’s gross profit in 2022 and 2023, with only 0.7% of related expenses.

To Our Shareholders

May 2, 2024

bloc k q1 2024 3

We went on to build ecosystem features to help people get bitcoin. 1.6

million Cash App Card actives have used our Bitcoin Round Ups feature to

automatically convert spare change from everyday transactions into bitcoin.

Our Paid in Bitcoin feature allows customers to convert a percentage

of their direct deposits into bitcoin with zero fees or price spreads, yet

another reason for people to direct their paychecks into Cash App. We

just launched a similar feature named “Bitcoin Conversions” for Square

sellers wishing to convert up to 10% of their daily sales into bitcoin.

We’re doing a few things to make bitcoin more secure. First, we recognize

that holding bitcoin safely can make people feel anxious, especially if

one doesn’t want to keep their bitcoin on an exchange. That’s why we

built and launched Bitkey to over 90 countries: a globally available, non-

custodial wallet that combines intuitive software, robust hardware, and

advanced security measures. Bitkey makes bitcoin easy to use and

hard to lose. It comes integrated with Cash App and Coinbase, allowing

customers to easily buy and transfer bitcoin directly to their Bitkey.

We also want to help secure the bitcoin network by building bitcoin

mining hardware. We’re introducing an entirely new 3 nanometer

ASIC mining chip, in addition to an entire mining rig system. Why?

We’ve heard from countless miners globally about their desire for

reliable, flexible, and US-based mining hardware and software. This

contributes to the health and security of the bitcoin network by further

decentralizing both the supply of mining hardware and the distribution

of hashrate, the computing power devoted to mining bitcoin.

With a standalone mining chip, we will represent the only large, well-

capitalized mining hardware vendor with such a solution. We believe

this will help unlock mining system innovation and support the much-

needed development of new mining system form factors and use cases.

With the full mining rig system, we’ll build on our product and software

development expertise, system engineering competency, supply chain

experience, and aftermarket support capability (with tens of millions

of devices shipped) to build something miners can depend on. This

is a massive market and opportunity we’re very excited about.

And finally, we want to make bitcoin more usable everyday. Our greatest

contribution thus far to this goal has been investing in the Spiral team, a group

of open-source developers who work every day to make bitcoin more than

an investment. Spiral has been directly behind the Lightning Development

Kit, the Bitcoin Development Kit, the Bitcoin Design Community, and has

provided grants to over 50 developers in more than 20 countries, leading

to a dozen foundational open source bitcoin projects. The team has also

been the inspiration for our Bitkey and mining hardware projects and has

helped us think deeply about how finance technology shifts over time.

bloc k q1 2024 4

Global remittance, an $860 billion industry, is a use case that’s more

urgently in need of better solutions today than everyday payments. This

is why we created TBD, to solve cross-border funds flow without the need

for going through a centralized exchange. TBD has created a protocol for

on- and off-ramps from fiat to digital currencies that would allow anyone

without a bank (~1.4 billion people) and with access to a mobile phone

to participate in the larger global economy. We’ll discuss TBD in a future

shareholder letter as we launch our first remittance product later this year.

Ultimately, making bitcoin more usable every day means seeing

bitcoin as a medium of exchange for the internet, thus solving for

the original problem Satoshi stated in the bitcoin white paper:

“Commerce on the Internet has come to rely almost

exclusively on financial institutions serving as trusted

third parties to process electronic payments.

…What is needed is an electronic payment system

based on cryptographic proof instead of trust, allowing

any two willing parties to transact directly with each

other without the need for a trusted third party.”

The internet will have a native currency; it’s just a matter of time. Artificial

Intelligence systems and agents will have to transact, and the most efficient

way to do so will be a common protocol for money movement. Creative

endeavors will rely heavily on micropayments, something that’s been

discussed since the dawn of the internet, and finally being realized at scale

with things like “zaps” (transferring small amounts of bitcoin via lightning) on

the NOSTR protocol. Commerce will be less constrained by national borders,

flowing freely around the world without gatekeepers or rent seekers.

This won’t happen overnight. The existing and emerging financial systems will

operate in parallel for some time. There’s an opportunity to build cohesive

and regulatory-compliant connections between these two worlds. This

is where we’ve always flourished: at the intersection of regulations and

innovative technology that can bring more people into the economy.

Recognizing the interconnectedness of the bitcoin ecosystem, we

understand that our advancements foster collective growth, and the

progress of others, in turn, benefits us. This synergy is pivotal; as the bitcoin

ecosystem flourishes, so does Block. We were the first to recognize this

potential and have reaped the benefits, but as others join, the advantages

compound. The rising tide of bitcoin's growth lifts all boats, and our

proactive contributions have positioned us at the forefront of this wave.

bloc k q1 2024 5

We also believe in investing in the overall asset of the ecosystem, and

holding bitcoin in our treasury. Going forward, each month we will be

investing 10% of our gross profit from bitcoin products into bitcoin

purchases. We were one of the first public companies to put bitcoin on our

balance sheet: we invested $220 million into bitcoin, and that investment

has grown by approximately 160% to $573 million as of the end of the first

quarter. We’re open sourcing our treasury blueprint so other companies

can do the same: https://block.xyz/documents/bitcoin-blueprint.pdf

Historically and moving forward, our investment in bitcoin transcends

technology; it is an investment in a future where economic

empowerment is the norm. This commitment drives our business

into new territories, unlocking novel opportunities for our customers,

and securing enduring value for you, our shareholders.

Jack Dorsey

bloc k q1 2024 6

21% 22%27%

Gross Profit

$2.09 Billion

22%

yoy

YoY Growth

32%

22%

2023

Q2 Q1

2024

$2.09B

$2.03B

$1.90B

$1.87B

$1.71B

Margins above are all calculated as a percent of gross profit. In the first quarter of 2024, total net revenue was $5.96 billion, up 19% year over year, and, excluding

bitcoin revenue, revenue was $3.23 billion, up 14% year over year.

*We have revised the 2023 quarterly net income and EPS results in this letter and in our Q4 2023 letter from amounts previously reported to correctly reflect the

impact of the remeasurement of bitcoin investment in each period, pursuant to the Company's early adoption of ASU No. 2023-08, Accounting for and Disclosure of

Crypto Assets ("ASU 2023-08"), in 2023, using the modified retrospective approach.

In the fourth quarter of 2023, we began reporting the financial results of our BNPL platform fully within Cash App, rather than allocating 50% of revenue and gross

profit to each of Square and Cash App. The prior period segment financial information in this letter has been revised to conform to the updated segment reporting.

In the first quarter of 2024, net income included a remeasurement gain on our bitcoin investment of $233 million. Reconciliations of non-GAAP financial measures

used in this letter to their nearest GAAP equivalents are provided at the end of this letter. Please see these reconciliations for a description of certain items that

affected operating income (loss) and net income (loss) in the first quarter of 2024.

In the first quarter of 2024, gross

profit grew 22% year over year to

$2.09 billion. Cash App generated

gross profit of $1.26 billion, up 25%

year over year, and Square

generated gross profit of $820

million, up 19% year over year.

Q1'24 Highlights

Q3Q2 Q4Q1

2023

2024

27%

35%

YoY

Growth

51%

$1.26B

25%

Cash App Gross Profit

$1.26 Billion

25%

yoy

25%

$1.18B

$1.08B

$1.05B

$1.01B

Q3Q2 Q4Q1

2023

2024

18%

YoY

Growth

12%

$820M

$828M

$805M$804M

$692M

19%

Square Gross Profit

$820 Million

19%

yoy

18%

14%

We delivered improvement across

all profitability measures in the first

quarter of 2024. Operating income

was $250 million while Adjusted

Operating Income was $364 million.

Net income attributable to common

stockholders was $472 million and

Adjusted EBITDA was $705 million,

up 91% year over year.

Q3Q3 Q2Q2 Q4Q4 Q1

2023

2024

($102M)

($89M)

Net Income (Loss)*

$472 Million

23%

Adjusted EBITDA

$705 Million

34%

$705M

$562M

$477M

$384M

$368M

*Attributable to common stockholders

margin margin

$102M$98M

$472M

Q3Q2 Q4Q1

2023

2024

Adjusted Operating Income (Loss)

$364 Million

17%

$364M

$185M

$90M

$25M

$51M

margin

Operating Income (Loss)

$250 Million

12%

$250M

Q3Q2 Q4Q1

2023

2024

($131M)($132M)

($10M)($6M)

margin

bloc k q1 2024 7

Cash App

Cash App, with its bank partners, is

focused on a three-part strategy,

introduced last quarter: banking our base,

moving upmarket by serving families,

and building the next-generation social

bank. Our primary focus in the near term

is banking our base by driving paycheck

deposit adoption and increasing inflows

per active.

We are committed to earning

our customers’ trust.

• We are working to provide elevated

card management tools for Cash App

Card customers, which increases the

card’s utility and is critical for building

trust with our customers. In March, we

allowed customers to stop charges

from select merchants directly in

the app, a frequently requested

feature via our support channels.

• Over time, we expect to grow upmarket

with families and can do so by offering

an increasingly robust set of oversight

controls to promote safety. In the

first quarter, we redesigned the

interface for Families so parents can

more easily understand their teen’s

balance, pay them, set up a recurring

allowance, or modify controls and

limits for their teen's account.

We believe our financial services

offerings are uniquely connected and

differentiated from traditional banks.

• Cash App Taxes offers a free tax filing

service. We can help our customers

with their taxes and also introduce them

to our direct deposit offering: More

than 40% of Cash App Taxes actives

chose to receive their refund directly

into Cash App during this tax season,

an increase from the prior year.

We are launching products and features across financial

services that provide customers with a differentiated

experience beyond traditional banks.

A transacting active is a

Cash App account that has

at least one financial

transaction using any

product or service within

Cash App during a specified

period. A transacting active

for a specific Cash App

product has at least one

financial transaction using

that product during the

specified period and is

referred to as an active.

Examples of transactions

include sending or receiving

a peer-to-peer payment,

transferring money into or

out of Cash App, making a

purchase using Cash App

Card, earning a dividend on a

stock investment, and

paying back a loan, among

others. Certain of these

accounts may share an alias

identifier with one or more

other transacting active

accounts. This could

represent, among other

things, one customer with

multiple accounts or multiple

customers sharing one alias

identifier (for example,

families).

A paycheck deposit active

is a Cash App account that

receives ACH inflows during

a specified period, but

excludes tax refunds and

ACH transfers. There are

certain features that a

paycheck deposit active

gets access to if they

deposit a certain amount of

money each month, such as

free overdraft coverage and

a 4.5% yield on their Cash

App Savings account,

among other benefits.

Cash App Card monthly

actives, which increased

16% year over year.

24M

bloc k q1 2024 8

• In the fourth quarter, we launched free

overdraft coverage up to a certain

amount for eligible customers, helping

our customers save money and easing

their day-to-day cash flow needs.

This is a key feature that can drive

direct deposit adoption, given the

engagement we’ve seen since launch.

• We believe that bringing a yield to Cash

App’s savings product will continue to

drive engagement, which we’ve seen

by growth in the number of accounts

utilizing it and increasing balances:

Since launching in January, eligible

actives have deposited more than $1

billion into their Savings accounts.

We continued to integrate Afterpay

into Cash App because we believe that

commerce tools enhance the value of

our entire financial services offering.

• BNPL GMV was $6.98 billion in

the first quarter, up 25% year over

year. Acquisition was strong across

customers and merchants, with growth

in the quarter driven by Single Use

Payments (“SUP”) and Gift Cards.

• We see advantages to distributing BNPL

through Cash App Card. Over the past

few months, we have been testing an

Afterpay installment product using

Cash App Card. This allows customers

to convert certain purchases into a short-

term loan and access BNPL anywhere

they use their Cash App Card for a small

fee. While early, we have seen strong

adoption based on eligible customers.

bloc k q1 2024 9

Square

Square is focused on four priorities:

a rock-solid and flexible platform,

providing a “local” experience to

sellers of all sizes, growing with

AI, and banking on Square.

We continued to strengthen our platform

with features that we believe improve

our ability to serve our sellers.

• A key priority is improving platform

resilience, and in the first quarter we

launched the full global expansion of

offline payments to all Square hardware

devices. Sellers in every one of our

markets can now accept payments even

if they are having connectivity issues.

• As we work toward a single app

for all sellers, we have evolved the

onboarding experience for quick-

service restaurants, reducing friction

while creating a more tailored product

experience for these sellers. Early

results show an improvement in

feature discovery, which we believe

will increase the ability of sellers to

find and use more of our products. As

we learn more, we plan to update the

onboarding flows for other verticals.

• We recently introduced new features

that improve the onboarding experience

for Square Appointments, our point-of-

sale booking platform used by sellers

across services industries such as

health and beauty. We are using AI

to automate the previously manual

task of uploading details about their

various service offerings to Square

Appointments, saving sellers time.

bloc k q1 2024 10

• We serve many mixed-use sellers

who don’t fit neatly into one vertical.

For example, we may serve a retailer

who primarily sells grocery items but

also has a deli that serves fresh food.

Ahead of our convergence to a single

app, we continued to improve the

connectivity of our software across

verticals to better serve these mixed-

use sellers. Retail sellers who also have

a food and drink component can now

send orders to Square Kitchen Display

System (“KDS”) directly from their Retail

Point of Sale, improving their buyer

experience and showing the power of

shared technology across verticals.

We are evolving our go-to-market strategies

and focusing on improving product velocity to

deliver enhanced local experiences to sellers.

• We rolled out contracts in the second

half of 2023 and saw the number

of U.S. sales wins with contracts

attached more than double from

December to March. While still

early, we are seeing encouraging

improvements in early cohort retention

when contracts are deployed.

• Expanded franchise capabilities have

been an unlock for Square to serve

larger sellers. Since launch in the third

quarter of 2023, we've expanded

relationships with growing multi-location

franchises, including Greek fast-casual

restaurant chain Taziki’s Mediterranean

Cafe, and signed new sellers, including

innovative dessert concept JARS.

• In the first quarter, we enhanced

our Square Loyalty Promotions

offering: Sellers choose what type of

promotion, such as a holiday special,

to launch, and our AI-enabled loyalty

tool leverages traffic data, transaction

patterns, and other inputs to create

an offer that optimizes for business

goals like increasing foot traffic during

slow hours or selling specific items.

Square KDS is a kitchen display system that connects with

Square for Restaurants, Square for Retail, Square Point of Sale,

Square Online, and our online ordering and delivery platforms. To

help multi-vertical sellers customize their Square experience, in

the first quarter we began enabling mixed-use retail businesses

that also sell made-to-order foods to send orders to a Kitchen

Display System directly from their Retail Point-of-Sale.

Our AI-enhanced Square Loyalty Promotions offering leverages

traffic data and transaction patterns to help our sellers choose

which type of promotion they want to launch.

bloc k q1 2024 11

We were able to bring new banking

products to market quickly by leveraging

existing Cash App infrastructure, as

we have focused on creating more

connections between our ecosystems.

• We launched Paper Cash Deposits in

the first quarter, which allows sellers

using Square Checking to deposit cash

into their checking account at more

than 70,000 retail locations across

the U.S. This product has consistently

been requested by sellers who

accept cash and want to use Square

for more of their banking needs.

• In April, we began allowing sellers

to instantly convert a portion of

their sales into bitcoin through Cash

App for a lower cost than buying

bitcoin through an exchange.

bloc k q1 2024 12

We outperformed our gross profit and

profitability guidance in the first quarter

of 2024. Gross profit grew 22% year over

year to $2.09 billion. Cash App sustained

strong gross profit growth of 25% year over

year in the first quarter driven primarily by

inflows per active and monetization rate, with

strong performance across Cash App Card,

our BNPL platform, our Bitcoin products,

and Cash App Borrow. Square gross profit

grew 19% year over year in the first quarter,

an improvement from the fourth quarter,

behind notable strength in our banking

products and international markets.

We continued to drive strong profitability

and delivered operating income of $250

million and Adjusted Operating Income of

$364 million. Operating income margin

was 12% and Adjusted Operating Income

margin was 17%, as we achieved meaningful

margin expansion during the quarter. We

remained below our 12,000 people cap at

the end of the quarter. We believe we can

continue to drive profitability by leveraging

our scale to improve our cost structure

across a range of different expense

areas, and utilizing AI and automation.

At the same time, we are also investing

behind key initiatives that we believe will drive

sustainable long-term growth. In Square,

we are investing in our sales team to drive

growth with larger sellers while increasing

product velocity to enhance our ability to

serve sellers across our business. For Cash

App, we’re prioritizing initiatives, with our

bank partners, that drive more customers

toward a primary banking relationship.

Our focus is on continued execution to

reach our Rule of 40 target in 2026.

While we recognize there is more

work to do, we are excited about the

momentum across the business and

believe we are setting the foundation for

ongoing profitable growth at scale.

Financial

Discussion

Reconciliations of non-

GAAP metrics used in this

letter to their nearest GAAP

equivalents are provided at

the end of this letter.

Bitcoin gross profit was $80

million in the first quarter of

2024. The total sale amount

of bitcoin sold to customers,

which we recognize as

bitcoin revenue, was $2.73

billion. Bitcoin gross profit

was 3% of bitcoin revenue.

Margins are calculated as a

percent of gross profit.

Rule of 40 is the sum of our

gross profit growth and

Adjusted Operating Income

margin as a percent of gross

profit.

gros s pro f it

2024

22%

Q2Q1

2023

27%

32%

YoY G ro w th

22%

21%

$2.09B

$2.03B

$1.90B

$1.87B

$1.71B

bloc k q1 2024 13

block total revenue and gross profit

In the first quarter of 2024, total net

revenue was $5.96 billion, up 19% year

over year. Excluding bitcoin revenue,

revenue was $3.23 billion, up 14% year

over year. Gross profit was $2.09

billion, up 22% year over year.

Transaction-based revenue was $1.51

billion in the first quarter of 2024, up 6%

year over year, and transaction-based

gross profit was $638 million, up 6% year

over year. We processed $54.43 billion in

GPV in the first quarter of 2024, up 6%

year over year. Transaction-based gross

profit as a percentage of GPV was 1.17%,

down 1 basis point year over year and up

4 basis points quarter over quarter.

Subscription and services-based revenue

was $1.68 billion in the first quarter of 2024,

up 23% year over year, and subscription

and services-based gross profit was

$1.41 billion, up 28% year over year.

In the fourth quarter of 2023, we began

reporting the financial results of our BNPL

platform fully within Cash App, rather than

allocating 50% of revenue and gross profit

to each of Square and Cash App. The prior

period segment financial information in

this letter has been revised to conform

to the updated segment reporting.

In the first quarter of 2024,

gross profit included $18

million of amortization of

acquired technology assets.

GPV includes Square GPV

and Cash App Business

GPV. Square GPV is defined

as the total dollar amount of

all card payments processed

by sellers using Square, net

of refunds, and ACH

transfers. Cash App

Business GPV comprises

Cash App activity related to

peer-to-peer transactions

received by business

accounts and peer-to-peer

payments sent from a credit

card. GPV does not include

transactions from our BNPL

platform because GPV is

related only to transaction-

based revenue and not to

subscription and services-

based revenue. Revenue

from our BNPL platform

includes fees generated

from consumer receivables,

late fees, and certain

affiliate and advertising fees

from the platform.

bloc k q1 2024 14

cash app revenue and gross profit

In the first quarter of 2024, Cash App

generated $4.17 billion of revenue and

$1.26 billion of gross profit, up 23% and

25% year over year, respectively. Excluding

bitcoin revenue, Cash App revenue was

$1.44 billion, up 18% year over year. Cash

App generated $1.33 billion of subscription

and services-based revenue, up 23% year

over year. Strength in Cash App gross

profit was driven by growth in Cash App

Card, our BNPL platform, our Bitcoin

products, and Cash App Borrow.

In March, Cash App had 57 million monthly

transacting actives, up 6% year over year. In

the first quarter of 2024, overall inflows were

$71 billion, up 17% year over year and 12%

quarter over quarter. Inflows per transacting

active were $1,255, up 11% year over year

from strength in financial services products

and 10% quarter over quarter, reflecting tax

refund seasonality. Monetization rate was

1.48%, up 7 basis points year over year and

down 1 basis point quarter over quarter.

Our top strategic priority continues to be

increasing engagement of banking products

with our existing Cash App transacting

actives. We continued to see strong usage

of Cash App Card as the number of Cash

App Card monthly actives increased

to 24 million in March and spend per

monthly active also grew on a year-over-

year basis. During the quarter, Cash App

Card transaction fees surpassed Instant

Deposit as Cash App’s largest contributor

to gross profit. Paycheck deposit actives

as of March grew quarter over quarter.

BNPL GMV was $6.98 billion, up 25% year

over year. Growth was driven by Single

Use Payments (“SUP”), which enables

customers to BNPL at both in-network and

out-of-network merchants from within the

Afterpay app, and Gift Cards. Cash App Pay

also continued to grow, with volume up more

than 40% on a quarter-over-quarter basis.

Inflows per transacting

active refers to total inflows

in the quarter divided by

monthly actives for the last

month of the quarter.

Inflows refers to funds

entering the Cash App

ecosystem. Inflows does not

include the movement of

funds when funds remain in

the Cash App ecosystem or

when funds leave the Cash

App ecosystem, or inflows

related to the Afterpay or

Verse apps. Inflows from

Verse actives were not

material to overall inflows.

Eligible customers have the

option to purchase online

Gift Cards from a variety of

leading retailers and then

spread the cost into 4

payments with Afterpay.

We calculate monetization rate by dividing Cash App gross

profit, excluding contributions from our BNPL platform, by

Cash App inflows.

cash app inflows framework

57M

Actives

1,255

Inflows per Active

1.48%

Monetization Rate

ca sh ap p i nflows

2024

17%

Q2Q1

2023

25%

YoY

Growth

27%

18%21%

$71B

$63B

$62B

$61B

bloc k q1 2024 15

Cash App generated $80 million of bitcoin

gross profit in the first quarter of 2024, up

59% year over year. The total sale amount

of bitcoin sold to customers, which we

recognize as bitcoin revenue, was $2.73

billion, up 26% year over year. The year-

over-year increase in bitcoin revenue and

gross profit was driven by a few factors,

including a pricing change made in the

prior quarter, as well as a benefit from the

price appreciation of our bitcoin inventory

and an increase in the average market

price of bitcoin during the quarter.

In the first quarter of 2024, Cash App

generated $109 million of transaction-based

revenue, down 19% year over year. Cash

App Business GPV was $3.96 billion, down

19% year over year. Cash App Business

GPV comprises Cash App activity related

to peer-to-peer transactions received

by business accounts and peer-to-peer

payments sent from a credit card.

Bitcoin revenue is the total

sale amount of bitcoin sold

to customers. Bitcoin costs

are the total amount we pay

to purchase bitcoin in order

to facilitate customers’

access to bitcoin. In future

quarters, bitcoin revenue

and gross profit may

fluctuate as a result of

changes in customer

demand or the market price

of bitcoin.

bloc k q1 2024 16

square revenue and gross profit

In the first quarter of 2024, Square

generated $1.73 billion of revenue and

$820 million of gross profit, up 11% and

19% year over year, respectively. Square

generated $1.40 billion of transaction-

based revenue in the first quarter of 2024,

up 9% year over year, and $296 million of

subscription and services-based revenue,

up 29% year over year. Growth in Square

gross profit was driven primarily by our

banking products and international markets.

Square GPV was $50.46 billion, up 9% year

over year on both a reported and constant

currency basis. Square GPV in our U.S.

market grew 6% year over year, and Square

GPV in our international markets grew 23%

year over year, or 26% year over year on a

constant currency basis. On a year-over-

year basis, food and drink GPV was up 14%,

GPV from services verticals was up 7%, and

retail GPV was up 4%. During the quarter,

Square saw a higher percentage of GPV

with custom pricing on a year-over-year

basis, as we intend to drive incremental

growth with larger sellers through our

go-to-market and product strategies.

Throughout the first quarter, we saw

weather-related impacts to our U.S. volume

and pockets of continued same-store-growth

weakness, most notably in our retail vertical.

Card-present GPV was up 12% year over

year, while card-not-present GPV was up

3% year over year. Within card-not-present

volumes, GPV growth from online channels

was up 10% year over year. We continued

to experience softness in a portion of our

card-not-present volume related to manual

keyed entry or “MKE” transactions, and we

remain focused on shifting to more software-

enabled payments volume. We achieved

positive growth in acquisition, or gross profit

from new sellers, and churn of existing sellers

remained consistent with prior periods.

Services verticals include

professional services,

beauty and personal care,

health care and fitness, and

home and repair.

squa re gro s s pro fit by pro d uct a re a

2022

2023

2021

2024

2020

Sidecar

Payments

Software &

Integrated

Payments

Banking

ex. PPP

pe r cent o f total s q ua r e gros s prof i t ex p p p

Q1'20 Q1'21 Q1'22 Q1'23 Q1'24

17% 11% 16% 20% 23%

Banking ex.

PPP

53% 61% 62% 60% 59%

Software &

Integrated

Payments

34% 30% 27% 23% 20%

Sidecar

Payments

Hardware gross profit losses are not presented for any period.

Percentages are of Square gross profit excluding contributions

from PPP loan forgiveness for each period.

Square GPV is defined as the total dollar amount of all card

payments processed by sellers using Square, net of refunds,

and ACH transfers.

squa re gro ss paym ent vol ume

2024

Q2Q1

2023

Q4Q3

$50.5B

10%

$53.5B

11%

$55.7B

12%

$54.2B

YoY

Growth

17%

$46.2B

bloc k q1 2024 17

Software solutions are a key part of our

strategic priority to help sellers save time

and grow their businesses, and we remain

focused on cross-selling more solutions

to sellers. Software and integrated

payments gross profit grew 17% year over

year in the first quarter of 2024, while

gross profit from our vertical point-of-sale

solutions, including Square Appointments,

Square for Restaurants, and Square for

Retail, was up 24% year over year.

Gross profit from our banking products,

which primarily include Square Loans, Instant

Transfer, and Square Debit Card, grew

36% year over year. Strength in banking

gross profit was driven by continued strong

demand for loans and healthy repayment

trends. We continue to find incremental

opportunities to deliver lending solutions to

our customers while maintaining underwriting

discipline. Square Loans facilitated

approximately 129,000 loans totaling $1.32

billion in originations, up 17% year over year.

International gross profit was up 38%

year over year in the first quarter as we

observed healthy growth in payments

volumes across each of our international

markets. We’ve also seen strength in

our banking products internationally,

most notably the recent launch of our

merchant cash advance product in Japan.

Hardware revenue in the first quarter of

2024 was $32 million, down 15% year over

year, and gross loss was $18 million as

we use hardware as an acquisition tool.

squa re gpv m ix by se ller s ize

2022

2023

2024

$16.0B

$14.8B

$19.6B

$13.7B

$15.2B

$17.5B

$14.0B

$11.8B

$13.8B

<$125K

Annualized GPV

$125K–$500K

Annualized GPV

>$500K

Annualized GPV

$50.5B

$46.2B

$39.5B

Percent Mid-market

Sellers

35% 38%

39%

We determine seller size based on annualized GPV during the

applicable quarter. A mid-market seller generates more than

$500,000 in annualized GPV.

$22M

$39M

$58M

$75M

$103M

8%6%

gross profit in markets outside the u.s.

2020

2023

11%

2022

2021

2024

13%

% of Square

Gross Profit

bloc k q1 2024 18

corporate and other revenue

and gross profit

Corporate and Other generated $54 million

in revenue and $16 million in gross profit in

the first quarter of 2024. Corporate and

Other was comprised primarily of TIDAL and

intersegment eliminations between Cash

App and Square in the first quarter of 2024.

operating expenses

In 2023, we sharpened our focus on

identifying areas where we could be more

cost efficient while driving growth. In

the first quarter of 2024, we continued

to make progress on these goals.

In the first quarter of 2024, operating

expenses were $1.84 billion on a GAAP basis

and $1.41 billion on a non-GAAP basis, up

7% and 3% year over year, respectively.

Product development expenses were $721

million on a GAAP basis and $461 million

on a non-GAAP basis in the first quarter

of 2024, up 15% and 16% year over year,

respectively. The increase was driven primarily

by personnel costs related to our engineering

team, as we continue to develop and diversify

our products, as well as by software and

cloud computing infrastructure fees.

Sales and marketing expenses were

$444 million on a GAAP basis and

$412 million on a non-GAAP basis in

the first quarter of 2024, down 11% and

12% year over year, respectively.

• Cash App marketing expenses were

down 18% year over year, driven primarily

by a decrease in advertising costs as

we have continued to focus on expense

discipline, and a $27 million release

of chargeback losses related to prior

periods, which were partially offset by an

increase in peer-to-peer processing costs.

• Other sales and marketing expenses

were up 2% year over year. Other sales

and marketing expenses primarily include

expenses related to Square and TIDAL.

In the first quarter of 2024,

operating expenses included

$43 million of amortization

of customer and other

acquired intangible assets.

We discuss Cash App

marketing expenses

because a large portion is

generated by our peer-to-

peer service, which we offer

free to our Cash App

customers, and we consider

it to be a marketing tool to

encourage the use of Cash

App. In the fourth quarter of

2023, we began reporting

BNPL platform marketing

expenses within Cash App.

The year-over-year growth

rate for Cash App marketing

expenses presented in this

letter reflect the new

reporting classification for

all historical periods.

bloc k q1 2024 19

General and administrative expenses were

$471 million on a GAAP basis and $358 million

on a non-GAAP basis in the first quarter of

2024, up 9% and down 1% year over year,

respectively. On a GAAP basis, the increase

was driven by a $32 million charge related to

certain purchase considerations related to the

TIDAL acquisition that had been previously

withheld for post-acquisition activities.

Transaction, loan, and consumer receivables

losses were $166 million in the first quarter

of 2024, up 30% year over year. The

increase was driven primarily by growth in

Cash App Borrow volumes, and partially

offset by a release of previously established

risk loss provisions related to prior periods.

In the first quarter, loss rates for Square

GPV, Square Loans, and Cash App Borrow

remained consistent with historical

ranges, and losses on BNPL consumer

receivables were less than 1% of GMV,

also consistent with historical ranges.

In the fourth quarter of 2020 and first

quarter of 2021, we invested $50 million

and $170 million, respectively, in bitcoin. As

of March 31, 2024, we held approximately

8,038 bitcoins for investment purposes

with a fair value of $573 million based on

observable market prices, which is included

within “Other non-current assets” on the

condensed consolidated balance sheets.

In the first quarter of 2024, other income,

net, included a remeasurement gain on

our bitcoin investment of $233 million.

As bitcoin is considered an

indefinite-lived intangible

asset, and upon adoption of

Accounting Standards

Update No. 2023-08,

Accounting for and

Disclosure of Crypto Assets,

we remeasure our bitcoin at

fair value at each reporting

date with changes

recognized in net income.

bloc k q1 2024 20

earnings

In the first quarter of 2024, operating

income was $250 million, compared to

a loss of $6 million in the first quarter of

2023. Adjusted Operating Income was

$364 million, compared to $51 million

in the first quarter of 2023. Adjusted

Operating Income benefitted from

approximately $52 million in non-recurring

items, including a $38 million release of

chargeback losses related to prior periods,

with $27 million related to peer-to-peer

transactions losses in sales and marketing

expenses and $11 million in transaction,

loan, and consumer receivable losses, and

a $13 million indirect tax reserve release

in general and administrative expenses.

The year-over-year improvement in operating

income (loss) and Adjusted Operating Income

was driven by gross profit growth across

our Cash App and Square ecosystems.

Please see the reconciliations at the end of this letter for a

description of certain items that affected operating income (loss)

in the first quarter of 2024.

2024

Q3 Q4

Q2Q1

2023

ope rating i ncome (loss)

($131M)

($132M)

($6M)

($10M)

$250M

$364M

adj ust ed op er ati ng inc ome (loss)

2024

2023

$25M

$51M

$90M

$185M

bloc k q1 2024 21

Net income attributable to common

stockholders was $472 million in the first

quarter of 2024. Net income per share

attributable to common stockholders was

$0.77 on a basic and $0.74 on a diluted

basis, based on 616 million weighted-average

basic and 637 million weighted-average

diluted shares outstanding during the first

quarter of 2024, representing a $0.61 and

$0.58 increase year over year, respectively.

Adjusted EBITDA was $705 million in the

first quarter of 2024, compared to $368

million in the first quarter of 2023.

The year-over-year improvement in net

income attributable to common stockholders

and Adjusted EBITDA was driven by gross

profit growth across our Cash App and

Square ecosystems and, on a GAAP net

income basis, a $233 million gain from the

remeasurement of our bitcoin investment.

In the first quarter of 2024, Adjusted Net

Income Per Share (Adjusted EPS) was $0.85

on a diluted basis based on 637 million

weighted-average diluted shares outstanding

during the first quarter of 2024, representing

a $0.42 increase year over year.

2024

Q3 Q4Q2

2023

adj ust ed e bitda

$705M

$562M

$384M

$368M

$477M

Please see the reconciliations at the end of this letter for a

description of certain items that affected net income (loss) in the

first quarter of 2024.

$102M$98M

net income (loss) at tributable to

common s tockholde rs

$472M

2024

2023

($102M)

($89M)

bloc k q1 2024 22

balance sheet/cash flow

We ended the first quarter of 2024 with

$8.0 billion in available liquidity, with $7.2

billion in cash, cash equivalents, restricted

cash, and investments in marketable debt

securities, as well as $775 million available

to be withdrawn from our revolving credit

facility subject to compliance with our

covenants. Additionally, we had $600

million available to be withdrawn under

our warehouse funding facilities, to

support funding of growth in our consumer

receivables related to our BNPL platform.

In October 2023, our board of directors

authorized the repurchase of up to $1 billion

of our Class A common stock. In the first

quarter of 2024, we repurchased 3.6 million

shares of our Class A common stock for

an aggregate amount of $252 million. As

of March 31, 2024, $591 million remained

available and authorized for repurchases.

In the first quarter of 2024, Adjusted

EBITDA contributed positively to our

overall liquidity. Overall liquidity was also

positively impacted by a refund of a $350

million deposit held by a processor to

meet requirements related to processing

volumes in the fourth quarter of 2023.

Net cash provided by operating activities was

$296 million for the twelve months ended

March 31, 2024, compared to $241 million

for the twelve months ended March 31,

2023. Adjusted Free Cash Flow was $1.07

billion for the twelve months ended March

31, 2024, compared to $423 million for the

twelve months ended March 31, 2023.

Adjusted Free Cash Flow is a

non-GAAP financial measure

that represents our net cash

provided by operating

activities adjusted for

changes in settlements

receivable; changes in

customers payable; changes

in settlements payable; the

purchase of property and

equipment; payments for

originations of consumer

receivables; proceeds from

principal repayments and

sales of consumer

receivables; and sales,

principal payments, and

forgiveness of PPP loans.

We present Adjusted Free

Cash Flow because we use it

to understand the cash

generated by our business

and make strategic decisions

related to our balance sheet,

and because we are focused

on growing our Adjusted

Free Cash Flow generation

over time. It is not intended

to represent amounts

available for discretionary

purposes.

ca sh flow (twe lve months e nded)

March 31

2024

March 31

2023

$296M

$1,067M

$423M

$241M

Net cash provided by

operating activities

Adjusted Free

Cash Flow

bloc k q1 2024 23

Guidance

Q2 2024

Gross Profit $2.165B to $2.185B

YoY Growth 16% to 17%

Adjusted EBITDA $670M to $690M

% Margin 31% to 32%

Adjusted Operating Income $305M to $325M

% Margin 14% to 15%

Q2 2024 OUTLOOK

Current 2024 Previous 2024

Gross Profit $8.78B $8.65B

YoY Growth 17% 15%

Adjusted EBITDA $2.76B $2.63B

% Margin 31% 30%

Adjusted Operating Income $1.30B $1.15B

% Margin 15% 13%

Rule of 40 32% 29%

2024 OUTLOOK

We are raising our full-year outlook to reflect outperformance in the first quarter and our

improved expectations for the remainder of the year. For the full year, we expect gross profit

of at least $8.78 billion, or 17% growth year over year. For Adjusted Operating Income, we

expect at least $1.30 billion, or 15% margin for the full year. We remain focused on achieving

Rule of 40 in 2026, which we calculate as gross profit growth plus Adjusted Operating Income

margin. Our updated guidance for the full year equates to a Rule of 32, an increase compared

to our prior guidance of at least Rule of 29 and an improvement compared to the prior year. Our

outlook does not assume any additional macroeconomic deterioration, which could impact results.

On a GAAP basis, we expect to recognize approximately $58 million in expenses related to

amortization of intangible assets in the second quarter and $53 million in each of the third and

fourth quarters, based on the intangible assets as of March 31, 2024. These amounts may be

affected by fluctuations in foreign exchange rates in future periods.

In the second quarter of 2024, we expect our share-based compensation expense to remain

relatively stable year over year on a dollar basis.

Margins are calculated as a percent of gross profit.

1. We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP metrics, including Adjusted

EBITDA and Adjusted Operating Income (Loss), or GAAP reconciliations of any of the aforementioned, as a result of the uncertainty

regarding, and the potential variability of, reconciling items such as share-based compensation expense. Accordingly, the Company has

relied upon the exception in item 10(e)(1)(i)(B) of Regulation S-K to exclude such reconciliations, as the reconciliations of these

non-GAAP guidance metrics to their corresponding GAAP equivalents are not available without unreasonable effort. However, it is

important to note that material changes to reconciling items could have a significant effect on future GAAP results. We have provided

reconciliations of other historical GAAP to non-GAAP metrics in tables at the end of this letter.

bloc k q1 2024 24

Block (NYSE:SQ) will host a conference call

and earnings webcast at 2:00 p.m. Pacific

time/5:00 p.m. Eastern time, May 2, to

discuss these financial results. To register

to participate in the conference call, or to

listen to the live audio webcast, please

visit the Events & Presentations section

of Block’s Investor Relations website at

investors.block.xyz. A replay will be available

on the same website following the call.

We will release financial results for the

second quarter of 2024 on August 1,

2024, after the market closes, and will

also host a conference call and earnings

webcast at 2:00 p.m. Pacific time/5:00

p.m. Eastern time on the same day

to discuss those financial results.

MEDIA CONTACT

press@block.xyz

INVESTOR RELATIONS

CONTACT

ir@block.xyz

Jack Dorsey

ceo

Amrita Ahuja

cfo

Earnings

Webcast

bloc k q1 2024 25

Square is one of the pillars of our

business. It’s taken us through

constant growth and expansion

hurdles and played a major role in

keeping our customers spending

money with Southern Grist. ”

“

Kevin Antoon

Co-founder and CEO of Southern Grist Brewing Company

Southern Grist Brewing Company is a Nashville, TN

based taproom and restaurant that has two locations

and a 9,900-square-foot production facility. They use

Square for Restaurants, Square Register, Square

Marketing, and Square Payroll, which have helped

them enable multiple revenue streams while saving

them 10 hours a week managing their team of more

than 60 employees.

bloc k q1 2024 26

My mom finally got a cash app card

now I can send her money whenever

I’m like finally girl. (She’s been anti

debit card for a while and didn’t want a

bank account LOL don’t ask) But yay

I have the pink card now it’s time

for glitter green one

I’ve done my taxes through

cash app /credit karma for

about 4 years now. Idk how

people file any other way.

cashapp letting me borrow

money is the best thing that

ever happened to me idk

@eloracyraM

Via X

@zanevia

Via TikTok

@ItsSwayBro

Via X

@cookielyonsgf

Via X

@timothysunflowers

Via Instagram

4.5% is siiiiiiiiiiick

bloc k q1 2024 27

safe harbor statement

This letter contains “forward-looking statements” within the

meaning of the Safe Harbor provisions of the U.S. Private

Securities Litigation Reform Act of 1995. All statements other

than statements of historical fact could be deemed forward-

looking, including, but not limited to, statements regarding the

future performance of Block, Inc. and its consolidated

subsidiaries (the Company); the Company’s strategies,

including expected impact of such strategies on our

customers, actives, and sellers as well as our business and

financial performance, expected financial results, guidance,

and general business outlook for current and future periods;

the Company’s integration of Afterpay, and its impacts on the

Company’s business and financial results; future profitability

and growth in the Company’s businesses and products and

the Company’s ability to drive such profitability and growth;

the Company’s expectations regarding scale, economics, and

the demand for or benefits from its products, product

features, and services; the Company’s product development

plans; the ability of the Company’s products to attract and

retain customers, particularly in new or different markets or

demographics; trends in the Company’s markets and the

continuation of such trends; the Company’s expectations and

intentions regarding future expenses, including future

transaction and loan losses and the Company’s estimated

reserves for such losses; the Company’s bitcoin investments

and strategy as well as the potential financial impact and

volatility; and management’s statements related to business

strategy, plans, investments, opportunities, and objectives for

future operations. In some cases, forward-looking statements

can be identified by terms such as “may,” “will,” “appears,”

“should,” “expects,” “plans,” “anticipates,” “could,” “intends,”

“target,” “projects,” “contemplates,” “believes,” “estimates,”

“predicts,” “potential,” or “continue,” or the negative of these

words or other similar terms or expressions that concern our

expectations, strategy, plans, or intentions.

Such statements are subject to a number of known and

unknown risks, uncertainties, assumptions, and other factors

that may cause the Company’s actual results, performance, or

achievements to differ materially from results expressed or

implied in this letter. Investors are cautioned not to place undue

reliance on these statements, and reported results should not

be considered as an indication of future performance.

Risks tht contribute to the uncertin nture of the forwrd-

looking sttements include, mong others,  continued or

prolonged economic downturn in the United Sttes nd in

other countries round the world; the Compny’s investments

in its business nd bility to mintin profitbility; the

Compny’s efforts to expnd its product portfolio nd mrket

rech; the Compny’s bility to develop products nd services

to ddress the rpidly evolving mrket for pyments nd

finncil services; the Compny’s bility to del with the

substntil nd incresingly intense competition in its

industry; cquisitions, strtegic investments, entries into new

businesses, joint ventures, divestitures, nd other

trnsctions tht the Compny my undertke; the

integrtion of Afterpy; the Compny’s bility to ensure the

integrtion of its services with  vriety of operting systems

nd the interoperbility of its technology with tht of third

prties; the Compny’s bility to retin existing customers,

ttrct new customers, nd increse sles to ll customers;

the Compny’s dependence on pyment crd networks nd

cquiring processors; the effect of extensive regultion nd

oversight relted to the Compny’s business in  vriety of

res; risks relted to the bnking ecosystem, including

through our bnk prtnerships, nd FDIC nd other regultory

obligtions; the effect of mngement chnges nd business

inititives; the libilities nd loss potentil ssocited with

new products, product fetures, nd services; litigtion,

including intellectul property clims, government

investigtions or inquiries, nd regultory mtters or

disputes; doption of the Compny’s products nd services in

interntionl mrkets; chnges in politicl, business, nd

economic conditions; s well s other risks listed or described

from time to time in the Compny’s filings with the Securities

nd Exchnge Commission (the SEC), including the

Compny’s Annul Report on Form 10-K for the fiscl yer

ended December 31, 2023, which re on file with the SEC nd

vilble on the Investor Reltions pge of the Compny’s

website. Additionl informtion will lso be set forth in the

Compny’s Qurterly Report on Form 10-Q for the qurter

ended Mrch 31, 2024. All forwrd-looking sttements

represent mngement's current expecttions nd

predictions regrding trends ffecting the Compny’s

business nd industry nd re bsed on informtion nd

estimtes vilble to the Compny t the time of this letter

nd re not gurntees of future performnce. Except s

required by lw, the Compny ssumes no obligtion to

updte ny of the sttements in this letter.

bloc k q1 2024 28

key operating metrics and

non-gaap financial measures

To supplement our financial information presented in

accordance with generally accepted accounting principles in

the United States (GAAP), from period to period, we consider

and present certain operating and financial measures that we

consider key metrics or are not prepared in accordance with

GAAP, including Gross Payment Volume (GPV), Gross

Merchandise Value (GMV), Adjusted EBITDA, Adjusted

EBITDA margin, Adjusted Net Income (Loss), Diluted Adjusted

Net Income (Loss) Per Share (Adjusted EPS), Adjusted

Operating Income (Loss), Adjusted Operating Income (Loss)

margin, Adjusted Free Cash Flow, constant currency, and

non-GAAP operating expenses as well as other measures

defined in this letter such as measures excluding bitcoin

revenue, and measures excluding PPP loan forgiveness gross

profit. We believe these metrics and measures are useful to

facilitate period-to-period comparisons of our business and to

facilitate comparisons of our performance to that of other

payments solution providers.

We define GPV as the total dollar amount of all card payments

processed by sellers using Square, net of refunds, and ACH

transfers. Additionally, GPV includes Cash App Business GPV,

which comprises Cash App activity related to peer-to-peer

transactions received by business accounts, and peer-to-peer

payments sent from a credit card. GPV does not include

transactions from our BNPL platform.

We define GMV as the total order value processed on our

BNPL platform.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net

Income (Loss), and Diluted Adjusted Net Income (Loss) Per

Share (Adjusted EPS) are non-GAAP financial measures that

represent our net income (loss) and net income (loss) per

share, adjusted to eliminate the effect of share-based

compensation expenses; amortization of intangible assets;

gain or loss on revaluation of equity investments; bitcoin

impairment losses; amortization of debt discount and

issuance costs; and the gain or loss on the disposal of

property and equipment, as applicable. Adjusted Operating

Income (Loss) is a non-GAAP financial measure that

represents our operating income (loss), adjusted to eliminate

the effect of amortization of acquired technology assets;

acquisition-related and integration costs; restructuring and

other charges; goodwill impairment; bitcoin impairment

losses; amortization of customer and other acquired intangible

assets; and acquisition-related share-based acceleration

costs. We also exclude from these measures certain

acquisition-related and integration costs associated with

business combinations, and various other costs that are not

reflective of our core operating performance. We exclude

amortization of intangible assets arising from business

combinations because the amount of such expenses in any

specific period may not directly correlate to the underlying

performance of our ongoing business operations. Acquisition-

related costs include amounts paid to redeem acquirees’

unvested stock-based compensation awards; charges

associated with holdback liabilities; and legal, accounting, and

due diligence costs. Integration costs include advisory and

other professional services or consulting fees necessary to

integrate acquired businesses. Other costs that are not

reflective of our core business operating expenses may

include contingent losses, impairment charges, and certain

litigation and regulatory charges. We also add back the impact

of the acquired deferred revenue and deferred cost

adjustment, which was written down to fair value in purchase

accounting. Additionally, for purposes of calculating diluted

Adjusted EPS, we add back cash interest expense on

convertible senior notes, as if converted at the beginning of

the period, if the impact is dilutive. In addition to the items

above, Adjusted EBITDA is a non-GAAP financial measure

that also excludes depreciation and amortization, interest

income and expense, other income and expense, and provision

or benefit from income taxes, as applicable. Adjusted

Operating Income (Loss) margin is calculated as Adjusted

Operating Income (Loss) divided by gross profit. Adjusted

EBITDA margin is calculated as Adjusted EBITDA divided by

gross profit. To calculate the diluted Adjusted EPS, we adjust

the weighted-average number of shares of common stock

outstanding for the dilutive effect of all potential shares of

common stock. In periods when we recorded an Adjusted Net

Loss, the diluted Adjusted EPS is the same as basic Adjusted

EPS because the effects of potentially dilutive items were

anti-dilutive given the Adjusted Net Loss position.

bloc k q1 2024 29

key operating metrics and

non-gaap financial measures

Adjusted Free Cash Flow is a non-GAAP financial measure

that represents our net cash provided by operating activities

adjusted for changes in settlements receivable; changes in

customers payable; changes in settlements payable; the

purchase of property and equipment; payments for

originations of consumer receivables; proceeds from principal

repayments and sales of consumer receivables; and sales,

principal payments, and forgiveness of PPP loans. We present

Adjusted Free Cash Flow because we use it to understand the

cash generated by our business and make strategic decisions

related to our balance sheet, and because we are focused on

growing our Adjusted Free Cash Flow generation over time. It

is not intended to represent amounts available for

discretionary purposes.

Constant currency growth is calculated by assuming

international results in a given period and the comparative

prior period are translated from local currencies to the U.S.

dollar at rates consistent with the monthly average rates in the

comparative prior period. We discuss growth on a constant

currency basis because a portion of our business operates in

markets outside the U.S. and is subject to changes in foreign

exchange rates.

Non-GAAP operating expenses is a non-GAAP financial

measure that represents operating expenses adjusted to

remove the impact of share-based compensation,

depreciation and amortization, bitcoin impairment losses, loss

on disposal of property and equipment, and acquisition-

related integration and other costs.

We have included Adjusted EBITDA, Adjusted EBITDA margin,

Adjusted Operating Income (Loss), Adjusted Operating

Income (Loss) margin, Adjusted Net Income, Adjusted EPS,

and non-GAAP operating expenses because they are key

measures used by our management to evaluate our operating

performance, generate future operating plans, and make

strategic decisions, including those relating to operating

expenses and the allocation of internal resources. Accordingly,

we believe that Adjusted EBITDA, Adjusted EBITDA margin,

Adjusted Operating Income (Loss), Adjusted Operating

Income (Loss) margin, Adjusted Net Income, Adjusted EPS,

and non-GAAP operating expenses provide useful information

to investors and others in understanding and evaluating our

operating results in the same manner as our management and

board of directors. In addition, they provide useful measures

for period-to-period comparisons of our business, as they

remove the effect of certain non-cash items and certain

variable charges that do not vary with our operations. We have

included measures excluding our BNPL platform because we

believe these measures are useful in understanding the

ongoing results of our operations. We have included measures

excluding bitcoin revenue because our role is to facilitate

customers’ access to bitcoin. When customers buy bitcoin

through Cash App, we only apply a small margin to the market

cost of bitcoin, which tends to be volatile and outside our

control. Therefore, we believe deducting bitcoin revenue or

gross profit better reflects the economic benefits as well as

our performance from these transactions. We have included

measures excluding PPP loan forgiveness gross profit

because we believe these measures are useful to facilitate

comparisons of our business without PPP loan forgiveness.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net

Income, Adjusted Operating Income (Loss), Adjusted

Operating Income (Loss) margin, Adjusted EPS, and

non-GAAP operating expenses, as well as other measures

defined in the shareholder letter, such as measures excluding

our BNPL platform, bitcoin revenue, and PPP loan forgiveness

gross profit, have limitations as financial measures, should be

considered as supplemental in nature, and are not meant as

substitutes for the related financial information prepared in

accordance with GAAP.

We believe that the aforementioned metrics and measures

provide useful information about our operating results,

enhance the overall understanding of our past performance

and future prospects, and provide useful measures for

period-to-period comparisons of our business, as they remove

the effect of certain variable amounts, or they remove

amounts that were not repeated across periods and therefore

make comparisons more difficult. Our management uses

these measures to evaluate our operating performance,

generate future operating plans, and make strategic

decisions, including those relating to operating expenses and

the allocation of internal resources.

These non-GAAP financial measures should not be considered

in isolation from, or as a substitute for, financial information

prepared in accordance with GAAP. These non-GAAP financial

measures are not based on any standardized methodology

prescribed by GAAP. Other companies, including companies in

our industry, may calculate the non-GAAP financial measures

differently or not at all, which reduces their usefulness as

comparative measures.

bloc k q1 2024 30

Condensed Consolidated

Statements of Operations

unaudited

In thousands, except per share data

Condensed Consolidated Statements of Operations

Unaudited

In thousands, except per share data

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Revenue:

Transaction-based revenue $ 1,511,209 $ 1,422,705

Subscription and services-based revenue 1,682,294 1,366,224

Hardware revenue 32,501 37,451

Bitcoin revenue 2,731,124 2,163,751

Total net revenue 5,957,128 4,990,131

Cost of revenue:

Transaction-based costs 873,165 820,787

Subscription and services-based costs 269,668 264,092

Hardware costs 50,785 58,785

Bitcoin costs 2,651,010 2,113,375

Amortization of acquired technology assets 18,027 18,508

Total cost of revenue 3,862,655 3,275,547

Gross profit 2,094,473 1,714,584

Operating expenses:

Product development 720,574 626,937

Sales and marketing 443,885 496,011

General and administrative 471,260 432,825

Transaction, loan, and consumer receivable losses 165,729 127,896

Amortization of customer and other acquired intangible assets 43,282 37,087

Total operating expenses 1,844,730 1,720,756

Operating income (loss) 249,743 (6,172)

Interest income, net (18,745) (3,161)

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

Income before income tax 506,312 74,706

Provision (benefit) for income taxes 35,492 (21,122)

Net income 470,820 95,828

Less: Net loss attributable to noncontrolling interests (1,185) (2,488)

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

Net income per share attributable to common stockholders:

Basic $ 0.77 $ 0.16

Diluted $ 0.74 $ 0.16

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

Basic 616,401 602,234

Diluted 637,360 623,579

bloc k q1 2024 31

Condensed Consolidated

Balance Sheets

In thousands, except per share data

Condensed Consolidated Balance Sheets

In thousands, except per share data

Mar. 31, 2024 Dec 31, 2023

UNAUDITED

Assets

Current assets:

Cash and cash equivalents $ 5,753,436 $ 4,996,465

Investments in short-term debt securities 573,390 851,901

Settlements receivable 3,714,810 3,226,294

Customer funds 4,046,346 3,170,430

Consumer receivables, net 1,914,278 2,444,695

Loans held for sale 892,068 775,424

Safeguarding asset related to bitcoin held for other parties 1,681,111 1,038,585

Other current assets 1,962,865 2,353,488

Total current assets 20,538,304 18,857,282

Goodwill 11,721,329 11,919,720

Acquired intangible assets, net 1,673,618 1,761,521

Other non-current assets 1,679,579 1,531,370

Total assets $ 35,612,830 $ 34,069,893

Liabilities and Stockholders’ Equity

Current liabilities:

Customers payable $ 8,137,147 $ 6,795,340

Accrued expenses and other current liabilities 1,275,321 1,334,669

Current portion of long-term debt (Note 12) 997,197 —

Warehouse funding facilities, current 410,426 753,035

Safeguarding obligation liability related to bitcoin held for other parties 1,681,111 1,038,585

Total current liabilities 12,501,202 9,921,629

Warehouse funding facilities, non-current 543,751 854,882

Long-term debt (Note 12) 3,125,456 4,120,091

Other non-current liabilities 475,225 480,455

Total liabilities 16,645,634 15,377,057

Commitments and contingencies (Note 17)

Stockholders’ equity:

Preferred stock, $0.0000001 par value: 100,000 shares authorized at March 31, 2024 and December 31,

2023. None issued and outstanding at March 31, 2024 and December 31, 2023. — —

Class A common stock, $0.0000001 par value: 1,000,000 shares authorized at March 31, 2024 and

December 31, 2023; 556,563 and 555,306 issued and outstanding at March 31, 2024 and December 31,

2023, respectively. — —

Class B common stock, $0.0000001 par value: 500,000 shares authorized at March 31, 2024 and

December 31, 2023; 60,501 and 60,515 issued and outstanding at March 31, 2024 and December 31,

2023, respectively. — —

Additional paid-in capital 19,687,428 19,601,992

Accumulated other comprehensive loss (660,203) (378,307)

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

Total stockholders’ equity attributable to common stockholders 18,970,801 18,695,256

Noncontrolling interests (3,605) (2,420)

Total stockholders’ equity 18,967,196 18,692,836

Total liabilities and stockholders’ equity $ 35,612,830 $ 34,069,893

bloc k q1 2024 32

Condensed Consolidated

Statements of Cash Flows

unaudited

In thousands

Condensed Consolidated Statements of Cash Flows

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Cash flows from operating activities:

Net income $ 470,820 $ 95,828

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

Depreciation and amortization 97,640 93,173

Amortization of discounts and premiums and other non-cash adjustments (266,991) (85,314)

Non-cash lease expense 14,512 24,333

Share-based compensation 311,168 279,592

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

Bitcoin remeasurement (233,404) (96,088)

Transaction, loan, and consumer receivable losses 165,729 127,896

Change in deferred income taxes (7,984) 1,353

Changes in operating assets and liabilities:

Settlements receivable (542,070) 452,868

Purchases and originations of loans (3,010,609) (1,834,442)

Proceeds from payments and forgiveness of loans 2,824,953 1,753,515

Customers payable 465,891 (418,948)

Settlements payable (7,341) (64,528)

Other assets and liabilities 205,970 (49,722)

Net cash provided by operating activities 489,395 294,401

Cash flows from investing activities:

Purchases of marketable debt securities (184,048) (56,761)

Proceeds from maturities of marketable debt securities 204,737 273,771

Proceeds from sale of marketable debt securities 327,128 15,697

Payments for originations of consumer receivables (6,095,104) (4,911,509)

Proceeds from principal repayments and sales of consumer receivables 6,824,596 5,339,800

Purchases of property and equipment (31,998) (32,253)

Purchases of other investments (2,924) (4,821)

Net cash provided by investing activities 1,042,387 623,924

Cash flows from financing activities:

Repayments of Paycheck Protection Program Liquidity Facility advances — (5,077)

Proceeds from warehouse facilities borrowings 160,587 47,975

Repayments of warehouse facilities borrowings (790,592) (692,556)

Proceeds from the exercise of stock options and purchases under the employee stock purchase plan 19,943 6,825

Net increase in interest-bearing deposits 18,650 13,601

Repurchases of common stock (252,095) —

Change in customer funds, restricted from use in the Company's operations 875,916 620,149

Net cash provided by (used in) financing activities 32,409 (9,083)

Effect of foreign exchange rate on cash and cash equivalents (41,755) 1,033

Net increase in cash, cash equivalents, restricted cash, and customer funds 1,522,436 910,275

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

Cash, cash equivalents, restricted cash, and customer funds, end of the period $ 10,531,523 $ 9,346,181

bloc k q1 2024 33

Reportable Segment Disclosures

Unaudited

Information on the reportable segments revenue and segment operating profit (in thousands):

THREE MONTHS ENDED

Mar. 31, 2024

Cash App Square

Corporate and

Other (i) Total

Revenue:

Transaction-based revenue $ 109,220 $ 1,401,989 $ — $ 1,511,209

Subscription and services-based revenue 1,332,560 296,218 53,516 1,682,294

Hardware revenue — 31,830 671 32,501

Bitcoin revenue 2,731,124 — — 2,731,124

Segment revenue $ 4,172,904 $ 1,730,037 $ 54,187 $ 5,957,128

Segment gross profit (ii) $ 1,258,527 $ 820,272 $ 15,674 $ 2,094,473

THREE MONTHS ENDED

Mar. 31, 2023

Cash App Square

Corporate and

Other (i) Total

Revenue:

Transaction-based revenue $ 134,663 $ 1,288,042 $ — $ 1,422,705

Subscription and services-based revenue 1,085,748 229,884 50,592 1,366,224

Hardware revenue — 37,451 — 37,451

Bitcoin revenue 2,163,751 — — 2,163,751

Segment revenue $ 3,384,162 $ 1,555,377 $ 50,592 $ 4,990,131

Segment gross profit (ii) $ 1,009,953 $ 691,562 $ 13,069 $ 1,714,584

(i)

Corporate and other represents results related to products and services that are not assigned to a specific reportable

segment, and intersegment eliminations.

(ii)

Segment gross profit for Cash App for the three months ended March 31, 2024 and March 31, 2023 included $13.7 million

and $14.4 million of amortization of acquired technology assets expense, respectively. Segment gross profit for Square for the three

months ended March 31, 2024 and March 31, 2023 included $2.5 million and $2.7 million of amortization of acquired technology assets

expense, respectively. Amortization of acquired technology assets expense included in Corporate and Other was immaterial for the three

months ended March 31, 2024 and March 31, 2023.

Reportable Segment Disclosures

Information on the reportable segments revenue and segment operating profit are

as follows (in thousands):

Operating Segment Disclosures

Unaudited

A reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes

(in thousands):

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Total segment gross profit $ 2,094,473 $ 1,714,584

Less: Product development 720,574 626,937

Less: Sales and marketing 443,885 496,011

Less: General and administrative 471,260 432,825

Less: Transaction, loan, and consumer receivable losses 165,729 127,896

Less: Amortization of customer and other intangible assets 43,282 37,087

Less: Interest income, net (18,745) (3,161)

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

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

Operating Segment Disclosures

A reconciliation of total segment gross profit to the Company’s income (loss)

before applicable income taxes is as follows (in thousands):

(i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment, and intersegment

eliminations.

(ii) Segment gross profit for Cash App for the three months ended March 31, 2024 and March 31, 2023 included $13.7 million and $14.4 million of

amortization of acquired technology assets expense, respectively. Segment gross profit for Square for the three months ended March 31, 2024 and

March 31, 2023 included $2.5 million and $2.7 million of amortization of acquired technology assets expense, respectively. Amortization of acquired

technology assets expense included in Corporate and Other was immaterial for the three months ended March 31, 2024 and March 31, 2023.

bloc k q1 2024 34

Key Operating Metrics and

Non-GAAP Financial Measures

unaudited

In thousands, except GPV and per share data

Key Operating Metrics and Non-GAAP Financial Measures

Unaudited

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Gross Payment Volume (GPV) (in millions) $ 54,426 $ 51,117

Adjusted Operating Income (in thousands) $ 364,264 $ 50,974

Adjusted EBITDA (in thousands) $ 705,074 $ 368,367

Adjusted Net Income Per Share:

Basic $ 0.88 $ 0.45

Diluted $ 0.85 $ 0.43

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Square GPV (in millions) $ 50,465 $ 46,220

Cash App GPV (in millions) 3,961 4,897

Total GPV $ 54,426 $ 51,117

Adjusted EBITDA

unaudited

In thousands

Adjusted EBITDA

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023 June 30, 2023 Sept. 30, 2023 Dec. 31, 2023

Net income (loss) attributable to common stockholders $ 472,005 $ 98,316 $ (102,042) $ (88,738) $ 102,236

Net loss attributable to noncontrolling interests (1,185) (2,488) (3,336) (4,806) (20,266)

Net income (loss) 470,820 95,828 (105,378) (93,544) 81,970

Share-based compensation expense 304,531 279,591 319,248 345,690 331,568

Restructuring share-based compensation expense 6,637 — — — —

Depreciation and amortization 97,640 93,173 94,545 115,518 105,324

Acquisition-related and integration costs 32,512 1,479 1,434 3,391 5,118

Restructuring and other charges 14,063 72 100,915 21,421 117,174

Goodwill impairment — — — — 132,313

Interest income, net (18,745) (3,161) (3,944) (21,415) (18,701)

Other expense (income), net

(i) (237,824) (77,717) (14,635) 23,912 (134,035)

Provision (benefit) for income taxes 35,492 (21,122) (8,150) 81,139 (59,886)

Loss (gain) on disposal of property and equipment (71) 191 343 1,355 1,297

Acquired deferred revenue and cost adjustment 19 33 24 21 21

Adjusted EBITDA $ 705,074 $ 368,367 $ 384,402 $ 477,488 $ 562,163

(i) Includes the loss (gain) from the remeasurement of the Company's bitcoin investment.

bloc k q1 2024 35

Adjusted Operating

Income (Loss)

unaudited

In thousands

Adjusted Operating Income (Loss)

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023 June 30, 2023 Sept. 30, 2023 Dec. 31, 2023

Operating income (loss)

$ 249,743 $ (6,172) $ (132,107) $ (9,908) $ (130,652)

Amortization of acquired technology assets

18,027 18,508 18,392 17,880 18,049

Acquisition-related and integration costs

32,512 1,479 1,434 3,391 5,118

Restructuring and other charges

14,063 72 100,915 21,421 117,174

Restructuring share-based compensation

6,637 — — — —

Goodwill impairment

— — — — 132,313

Amortization of customer and other acquired intangible

assets 43,282 37,087 36,865 56,965 43,127

Adjusted Operating Income

$ 364,264 $ 50,974 $ 25,499 $ 89,749 $ 185,129

Key Metric Margins

Unaudited

In thousands, except for percentages

THREE MONTHS

ENDED

Mar. 31, 2024

Gross profit

$ 2,094,473

Gross profit change (%) YoY

22 %

Operating income

249,743

Operating income margin (%) of gross profit

12 %

Net income attributable to common stockholders

472,005

Net income margin (%) of gross profit

23 %

Adjusted Operating Income

364,264

Adjusted Operating Income margin (%) of gross profit

1 7 %

Adjusted EBITDA

705,074

Adjusted EBITDA margin (%) of gross profit

3 4 %

Key Metric Margins

unaudited

In thousands, except for percentages

Adjusted Operating Income (Loss)

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023 June 30, 2023 Sept. 30, 2023 Dec. 31, 2023

Operating income (loss)

$ 249,743 $ (6,172) $ (132,107) $ (9,908) $ (130,652)

Amortization of acquired technology assets

18,027 18,508 18,392 17,880 18,049

Acquisition-related and integration costs

32,512 1,479 1,434 3,391 5,118

Restructuring and other charges

14,063 72 100,915 21,421 117,174

Restructuring share-based compensation

6,637 — — — —

Goodwill impairment

— — — — 132,313

Amortization of customer and other acquired intangible

assets 43,282 37,087 36,865 56,965 43,127

Adjusted Operating Income

$ 364,264 $ 50,974 $ 25,499 $ 89,749 $ 185,129

Key Metric Margins

Unaudited

In thousands, except for percentages

THREE MONTHS

ENDED

Mar. 31, 2024

Gross profit

$ 2,094,473

Gross profit change (%) YoY

22 %

Operating income

249,743

Operating income margin (%) of gross profit

12 %

Net income attributable to common stockholders

472,005

Net income margin (%) of gross profit

23 %

Adjusted Operating Income

364,264

Adjusted Operating Income margin (%) of gross profit

1 7 %

Adjusted EBITDA

705,074

Adjusted EBITDA margin (%) of gross profit

3 4 %

bloc k q1 2024 36

Adjusted Free Cash Flow

unaudited

In thousands

Adjusted Free Cash Flow

Unaudited

In thousands

TWELVE MONTHS ENDED (i)

Mar. 31, 2024 Mar. 31, 2023

Net cash provided by operating activities

$ 295,955 $ 240,881

Consumer receivables cash flows included within investing activities in the GAAP statement of cash flows:

Payments for originations of consumer receivables (25,152,382) (21,326,912)

Proceeds from principal repayments and sales of consumer receivables 25,726,447 21,588,716

Less: Purchase of property and equipment

(150,896) (161,881)

Reversal of:

Changes in settlements receivable

2,103,467 825,828

Changes in customers payable

(2,141,417) (505,439)

Changes in settlements payable

396,849 (133,006)

Sales, principal payments and forgiveness of PPP loans

(10,901) (104,918)

Adjusted Free Cash Flow $ 1,067,122 $ 423,269

Net cash provided by investing activities

$ 1,101,664 $ 719,007

Net cash provided by (used in) financing activities $ (198,645) $ 1,057,053

(i) The twelve months ended information presented in this table is comprised of financial data from the years ended December 31, 2023 and 2022, excluding

first quarter of 2023 and 2022, and including first quarter of 2024 and 2023, amounts, respectively.

(i) The twelve months ended information presented in this table is comprised of financial data from the years ended December 31, 2023 and 2022,

excluding first quarter of 2023 and 2022, and including first quarter of 2024 and 2023, amounts, respectively.

bloc k q1 2024 37

Select Financial Results

Excluding Bitcoin and PPP

unaudited

In thousands

Select Financial Results Excluding Bitcoin and PPP

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Bitcoin revenue $ 2,731,124 $ 2,163,751

Bitcoin costs 2,651,010 2,113,375

Bitcoin gross profit $ 80,114 $ 50,376

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Total net revenue (GAAP) $ 5,957,128 $ 4,990,131

Less: Bitcoin revenue 2,731,124 2,163,751

Total net revenue, excluding Bitcoin $ 3,226,004 $ 2,826,380

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Cash App revenue (GAAP) $ 4,172,904 $ 3,384,162

Less: Bitcoin contribution to Cash App revenue 2,731,124 2,163,751

Total Cash App revenue, excluding Bitcoin $ 1,441,780 $ 1,220,411

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023 Mar. 31, 2022 Mar. 31, 2021 Mar. 31, 2020

Square gross profit (GAAP) $ 820,272 $ 691,562 $ 615,080 $ 468,016 $ 355,769

Less: gross profit from Paycheck Protection Program

(PPP) loan forgiveness

182 693 51,454 9,400 —

Square gross profit excluding PPP loan forgiveness $ 820,090 $ 690,869 $ 563,626 $ 458,616 $ 355,769

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023 Mar. 31, 2022 Mar. 31, 2021 Mar. 31, 2020

Square gross profit from Banking $ 190,363 $ 140,328 $ 142,191 $ 60,289 $ 60,208

Less: gross profit from PPP loan forgiveness 182 693 51,454 9,400 —

Square banking gross profit excluding PPP loan

forgiveness

$ 190,181 $ 139,635 $ 90,737 $ 50,889 $ 60,208

bloc k q1 2024 38

Adjusted Net Income and

Adjusted EPS

unaudited

In thousands, except per share data

Adjusted Net Income and Adjusted EPS

Unaudited

In thousands, except per share data

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

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

Net loss attributable to noncontrolling interests (1,185) (2,488)

Net income 470,820 95,828

Share-based compensation expense 304,531 279,591

Restructuring share-based compensation expense 6,637 —

Acquisition-related and integration costs 32,512 1,479

Restructuring and other charges 14,063 72

Amortization of intangible assets 61,309 55,595

Amortization of debt discount and issuance costs 3,071 2,949

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

Bitcoin remeasurement (233,404) (96,088)

Loss (gain) on disposal of property and equipment (71) 191

Acquired deferred revenue and cost adjustment 19 33

Tax effect of non-GAAP net income adjustments (118,336) (84,607)

Adjusted Net Income - basic

$ 542,262 $ 269,928

Cash interest expense on convertible notes 673 1,236

Adjusted Net Income - diluted $ 542,935 $ 271,164

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

Basic 616,401 602,234

Diluted 637,360 623,579

Net income per share attributable to common stockholders:

Basic $ 0.77 $ 0.16

Diluted $ 0.74 $ 0.16

Weighted-average shares used to compute Adjusted Net Income Per Share:

Basic 616,401 602,234

Diluted 637,360 627,423

Adjusted Net Income Per Share:

Basic $ 0.88 $ 0.45

Diluted $ 0.85 $ 0.43

bloc k q1 2024 39

Depreciation and Amortization

by Function

unaudited

In thousands

Depreciation and Amortization by Function

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Cost of revenue $ 18,505 $ 19,222

Product development 37,101 30,537

Sales and marketing 1,006 1,458

General and administrative 9,456 16,879

Amortization of acquired customer assets 31,572 25,077

Total depreciation and amortization $ 97,640 $ 93,173

Non-GAAP Operating Expenses

unaudited

In thousands

Non-GAAP Operating Expenses

Unaudited

In thousands

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Operating expenses $ (1,844,730) $ (1,720,756)

Share-based compensation 304,358 279,449

Restructuring share-based compensation 6,637 —

Depreciation and amortization 79,135 73,951

Loss (gain) on disposal of property and equipment (71) 191

Acquisition-related and integration costs 32,512 1,479

Restructuring and other charges 14,063 72

Non-GAAP operating expenses $ (1,408,096) $ (1,365,614)

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Product development $ (720,574) $ (626,937)

Share-based compensation 217,450 197,857

Restructuring share-based compensation 4,504 —

Depreciation and amortization 37,101 30,537

Loss on disposal of property and equipment 45 324

Non-GAAP product development $ (461,474) $ (398,219)

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

Sales and marketing $ (443,885) $ (496,011)

Share-based compensation 30,290 29,365

Restructuring share-based compensation 1,078 —

Depreciation and amortization 1,006 1,458

Gain on disposal of property and equipment (8) —

Non-GAAP sales and marketing $ (411,519) $ (465,188)

THREE MONTHS ENDED

Mar. 31, 2024 Mar. 31, 2023

General and administrative $ (471,260) $ (432,825)

Share-based compensation 56,618 52,227

Restructuring share-based compensation 1,055 —

Depreciation and amortization 9,456 16,879

Gain on disposal of property and equipment (108) (133)

Acquisition-related and integration costs 32,512 1,479

Restructuring and other charges 14,063 72

Non-GAAP general and administrative $ (357,664) $ (362,301)