Block (SQ) 2 May 182018 Q1 Earnings call transcript

Company Profile

Participants

Jason Lee	Head, IR
Jack Dorsey	CEO
Sarah Friar	CFO
Tien-tsin Huang	JP Morgan
Jason Kupferberg	Bank of America Merrill Lynch
Dan Perlin	RBC Capital Markets
James Schneider	Goldman Sachs
James Faucette	Morgan Stanley
Brian King	Deutsche Bank
Ramsey El-Assal	Jefferies
Josh Beck	KeyBanc
Pete Christiansen	Citi
Jeff Cantwell	Guggenheim
Bob Napoli	William Blair
Joseph Foresi	Cantor Fitzgerald
Andrew Jeffrey	SunTrust
Paul Condra	Credit Suisse

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to Square First Quarter 2018 Earnings Conference Call. I would now like to turn the call over to your host, Jason Lee, Head of Investor Relations. Please go ahead.

Jason Lee

Hi, everyone. Thanks for joining our first quarter 2018 earnings call.

Sarah today. and Jack have with us We

First, of our to remind the format everyone of earnings we want call.

the We have which after website, our Investor closed. published a shareholder was letter available on Relations market shortly

call We directly call questions. with will your begin some prepared opening to remarks short the before this

Actual to indication During will those will the results contemplated on to look by like should discussion cause remind asked not our differ. that we financial with take forward-looking Also, could forward-looking in discuss non-GAAP law. information on future results as this results. will factors to us shareholder on note forward-looking from for addition this SEC Reconciliations statements statements. sellers be obligation call, Reported in results also Also, considered that Q&A, questions We performance. the update based date. certain as any from the call required from intended of call. are filings would making not could Investor materially we we comparable by most a measures of available except be for disclaim as a to take our non-GAAP website. this forward-looking to Please are the a Relations These letter are measures at be our to conference GAAP to financial that an our questions today’s our statements GAAP of call differ directly during on We substitute participants. everyone measures. statements, any provided the our

this will website An on its audio be audio available in that, being over replay would shortly. Jack. call to I With webcast this our like our turn to Investor Finally, is on Relations website. call it of entirety

Jack Dorsey

build sellers. entered with for to to online from acquire and Weebly, years, grew easily Weebly respectively in scale. and we build all commerce progress year-over-year, several I an allows two buyers company start XX% sellers one professional Combining we We’ve Enabling In grew wherever up once or accelerated we omnichannel, again XXXX. companies entrepreneurs net to the thank into first aligned anyone priority us. XX% to week, our for or Total that is XX% powerful, and Last are had they to year-over-year XXXX. help both Weebly, adjusted technology agreement the very omnichannel that partnership global cohesive for in highlight growth also Jason. tools And fourth want revenue with solution a grow omnichannel reach a and at and quarter website with of store. our sellers larger the quarter, provide succeed. we top that business. want accessible you revenue will on expansion joining our to Thanks, are, XX%

as the ranking quarter, our the see of UK people quarter, XXXX. grew the they free that relationship Additionally, of choose important the is when know year-over-year. larger ecosystem. top Instant like adjusted In use help States, the and as card offer bring the XX% and we services we’ve which with And in money particularly cohesion minutes at store. now Cash or cash growing App us we Similar sellers we’re in products, sellers market, the U.S., excited nearly this to accelerate fastest grown In because of for from two deepen paid the Square. app launched in our net was in along opportunity Walmart, more the finally, and up to Cash expansion. everywhere found receive uses Weebly’s In sellers outside suite first our quarter, Square they value year-over-year, demonstrate of XX% Cash of sellers other Deposit, global sellers can that the speed, This meaningful XX the sellers Cash an to larger top more their hours. like more a because products it them. our comes we UK, United we subscribers two to the with a money. to businesses turn, App’s that the XX% business services value Instant than mainstream button regularly first usage. expand With app see during We Square revenue are of used in More This we And UK financial growth we total McDonald’s grew App world. and around half App. even our drive Deposit larger tap outside revenue their

really on first And our now better. us I’ll of sellers financials. remarks more quarter We’re proud over you our thank always Sarah to to results. some for our making for detailed as Square it turn

Sarah Friar

QX XX% million business adjusted Adjusted drive quarter, in to as margin XX% basis and the this continued growth year-ago. in GPV Jack. year-over-year. was we EBITDA up to $XX XX% a to we increased reinvest compared accelerate QX a continue In you, the a XX% EBITDA $XX on scale. growth and quarter, year-over-year Thank to revenue was scale. approximately first XX% billion, at Adjusted

percentage higher margin we momentum transaction-based virtual as GPV e-commerce drive terminal X.XX% from margin as profit profit. invoices improvements benefit and cost improved profile. to and based transaction payments products our doubled a API continue year-over-year. GPV in to from We continue products, of and Transaction to higher

by is of and consumer Capital. Building and which services a a drove nearly moment year-ago. through sellers also larger showing Square subscription average over of in as more and contributor year-over-year revenue now revenue based of Growth represented was on to as Square strong momentum consumers both Register of Cash seller Card of paying in take the also The from momentum resonating Square a both We product based growth treatment annualized Instant of becoming to meaningful traction, with Register Caviar benefit XX% noted hardware the saw services walk up subscription the Deposits, seller driven a and is XX% and XX% offline. $XXX,XXX. recent The is basis. GPV accounting on a utility QX, and our from Bitcoin. launch adjusted revenue, revenue, doubled I’ll online year-over-year

of follows. of activity As customers. Bitcoin facilitate by to to as sale costs we Cash a purchase and total revenue are reminder, in of that buy January, Bitcoin buying Bitcoin Bitcoin fully we to order the App compliance costs sell a to Bitcoin recorded In Bitcoin amount Cash GAAP, customers. ability customers all the the launched Bitcoin. U.S. in total for revenue is and App are amount related the with

$XX.X in to from million loss a of million revenue year full quarter XXXX. quarter Net loss total of this first of loss adjusted revenue year-over-year. $XXX,XXX. million first per Bitcoin revenue basic of XXXX. GAAP is net net million Adjusted XXXX, was revenue to to $XX guidance. growing the Bitcoin the compared I’ll quarter $X.XX the Bitcoin minor was of EBITDA net $X.XX in the net of to Our $XX Bitcoin quarter. costs. first first share XX% add a in in first cost the Bitcoin quarter compared of the a quarter $XX $XX.X $XX loss quarter first compared adjusted was now our share to in and turn our was million in XXXX minus per revenue diluted for to resulting contributed million

details more to please our For guidance, regarding quarter second refer shareholder letter.

closed reflect revenue raising for the net the not to full the ongoing April adjusted on year revenue and include total year Zesty Full the We our acquisition Weebly. which business guidance impact and of of XXth. guidance our of momentum of are does acquisition

is to the close our during transaction, the which update completion expected quarter. the We of will guidance after second

XXXX, $X.XX growth to range $X.X total be from we $X.XX net year-over-year growth, revenue year in be our full midpoint, adjusted XX% At of represents range within in revenue to billion the previous billion to For the up billion. to and XX% revenue expect billion $X.XX of this guidance. a adjusted

business we and significant the ahead $XXX adjusted guidance to to us, thus million Given reinvest $XXX full-year of maintaining growth opportunity long-term are drive EBITDA in million. of will our to our continue market

to within of $X.XX $X.XX adjusted We in range positive to of be range expect and the GAAP EPS be $X.XX. to net positive loss negative per to the even, break share

that, call. with the portion back it turn me let the So, to of the Q&A operator start to

Operator

first Our question JP of line comes Instructions] from of [Operator Tien-tsin Huang ahead. the Please go Morgan.

is Your open. line

Tien-tsin Huang

get afternoon. being the the Good I this question assets Weebly? to or community to scale Thanks. And an with place to omni like in guess, Do you et also, to partner Hi. have in on feel commerce? is, versus competitive be your e-commerce gateway I do why Weebly. just other thoughts need big you or asset you wanted developer own ask app platform Just add cetera? on that. areas wanted like maybe in

Jack Dorsey

the for questions. Thanks Yes.

did time quite cohesive saw time. get the alignment seamless So, real we alignment that purpose. much much deliver we have some a experience our we quite battletested had because for more and together. only relationship an we’ve and roadmap move We for of this saw companies an the we some opportunity been if faster to to terms two and we We partnering with with were Weebly in realized and really

good and go. that feel could we is really So, it where about where

very online platform. push a that easy sell lot intend can minimal we both as quickly And our huge and roadmap. us looking we continue block our look on hassle sellers that for In we now that very, have way of gaps around other is out we’re with a offer terms But, to move fill, Square strength building we to an to to offline. and of this

something proud a we to it continue where continue is to reiterate going to is to step, but and big work this really we’re but So, are. have of that

Operator

line comes Please Your question go ahead. of from the [indiscernible]. Pedro next

open. is line Your

UnidentifiedAnalyst

I’m Hi, Jack. Francisco. guys. Square [indiscernible] here Yes. Hey, San a and seller

more pop mom Bay to I is, back want partnering questions the of to space pop-ups really do here properties the create would sellers in for with have the Area? consider to bring One Square kind commercial here and to of for ask

Jack Dorsey

Square for and the Thank question, you customer. for Pedro, being thank also you a

keep past, at the in communities some we’re we in that and getting there approach, updated. more sellers New in. this We’ll But out sure that in all deeper to right supporting want the but and we’ll of We consider York are here. our this to we you you. and physical not certainly sometimes make have into Thank open the I’m creativity particular looked figure means

Operator

line Please from Lynch. Your next of question Bank Jason America of of the Kupferberg go ahead. Merrill comes

Your open. line is

Jason Kupferberg

afternoon. Great. good Guys,

you’re I upside for So, guidance this on revenue the taking basically $XXX adjusted just ask implies year. updated the wanted -- obviously about the million to in

into back all it reinvesting the business. You’re

a those other you is sense of little and then, sales development, about a product between any XXXX can talk just revenue us maybe if just So, also, to marketing, Sarah, adjusted contribute bit And investments Zesty and split to what the you. EBITDA? give going of texture. Thank

Sarah Friar

thanks, Jason. Great,

top-line the you it’s I on ago. QX, guidance XX we’re in saw you actually we worth year-over-year points the in just I’ll we’re to that gave So, think, XX fact now answer the your with noting, guiding growth there. XX% up that’s delighted our you Zesty top-line XX% rate since days and so about question

rest two So, one outperformance to of revenue the core. continued is just the Zesty from probably adjusted points is growth, but

So, amazing I think that’s an outcome.

key this right positive enviable we those. And always available is ROI the investment have us many prioritize position do team as for we and sequence in a how to We’re strong where now frankly us. opportunities

ultimately really financial you of about services, saw terms to us in going in are omnichannel, put we year, first so, our build drive customer why wanted XXXX. what do growth. always beginning money, at of to On products then for is of revenue remarkable we’ll as top growth that, we the talk that’s and that So, and focus international where the on the how

all course of great United see great That’s the product to give scientists, in give will come us the promoter here engineers, hiring back score together us of come product like pieces great to XX that that net remarkable of you So, things usually like a data States. developments. us designers, a

for is one area that investment. focus So, the

and The sales second is marketing.

of quarters, perspective. period so, payback we to massive three to efficiency continue So, marketing a from sales four around see

the to within around and we Cash back is dollars over want is value the maximize doing that keep go we’re run frankly. so spend and really we long think can grow shareholder And Also the will Approximately. that to marketing work because putting sales what ecosystem again we that

continued are forget million we so, right people to App quarter don’t App, daily. a XX if the Cash app up talked mid-teens, about an that last top into even using active. that. Store; We’ve $X becoming look So in monthly app today, you we’re the be

going keep that to ecosystem after we so, too. And want

And so that’s efficiency. a there standpoint. another goal G&A, area of sales and marketing investment is from our

slowest efficiency driven see growing, by it that G&A be. QX technology That investing our there even was should line cost in can as too. in item You gets

management, learning to So, people our ultimate are machine outcome. places can efficiency account we great utilize that more we like customer so success, give sales, to and there, customers melding drive technology a

that reinvestment that helps with hopefully back how So are into business. about the we thinking

Operator

question next Please line the ahead. from RBC Perlin go Your comes Capital Dan Markets. of of

Your line is open.

Dan Perlin

And I had extend a on the guys XXX,XXX outside, it also helps context, in you Weebly. subs. question have clearly paid you

the partnership strategy? of past model associated acquisition partnership -- even might with versus the that to a layer through strategy we questions how that materially I their or thinking if have One cost, you is acquisition have just customer or strategy little on cost though change, bit, in opposed ownership that their as had maybe

Jack Dorsey

plans So, no we currently. have model the change to

and the to are to already at our until the deep and really obviously to don’t deal is we integration, we services, there built. first some of and to fastest our that can the take of to goal that. our understanding And the paths want And we suits of they’ve sellers. close off optimal into the it lot for path our ecosystem, larger and too putting going is whole options. really understanding ultimately how and sellers do is what get this start of introduce we we tools to and we what all to complete looking But, are is sure customers As channel make build a

customers see world. continue more to opportunity our sellers, another small And more We or utilizing benefit from a lot two of services. is our and both products around to of and large, this serve the great even

Operator

comes line the of question of next Your Goldman go James Schneider ahead. Please from Sachs.

is line open. Your

James Schneider

traction you for Square Register was wondering Square packages even that can are of on if other getting of provide what your the the beauty our terms in such have intend functions Retail verticals? look rolling you forward in comment gotten? Any the how QSR or out and uptick packages back I specific vertical and as office such as maybe health software then, additional metrics or particular things can you Jack, some market. maybe those as for much to do you And on of extent

Sarah Friar

Jim, on So, question let me grab the traction.

sellers. is that see the in of you way one growth larger think, I

our perspective. standpoint talked from we in it XX% as nicely move So, we quarter, they larger resonate grew we that as on continue is we and target about sellers, from before almost as the we adjusted to quite have is product a number multiple ways revenue adjusted upmarket. go that There after and the put in an

customers third about the first in Register quarter, And talked net success actually through The and of Square of the to a hardware. little Square. bit Square to Register see a is actually pleasing new were we

so, Layer you’re your on need specific. question, the opening more new of actually with for us. kind that software and that’s where So up a be door vertical top going front whole of to

the of we base strengths the Square have. of clearly that the One is diversity of

customers so in in about of teens, getting point food, lots installed go retail, diversity GPV; we but XX% also GPV; services, in and beauty the on, could being health XX% also the customers professional see into I base. it’s of and we kind of So, services, high of about see

have they things some need bigger get those their they setting. for you very into and of verticals, customers each As specific

more point more CRM we when That’s Square case launched the retail, Retail. much of we So, launched for in sale. inventory, what of forward a

reasons line, in one our that subscription the growing, on And doubling basis. many that a it’s manifests of almost effectively services year-over-year so,

verticals, we’ve strategy. partnership a that’s In the used place terms other where of

us of areas look you the to believe it’s a in if food, on on partnering But were side. e-com in in example there; is there. is Vend like TouchBistro the So, side good retail

customer, when sure we Square’s So, to platform. they can the we still can satisfy fully use make want

where API that’s so, And into really comes opening own. the its strategy

build a a -- and So, a it both partner. is

that successful strategy party third sellers. for think the the be and will first So ultimately we most

James Schneider

revenues maybe up you helpful. then, adjusted And outlook? the margin EBITDA. follow That’s but Clearly, on could not raising

is you see of top-line the points outlined term of strong. at years, and provide of sort past changing the the talked all. Any basis that’s you would some can on growth longer potential obviously and of kind kind the commentary margin expansion goals over of You about whether growth you very couple XXX

Sarah Friar

So, a potential ideas I lot clearly think right of growing it’s we us that at that XX% have always at, front a in growing When we’re so balance. you’re signaling over the quarter, pace now. that’s of this

that the platform, And so, the sell into. that ecosystem, then onto investment cross a the upsell we bring we go base because short grow go don’t the and we provides want to can on there, sellers more

as mentioned, So, back think customer have they you’re more to as greenfield using of we with sellers, products Jack products. or go or in like if are larger And opportunity lot loyalty or services particularly broadly. payroll a two we appointments a

into so, the for foremost the And ecosystem getting is incredibly to important platform first long-term folks Square. and building

to out. So, balance I want that

growth. platform environment the in our we now, perspective. And I so to think the depending our depending for cost the XXXX, for giving EBITDA change to different keep margin and of the is do to feel We’re -- just be from million time. a for will growth still that $XXX will is where get growing we course lots to we very $XXX yet think efficient pull continuing to think you is But degrees, I and about second EBITDA. still over thing to a top-line million accelerate in. business ways of XX% that year, that expansion we’re right showing on that the There right on healthy those of is One levers panning different out, long-term to on at so good more reinvesting

Operator

the Please Your Stanley. Faucette Morgan ahead. next comes line of go James of from question

Your line is open.

James Faucette

I an to Hi, some news. question et of thanks. I’m with could application. incremental ILC the that additional you perspective And things us to that Thanks. the if a that talked if when and maybe you we could about from can update give was you as had on you relationship are wondering differently have it get ILC related thinking to regulators if part think license? process, cetera. get business you improve and do important that you’d you opportunities always the that your how to about I But

Jack Dorsey

Yes.

update to to So, an But goal we have you the the ILC. of folks don’t of provide remind just today.

ILC, we’re to bring lending bodies. Square this reason the us and the of efficiencies with the directly is So, bank more Capital doing to potentially, in-house create a within allowing capabilities engage regulatory

dependent However, not getting note is I that like business that It it. such pursuing. strategy is upon will our us we’re one

and working We’re agencies Square to continued bank partners, the of business. Capital growth the also with investors facilitate

So, lot to we more but no are today, business, efficiencies the push optionality and a update That’s the goal. more to giving and that sure continue creating ourselves Square Capital grow make we

Operator

Your the King next comes Deutsche ahead. question Brian Bank. from Please of line go of

is open. Your line

Brian King

just on subscription about guys. ask services; year-over-year a I accelerated basis. want and it to Hi, again

And pushing higher? about growth one clarification thinking what’s just guidance. then, that So, rate on the

growth probably I if about making XX%. and think, growth higher goes investments Thanks. these year on to revenue upon where that almost based is a I’m at and could the you’re go? guessing talked growth you of Analyst long-term the forward the looking a Day, stale rate number number ago, XX%

Sarah Friar

Yes.

it yes, to the accelerate of year-over-year. on first, subscription kind mean, XX% I just outcome to business, So amazing services see an

speed If within are to our to today item, line are. important, Cash large that App. we to you you access a know small who and the Deposit, to sellers a offer consumer, money. just Instant of want a Capital. Whether both the something is Deposit, you’re people business and top you as Caviar their or three that consumers is within And look business, regardless contributors Instant

can more great really their sure very And so good make perform are a so, they quickly, and App strongly. a Cash engine in getting to it’s invest for been Caviar business. continues monetization just our to been capital sellers it’s way

the invest We’re reason the seeing in think we’re of orders very to the that and business number go here. ticket we why growth size. we both something back continue because doing and It’s in different average in in

Square of grow they get in partnering that proud business to the invest delivery even of saw And million their We’re another those grows. Capital $X.X $XXX facilitated business. way to our It’s another just on business; omnichannel get more loans year-over-year. grows, And when sellers. in and of billion have that the for pick What them with and their is we quarter, have actually with become grew the then, play now it, you sort they when Capital side, food. effectively XX% into about for I’m their as to And small they capital. of access originations business don’t businesses our up way

strong continued really three overall So, that is acceleration. areas that driving

of XX% terms just revenue for In but ago. this ahead we we’re the about the look you grow a at we guidance, rate you well of anything when that year question, guidance XX%, XX% at can growth like to sure, year that long-term to for talked we’re of at of the target you midpoint telling

In we that amazing And for faster scale. the XXXX actually that’s would XXXX did fact I XXXX. midpoint think XX% would really we at in at mean than grow in what

ecosystem the building now. how right with is happy So,

Operator

go Jefferies. line from the comes next question of Please Ramsey from El-Assal ahead. Your

line Your is open.

Ramsey El-Assal

us there other you Hi, might that for about looking technology excited couple you’ve Bitcoin. that you’re affects had this you regulatory a internally? be that thanks or that as your management outside on pretty to through been your model? on or Jack, vocal And are approach currency volatility on corporate you’re legal sort of of I then, that utility Bitcoin that blockchain holding the future uses of follow-up, of fraud of whether sort way my functionality, risk App, broad with for impact or walk or a taking cryptocurrency question. Could at any or risk risk it’s liquidity

Sarah Friar

a the Bitcoin take first Sure. risk Ramsey, and around on question so perspective. from me management let

it’s right, generally we Square, risk at where So just management began.

in seen us from risk, unique we of a rates reasons to we think, take And of XX that sub you’ve kind kind core learning. to had loss of of view sellers it’s one why in super allowed We I get-go onboard And machine in it invested GPV. points stay the deep basis the seriously. of which minutes. the very

is the right. Form no to approach, an difference there -- perspective, overall really from a Bitcoin

answer. are is it’s a constantly of are vectors journey. investing I that bodies we There in the different sure think standpoint infotech to we from sure with we movement, can forms that of Bitcoin the all ahead make and same coastally and of never security We are We standpoint. kind a make one fraud is close money regulatory iterating do staying that to staying there. step of to terms to across regulatory It’s work end don’t that any the could everything different happen. we From all

Jack Dorsey

the in new technology that can the we yes, artificial our and deep operate service more affects business. intelligence people built learning a within there providing that quickly and and out can mean, to way because creating applications minute more ton around business, quite our I this of individuals but build are it learn been terms And is of we connected and and impact of machine a around this certainly could able we’ve the creating technology also single blockchain, of to our service rest opportunities And and learning apart blockchain our use, is every as using way and we we business Difficulty] can efficiencies to day, every no the well. as well. other more from access [Technical how it the directly have There implementation. single

because a it still of are doesn’t to fit just we it can significant problem a Company real the need the we building actually solving apply where are we we that don’t where internal apply and are right or purely have do in way sure external. we in the what be But, of want making real phase technology a So, And within of a to learning carry for we do a do lot it can that. we -- do. excitement whether expertise a lot but

Operator

Your next ahead. question of of KeyBanc. Josh the Beck Please from go comes line

open. Your line is

Josh Beck

suppliers. business ask a I on wanted small question to tech industry higher level

So, working their with or do become platform in envision sellers shop one-stop think Weebly you needs? address all bit you you specialist can then and do and a e-commerce of a of with a separately brick-and-mortar

Jack Dorsey

one have what online, to they think customers. Our think and is they have all or brick about they to intention mortar they and don’t selling is about attract are become place, to more so how

that So, through an that our as partnership it coming with opportunity also two we these we way customer bring accelerate of is having both to years opportunity And the an to deepen goal recognized where but together. not things a see our about towards think well. the Weebly as to over sellers from,

them and So, by we a were really we Company, the to the inspired to well. the lot bring team as and we think potential that they brought

to ends excited comes are it. and up is seller or love has definitely ultimately online seller they a from, whether never it that offline, to about think where they a that about purchase customer where but or be would going shop goal So, a just

Sarah Friar

you’re to add net as if wouldn’t already book I it. new. Recall, something hair it Josh, today And just appointment of an a can you I’d think Yes. online. salon,

XX% the business In of fact, on we app, know that appointments book hours. of buyers our outside

or walk want. effectively shampoo get that or or online top an whatever to course, they mode. the they that haircuts whatever. on conditioner But into then they seller salon may So, are not of order But in buy they of their in coming to

they can if payment. to buy we get shipped, If pseudo store. almost the want buy So store, there want there to And a help that it they’ve take to become in payment. that retail that they take we online and to can be be

it’s you’re in. regardless lot already it as And one people happening is not define overly this they of I of omnichannel as is and of seller retail with So, it the and And what’s things overly happening. think a define not. e-commerce it’s

you’re Your be you everywhere. plumber. showing a show be store, Caviar. house might a your e-commerce store, mode, just your going be up are they they be they if your to in buyer might in at offline in might but also might up pop-up, In like They in not is their marketplace

bring I So, of it’s that And we Square’s breadth really is all the across multi-dimensional. strength think here those dimensions.

Josh Beck

helpful. where if opportunity milestones should be update give Very international could we and on are And watching for maybe what there? an we quickly us the and just you

Jack Dorsey

Yes.

year of one we’re add set markets goals beginning we sure at the in the the the make of to that that we in. to So, continue currently strength is

UK, more a a Australia have we and completing are so markets, each all the Canada, of that given the their does United dimension, new bringing the on our continue of States. significant the of many Weebly focus. customers ecosystem and will that So, one focus be add to in offering to Japan, outside the

XX% In States. subscribers paid their United outside are of fact, the

So, sure make now, focus benefit going of the strength to is more right see those and serve to each that accelerate people. we definitely It we may on can sure some our we’re building one. make But markets top thinking. in continued

Operator

comes of go The line next of Christiansen ahead. from Pete Citi. Please question the

open. Your is line

Pete Christiansen

that promoting of as it to how cost at around, opportunity payments, calculus arm? top offer more to Square guess, Weebly for that it e-commerce that, like merchants the building is an other Square platform, the on coming question. to going does then, platform? change reports discounts here? it Is think to to way it of you Good the Jack, to on the Weebly all afternoon, that about or as to users just their is And your clarify, out I’d on I relates thanks what’s Amazon an or users e-commerce moving way

Jack Dorsey

don’t to overlap our base. and a So, we seller to of question answer bit your lot both, first see between of

potential in terms a lot companies getting of do strength the two So, see of together. of we

acquisition see So, of the our our with services, to And we channel that every potential as a introduce it the broader one key people ecosystem. differentiator. to is

enables As Sarah And anything you and offline a side. have but that said, have about Weebly offering the not on we obviously retail on we sell, it’s just that sellers online side. the number for an

So, benefit bringing both. us to together allows these

and versa. want sale online Sometimes in we’ll have they sellers offline and to come vice

our seller base. a we see don’t So, we’re huge the in fact excited also that already overlap that

dynamic. with differentiator, the lot ecosystem. see competitors enter strength continue terms and of peers core Pay our of is the Amazon have a of our into around lot one of In space the to our we impact, we which seen and a our And cohesion particular

lot match we seen and cohesion. of have try that. newer then we sellers because see approaches, ultimately haven’t So, when a entrants folks some to we us back And but new come of do it,

easy to our the just sellers around So, and what and optimizing going without any the we’re make they out that for so critical into needs base. do our continue seller services how are whatsoever, focus we’re a of cohesion for to can SEMs seeing most their because build customer we push on

Operator

ahead. The of Guggenheim next go comes from Jeff Securities. Please line Cantwell of question

open. Your line is

Jeff Cantwell

for Register. a products? anything useful little differentiated, compare what the that Register is other terms of so to going feedback In new to on move I far. that you comment Square far. merchants, particular qualitative so from and appreciated how, curious in bit is feedback maybe just is on got disclosures how there you to why if I in it you’ve was the be other just wondering is is hear words, qualitative us able Just Register versus to the as upmarket

Sarah Friar

Sure.

I hardware of nice mentioned really see growth to as XX% growth, So, year-over-year.

other in part base Register, new continue in but bringing sellers. that is to resonate Now Square hardware products clearly of then the the well and

whole coming our we’re They that, simplicity speed. that Jack first loved one the that And has the want see of been really value merchants Register hardware. that is think, different upmarket in all, move they because, about seeing Square of and they We the talked what they cohesiveness I of about. they’ve are of Square large what small the the value elegance value to kind the the micro. offering. from because speed, not and stop, They’re

So, you really fast do in the technology can so fastest to pay, to it speed there. it swipe, but is do line, probably tap, of dip whatever out any want you

an together, the Second, not software software engagement kind some buyer thing from have is they’ve stop in our emphasize really it they’re and really And is connection putting third that seller’s and to loyalty one added with liked think that just the solutions between with seller, coming with into having the that other more of like I of draws seller. and it’s that buyer really things hardware deal because the the liked of then, the to they facing all the it Square. We’ve brand. much screen buyer

really has that So resonated.

just Beyond tend sellers that to larger micro. that, like I would also remind you come to Square

they’re is So, relative the for that going getting About self-onboard, because not means or we’re of means orders of we’re base having that great to us then, is love relatively GPV we into se into team, that to technology and sales up that the that’s which into how our The larger retail. engage management new over about we’re easy they’re selling with $XXX,XXX, food, Square. and And XX% quickly right selling how if you seller, the use categories and a per seamless net our our And a services, at fact that. now. that huge selling stat account just you that to the is. tells to third they’re look that are and

So, installed it’s we that overall the the again, down diversity in doubling base. see on

Operator

Your line William the of Please comes from Napoli next ahead. of go Bob question Blair.

Your open. line is

Bob Napoli

the got that attracting the Can on Thank strategy, people on they you trade -- why obviously follow-up is crypto long-term it is people, places a to ecosystem are these the you. -- lot with your color come the square what what’s and customers is broader cryptocurrencies, into would. strategy of strategy? or you into There’s overall to give and the the ecosystem? bringing why who some Who are to who Square coming? is a the reason bring if I’ve there

Jack Dorsey

question. the you Thank for

what place the the we So provide see seller overall, strategy complex from That our made and first that side. in financial Company continue individual to but is just relevant access to not in is the to also systems. side,

this the very customer So, Cash demographic have App. majority different This and the very into base is crypto exchanges. a different of we than built

wanted participate to to safe a way on is provide we which focused chose. Bitcoin. one And initially cryptocurrency have We in this, people if

same complicated demographic the other safe. not So, and protect to easy, to or wanted a it’s it at those make exchanges be typically make time, something to use that would find that continue and we but super would able

And something see their the strategy valuable. learn we In long-term, is quickly we that first this to utilizing wanted -- as step customers we take to buy started possible, accounts. we people to cash initially crypto, did cash did the would as we that wanting terms find see of see do to offer is because -- reason

this There in of bit learn as meant company want both providing then better us So, strategy externally. to more a simple obviously and the that. ourselves we and easier. a internally as value class possible. easy people quickly learn of blockchain and the But exchange little can provide But and be lot off spreads we able to sure as simple of pushed we we also for made for build a is that to we of that and -- was would as can also make benefits service made terms and a technologies, that what to utilize best industry a also of in our really a were lot

to industry in and we technology experts in our also that be world how So, is going to impact leaders continue we’ve become and that. this our

Bob Napoli

Sarah, think the and pointed, $XX a fourth $XX follow-up quarter. to Instant of what you quarter guess services in even that about $X million is the main pretty looking growth that type million but sub over or quarter, momentum sequential question, million quarter we first has Square revenue, grown And it? only Capital of as Deposit is added I the of driver the dramatically, base, the incremental. Is in that as

Sarah Friar

of the definitely our we’re both seeing that that Cash Deposit in but is is because a it’s it of is sellers, Instant growth growth area and So, working key App. for also part

whether think Cash for App example. in indicator software line that’s do, point, so, for in then which like underestimate how sure to sellers; product a of so what I CRM, it’s is puzzle ecosystem that our areas of well beyond management, are lot that from definitely pieces focus like just Jack’s clearly, of there our a is lot growth that loyalty, are we just products the their other to is their But, there payroll, is can of I And there employee now make we growing. that then selling And together other products, bringing our an product. seeing they Caviar, the and items making they wouldn’t on

hand the come all what they on And with just want get of just make when over components so, and best. that can to sure we operational they they do to Square, really

Operator

Cantor Fitzgerald. Your question go the comes Foresi Joseph of with ahead. next from line Please

open. is line Your

Joseph Foresi

about upstream. you competitive of to your the continue any progress It moving could was market. size talk making about I could you wondering well. if you’re the widen Maybe talk you like seems customers average as

Sarah Friar

Sure.

coming seller to see bit just a into as being you some smaller larger some of the of see seller. from given, sellers on color QX, I’ve through they sellers, seen you larger sequential XX% little as them actually, So, side, QX tip that may downtick as I a and not mean, in to into add go we’re a seeing back on larger totality, about bump of of can that the some GPV. because the Typically, comprised holiday more period,

a to that data consistent strong I as it’s that on actually really upmarket. QX QX, move fact the stayed view So, point

we’re I talked before of in some Beyond so to and about of terms remarkability awareness. what on, build starting also think products better I

I locations, sure really go thing payments, to, you not employees and place you as when to they because think, Jack have accept that a complex to make to much you when Square when talked multiple of place one call accepting I if have just is you as the you they sellers can there about electronic multiple but know and digital business. on have would the payments, more this have think sure start larger go before was after to of making go to us

definitely all it’s outside United I do to think are when is lot making of we you that have still our of improving, the I that a that work and go definitely newer of that although there true So, countries in States, sure that too. that we known think for

featured fully the set. case really we point where with a I and UK launched product good think the is

good So, really the think great example use kind with where offline elegant can we software the present, so, business. of they not split with of API that awareness of is online much be that of also card to UK see a both sellers the higher market kind can not online letting beautiful know so easy full we our And just hardware, and card offline in present but between piece I kind the launched online a is and Square. and offline on platform,

we start of example good from So, there, for a any broader offering the a customer a build scale. much brand when being we of of can

Joseph Foresi

Okay.

movements? market follow-up, And quick in on based any fees, any given interest in loan you behavior volatility? a Thanks. expect customer rate any changes the As do change

Sarah Friar

So, see exactly in quite terms strength of not But just customer base. sure you real meant we market behavior, I’m in the volatility. what by

business strength is So, fact quite both think the the fact the set, XX% underscores year-over-year our our taking moment. the fact I strong also of we growing we’re but that share, that customer’s product that are at

fairly continues is index show NFIB the on frequently it at and basis. think to look I I something a period-to-period strength

terms product. interest Capital, it’s unique back such to a rising, In of coming Square rates

not helps for have when lease grows doing buying that recognizing our businesses just location. business to do The we loan, we when any fallen be not build to when their is that, They’re would and second employees, business you’d do getting survey feels a that they’re what fact they would incredibly family they have And the them, that hence and grows. now it hiring new small they offer they’re that I trust that’s But, capital. scale just their have got access And -- into what can loan we them right for them. business what the and frankly taking expect. back think, the inventory, been opening probably was money. they hold may get there or friends

that into. we have think product still follow one can else no a unique we So, really us

it. pricing really We benefit customers but continue have the continue now. to we we right product to like watch rates, from think the we interest that And in

Operator

question of Jeffrey go of from ahead. comes Andrew SunTrust. Your Please next line the

open. is line Your

Andrew Jeffrey

a Card more that Is product. Square know the type of without that in Thanks this bank perhaps afternoon. using It’s are card bank and with taking some I to offer Hi. the enterprise solutions market are -- that. extension just for potential other around there the ownership or that with Cash and players functionality? card’s that partnership the question the doing ability

Jack Dorsey

do more When enterprise, you by you like that? what say mean

Andrew Jeffrey

be could deposit for to that their create example, thing is is ability partnership in of Well, I done into conceivably permitting with spend, to would there to drivers bank a be than a if extensions rather the an owning account, ready thinking company you directly fares by functionality didn’t Uber there that might know product about. virtue of were bank. a beyond a its type which current which

Jack Dorsey

Yes, definitely.

their evidence And as So, we’re people show spending as us see account. it definitely have that using primary looking for a do as service financial a primary are individuals we easier it to device. to make to

app We can can have store of launched card and at you money, a to you or online be any get Visa used also can the your ATM. used a suite that download place that such have card you be that a offline, features,

to we ways And valuable. routing more that make directly. You deposit actually paycheck continue for to a number look get even too, to your

the into added rewards program, things just One a of that built right we the yesterday card. was

this cash the of before. seen a time can choose card and anywhere for And every those discount card debit category be done categories you whether we or or use a particular off as it one merchants, a $X merchant merchants a So, get haven’t such or XX% of off. you would or hamburgers, coffee of one those you at

associate a exactly everyone card do. So, that more to want would is what things to normally premium giving you with we

Cash spreading of Cash well. App of all Company beyond the elsewhere out The of things benefit that from terms and as is that makes we infrastructure consumers, Card the the one rest that benefits the from In work work.

internally. Instant that of So developed have Deposit, which ship lot infrastructure the our instance, a sellers is cash for to we

benefits individual other see opportunities to continue is products, if we to those look can as as we utilize so continue between And see infrastructure apply we develop Cash for And what take continue line to the well. continue and we actually to the as from the we this Even it’s on developments blur App And base opportunities individual these seller and product, see you’ll can an that we our customer services. through will well. the where we go that. for year we our as seller to sellers to enable to

Operator

Condra go ahead. question. Credit of will This please the be Paul last Suisse,

open. is line Your

Paul Condra

to in the it afternoon down, good and I because my thanks quarter. positive about the wanted really questions. ask it was taking I was guess, Hey, cost for transaction just

we was So, the quarter at about it, specific staying wondered think how to I or there if should that anything rate?

Sarah Friar

Sure. Thanks, Paul.

year really love where we’ve you it, X.XX% call transactions price. often actually were -- margin places driving end to Transaction about as all aggressive, overall, rates that? we in ago. we before, was the up or at yes, where want So, will with with out. As a up take balance to does but sometimes often, came not custom just from a between What’s X.XX% QX profit being perhaps of talked sellers a be offer more so larger pleased

APIs, the do inflationary the it’s of really onboard don’t might effect invoices, all that terminal, But is been with you but of a against our have engage you in place higher going custom we sales, like improving revenue which naturally website If price. e-commerce products quarter. just virtual hit

piece margins profit cost And is are profile why transaction one So, up. the the of that’s driver second then itself.

we’re the system. proving to bringing that new to net lot I of a scale. a as recall our onto we So, is think lot that chains we are And supply get what

didn’t know it’s cards we of and businesses So, businesses, only there. whether small who still take is lot a to want previously out there maybe cash that

we bring the story that where bring them that’s have sale. with we branches the to onto equitation. we We UK in electronic out never able can front But places to a really for see great are closed. of stand place our why as partners because negotiate them. folks where the they work the payments struggled that side to of now, of rates sellers And us a best and it cost continue have miss the them with the to with negotiate bank it’s the reason been like can We to system. And in work good we up

do with continue how pleased to or better just that from margins we we and drive bring all profit a are we to to we can and a can net-net, for So, and we whether about that place. that products it’s better continue quarter negotiate bear to technology standpoint, the standpoint will our to new

Paul Condra

about sellers sales focus sellers. sort and you needs the sellers model relative serve you the larger on different more service of and that Just How seller customer the I’m on how to kinds for those thinking and you use more of about multiple of categorize locations. complex group of with are smaller some the self the thinking

Sarah Friar

Yes.

needs you customer to the engage. talk is a for the about So, ever call. the think is that industry to to that I And one do ever have the for is this people loves place of need lots no one reality that will support

over to to organization technology. And built glove confidence. we do that as fact that. said, onboard need talk sellers multiple the it in us. our to that to do sales love do to folks they want running, get have going they do constantly actually absolutely who get do get onboard, and I XX% person hand locations, we that some an for with of our never have So, up, on understand talk But With Square to self might we get

to that business our will on to back be but that reaching use those confident that Square out we identify forces the for larger our place margin have a sure So, when overnight convert website machine score inbounds, self able example propensity we are want bring of folks there we a with seller, as that to them sales keep our and we you -- a make that good really reinvesting. would in to overall, high all they learning the keep

If pertinent a you that into our to to are business. very back, into put fall your don’t back flow happy call back feels absolutely we

we or hair to store. retail you So, to speak a as as we speak a salon you

we to going technology they’re make the comfortable, use that’s And able or the be technology feel a piece. they’re person people so to whether that through whether just ways talking to really

the sort time we I more management company think of scalable all do our sellers same from in could is talk an our utilize I they and industry perspective, catch if we I just to ever it’s trying build goal technology make people rest catch to the has on, And most this they will to of standpoint, with. that comments. the how the length need of is feel lot more where think, the over given a But, on. up not up something places I’m that we of that to customer can that account make where success our people efficient, really but effortless. the come sure up

Operator

turn I’d for now closing back to over the remarks. Company to like call the

Jack Dorsey

for call. we’ll quarter I today. Thanks you, like hosting XXXX again call August Thank for would that to everyone everyone joining on earnings our our be Xst. participating second remind

Operator

the Ladies in conclude and This thank gentlemen, program. you for does call. today’s participating

You may now all disconnect.

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