Block (XYZ) 27 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Jason Lee	Head of Investor Relations
Jack Dorsey	Chief Executive Officer
Amrita Ahuja	Chief Financial Officer
Darrin Peller	Wolfe Research
Bryan Keane	Deutsche Bank
Tien-tsin Huang	JPMorgan
Dan Perlin	RBC Capital Markets
Steven Kwok	Keefe, Bruyette & Woods, Inc.
Jason Kupferberg	Bank of America Merrill Lynch
Peter Christiansen	Citigroup
James Schneider	Goldman Sachs
Thomas McCrohan	Mizuho Americas LLC
Chris Brendler	The Buckingham Research Group Incorporated
James Faucette	Morgan Stanley

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Square Fourth 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 fourth quarter 2018 earnings call.

Amrita 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

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

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

Jack Dorsey

joining and turn Hello, us. a some brief start over few wanted comments, with prepared it to then remarks. for I everyone. to Amrita off for Thanks

to call. earnings I welcome her to foremost, and want First Amrita first Square

I’m ahead. the with we and our is, going believe really what excited differentiator to our ecosystem. years thrilled CFO have her an as core to We’re about start is which

ecosystem and the for an of goes to financial sellers, are tools and time that power on. prove as individuals both and uniqueness of continue We we the

and and – the of This more back active to back financial is investments, weeks amazing start a individuals, focused lot year-over-year. we’ve on long-term Square shown – XX of for years, building ago to amazing I’m past the an December that’s over of XX customers than discipline One XXXX, in ecosystem is things double few turned services proud that of most an a building these in this but is in start XX we’re really that really that Today, paid to other made good have for it been bets also powers of building has investments can built well. build ecosystems longer-term have we product All this that we million seller off. as we’ve ecosystems, we that faster on the App products the A example the power of over Cash tech monthly well. Cash the as some App. speaks so announcing

grow the Square did continue anywhere The underserved an and serve past store that can start they been This to highlight the Google so the a able can way came them without So another business Card. can a over as to App Register account, to they where Instant months. unbanked debit us use Card MasterCard Cash their from from is Deposit a download for to business. they or literally to Square give Play. And technology card, be sellers, which and App also money has we a their going three even the bank, Store

soon grow their them to The help stay invest as to one Square most Square it C.C. is chair the business, then Card, to People and Marketing, good funds power come their buy immediately, gives it about also so days. more they of using in the business She’s in she them for their Card it of business Square Square see used and supplies Capital, uses them, thing She enables their access also marketing business. the though, ecosystem. a needs them speaks new important can and quickly its for and Square more whether since really this really or a to and right financial We a their thing capacity be Square offering. can are and also she Example as salon other host services of Invoices, do go to whole and off add Photography. buy been Nedrow things here, earliest seller. to Payton’s to buy

found we’ve Square that have a to and sellers our lot Card and things work of XX% their didn’t of from is were debit for time their found very, time card sellers meaningful, manage, mixing hard their that was the of from personal with bank ultimately before, sales. is One with is away business doing, a very accounts business beta making because away more this them took which what we took

we believe now. sellers made, powerful investments how off paying bets speaks is longer-term the for that they’re we’ve this it So and really to right we’ve really going and made, to be

three ahead, For on we continue the year things. to focus

mobile strengthen we to payments, to our continue add payments, We’re also That omni-channel that to offering. strength to means online. and in-person going to

from we sure we’re we’re focus the and Square international of market to everything about fit the them majority excited to App Payroll doing continue Card that product in our Square ecosystem. really – markets financial Capital. And more to making for we’re services. that on find complete, This We’re Cash making to we finally, in, captures stronger, everything

our continue our and excited markets. it ecosystem all tools with I’ll to to to of roll turn services more We’re to out of And Amrita. that, over

Amrita Ahuja

journey. and by and joined, teams such of a agility part of with you, us a our about It’s operational I and I’m strong for be moving rare Square’s Square’s to massive doing I’m that to Square. saying There’s find of alignment opportunity I’m and Thank well, ahead creative and excellence, doing I urgency, economic start passionate to Square’s a customers. thrilled good meaningful Jack. to to of serve wanted because part are be purpose empowerment. excited

in was excluding includes quarter, up up $XX Our revenue and drove XX%, our XXXX our $XXX up the we results for at quarter year-over-year fourth loss revenue which in in and mark-to-market the was strategic scale. Total up valuation acquisitions. fourth growth overall Adjusted strong highlight the excluding acquisitions. of year-over-year XX% revenue momentum $XXX overall XXXX, In business. full-year XX%, XX% million and Eventbrite. million, fourth quarter million, the net was of Net investment

was EBITDA $XX year-over-year. was the in Adjusted fourth impact, net quarter, up loss $XX million this XX% million. Excluding

Our ecosystems in the for sellers and for individuals drove growth quarter.

payback quarter both as for seller positive new join new helping retention efficiently our of maintained our the side, scales, once and for a continued sellers cohorts. This existing cohorts we business On adjusted go-to-market cohort three to economics, Square. revenue with efficacy in underscores and they strategy strong period four grow the acquiring them

larger we omni-channel XX% GPV fourth their on group Additionally, customers the from fourth serve of Square. from larger up for than larger reason momentum quarter our solutions, XX% XXXX. in come In XX% grew to made this quarter, Square larger our year-over-year. sellers sellers sellers via One the of overall XX% with sellers. of drove as more one is GPV, up channel

at App. drove we growth for rapid Cash scale individuals, For

of meaningful total revenue XX% can last than turn generate in App , reinvest in launched points more fourth in XXXX, in mentioned, than adjusted quarter, revenue million leverage velocity delivering we Cash ago. been which net up XX which and December the in in XX We’ve long-term. scale represented Products doubled Jack year had monthly customers years enables drive of growth and product As a our XX% and revenue business, to the active at which more from the five operating year-over-year. us

Now turning to guidance.

billion XXXX, revenue For full-year given total in year-over-year billion revenue a to represents be expect within which range be revenue adjusted the $X.XX range and growth, to At to is the $X.XX scale. net adjusted XX% to $X.XX our midpoint, this $X.XX billion we billion. of remarkable of

growth $XXX of the XX% million, XXXX, which million represents we For EBITDA expect full-year at adjusted to of $XXX midpoint.

drive Given discipline. opportunity massive continue to business of ahead financial we growth, by reinvest to long-term the the in us, guided

consumer the with tools turn I’ll participate expand to more back to in economy. our We’re and operator now to people the ecosystems to call. the portion start to excited provide it more the of seller Q&A

Operator

comes first question Your from Darrin Wolfe Research. the Instructions] line from Peller from [Operator of

Your line is open.

Darrin Peller

and you, Thanks, working to guys. Nice working on look – the job to quarter Amrita. forward look with

continues very really big strong growth Let helpful. me part be just gave guys. obviously extremely App you numbers seems a of and subscription I to services that. mean, off, The be were just to and start Cash

And correlated of is? the Cash the of that, you sustainable Cash App then, into If the breakdown help percentage the insight better to numbers and a maybe if App growth driving just monetized just behind guys. are revenue App. could then, Cash so far again, what how us. users you aspect it to at us give even forces least Thanks, maybe And give to sizes each in on can more

Amrita Ahuja

with Hi, you forward look as Darrin, well. I to working

bit then bit me a let a the little share App, So I’ll sharing business start the by about for about monetization little and the Cash model well. as strength of

Cash pleased the progress very that we’re with with So seen we’ve App.

in some we massive the of achieving We underbanked, business see growth driven XX strength now and opportunity as app are contribution, that and by to to meaningful of network where ahead underscore are services. driving Cash revenue a engagement, a see unbanked of over scale. There those the us U.S. we XX% points, and with and clearly, access households enable network along are App is just financial or top mainstream is there, to XXXX, model of

when the team when app. Cash really we you reach business, network with terms at per seeing also see we’re drives been which also – coupled strong the engagement is dynamics increasing very measure the has scale. increase really active, effect overall focused strong the transactions the increasing with And we that In then on, effects, underlying by of which which of compound combine efficient frictionless onboarding, the with acquisition which App,

for new drive direct that through engagement at deposit. executing well And right boosts now. to continuing features very team card this a We’re and like just daily is utility high-level

experience. We’re which can And delivering given traditional and obviously financial the deliver, speed we product quality daily and velocity, with with refined see only services new you rapid platform mobile The greater drives, what scale it’s utility. than which but iteration, with not that and speed. is products

There and the we Cash at and be the opportunity. why cards, we model bit opportunities variety there’s which continues is So that again, And as streams interchange. that services monetization that’s was then just perspective, are number PXP beginning we’re monetize App. From build a underlying a the there trends spread. a and the number where products a annualized second business excited $X about and the enables There’s momentum business credit see just where we’ve the Cash make the rapidly, balances. Instant we of with make with about stored little of Card, that and gotten really revenue which which obviously, mentioned our to Instant eventually today, highlight and when quarter we have this instant to grow is Deposit to just levers cryptocurrency, four of our can billion access in of to engagement, last we’re product business, of in There’s a we funded spending had which sellers’ for future -- Deposit, future. to and started. for There’ll similar we

Darrin Peller

Speakers] [Multiple

Jack Dorsey

there… add would I thing only The

Darrin Peller

Go ahead.

Jack Dorsey

there network Darrin. only out. I we’re the starting Sorry, add would play The to thing effects is, see

another aspect think can States, where inside And see this biggest see have the their do the because weeks are landlords effects. the product us has payday, money in up of driver of we families, yourself in the surge download So is growth Cash another – to huge the on the friends, some network. for into network causing inherent United and I and they people you and App of downloads PXP utilizing itself Fridays of

biggest the driver the quite and Store So to too one, that We as it reached becomes has add we much, Deposit, more spreading kept for as think, just of that not I just this or inherent at such more number relationship. ATM, is year. business. is much App network effects ago really durable But has in sort the utility a balance long going top sometime. how network the the be and us XX or in the it the more And services, card financial Instant

Darrin Peller

Yes.

again, like Just quickly, obviously. guys. XX out ever have it’s trying disclose I what seems mean, of in early Thanks, do very some you much been about users actually the million how way? It guys monetized to percentage runway? Just figure

Jack Dorsey

Yes.

disclosed we that. have as app pull to of – those we Deposit, haven’t levers cryptocurrency, a ton in revenue. on We terms Cash But PXP, have Amrita areas four of just into Card, the over said, takes where and

Operator

from of the next comes Keane Bryan Your line question Bank. of Deutsche

is open. line Your

Bryan Keane

just Hi, Can there? guys, congrats competition it about ask first role. how plays would it quarter But a XX.X%, secondly, to you and at ago. know XX.X% is about Square a itself talk like quarter. the midpoint Card you seasonality just small the for a differentiates drive then looking how wanted on around engagement plan And guidance the guidance, the year I EBITDA from to the that from business looks bit margin at somewhere be little down more I business.

Thanks bit figure there much. investments to extra that’s is out year-over-year? So little margins in going just driving a down so trying

Jack Dorsey

Card most the is one seller’s about in this of ask traditionally sign Bryan. just things bank because account. of pain is Yes. in one the excited a – point Square Thanks Square. life real a year to a up the for we we’ve I’m link for things We and question, identified for

to customer’s to that’s Master our app same access they opportunity situation And because funds their to they give grow increase. more pretty to that their now themselves money powerful if So your place download And for we any can we access you was, that so now money. you we is sales you which download cards. to a gives the credit see the it critical way whatever funds it and we use get you But can find literally and can think Deposit register funds. offer this card business, small spend in, anywhere. And customize, swipe card, importantly, their a an Instant can quickly you after your that is tend access you in can receive store business to your in a and

– anyone anything breadth is the this think I especially well, like of don’t know we ecosystem. with our So this, else offering of

can’t sign is inherently So a way think I about to up it’s think customized I unique, but business, that’s your and card, also get a start. differentiated, inherently flow simple to simpler

scale adding more even excited top pretty We to small this we’re go And really can is business think this a you start really having a profound the So don’t pretty without is think we card. cool. businesses. to powerful, bank, of and which for can on and just about functionality

Amrita Ahuja

the guidance question Hey, QX. emphasize for Bryan, take want it’s to Amrita. things. I I’ll two

terms we on is we and First foremost how that some the of that of secondly, terms there And looking guidance focus be really in business on the focus QX, full-year and why you a at in the seasonality perspective. in which full-year. is should how from manage it we

XX% – similar XX% remarkable grow $X.X revenue the are is note perspective, over our So, full-year, delivering expansion our in margin revenue the again, that sequential is X.X trends revenue delivered you a numbers in line, just showing what business, grant at scale. some for that of at XXXX, profit But to profitability. on growth particularly we’re adjusted business to expect important line to to we over top there and and growth the impacts seller growth seasonal which it the XX% which year-over-year. we bottom pretty on effect QX and From the billion

the which seasonally a trends, the perspective, slower a to we in year, drive impacts in revenue relative you business look which for QX, investments these holiday back. our And quarter perspective, expect beginning a to we Bryan deliberate making see to timing medium last from again if are growth each long-term. QX the QX in earlier the have So from seasonal years, of we season, business been three for in the profitability. in Also

Bryan Keane

helpful. guys. very Okay, Thanks so much,

Jack Dorsey

Thank you.

Operator

comes line of question Huang from next the Tien-tsin Your JPMorgan. of

open. is line Your

Tien-tsin Huang

and you, Amrita. Thank to the welcome call,

last really looking and the I upside it’s year, I XXXX. back a to Jack, to but you on things. some in Cash carried to excited perspective surprise Just, Deposit load you’re wanted Cards, your about the said Instant get know just

in our year, lead to what’s In are this Instant what you this year’s positioned other best growth think at looking drive XXXX? So Deposit? do products words,

Jack Dorsey

Yes.

here. are proud has come. so few One, – really company. Card how things significant think, I far of Those for bet I’m a the Cash

allows fast, being move major the We’re all years. thing require infrastructure it thoughtfulness, to most that products a something incumbents. and is, at superfast continue did when as like it not us square push day lot We every our other have of to past disposal around us of with out. a – on against side lot XX we of build timeframe, we development can like and short like we’re going of But allows move proving patience a we and saw Square lot to see a our considering lollygagging our that important like very well, in because Card. because anymore, just, this And card single

of So thing App everything that individuals and I seller in Square reach apart can just that place from community I’m we with it think same reaching is. and on the top – we’re Card the Cash way the

I are just the starting and entire as people not see ecosystem. tools, parts of ecosystem, and seeing think, they’re finally our to but power us separate separate the

the that industry, those unit. connections those will make we and more the of as So a of of folks competition in but driver one certainly integrations, regard. and have lot is our our don’t that’s investors customers, more see I that And think we – our people it starts shareholders, biggest as with in

I way. mindset also not the well. this platform our think, but it’s we’re is just And services, our around around ecosystem in unique ecosystem as fairly developer

continue get place. provide a just platform, all well. hardware, and for we and we online, much small improve our that in you customers experience, as in-app get to but get larger business powerful And to your only coming you your customers, So more their access access option, not one as their developers you developer your as merchant a access

real fit developer One into been their an ability of parts have. ecosystem for larger custom a legacy shops the us want that of systems our they restaurants, take strengths of has may the seller or with that the to ecosystem for their connected they

carry and missing to a business not on to disruptive it’s beat. continue So their without

than individual see unit think to we equation powerful ecosystem and to as a like continue just really the So the add that rather you’ll to equation to continue it’s strengthen us parts. a

So that gets mesuper this excited year.

Tien-tsin Huang

then. Thanks

Amrita Ahuja

Tien-tsin, the underscore points Maybe the things made so momentum the Jack us of us of into XXXX. that for few us I’ll strong a we you get XXXX – much carrying for about have a very couple that welcome. XXXX, focus areas in the some thank the with of excited and from

payback We strength, We of Xx from period And we As in we’ve said, that our up new driving and now and into of actives mix have we’re by an Cash exiting at increasing heard, had coming XX% and adjusted for scale of adjusted cohorts billion was growth diversity a And XX revenue to quarter higher four larger tremendous at over sellers. monthly growth a position levels levers. positive three you’ve as with growth of then sellers, saw sellers. revenue of of $X.X new million App ecosystem revenue. year-over-year. XXXX XXXX scale a consistent retention driven

that future seeing but ecosystem seeing driving Cash out from building opportunity growth continue we engagement. We’re also Card see Cash App Instant a and growth further meaningful we’re Deposit, to from

key over for areas of So us drive of growth that the adjusted quickly take revenue to billion. off some to focus over $X.X just XX% XXXX

our we long-term have going take a approach, priorities. to to as We’re strategic always

a be will that. of continuation XXXX So

We as launching new and focused scaling be on products ever. will

us all – engagement where launches, see while developer customers to And in Card new across early continuing we’re with and seeing ecosystem. the the ecosystem restaurants, traction of specific retail the some Square enable vertical Terminal, scale So investing segments, products and of service really our increasing strong offerings, the those are on recent new to reach vertical platform, including both. of seller our help you expansion going services to might things

Tien-tsin Huang

you, stuff. Thank Good both.

Jack Dorsey

Thank you.

Operator

comes Your of next Skinner]. the line [Quest question from

open. is line Your

Unidentified Analyst

Square Very have Square I I for a App. guys? over this. you offer quickly system which years to it’s hear transition infrastructure to and easy my say But made I’ve Cash you are materials. amazing me know all guys I now, to of How other been thing is, to you’re over and completely Card Hello. one with planning my in supplies, for to services from buy would that new would be banking me designing? this what my allow But traditional can

Jack Dorsey

letting for and the Yes, us during launch earnings Square thank you, letter. Quest, and on you Card also thanks the feature

Amrita Ahuja

Thank you.

Jack Dorsey

we’re of were in very, accessible critical excited and sellers about pain So of about most we do the regard might looking is and breadth some you very from ways customers way the to a trip think to. out issues. have handling points that payroll then the forward more save that of that your a our solve And developing – the experience, partner Capital simple to that can and at Square needs figuring our that everything we have services more could imagine, banking you from we that traditional those

Square we’re a that fast to going with be could areas – super and identifying we’re sure where we helpful. we’re So make learn Card,

One and community I’m in of that builds. seller naturally the like to Card really as we Square honor recognize the serve the to proud decided things

we things fee. the seller doesn’t your you at is Card anytime Square use pay that of one Square So did Seller, the another

think can for X.XX%, sellers. as that to folks that’s awesome where to give we critical like you’re see So needs is our more a really But way handle of. solve and things back we going where to we that

well, ideas to as open coming.? them We’re so keep

Unidentified Analyst

for I’ve few. Thank you, a sure, guys. got Oh,

Jack Dorsey

Quest. you, it. Thank appreciate I

Unidentified Analyst

evening. a Have Bye. good

Jack Dorsey

it. appreciate I

Amrita Ahuja

Thank you.

Unidentified Analyst

appreciate Bye. guys. you, I

Jack Dorsey

you. I appreciate

Operator

question next comes from Your of line Dan of RBC. Perlin the

is line Your open.

Dan Perlin

I Good question. have Thanks. evening. a

where the around instance versus Card idea to this over Cash I’m Cash charging with they the on Card Card? side, Thanks. deposit? for of you users the previously kind then cost converting users consumer merchant Deposit burden users, seeing for going porting interchange you’re secondarily, model are to Instant the you us Square interchange being Card the wondering, that in give to Cash And economics versus were If sense could some the

Amrita Ahuja

question. the Hey, for Dan, thanks

course, on value. similar So interchange part really Square the in greater business What debit question with lifetime interchange leads the available through on of to your tables. the Master higher we a is regard makes purchases. customer first Card. prepaid we’re The is money of on spread a with Square economics, is to drives which That’s interchange where driving publicly Cash Card is Card with approach hiring and focused to what engagement took utility, ultimately card, similar

Jack Dorsey

you I’m just the your second part repeat sorry, Dan. it? of Could question? I didn’t understand fully

Dan Perlin

sure. Sure,

So charge your you’ve Card, historically long-term consumer is The Instant great. a can question which you is anywhere had funds accepted, Deposit, those that the But the if you Card for. so can something which way Master would it, utilize in is you move say, Card, Cash let’s curve to that viable model. is Deposit hit move this the is And to Cash consumer business just over. which maturation Instant those

makes you’re – longer are pushing taking the basically onto They the sense? Does economics and that that being that no they’re charged. merchant? basically So

Jack Dorsey

makes that Yes, it. Got sense.

want to clarify it store things. move your you some place. Instant just So And Deposit bank where so can within takes the money App. account, to that’s if you We Cash to –

move wait two, you So X.X% we for at it account, transfer. to your bank days to otherwise charge three instantly

keeping people within and do have as spend to Cash We want have App – also Card, to financial of that the believe customers at going allows that and services seen ecosystem other have us first look for and instant which the generally card. utility well. economics to the that the and because is we’re We that we add for and add to to we be that going from positive agnostic, but do Cash continue the generally we we’re

to banking has making can can want utility card. it a Deposit. to delay But go their they just And with Instant instantly or they we’re something that instrument, has if traditional free that. for they do lot can – do do they with to that a that peer-to-peer sure daily with that of from is the to providing folks it So do to

we So confident as as even App have right where monetize and we these complementary Cash more areas, because see in things we well. the we’re that, now, four we –

for diversification enough we resilience. have that provides it So

Dan Perlin

Great. Thank you very much.

Jack Dorsey

you. Thank

Operator

Your Kwok of KBW. next Steven of the comes line from question

line Your is open.

Steven Kwok

Great. momentum into seems Thanks question live questions. for about the of sellers. expect I as how sellers is of you the GPV large of my What couple moving have first It talk upmarket to about around go that the just you guess, just I now. right years? is like that’s taking the Can do seeing? opportunity from the – next Thanks. What’s currently XX% over of you’re going?

Jack Dorsey

needs. this speed that factor our developer full big is businesses to in Yes. I’ll in then access comments for But our have excited making sure the Amrita part over A question we’re larger it of of the to pass to their what can your well. tools with generally, platform, and take sellers. larger seeing first pretty as ecosystem and custom fit about it we’re

to can systems. own integrate newer legacy use a can or and systems, just whether it So then if a it systems want they hardware their use just would they hardware, be to

of also merchants We’re that pretty services. excited our size various the are about utilizing

registered for is make don’t that developed so New their and this and sellers, in seller something Square used make was Juice. They custom Yorkers Terminal XXXk, XXXk. Restaurant larger XXX,XX, example around GPV & some about a instance, So annualized is all folks. reaching is we’re good is for use Square that of of it seller, Joe of they they and you good and One to XX it business. sale about. to it worry to work SDKs to point stores specifically have our over make for look of have The their They a

system been largest. products up want because to along way a at that, they we the them to that build and from scale that’s smallest the grow folks scale, So about and outgrow we’re and of think all our every thesis we reaching never journey support that’s a seller our how the we is sellers to path broader to the want have that to of enables roadmap. And really us

Amrita Ahuja

fourth was saying, points provide just around focuses sellers. that the it’s momentum products Jack payments, add to larger as XX% by GPV of just came Steven, employees locations, going sellers. And multiple the manage in customers, and many larger because XX% we complexities growth. drive see cohesive managed ecosystem couple in continue that tracking that solution from you ongoing all what And model up Jack that do sellers data can capabilities, offer this quarter a said, is that. the really GPV on Hey, to driven that’s we serve year-over-year. with And really, to really That we to to of our larger give to one what’s that omni-channel

And omni-channel, sell XX% multiple sellers provide continue that our or XX% with to channels two larger that Square. seamless we and of over obviously can can larger something of grow. integration that that’s products with more sellers through we For use

self our onboarding. onboard. the onboarding, with offer can sellers of XX% friction Because of over we Finally, larger self

make continue going to we’re So there. progress to

Steven Kwok

thanks. And know aboard, a the reapplied And just thanks, around Can I you welcome follow-up timeline I about for guys and Great, it? talk have license. around just you the Amrita. banking quick recently one.

Jack Dorsey

timeline. Steven. We have updates the you, don’t any Thank on

updates our as working with now applications, right FDIC the they you closely we We’re give and and as soon DFI, have as them review we’ll Utah

Steven Kwok

Steven. Thanks,

Steven Kwok

questions. my taking for Thanks Great.

Operator

Kupferberg line next comes Jason America. Your of of of Bank question from the

Your open. line is

Jason Kupferberg

to great. wanted start I Thanks, perspective. Maybe question you. get margin just and guys, welcome a Amrita. Hey, with some for to

further? think year? should the this business year. this of think kind XXX year, expansion Just but amount view I similar XXXX, see maybe of margin just get to one on countries of in Jack, out points there XXX, medium EBITDA long-term? we And What’s we beyond as then unrelated, Thanks. basis the we maybe last in for can your a acceleration more code, of to we Do did rate to plans the right zip latest leverage as you you as is just as there a some look a conceptually mean, quick be mentioned wanted the non-U.S. XXXX? this is any more in and add more markets, kind operating update trends

Amrita Ahuja

Hey, Jason, thanks.

Investor shown over to the margin of financial question and how in being expansion, momentum XX% underlying Square and purposeful strong and We’ve that XX% reinvest in respect very ever continue a business. long-term continuing growth the and with we’re your at our to years. to has about we long-term margin drivers talked goal discipline see Day we So as deliberate for on

We that Services heard: we’re results of X three areas have the across international, over in omni-channel, margin leverage in with a and points expansion top front opportunity us financial of of and real years, our OpEx five XXXX. focus driving invest you last each massive to for

scale, we going our we retention, expansion. continue So expansion. model, overall have levers monetization to And And just and across variable see be that we roadmap expansion of business confidence multiple that four quarters, say, costs, three and to payback across head margin can margin dollar-based we’re and ability see operating continue growth or sellers to sales continue in positive support. finally, whether margin an and to new I’ll as our products continued if flex period into to individuals marketing levers lead to against will we that execute delivering for can to that can to XXXX, lead leverage

of margins. believe All to long-term for – continue will over terms in things of those the drive we us growth

Jack Dorsey

the new have we will – and one moves markets we’re some to remind immediate Jason, markets us have that they Weebly new the XXXX was of instance, of to for were we the with how we in for – how and With no them. that just the able everything make lot where a market are us ecosystem into gave how the in-person is much think I be around plans markets, acquisition our or adoption, the about and that insight everyone than significant One, and of Olympics, much something benefit focus we Tokyo much entirely a credit Japan. faster would because world see really open and so government more so payment to can move strengthen deploy electronic the be of we things for parts might biggest particular, more that the interesting we in we pushing markets terminals. that’s opportunity from. for might going But card new global see We mainly of can happening the in that

markets we’re the prioritizing. all the So can But as in them. and double on much that to learning taking information we’re as down that we’re we fast opportunity there’s to looking in certainly continue and going so believe we – we’re we’re

Jason Kupferberg

Thanks the Okay. comments, for guys.

Jack Dorsey

you. Thank

Operator

line question next of Citi. Your Pete from comes the of Christiansen

open. is line Your

Peter Christiansen

offerings that comments I Do and like welcome, more does look the starting Thank type now of view there’s this competing some another. you, competitors there, appreciate pricing. converged it’s a guess, believe solution, usage seller from I the as competing Amrita. your if you power I how a pundits of interchange payment these switch of to pricing somewhat solution your about you’re on think Jack, mean, ecosystem. particularly Square products? increasing Square. of one and that a type competitive And plus look similar in at less that of And see easy to against And lot that threat? to stickiness you out

Jack Dorsey

simplicity, definitely larger Pete. were And for we kind aggressive pricing short-term in Thanks what interest seen after with our And our a we much competitors we’ve question, customers switching back. than offering. those software, the Yes. some is hardware maybe the ecosystem. – so before we’ve quality and pairing much seen they’re of reason the of see the months, We customers But broader the our we switch this space and doing into and did with saw same why come the more over.

they on builds certainly, are ecosystem durable because If Capital. then it hard the Register, – that the really Caviar there. and relationships. providing or many think mix But are in just when Square I people believe from anywhere builds focused we’re they Register restaurant the really come out and there and that use payments extremely offers find and competitors their to It’s and the in just marketing or payments durability. use else for getting payroll sticky, offering in we’re is so other I these

the if even of one in service, see relationship have part still rest the with decline the services. we of particular we strong a a So

a of things. fires part our one the use fire competitors, lot single focus but three company, our of other – of entire unlike ecosystem, a they still whereas So one customer it can fire may them and

ecosystem. a how core above an our and well we with the we know function of our durability we from So a of a we We customers, of all speed continue our relationship, differentiator of ton all development. but not resiliency, we’re ton that else that that’s this external only know to strengthen think and benefit, adds building of focus. too, is customers, internal this Like, but it’s

Peter Christiansen

with to would would I’d any realized product. get the follow-up installments Square’s helpful we an what just to that is that increase where high-ticket And installment over product like actually new – a questions development lot percentage then time. roadmap? But volume commentary. in be on it That’s is see We are developments helpful what And about the of I volume?

Jack Dorsey

Yes.

early testing lot. We’re still pretty a on so it, still we’re

more does purchase it, be We’re intend benefit, it as to to tool, it seller – they excited it’s it can but makes. to – is, what and to the because like we looks really a ready customers sales it purchase offer but they about more the customer give their – them and seller a launched enable a

there’s we for want we strengthen. make the still right. to playing it to – now, we’re that think that with we to that a and right a pretty critical variables think we get continue to sure ton learn But bunch So and of something us that’s is

really signing and the So on that that, our pushing sellers, customers see up for it it and and they it. they’re utility see

Amrita Ahuja

third we add, quarter, And transactions to installments that. just Square $XX or the add in going In Pete, just saw were – third the greater that on than million $XXX. quarter to to

Peter Christiansen

Thank welcome. and you

Amrita Ahuja

you. Thank

Operator

James question [Operator Instructions] Sachs. Goldman the Schneider next Your of line comes of from

Your line is open.

James Schneider

to on afternoon you’re a the get pick develop are I provide expansion? scale the EBITDA the revenue it But revenue tell solving revenue think to to. expansion for of Specifically, TAM? long-term are little margin you Good about thinking the possibly want Thank the about for you outlook us maybe obviously, the wondering welcome, was working like that provided in you. up base you Maybe and solving if and earlier. Amrita. you. how could biggest balance largest medium-term, the possible potential Thank and can franchise, how you margin invest we just more company or growth, should sounds commentary you

Amrita Ahuja

the Hey. question. James, thanks for

focused driving the growth we’re on on the line. line on what top is So absolute and bottom growth dollar

up of we’ve the record five EBITDA driving again, million X And Just financial are and XX% to record the developed little results. years. margins investing growth/ that OpEx about margin margin more in discipline, EBITDA, was last a we’re at of the things of that delivered we things bit expansion here points speak – of In types track in XX% of the the around have that track points XXXX, $XXX each with year-over-year in leverage X

And few we’re products new the launching results have We’re and new scaling those been last in products. years. remarkable

we important reinvestment think, underscoring, profile how so business. worth it’s I the about that and for long-term you this understand the think for

now ecosystem launched now it’s years, adjusted a higher with where We’ve an million the XX entirely XX% products this, we period reach can of in we few to – points XX gotten mainstream year active. time all for years new a last that’s also revenue. while top it over monthly out Our of line us new than in deliver last now That’s was built where account not the and scale we delivering, only the investment did That’s expansion five And margin Cash purposeful but point business. ago. App in this growth, status.

to long-term scaling absolute we focus our And as continuing time. the dollar and great growth. ultimately think out that’s So will about that them products what over lead here, is, put to

James Schneider

of terms are in the traction provide for et one whether in you. solutions maybe metrics kind your penetration of cetera? Thank of updated Could getting Appointments, you then any Restaurants of that maybe sellers, specific Square terms us vertical And for be Jack. or software

Jack Dorsey

Yes.

focused lot staff So restaurants now, could and learned that launch, particular serve We right we serve don’t themselves. a bright we – build book to make sure to getting We types from getting all continue here. we’re workshops as with really is we star is can – but feed that flow on learn of a much it’s right. great restaurant just from We very a the owners had a as Square software. a Restaurants how definitely for of bunch And we it and restaurant start. exactly because type restaurant. the we’ve feedback mainly launch, We the

larger lot issues with a of and continues to all been reboot we attract So sellers been interface Caviar. well think things we want We in We applying the space as same a make just We platforms a retail, well. we into had retail. lot have the about to of on as then the look appointments we’re make of with deeper continue use restaurant available thrive. and who to saw do sure to retail terms – of to a that accessible and rethinking we learned we’ve the can and to to ecosystem we’re bit sure on that the solving there’s for app from that how a that ways to continues that and restaurants needs original and just integration larger retailers’ integrate we’re everyone that wants

it we push much self as all as We and our they’re quite Square in the sellers It’s onboarding. and much us great to positive sellers XX% our over then That’s for all that verticals. of I speaks is to self starts. interface. standpoint simplicity Restaurants, really onboard. for in to what generally, and of want throughout to easier one easier Restaurants The So thing for possible elegance our the particular, want would obviously exactly point metric for a that of

applying we as So very now a the have high other to and set verticals two right be going bar across we’re well.

James Schneider

you. Thank

Jack Dorsey

Thank you.

Operator

from of Tom line McCrohan Your question next from comes the Mizuho.

open. is line Your

Thomas McCrohan

balance team. might is Boost And there are evolve that metrics they’re any keeping time? reward as App? any the the around people Cash question Is maybe provide growing? the Card. the Hi, how over to in I that their there there And program and and Cash welcome, thanks, can a on program had trends relatedly, average Amrita you any update on

Jack Dorsey

Yes.

Cash App give average is increased appeal customer through And to with we seeing So as And way XX really a people their interesting, and and we spending using – as App we we’re we’re friends one and other we – starts And thing aged that more to increasingly see Cash onto interesting primary keep, it seeing people the mainstream some seeing have are into engagement lot the it as all right time, merchants deposit moves to the the deposit that Square people balance Card are well. are higher the who Like per functionality but not people we’re I this is will because transact. seeing adoption. are family tool. disclosing that, that XX. their the seeing do with we’re transactions where where we so to using direct folks a payroll they actually go average you their can points.

continue first we many a to that as So well. us consideration, add make the features tool and in cases, primary

even continue out and build that So we’re to strengthen going to more.

Thomas McCrohan

product and I if there. of have on kind follow-up can And expenses trends quick a Excellent. development

those so can adjusted that and on have spent? for I similar growth, revenue revenue had development maintaining you’ve dollar year because million year you levels pretty incremental year this absolute basis, you’re about people entered And in want. product the had XXXX return you XX% – on money And – next million revenue returns products due additional guidance product of the on So an largely about revenues largely of spent you creating to year, $XXX about like year XX%, on adjusted development revenue $XXX you of spend development. the end expenses. of seems incremental the this of implies thinking understand it to an incremental dollars just guidance You or XX% the product with for how got the want and

you’re terms did forward, getting return just sure to the about the spent way past? make each I of in So you looking you’re thinking same on product incremental development, want on in that returns seeing the dollar as

Jack Dorsey

boost. before I into and we get forgot on your Sorry, that, question

this about excited pretty We’re program.

add to it. new merchants continue We to

lot enables it. of We’re we other merchants, a also at program aware seller partners that our card for consumers and potential, both debit favored on instant of there’s any back and think cash not

Amrita Ahuja

the well. and five your look products continued again, cash lean five financial accounting continue years an around will you scaled Where to our eCommerce continue I Card it’s development a entirely the for for to then services obviously driving we’re track perspective omni-channel, integration. over thanks adjusted to XX% now and Top years, features. of velocity past in that in the going investment verticals, here year-over-year, XX Tom, then, with And and platform, in is new international developed From revenue, products App question launching at urge scale obviously back an Square last perspective, and over points on we’ve product Weebly, growth from record development. as up ecosystem. product to on Cash priorities, scaling new developer,

track execute against continue priorities. So, and to again, will long-term strong record strategic the

Thomas McCrohan

Thank you.

Operator

Chris of Brendler Your of next the Buckingham. question comes from line

is line Your open.

Chris Brendler

my so a sequential Amrita, the the I’d actual welcome, thanks about mid line by look well. in to picked acceleration like as of taking for sort in and little question volume this growth micro the up mix Hi, quarter. slightly slowdown sellers, continued ask if sellers accelerated with much and It in the I at bit. But in seller, estimates. large

you��re that’s and that wondering So seeing why slower from there? is micro, sellers, there’s I you’re that away the level anything just seeing shifting macro micro at bit a or the in business Thanks. little was growth if

Amrita Ahuja

question. the for thanks Chris, Hey,

from quarter, in billion. about billion I’m to at drove XX% We talking growth and there. going $XX growth yes, in the GPV So volume, GPV up you’re up assuming XX% scale, year-over-year strong $XX XXXX

as And serving also of we’re many terms sellers services too We’re focused larger of in there’s grow different things micro micro for ways sellers. I on we serve of community doing products of that matter sellers the of all lot and that well. to and wouldn’t that our we’re micro. into much read on can because there, mix focused very with the specific a

the the some and them the business into larger And actually push grow of ways help category. seller

there’s sellers we mix micro little categories. going think micro also we’re about moving channel, the and between when And of on a bit So sellers. serving

of We’re also sellers started services as suite focused micro. them, products growing adding on, ecosystem, and not only that XX% onboarding, with but across the larger new our and to

we view business, their success. as grow them help can we that if So

Chris Brendler

how coming Thanks growing? have of omni-channel Virtual on Terminal you would And volume XX% one there sense and eCommerce. XX% a of be of very a X I think the so point much. card with disclosure Page that my of at your great. that a That’s there’s present. follow-up sellers impressive was you number, is is there third Can your was potentially from the much comment Invoices sort a us is not and comment volume give a

XX% [indiscernible]? So I reconcile that not present with the just third card being from Thanks. moving

Amrita Ahuja

can Chris, Sorry, clarify the you question?

Chris Brendler

Yes.

XX Just – more have. nice of there third Square’s That’s a present. the prior was GPV number the a to of X Virtual Terminal of – was volume card eCommerce in also Page a so than Invoices quarter. that not contributed comment XX% I thought on the your

mix? your go card besides Invoices to get trying So sense present, not eCommerce those it if does Virtual and it’s I’m API? where Terminal a of eCommerce

Amrita Ahuja

together, two those necessarily Sure. it volume XX% but to though fourth focused different over time. and be the correlate continue not This I’d metrics I’m eCommerce GPV is XX% that an contributed meaningfully of than we area our Terminal, Virtual growing in quarter more across on. sure is Invoices,

Chris Brendler

growth. more Okay. It Actually, than XX% I reading says contribution it wrong. was in

overall of And eCommerce any in the and on business? of like terms Okay. comment mix then health your

Jack Dorsey

We’re just introducing Weebly been – versa, the hard update be see sure the to few one brand for sellers Square and to to efforts we of that working a going on we’re the focus about Weebly to And right the acquired thing, make sure focus concept lot integration, just these eCommerce an thinking next to us. as people opportunities of on to strengthen months. and our every vice and make we’ve day that’s that and the

Chris Brendler

much, so Thanks guys. Great.

Jack Dorsey

you. Thank

Amrita Ahuja

Thank, Chris.

Operator

Morgan comes the line Your Faucette James from Stanley. final of of question

open. is line Your

James Faucette

very the for in much thanks I it couple Amrita, must so my been Square and quickly, of quick last Thank lot you or so so. to work wanted to saying internalizing month ask of you, much of a a questions. hard

be we that there more And were business, that in the a but up Square better in a thought. of bit First originations part would Capital, had historically, sequentially. we than seasonality the on bit that thought came

little So update cetera, from have to year with circumstances? And on with under anything talk And happening don’t early left and to Thank you’re or last And the have I did very bit to ILC gotten you you you you feedback who on the a much. about regulators, economics have follow-up on you changed extending what credit they business question. in around can then the if I et that anything about know Jack, the the incremental of an But want so? there? timing. application? that any think have what’s

Amrita Ahuja

Thanks, James, welcome. on I’ll warm capital off start your question on the originations. for

Our core well. perform year-over-year. platform had the in product was which $XXX continued million, totaling really quarter, XX% loans to We XX,XXX up

However, I basis, some quarter-to-quarter. think, do best look it’s business to because you a this swings probably a XX-month trailing on full-year at or have

sellers. $X.X and $X So and which was have billion XXX,XXX loans XXX,XXX on basis, a year-over-year had full-year billion, we across in now XX% cumulatively loans facilitated up

And short-term our We incremental discipline, financial have a with year. of not criteria long this on as prudent know, we record we not respect have loans sort than management, track here, you risk. generally a risk with of have less taking changed product, risk, to

ability the to we pivot have So quickly. that

lot the our around have a real-time manage around ecosystem models of inform broader risk. We in data to sellers to

have I’d we quarter. year a full as believe the given highest the product. we opposed But again, level, any to look at So differentiated at

Jack Dorsey

to say, updates. the about will with enjoyed any unfortunately, talk and process forward we’ve the I regulators. look relationship But and conversations ILC direct James, I more can’t like we

James Faucette

Thanks very much.

Jack Dorsey

you. Thank

Amrita Ahuja

you. Thank

Operator

call turn back the company I’d remarks. the like closing to for to

Jason Lee

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

Operator

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

disconnect. all may You

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