SQ - Earnings call transcript Q1 2020

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Operator

Good day, ladies and gentlemen, and welcome to the Square First Quarter 2020 Earnings Conference Call.

I would 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 2020 earnings call.

Amrita today. and Jack have with us We

available First, of published our to remind which a market the format everyone of was website, earnings Relations letter our we after on the close. want shareholder Investor shortly call, we have

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

During to call conference questions will participants. questions our from take we from Q&A, sellers addition in

that differ we’ll to call. We from be future call forward-looking any note an on except date. look would remind filings differ. the a also forward-looking our by this could statements SEC like indication of at based take us statements obligation results be are with by the to Actual Also, update contemplated forward-looking everyone that results Reported a should materially to for of those on results of the statement. considered that Please this discussion our information disclaim making any forward-looking today’s factors performance. law. as statements, not as available on We to required our could as cause

estimate our During review April have month the our describing preliminary current the month interim by our not as gross performance be of accounting closed auditors. monthly of financials April. and call, for not to represent April our growth yet results we These are subject profit we’ll for for the results

these estimates. As a from April differ actual result, may results

our These are are most on in we results. intended letter will non-GAAP comparable the this call, non-GAAP website. measures substitute be measures. a not Investor to Also certain provided Relations measures our for to directly during GAAP financial Reconciliations GAAP financial discuss the shareholder

third discontinue we in reminder, of of will XXXX. a quarter use revenue the as Additionally, we adjusted the

in operations no There comment a determined any total to changes disclose and with other of GAAP the key adjusted revenue, continues letter with metrics. revenue. GAAP, are or of of statement components bitcoin are receipt transaction-based from costs costs accordance non-GAAP which SEC, net discussions our the and Following to

with a to statement. our posted have website related and Investor financials Relations income historical We additional spreadsheet details on our our

this on Finally, Investor on available shortly. its audio Relations call our be is webcast audio being replay call website our of will website. in this An entirety

it like turn Jack. that, With over I’d to to

Jack Dorsey

joining everyone, thank today. and Hello, you for us

going get remarks me with start We’re to from Amrita, a and then your few and questions. to we’ll

our we share gratitude on for COVID-XX those frontlines Before fighting the I want begin, all pandemic. the to

and us without every will acknowledge We yours. and work you. Thank the able around to providing world appreciate to the everyone keep make workers services moment do not be you we you safe. do to our essential healthcare and We our sacrifices healthy to all

our the to customers too. We’ve rise seen occasion

found less serve orders through online delivery than Berkeley. full-service wine they While Star launched ingredients, a traffic curbside have Panisse produce, Retailers, open, ways by in stores opened ordering food pickup. like Chez online restaurants raw and to Michelin even restaurants markets staples retain and to day sell doors customers. slowed shelter-in-place Larger for the community to QSRs keep staff new foot and websites and shops building sellers, our in

and Distilleries dressers on and like protective selling beauticians tailors and sanitizer equipment to advise self-styling. appointments to personal hand shifted to video masks. moved Hair

into help all XX-hour danceathon funds their and before. online to weeks, Folks like Diddy to hosted can asked artists raise performances. fundraising and fans customers also Luna together Cash pinning cashtags, churches, their healthcare six Instagram Jeffree Star for send workers people like by relief. through direct his for strangers money DiddyDanceathon come tipping live we’ve a so go media, to the Artists they money. in cashtag post past seen charities, doing social and FX the Over donating App never need are businesses the small

in to work roadmaps pickup and our at these reprioritize and our Square in help for quickly curbside continue them card for they to the shelter-in-place year. search our way sellers. originally unpause slated launched to products We some and launched Within neighborhoods April, to a we help launched advance them. two free and Online and made software delivery In to critically March, sellers in cut first of in we to eliminated orders, sellers support subscriptions them temporarily weeks We their look for all decided the initiatives, options and a rebound. March fees portal the cost later buyers quickly when Square them pause for to Store gift

management help information our them account customer launched gave advice, sellers. support and with teams’ and simple We to sales resource and our information enable a hub better to

and As help as was across to teams Cash access Act App and quickly fast possible. to both support drafted stimulus the Seller our moved ecosystems sellers finalized, government individuals being CARES get and as

to secured to new by First, the quickly application form. a a through built remove We’ve product from Square PPP loans. Capital sellers PPP process SBA approval move offer complexity simple enabling that

sellers. we’ve far approximately, applications were has $XX,XXX. SBA million submitted size $XXX XX% the proprietors, of sellers XX and behalf verified to were of loan million average businesses is employers. the states to sole So by applicants The XX,XXX all on XX,XXX XX% $XXX approved been in in

the XX fast, people stimulus our money million. Cash their access X grew send instructions worked get From directly, for it million overnight. use so published number Card. to from to to they program they to with whatever our App expand or straightforward could to easy their access with making customers to Cash purchase direct traffic or family folks of Cash to deposit on four FAQs and Cash banks App help doubling it direct App web customers, deposit we it deposited friends for the their need with partner there, get money understand how In weeks,

value trust. Now down comes and we of more speed the and our strategy. than ecosystem strength ever, to see It

but have decision this and have strategic strength. aren’t out we current have to different provide to transformative just adapt Our This up side may we can tools a simple them navigating to challenges other shown – a through come customers many tools, anyone and help as that business, to the of complexity to made pick here proven on in support position have invest been they new and that the be is enough And safely. meet. moment, or the we challenge quickly

We is see and to non-essential while significant believe opportunity slowed both to bring and find new And serve to build and launch great unique them long-term. new sellers people. into we we opportunity ecosystems, hiring, this a our products today and individuals

to So, we’ve roles help us. prioritized critical

agility proud We’re working on something our of and through these times. foundational and we’re really heart society to

and as that, trust and build Thanks serve. continue we to the all with you of And our customers, to to employees Amrita. over for our

Amrita Ahuja

comments I with with hope Jack. the and families for Thanks, time. during today. to echo this your I’d safe healthy you of frontlines like all pandemic. I on which are share those And gratitude There three you with items, are this key Jack’s

first weeks Seller our to we business growth quarter last March. of on in February and the First, results, in prior slowdown in two January strong achieved our the significant

Second, in in early with potential Cash signs April, we saw on momentum improvement trends in App. of our strong ecosystem stabilization continued Seller and

empowerment behind than it’s of more believe customers. we service of important Third, ever and our to invest economic our mission now

XX% These excluding rates what and up observed or was $XXX Overall, and points about overall gross the our January at last lower I’ll the February in We in prior year-over-year Seller are to strong growth First, through in February of slowdown quarter year-over-year the we first first two achieved impact of to XX quarter, growth March. million, look in results. XX% January COVID-XX. prior Caviar. profit than growth weeks the

of Our March, Seller were the volumes were ecosystem two in sharply weeks gross first March, includes profit card-not-present to Seller grew affected. two where decelerated year-over-year GPV last of This quarter. down while XX% of a year-over-year. decline last XX% year-over-year weeks approximately XX% volumes less the the in Card-present

beginning during Additionally, we sellers Square pandemic. March visibility flex all paused disruptive in in to given COVID-XX core for them new support for loan fees mid-March, this offers software we our Capital lower time. the refunded And subscription

the year-over-year. delivered gross XXX% with up first profit growth in App Cash quarter impressive

remained from then in number gross transacting new with deceleration year-over-year up March, April, volumes A Cash highs new we actives. strong new saw App modest for March Cash and App spend Cash acquisition. While of a net in Card set monthly in efficient profit remained driver peer-to-peer overall In its in COVID-XX key again, growth customer in March. XXX%

drive bitcoin and our For volume growth volatility and the helped strong brokerage during quarter. stock adoption increase products, the market

Turning $XXX to the to key loss during million $X profitability, was net and EBITDA million two adjusted first call out. with was factors quarter

of duration transaction a Capital. increase impact impact losses significant in the for an reserves reflected We COVID-XX. loan on based in severity the this on primary could and Seller actual anticipated estimate First, transaction losses, vary related of in future processing losses for of which quarter and COVID-XX the Square recognized was impact the

our The Seller margin was slowdown last weeks in the March. high in ecosystem the in second two factor lesser revenue of

are anything unlike The we experiencing seen. macroeconomic is we have environment

Our and meaningfully focus is communities on our that have customers impacted. been

also our could a financial remainder are COVID-XX. or time. and of revenue the of year full wide length the range results and of recognized on for Therefore, at guidance We depending the financial outcomes not severity year this earnings be there second quarter quarter in we providing the second

we Cash GPV in momentum signs in we profit gross expect and Instead, our approximately from we with to App. on GPV down of down you April. share Seller real-time stabilization business Seller wanted an potential with Seller year-over-year was are in seeing early XX% ecosystem, April, XX% to what In April. continued including update in trends be in improvement year-over-year with

daily of trend we line week rates improving of still but While these of We decline recent by XX% we last and from growth saw a been see we’ve the continue since these as encouraged half year-over-year we stabilized April recognize to early it’s the through have March trends. seen at first mid-April. approximately volatility, levels,

coincides Two, stimulus And of improvement to the potential adapting few Three, shift with timing Easter. omnichannel they of One, a sellers benefit efforts. commerce. government sellers. this from believe new as four, We existing factors. a acquisition

growth, While adapt GPV their businesses saw and in-person positive down significantly year-over-year many we our offerings. from achieved activity GPV year-over-year as omnichannel April, in card-not-present of leverage sellers was

recently area more Online Notably, our pickup two-thirds Store hit in XX retail. than from GPV we and by food saw launched since the and and adoption verticals; Square Square service. over two Store the hardest come of up strong strongest delivery GPV growth Online of of acquisition weekly sellers mid-March with drink with an and was in

Additionally, we quarter, and better temporarily benefit results manage subscription believe our sellers in sellers pause for to to second impact COVID-XX, the our customers to our but and our billing fees We taken to April in top-line and option customers have the subscription companies measures support long-term. that through us Seller costs. will waived offered the measures protect we our for allow

we where see we For in weeks Square loans, we core Capital, while the paused for coming to stability new origination flex flex reopen months. offers intend and loan

As PPP. from we loans you the distributing Jack, round second in started heard of

While to there is don’t a materially here sellers, gross revenue the to tremendous capital in support amount our happening and second quarter. profit to work of contribute expect we

modest half March, sending stored and during Turning e-commerce cases of commerce monthly deceleration achieved stock our After new for deposit transacting performance we cash growth peer-to-peer active, new first improved in April Cash the Cash money used of volumes was active, bitcoin spend, direct as App’s broad-based seek to we for App volume, to we brokerage as year-over-year. XXX% Card funds. channels. outperformance and saw Cash Cash expect customers shift gross new peer-to-peer where late volumes profit spend April over in transacting strong highest and totals net initial Card and

April roughly the During volumes adoption various customers store and new balances In grew in and half the Cash Cash the stronger transacting April, billion App App compared drive we up to by deposit X.X Act beginning January across times even during direct particular, by growth customers This XX. doubled $X.X actives drive aggregate direct month, and stimulus grew products. which the strong helps of CARES March. was more to of deposit saw programs than month-over-month. deposit XX to direct compared of second helped cash

environment. stimulus in by continue monitor App’s customer encouraged dynamic behavior April, in macro normalizes Cash are this we post how will we results While to

Turning investment that key profitability. impact factors my final and to topic, framework our

I business. high have mentioned as our First, earlier, incremental margins we in Seller

result, a in profitability. gross profit decreases Seller will flow As largely through to

in these lower for our estimates higher could vary losses by determined periods. COVID-XX loan and inputs; primary results losses length or the generated and may which quarter in are on on volumes first severity impact. depending in losses volumes, transaction two quarters of of actual quarter subsequent Both than expected prove Second, first on future inputs

we macro mitigate to this new continue but environment, taken an to As second and it quarter relates this sellers is we volumes, watch our area steps have risks in to closely.

in expenses pull is we and appropriate, have of believe discretionary more to reviewed invest we taken individuals. service where than sellers mission to expenses while and ever our important both to now it Third, and operating empowerment steps back economic our

back pulled for in Seller build-out, G&A. of XXXX other non-critical have marketing, XXXX expected reduction $XX and expenses, We discretionary around travel, certain company facilities to our positions, events for product non-GAAP compared and million an non-essential marketing expectations leading $XXX expenses million sales operating initial hiring and development, spend to to

For strong to operating costs as reminder, expenses scale such quarter, spend. product App’s a non-discretionary of platform. the development, investment with of growth planned given We in Cash App be as originally and a along the performance, line and portion expected and large PXP are with the first second pursue non-GAAP, expect aggregate marketing sales Cash we to and intend quarter G&A to in

our targeted appropriately from were pre-COVID marketing profit While lead products volume and mid-March in that April multi-product global being ecosystem, campaign awareness gross customers. our that back we encouraging as new seen both recent sellers attractive marketing signs to early add new sales Seller improved saw in returns early We on are omnichannel quality signs, the us the levels shifted can deferred we’ve messages campaigns. of cohorts our investment and to results sellers and investments and brand reach basis. early We of indicate of our larger with to deliberate on prioritize and

times our differentiated, ecosystem believe like significantly Seller especially We is these. in

integrated to online and in can manner, that communicate sellers way offline with buyers money and move commerce enables between up speed an few offer. products and of seamless in a movement other portfolio Our companies quickly

higher in taking App team App, with The product demonstrated focused unique Cash For flowed moment, that velocity this – shape. new in is are crafting customer commerce new a is our is hasn’t which Cash resulting habits efforts on a revenue is consumer-driven this experiences time customers direct which around on of deposit mentioned inflection the great Jack teams’ peer-to-peer. Direct multiples stimulus, disruption. generated to the who use only have meaningful. deposit customers compared

we’ve believe the has their As of in has expanded early products, increased driven products, is opportunity adoption addressable their lifetime profitability still Cash Cash App over was market value more added days. App’s increased, improvements time, have we it customers which as those and

existing affords been and serve customers and selectively more new as make long-term-oriented invest. we our to stronger to strong our never liquidity first will balance in opportunity or recently urgent look investments we our us customers emerge upsized the reaching with us talent be Finally, billion important. the We work the sheet the hire a we amplify at customers to approach we quarter The believe $X.X strategically and today a to ahead end to has recovery deliberate revolver, of and great do support our enable go-to-market as

the it turn start to back Q&A call. portion the now I’ll to operator of the

Operator

Huang [Operator of Instructions] Tien-Tsin the from comes JPMorgan. Our first line question from

Your line is open.

Tien-Tsin Huang

touched did, side just you for bigger, upon, Seller you’re ask, sort bit both of in are approaching so and sounds risk suggested. the thanks. quality you It data. Great, Capital general? of like think both how Thanks I a you is the for which as to on skewing little wanted helping management much Square on this underwriting I you

just because else I’m it. to anything And just getting on to So questions also some add clarify, to then that?

is should that you. starting stabilize. fair when that I about higher look I that else it much that XXs. margin all to your how point else a a EBITDA, quarter that first apply driven equal? in think like All are going Thank the margin incremental ahead, things good was the well, presume is equal, stabilize reserve? think And loss looking And volumes the decremental was by The if to

Amrita Ahuja

loss was to related question the off. was $X can questions. two of to lesser start tackle Tien-Tsin. I’ll margin primary was a your Hey, the The to quarter, EBITDA impact reserves, through your impact flow the were us will first and the million, can impact start moment. the off we top-line we quarter The larger speak there. Maybe second with I the which to around then risk this With impact of for first in the EBITDA there and respect which in impacts. of rest

margins as the which the obviously benefits margins As quarter of you incremental impact us then other revenues terms QX. in noted, last on two the we in high grow. in direction Seller saw business, decremental And weeks the of our for

EBITDA risk losses XX% the is with can up question QX of would loan the ex-risk year-over-year. clearly up. would two me takes we there impact I’ve the And and loss, larger have then some puts have EBITDA our let of with that Even been weeks of QX. through is The of loss see March, been and impact for and to talk your respect missed. transaction the more last if

$XXX transaction look both areas, at to quarter, at is the we the in the just on with XX first than prior booked with the the that and transaction we estimate balance processing million. higher that reserve point, So dollar an our can by losses, quarterly rate is $XXX this those a in reserve over we basis. driven took And way which primarily for loan is on you two sheet first of run of loans respect capital took, that about Seller million the the quarter, along volume

was So think QX. about XX of What higher. QX took we in

indicating And so And to Seller give less non-delivery goods one than charge what levels. – actually watch the indicator is normal losses. XX leading a far charge to backs on we’re sense we we’ve seen of of side related of what backs you in tracking, as

COVID the of losses. duration Hence, could a know that’s what However, and the in and here typical levels. set much severity is see reserve that in what we very XX we additional we the provision terms that of we impacts happens on see dependent

basis. sort business, on on our XX loans approach. capital run a about sheet, in COVID. seeing on which dollar from rate the but similarly, current a would basis, balance million expectation terms $XX repayment loss And impact flows be the similar that On there of actually X.XX the from only about the booked lower than what provision in prior we is of capital rate further

taken our question, this to dynamic mitigating exposure measures And in your time. manage we to have very risk

that disputes, are things to the legal of Service, to on have risk terms. Seller Some is payment for Contract for our sellers, instance, been the reminders some done releasing help Square assess and related higher SMS we’ve of assessing including sellers, business exposure products extended which the that manage managed framework our industries a

that On the loan remarks, than risk mix capital geos for as puts could to we months. a level, And the the taking serve we forward. terms of our our in weeks But there’s made, in outlook we losses intro there’s future future of and core and risks that and across higher we of of verticals coming verticals, as in side, we’re the we’ve terms originations of assumptions flex reopen or look takes, core the plan these paused which across there obviously to then mix product see in GPV in is I through flex the that loan have here now. that QX, there’s mentioned loss, flow products the there be actual reserve actions lower and that and mitigate and number the stabilization are

manage risk. focused our be So very, we’re this monitoring proactive measures variable, to could on but that area and here is very taking an

Operator

comes the line Darrin question Research]. [Wolfe The from Peller of next

line Your is open.

Darrin Peller

all you customers. Look, Glad guys. the okay. resilience numbers merchants thanks to of Hey, questions that the give around Is get us any just we addressing sense indications there early this this? can the of importantly you through expect better your – doing hear into first not versus we perhaps of other merchants of guys omnichannel more on the really should that some mix are technology. clearly XXXX, looking through And side then maybe the the managing have you’re

market to comment side And omnichannel? tech industry you on them can kind for versus and merchants inbounds getting Square share it? from you’re help the with of of that the your the what other on So mean does for your

Amrita Ahuja

then Jack our we where start is believe can off differentiated. what jump I’ll there. on to us seeing on in we’re start Hey and ecosystem

both variety our far we’re and of of some most diversity we So with shelter-in-place we the what serve of seeing products we with a shelter-in-place a geographies, across serve so you’re that terms domestically variety verticals, internationally, right, measures ecosystem, number measures, and in of ecosystem. and of across some a are serve our because easing

the At So, year-over-year, seeing let tease XX% apart but of we tease the improvement above The about me half you seen when that. GPV it’s week look across back it’s was first apart factors. try half of the March through March to on bit last the has of of what level, believe three April then we’ve XX% was Seller what and half important and down to April that driven year-over-year. in a We number. back that week-by-week In blended year-over-year down saw by of we’re all basis. aggregate the nuances XX% April, of rebounded main

timing products that sellers First, and sellers of We’ve through contactless this sellers the in stay potential our started and interacting programs, join the them existing buyers. of time our mid-April. the some of we’ll impact which time of the have aspects commerce from have really the effect that the served Easter we’ve their with new our to and have seen in And seen to platform in both and we because taking open differentiated talk impact government ecosystem. enabled stimulus adapting of really this

now for really as account our in XX% which which breadth now have our type GPV contactless our sellers card-not-present account over used the products, year-over-year a well growth to speaks in to third have for adapted solutions. April. From perspective, seen to about we And commerce of of our products ecosystem, positive commerce a of volumes, card-not-present

which about in the since what weekly store had Seller point power I is our include XX earlier mentioned, online the outperformance to the online curbside seen of Some pickup of QX. launch on key delivery, out we GPV and here store, the

options, year-over-year contactless seen achieved their that virtual of and we’ve may the related partly less to both impact As which vertical, invoices use be approach in additionally, services growth, really positive to which the sellers are makes shifting terminal product.

seen market standpoint geographic seen that to cases COVID From a stabilize our past our days a of market, is most growth which mentioned, in has interestingly, success seen, we’ve XX had we’ve the Australia reducing have variety or international in first the rates standpoint, that was first return across outcomes range. the market in growth year-over-year I markets, positive And positive some we as in of to metrics a states indicates of restrictions, otherwise. place. U.S. data the lot to the in at that continue obviously lot only early so is far versus monitor. week and that in states an with in measures late here, have look considerations data April health is a area this shelter-in-place those a states started of easing around we But shelter-in-place uplift there We to stronger that a and in will a also

from the of sellers Across every a widespread particular. in in vertical, the number millions noted, different businesses you seen and serve ways. impacts across diversity as and Seller we of our across COVID-XX U.S. We’ve base, of

all have products was declines mentioned, verticals hard GPV, While use retail resilient. experienced those And hit year-over-year the have repair like like services and has I I and that that industries and and food mentioning as we’ve earlier. omnichannel seen vertical, beverage been home the services most in been of make professional

is sellers, Micro with same what growth point are see now sellers’ size, in, were to chimes declines maybe By larger comparable micros segments you seller both more higher before sales my size by Jack but all store growth. impacted. so churn higher and final seller five

across geographies system, So serve still, products. and the a diversity across verticals, nuance but

Jack Dorsey

Darrin. Hey, Yes. well. Hope you’re

here. So, we lot are seeing opportunity a of

from sellers because Square to our omnichannel of ecosystem. the We are competitors seeing switch

just run these inbound, time wanted of people online, to the do the to a sell online, help business quickly to we online didn’t but was how shift. to were first my and foremost lot I just terms able sellers and wanted so get so. and do In And make of

that I does have was forcing be function attention more online. the lot of stronger is So this being what offline think back of benefits online which is And ultimately and them kind will businesses to comes awesome. a they the as of it, all because much a show

increased as which also It’s And struggling the XX%. the over get We’ve came large us coming to one example. from chain with of to well. was a ecosystem had are because sellers, very competitor. seen March. of And they since to We We to breweries were adapt online have us some them saw been install just omnichannel Instead, calls to business much running we and the pandemic. up faster. with their able which they much, up

So to us. everything they switched

restaurants all the it’s that tools be the lot So we to the there category this, covers all the out or of in emphasize with or just new that and important going critical are they’re come services that as to we to sellers the out to one actually really serve customers and believe ways. a to going category, they’re merge not things, creative verticals your creative these do Square in of in going category get retail in only and is the actually be

sellers at larger scale. we’re So seeing

that you go seller done networks poorly. be for and like. financial institutions to offering versus see net PPP easier. and our want tools there another seller and move do rich they us seeing for which to we’re We’re in seeing our What’s omnichannel past very, asking of volume sellers to the attracting because program what us with sellers with What we done speed the of able who are a a well believe are for our the we’re terms I the new halo, the the because positive goodwill company use current move will why. rest And the very way we’re lot sellers customers of what of able and customers and a they in this have to have at

a supported throughout sellers newer be will So I of terms and huge but well. this we’ve retaining, for win think us in our handled them how time also sellers as

Amrita Ahuja

just a point add to to that. And final

point the of we’re larger that which we’re but basis that both very of that in middle cohorts earlier we mentioned seeing not on seller-by-seller shows attracting time. only weekly attracting individual the larger across sellers, pre-COVID to levels, are believe that really cohorts since showing new that’s versus results that I broader sellers and cohort the of an Some of differentiated seller making this aggregate ecosystem a marketing in underscore dynamic Jack are was those sizes we’re March the

Darrin Peller

All right, helpful. that’s Thank you.

Operator

from comes the Dan next Que. Your question of Misuraca Red White from line &

open. is line Your

Dan Misuraca

Hi. seller here White Jersey. & a I’m Red New Kearny, Square Que Smokehouse with in

on like Square the Online out website an for each variable zero. amount Inventory, ours, But business sold Store we have day. Regarding shows hits once a inventory item

As like Square this the & shifts system. Store? features like during build more for Square we’re Are out using there a management Online restaurants White to service quick Que flexible quick restaurants seeing Red service us, COVID-XX, inventory Online Store more for plans to

Jack Dorsey

this we Yes. for working delivery. organize site actively Inventory zones. fulfillment need order option adding pickup in mobile focus Hey without support our Square, orders is a a the and staying on. to sure app, to Thanks safe. make modified you’re accelerated is channel Dan, the delivery And on out to we we’re area we’re big and is hope for that by curbside of using Jack. This us something roadmap bunch and of the

in we’re as ton feedback getting to the it. working on system of So new working not shifted with and inventory working regards on we this this and as what’s world, fast in we’ve what’s time to a can we’re as and generally

feedback the we’re appreciate it. and on So, I

Operator

MoffettNathanson. of question Ellis the next from line Your from comes Lisa

open. Your is line

Lisa Ellis

do the forward, Thank because remain we’re some employment you of App Cash Cash general tied thinking expect the volumes your unfortunately Cash folks is you for the to a to of Card you. unemployed their seeing and My to activity of in there? were non-discretionary pretty What on is Cash outlook or the how to the April seeing Card? are spending late Good lot transaction low-single-digits transaction the volumes about actually resilient you there. Are week positive that U.S. on to related reported App And due in the question on voices. you like Visa afternoon. trends guys’ seeing Last activity stimulus you’re some spending. hear looking similar trending Good Are users that they’re currently. impact that debit then Cash Card?

Amrita Ahuja

you the for volumes was off. I’ll for a spend Card monthly month, and where Thanks saw the orders strong across Cash April Card’s both Hey, we Cash us Card. Cash highest Cash And for overall. total App Lisa. start of for question. for heard as including

of that Ahead in prior the stimulus the We direct spend which Cash explored late saw growth functionality significant active Card. a orders saw programs, April to Card the XX. customers on Following payments, and and government active end about increase IRS for the before to mid-April. the we even deposit that in stimulus around came of And in the growth the across engaged began with troughed app. portal base March, was Cash in deceleration rebound second in April March early roughly and release

in half were can increase disbursed, measures. stimulus rapidly. card And by the need customers in of a we’re The we Card App you behavior payments access funds second understand, here the the levels. weekly As material Cash a has saw their helping Cash as critical online seeing active continued as and April, serves volumes shelter-in-place and uplift per on shift really more in toward pre-COVID although spending given card-not-present still commerce, spend below use

and individuals grocery, categories including Boost wellness, help we we grocers, us program entertainment, has positioned the help away health here elevated and pharmacies Boost have would offered ecosystem seeing that where non-discretionary also to our aspect we things and merchants have to that we’re Dollar bars, spend; seen the transportation rotating pre-COVID. here awards using with to We’re from believe like actively restaurants, our stores. specific benefit retail And and unique our customers

terms stimulus want see like spending looks normalized unemployment, efforts. post we here are to and the broader we what the about In watchful question very of

say, too engagement for through weeks Card in App both it’s deposit growth but are us and So to we’ve seen and we probably depth Cash Cash early of and that of last very encouraged like the base the across months. users of products the direct in the the

Lisa Ellis

Super helpful. you. Thank

Operator

Chiodo Timothy from of line Suisse. the Credit from comes question next Your

is open. line Your

Timothy Chiodo

direct for my there you little Thank App follow-up bit a taking Cash and deposit. Also of on related a question.

letter So more it like especially pretty I looks deposit standout. The across active were shareholder up stats yes, more was board than direct the than really the Cash month-over-month April – deposit think users shows App a direct XX impressive, into the terms to deposit driver the activity. their users a of in stimulus? deposit being direct use big their can beyond us there stimulus tell and mentioned about direct paychecks the perhaps you these continue checks of propensity the what to But with

of And adoption do then usage? a in continue direct XX to already help to follow-up that that you of App notice planning sounds so What as pretty a good account there. did the general terms that like million is a somewhat from X eligibility about are to has of start. in million I deposit, strong either some done things that increased the or mentioned primary Cash of

Jack Dorsey

peer-to-peer. believe some hope a products bitcoin Yes. I Customers much tax significant recently. most paychecks a balances in equities late well. and Tim. their more we as February on ecosystem the that in PXP addition you’re to is and do said Cash late and are the And And direct saw whole of received refunds an more typically also opening, March. in in We saw Card deposit our and use in engaged spend Card and and two We of platform. carry we lot Cash opportunity. used deposit like our higher they customers huge and bumps volumes direct Thanks, increase the depositor

obviously, receive teams direct accounts opportunity to million And in work, XX million. much, did banks our the the then much expand folks partner provided to we our money And deposit us with to faster. had help April, mentioned, government in as X we February an their stimulus

is made clear. very sure the also interface that We

tab right where into you see money number routing that is actually you deposit the away. your So, should when click is direct the stored,

invest your upfront to primary that used are people the equities, signing been for the App lead So on Cash has can tool not paycheck does around money seeing so this they a go pretty using going peer-to-peer people Store, using is to just buy to is account, who putting stimulus, branch it ultimately bank that using up buy job card, the people, incredible. to for also product in and to tax, as are to App know regarding storing that that a And your in a business. but and to just critical. that bitcoin And needing money and be and that for not at your it’s

this reason is we think strong. the why of the So, part ecosystem strategy so is

We’re app. not just peer-to-peer a

a stock We’re just purchasing not app.

just app. not We’re a bitcoin

one app everything people personal that money about straightforward will in more to we telling in is that all think us better are spend continue critical my that adjacent And We simple I one. complement that is how own have. some finances of terms everything my have of and they in make needs add features and interesting these

Amrita Ahuja

And April, Tim, this grow active direct March to saw metrics to transacting From topic; $XXX add by users to from funds App of grow couple saw billion. deposit April, from direct across deposit And to over saw just the March we XX. we April, a volumes stored to to new grow Cash by from March our XX. base we million $X.X

are commerce an commerce serve transformational our believe a our conducting product along Cash And moment a to shape. where customers And banking ways we taking right is new of moment. this resonated. and in standards, we’re that’s business this in App, Seller services now, financial with has opportunity clearly, new So habits, new uniquely

direct the for future, April for a happens signs think this priority is changes say while in what early or with the that us to of we’ve seen in So, it’s here. I encouraging what us the and deposit curve of month key

Timothy Chiodo

lot, definitely and on features a to change Thanks to the the the more noted come. metrics, interface Great.

So, thanks a lot.

Jack Dorsey

you. Thank

Operator

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

Your line is open.

Josh Beck

is you’ve App. I in to taking look be you at good and in it that work market really product sellers that really newer actually a pulled how any some addressable impressive the you. level your the really online Thank give us audience so, would done any higher Cash up ways? Yes. or may the ask in consumers When store, I for last month and for customers Thank the And you sense you’ve that expanding lit on helpful? in, question, many have that sellers. had obviously, wanted the question on stats be to

Jack Dorsey

seeing pretty It’s of audience pretty strong has it’s it a believe association seen us during App it a something the expanding just ways COVID-XX. the Thanks, and that that many out, we’re as is dramatically. of Cash special has do seen Josh. a really that and as not in app, traditional financial play I been part culture now culture. lot especially with for

pretty closely remarks, with Cash have media, send lets looking in since a there social are happening their launch. we more and to the partnership my tips like which account the As page. that fundraising, taking App we musicians, contribute cashtag the the on opportunities new, money to their And first in artists Spotify, And on the and this artists like partnerships week all this and form mentioned I we’re we’re the is XXX,XXX that and at that’s artist announced tipping their than all than to opening listeners artists saw Spotify. some, more already post linked XX,XXX with donating

gamers. is area big Another

In of similarities our like interesting is regards over XXX,XXX. a this is gaming Twitch. quarter, a we and on lot follower in we’ve also there’s of lot around what’s seeing first music Twitch to But App to in about We’re and channel the used launched being App activity grown we’re seeing what and our how Cash both. between account Cash

And have the and we trust, think is we reached because that of app it can bitcoin because we’ll what a it how here. stocks of and And audience. definitely and can So, very the simplicity, a do we influential you everything mainstream our of inclusive because of word love check Card, within lot of lot of do. buying stimulus of draft and the mouth off the and a benefit offers friend for what Cash handle

Stores in Cash rise it consistently, App see it. of the are in the consistently people and App new we use So, top XX see the as of broadcast

is is favorably. nice system that to compound that a and grow loop there So, viral the inherent continues very in

the On question, many how to you second have this? Online the Amrita, take Store; sellers Square want used do

Amrita Ahuja

point cash the opportunity. I maybe, on Sure. I’ll final hit and do just that one that one before

million March billion $XX serve related XX addressable across a our in the age we that people and today. late slides just and some in ecosystem Cash to Cash between remember, App addresses over with you released market ecosystem target ecosystem. both opportunity which of across App of product Seller U.S. we the represents Josh, XX, XXX the If areas

terms ahead really April a at Cash significant downloaded apps envision in only the in runway we Store apps. the behind And month the some of chat five iOS of for points in was App of Cash top App So, App. various

of this in So, moment as Jack said, resonating, sort cultural in. clearly that we’re

your up about to Store, offerings, broader CNP Square our can about we talk second and speak Turning Online card-not-present offerings. then our level Store, and Online let’s question Square on

but sign-ups app So, number would annualized billion have seeing Online a most in or the million a on than an that of weekly number up at sign-ups Square mid-March, weekly $XX we run our our usage to recent XX in haven’t point-of-sale GPV active sellers, daily basis been And higher effectively. basis. terms provided on rate Store, And we’re GPV since are pre-COVID the $X Online typical now what Store pre-COVID. for was

third versus would parts sellers And has omnichannel volumes invoices, existing but products, e-commerce us think April. for with platform this that about our than on spend resonating more a the API, But And XX% store, as broadly, GPV as area clearly, of and the virtual strategy well rather just over sellers. COVID. in with online broader our been store. year-over-year for of of developer volumes the I online So again, as focusing our our card-not-present new not for I our positive earlier, mentioned of just resonating of prior growth now is to month and terminal, an strength

Josh Beck

Thanks Very much. so Jack and Amrita. helpful,

Amrita Ahuja

Josh. Thanks,

Jack Dorsey

you. Thank

Operator

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

open. line Your is

Unidentified Analyst

initiatives my products if the to be you have? or particularly for Hi. update initiatives complement This taking Thank effective? found get just sellers already an new question. I any perhaps, and And ones whether to some Jason. churn is specific Cathy existing maybe Seller programs with Thanks wanted to you. have or of And on for coming you on you

Amrita Ahuja

I this on can off us one. start maybe,

the it’s typically large may of portion seasonable terms for micro-sellers – given in of who a figure be serve, us So, churn, seasonal. we variable that

are how that up, the Seller or range in the in change is early the you in GPV So, given which gross for profit I’d April. the today indicator we trends would that towards, minus business change or for be noted noise and see XX% main of as XX% point month shaping minus growth,

stimulus we’ve seen We’ve coming improvement April. cards transitioning their improving in to back based unique to half seen forms April, further us, noted sellers business reopen what earlier in of easing terms has and seen certain we’ve sellers also in number of in on on place on in, April and back we’ve improved, commerce, the call efforts. of unique back existing sellers areas of shelter new have of are based also half trends that the able that new which on to the the of who half measures number based indicates noted of sellers, with We’ve we that

kind trends around that churn. seen we’ve are of those the So,

loans with to In Sellers a in on new and for strength solutions also the week, formats, in interact with in buyers online, terms this running up our that we weeks. helped our and omnichannel been in we sellers, and the this just think and things to short really have do bridge move to call. billion a this disruptive et their gone the supporting we commerce, get opportunities enable of They’re lot a ecosystem whether noted flow has of over to product past that time. speaks quickly few enable for for that And can in cash way invoices, that’s the of PPP key to sellers were are looking long them I able them program, where also $X.X looking the cetera. them

now. the teams hard. payroll cash our direct supporting that towards towards sellers at these right short No few government the happening pickup applications a the in it’s company of accounts, that Within our stimulus product features each boondoggles very span was you see program in business, of or as the order it’s deposit well products, delivery as are PPP working for the and and the enabling very, launched where on Sprint weeks are pre-populating whether sellers, working

across working enable are new hard very teams individuals. sellers very, our and products, supporting Our features to and

Jack Dorsey

this but seller out may others us. the Kathy, areas, us makes one three stronger. one product, two churn a where or of ecosystem using lot from be is also the still strategy A of others

more gets out durable. So, company, functions we the even tools and and more they’re critical those and more not churning with add whole of as that

exactly and as in else, they lot about learning going ecosystem all what’s strategy So, everyone how things working during be of features possible with this. on partnership time, learnings is as those why our like we’re the reopen need, and a will sellers quickly products behind as they forward. the more rebounding But what distilled into this think reason

And are Ben this. our like we’re new is even small our point-of-sale our and current rediscovering that to example our tools needed with and are & online. across ways who larger customers, customers customers, Jerry’s and doing XXX retail shops discovering other to a good of These pivot

showed coming and the weeks. we nationwide the Online Store demoed out – Square So, they’re we rolling over it

with out value So, large, see sure of and making people gain the suite if them. or services retaining full think, is most you’re helps small we what of that very our very

Unidentified Analyst

Great. the Thanks for answer.

Operator

from question next Your line of from comes [ph] the Jason Susquehanna. Friedman

open. is Your line

Unidentified Analyst

operating a to App. of your has question. the hungry. & of Ben hear me taking That investment narrative for Thanks been ask, making and Hi. in my may cross-selling was voices. just cases, of to how part Cash a of Cash remarks. and Seller the wondering Seller Good the want in I ecosystems? of on the Jerry’s cross-selling And good I affected use lot current business prepared thinking that had your have just your environment, light You about Jack,

that kind time So, is of that you’re forward of Thank horizon? something your you. in terms moving

Jack Dorsey

Jamie. question, Great Yes.

So, employees points They’re to boost we’re our they’d whether of sellers handle seeing sellers, that seeing for amazing customers a do did is to our connection reprioritize our look we we’ve as real we we’re comes strength so they what issues access that and believe from presently challenges a local payroll due App but paying moving product and those their some that have done COVID. and just the with be with immediately. are But to App to ecosystems. connecting roadmap forward. with We the of there independently, Cash we Cash could two lot funds

we really number impactful. a are of there’s potentially think that interesting So, those really and

we’re in we the eyes So, the we’re connect to down of the present but terms make off definitely wanted our that line. how first, handling two taking we not these sure ball challenge

Unidentified Analyst

you. Thank

Jack Dorsey

you. Thank

Operator

the Your from line last Ramsey from question comes Barclays. of El Assal

Your line is open.

Unidentified Analyst

Hey, kind follow-up on product on that change of nicely I And of that earlier noticed how wondering quarter. guys. rolled This opportunities now questions And is a your to had going due question I and of pretty specifically some I the you the the international Ramsey, are revenue out now? is the roadmap countries? wanted kind change on the being does first, about just specifically, to Ben of roadmap. a broader grown everything all kind being in so guess, more for the right thanks products But for out? suite the the in much kind with I’m question. in of of see taking pushed guess, is there what

Amrita Ahuja

April. was up From in with perspective prior what XX%. was quarter COVID from levels. I a first down XX%, GAAP international a Maybe, an was deceleration versus perspective, kick GCV international international and can first April revenue seen we’ve us an off the in quarter From perspective, which

in we seen are internationally. products prior couple where seen resonating quarters, strong growth and had So, outperformance the with our we of for consistent had us what as

seen In that down growth. perspective, as we’re UK year-over-year, still terms in COVID a as I we’ve of modest declines, April, year-over-year Canada breaking seeing positive down some Japan in and April, earlier, From well. and seeing of those trends we’re but improvement Australia, now related are seeing in to mentioned

impact this do very So, sharing to obviously, internationally that we’ve they consistent there narrative And a perspective an with perspective. our from omnichannel in products far U.S. continue the resonate on the broader call COVID been from so as

Jack Dorsey

of follow-up, our the growing and going sound outside take is we’re States. to we’re comprehensive sure to ecosystem the that not United making outside United our States; just off And focus Yes.

our do. good U.S. We we’re a make lot the sets sure we apart, of from that have but thing but past a and a that set with this it us the various during and globally as sequencing ton more just And products over – States, there’s same done And needs we want around this quarters, helps learned took on that ecosystem to the few in and the United see U.S. roadmaps. time everywhere. the these lot not apart seeing off, in the helps we that well COVID is us work us we’ve how to

we work to So, more can the the as into launch. be do impact put sure of we actually work the

Unidentified Analyst

Thanks question. much Great. my so for taking

Jack Dorsey

you, Thank Ben.

Amrita Ahuja

Thank you.

Operator

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

Jason Lee

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

Operator

today’s concludes call. This conference

You disconnect. may now

Block (BSQKZ) 6 May 202020 Q1 Earnings call transcript