SQ - Earnings call transcript Q2 2020

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Jason Lee

Hi, everyone. Thanks for joining our second quarter 2020 earnings call.

We have Jack and Amrita with us today. We'll begin this call with some short remarks before opening the call directly to your questions.

During Q&A, we will take questions from our customers in addition to questions from conference call participants. to on that this like making will also statements forward-looking call. would remind we everyone be We Actual results be could our indication forward-looking differ future materially from and of results those reported should not performance. considered an statements, as contemplated by with look of a that cause filings factors differ. to SEC the for Please take results our the a could at discussion the of Also, information available on note are today's call date. based that the this forward-looking us statements as on to by forward-looking disclaim law. any required obligation except We any statements, update as to

we our During gross as growth by review for not call, of closed preliminary this will of and auditors. month profit our the yet performance July, results are provide subject month our our the to July. July for results accounting we not interim is current for have These financials represent estimate monthly

financial result, to not a be will this certain As from differ intended July most GAAP our measures the may a for results. Investor the to Also, website. directly our are call. actual these These measures are substitute Relations we estimates. GAAP non-GAAP shareholder letter non-GAAP measures during Reconciliations provided on financial be in discussing results comparable

our Additionally, reporting Cash review of quarter the we segments separate segments. and XXXX, as we App in reflect to on how and changed operations second our and assess operating began Seller

quarter segments. well As for App operating XX, such, June profit as report and our our Cash as we and for ended website introduced revenue additional Relations quarterly the disclosures Form in Seller on the shareholder reporting XXXX, Investor letter our gross on for XX-Q

XXXX in the following and revenue of comment discussions of with we the quarter letter a discontinued and reminder, As use third from adjusted the receipt SEC. of the

components determined other costs adjusted net revenue. are key continues changes of non-GAAP statement bitcoin GAAP, no with There metrics. GAAP are which costs accordance to operations Our the or to revenue, in any of total transaction-based disclose and

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

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

Jack Dorsey

everyone, to morning, every early we sellers, people minds food to people our families, even investigation our in strategy open, us better. coordinated ourselves we to world quarterly build internal individuals support We're employees, this this investor an pay us using whatever to all end elected take call to been again. consultation of today. It's platform can release continues to single more for close that crisis, whatever protect at Due moved and and to businesses action coordinate that counsel. right wearing day. their from COVID-XX close, hurts joining and Good are thank our we to mask this yet have officials struggling our morning. up Cash media's a to of but demand buy than families. pay We're Square. the as has our bigger out their our learn be us and reopen App. keep and lack of and doing release their we for get their both our this up to This early rent early financials, obviously the serve, best into so our to you all employees the now Folks of with of a much is on and Parts hard at external customers, the to and to use this the conducting top economies extremely who

must to be our can't This fear, day day. Black felt nearly and and for past We're an looking racial and investing personally due of minority drive an On as products. announced suffering and more more day. change. justice of months the driving We're systems ways pain through for wait I into top to hundreds for every wait Start through initiative not also acknowledged ethnic our also taking the but and neighbors and fixed. employer. the enough years can't and Just action election Small seeing election employees a for acknowledgment, policies be communities, We're we're ago. organizations racial in bit customers, an and that, have policy change business I funds Black will putting racist

active updates to before your part some We In these we the questions, June, service. in to paid in on We ideas on their million can Cash to to increasingly Cash any. last June, expect more with do Cash our And you And of XXX% customers and transacting App issues. on have had device. July, feedback year. open turn let business with use XX know starting profit than I people gross Cash growth ways their X if double primary are more our saw million spending our Please and Card on as now customers their achieve App. we always us year-over-year. compared Amrita our Card than

And to saw people approaches We strengthened App marketing. announced Bubba a edition with for can recurring limited designed this you NASCAR the deposit LGBTQ proceeds an direct in by increase partnered stimulus Cash HBA we Cash communities. refunds. with and App and creative culture brand, and Black and we going and checks paychecks, is ride We using create car by streetwear Cash show and tax phenomenal you'll season. a with purchase uniform to Wallace, Card continued Hood unemployment also throughout with to to his Air, see

in-person in entirely these the was including in of our and and And online earlier, were our ways. in to commerce. GPV ecosystem, parts immense to uncertainty to They've second navigate up more quarter used the ecosystem new XX% other of channels amount our three new sellers Square, sellers had quarter, their reach an many One customers have online year-over-year. sellers second than challenges. in mentioned new onboarded of I adopted from As

the Square Coffee Pittsburgh in joined having online an Tree store, example, never Roasters previously by launching a website. For

using point-of-sale their payment to our We're due as – shifted of one in retaining during scale their in-person more from paper customers they Square to sellers quarter, gained We cashless. cashless. On-Demand sellers delivery their COVID an to functionality, in of launched five This of take directly of use four cash to want contactless seeing websites. third-party offering delivery service. economics the control for enables system. risk. And their sellers of their converted And of by don't customers process our to by to were sellers operating in that one Square's June, which In fulfillment our XX the benefit hardware also the to increase March, a locations by end Delivery compared

facilitated million loans. Program we than better close our Communications And the We Zamost, helping was saying lifeline love to day. PPP only loans, thank $XX,XXX we quarter, loan. not of administration helping us in us Aaron, underserved Square one-tenth XX,XXX Aaron business for and you. People, call During of finally, build this Square Through The been around the than Aaron businesses total with us we or Protection providing we're but every nine years. financial program, and has made IPO, since reached the to goodbye Amrita? our been the PPP small average who's less to Head a a small $XXX country average Capital Paycheck sellers. more traditionally through for loan

Amrita Ahuja

quarter; showed Thanks, the cash was XX% we the of and are million. at was each for excluding today; like ecosystems. during or Jack. in was $XXX million invest quarter, on second, month and business million, up $XX improved improved; There and year-over-year in adjusted I'd of see three both where XX% further signs Overall, trends look App growth cover Seller profit first, quarter, growth, the our our compelling update to the our Seller topics a Net July, EBITDA where performance second third, Cash in stability gross second opportunity Caviar. in loss to $XX each an

look the Let's ecosystem in quarter. a take of performance at each

XXX% growth with engagement. focus and million, profit as we our saw driving of strong teams gross App, Cash growth to $XXX network For on continue increasing year-over-year

Boost, App investing. direct to beyond only who products deposit features. higher to Cash Card, revenue generated bitcoin and In such lifetime the quarter, mentioned, these Cash nearly month more products than uplift more cohorts customers new who other day, App for customers Customers peer-to-peer. of average which rates on and every had were from per attach acquisition has of three Cash million more two As as the active value. XX use or We June. ecosystem two a year customers join in in with we XX% saw of customers monthly transacting up is XX times or In transacting quarter, our peer-to-peer driven second times adoption saw Jack an This payments, customer use than customers second the higher ago. products

For each month X% ecosystem, through out $XXX sequentially million, year-over-year. from GPV profit call improved gross factors April our here. June. to Seller Three was down trends Seller

we've two First, our ecosystem, our in particularly these omnichannel seen capabilities and over building times. past in dynamic broader years the out invested sellers utilize have

channels Our than serve quarter, Seller a of from all GPV, online up strategy the ago. GPV web XX% and was made Seller includes sellers them of and XX% connecting up sizes, second of In online from that year-over-year more through more with variety a GPV mobile. channels and our types XX% up than buyers of year

in improvement XX% volumes down year-over-year while each card-present certain in relaxed month the Second, quarter, states sequentially were shelter-in-place saw significant card-present as we restrictions. volumes

in we sellers hardware hardware bringing a uplift anticipated our the These to Third, in our also related acquisition Square. distancing outperformance business first mid-May, Cash quarter, which important had the end than unit our to benefited release of provisions significant has App a our social quarter our more in differentiator quarter. $XX of Terminal measures EBITDA Register new or and offered Square during Adjusted ecosystem. tool, to from through to and as driven our the sales and adapt continue empowered in sellers primarily transaction important in serve in for an pricing the reserves stronger Adjusted Seller promotional on million than EBITDA for by assumed. provisions saw contactless Square transactions business per risk favorably recovery business. Seller our the trended an has our primarily products of to loss, Beginning was and been in loss

than second in driven App increase adoption. said, have is our quarter. or and quarter only company of profitability, our XXX% early depending business with financial we Cash in App, at on ecosystem. broad-based, in last this and in the wanted net profile of a an restrictions The in ramp of regional The high-margin revenue remainder continued margin product impressive share part year reopenings strength an providing a in growth, we of in began growth growth in Therefore, are time. As the year-over-year time. real guidance overall growth outsized wide from whereas profitability actives of years we showing mix in has saw in Cash profit to and full Instead, four stimulus changes momentum Cash you business. new as still seeing reminder, the Jack Seller on streams, is we transacting business network by highest range business what App ago. monthly In impact profitability our there results including quarter, year, as in in can We outcomes more financial July, of similar with signs are for July, our gross we efforts. saw not increase Cash Seller July Cash recognize third App our can monetizing we during be our was the new our and government App stability its to

uplift monetization Card our peer-to-peer customer saw We per Cash and an bitcoin also volume in monthly payments, active investing. highest with across

spend encouraged in results, While or customer -- a here, sustain these could is lot are to an expect government growth these is programs at stimulus or we spending, unknown we growth App's if see that contributed recognize normalize. not uplift and stimulus impact consumer per customer. the There Cash we're renewed, and to programs levels. either to would not If reduced by we growth

ecosystem saw year-over-year pre-COVID, growth gross profit Seller a X% more App our we Cash achieve on year-over-year In of to reminder, we in the than more a growth first As of than basis. gross profit quarter. XXX% July, expect

which June step-up GPV improvement X% we results a around modest main the the was our year-over-year a In July, this year-over-year drivers, GPV on July. Seller which extent relatively year-over-year, and we excluding XX% in in Xth continued up In from ongoing of uncertainty. shelter-in-place primarily July, July. of to was restrictions, core holiday, growth loans. at GPV compared But to pause U.S., June. stable basis the was the was expect to flat services and variability, Regional relatively flex Seller trends Capital's moderately Square were strong driven improved the for trends saw saw compared a in Looking we markets, profit international given and depending June. down have vary to gross year-over-year of on subscription by

While under Square immaterial stricter in days, was loans we past in flex Capital the core reopened revenue July, eligibility criteria. few

into achieved believe other services-based closely the products we with trend, Given allowed And end than our had July, their to of subscription we subscriptions We sellers starting sellers insight approach we subscriptions July. positive are May. this revenue at have data, year-over-year real-time a growth of pause in Seller elected to less pause. XX% in to relaunching our we from are watching product. taking and and conservative

both a across quarter, operating an expenses and the development, marketing. expenses. marketing, in the our investing this incremental significant majority million we believe is be $XXX now invest sales opportunity and Compared ecosystems. quarter of sales third to investment on we're general for The to Finally, will and in of administrative compelling and second product non-GAAP

we at if a on both track continued have our least opportunity spend to have by closely years acquiring recent Across including compelling and acquisition to increasing performance ecosystems, trends we we X acquire of intend we times of within seen with new As a dynamic see returns spend, cohort. results. spend strong customers, to encouraged be be three our strong to see historically acquisition

look we'll marketing further customers we creative network. as the continue and existing to to and at rapidly App, strategies customers new more Cash reach scale For engaging

cohorts in our a the Seller, our the teams. reach management strong ecosystem deliberate differentiated our weeks in portion five with the back Square. year on and post to first is to Seller For to as in new acquisition period. incremental and we've making brand compared awareness and the believe it approach momentum invest This primarily seen. profit We're operator investment growth prior sustainable gross this will quarter, account focus I'll will to to long-term, Q&A recent higher we and cohorts customers for moment In of new now drive sales adding marketing given turn call. decision second onboarding trends campaigns generated their start a unique the products, saw to new we Seller the

Operator

Huang first your And Instructions] [Operator Tien-Tsin JPMorgan. question comes from with

Tien-Tsin Huang

the remarks you Thanks. the to and Cash can at hear July XXX% growth ask was before. I running me. for sustainability July update. on wanted the Hope Thanks obviously of and the heard App. XXX% I in

various retain do You you do number is? given million that XX are how sticky the monetize How the So if think What extended? to the users, Thank the expect acquired you to the that stimulus I know them. maybe there, uncertainty unpack really sustainability to anything and you. answer, else happen? there? given hard question thinking isn't might scenarios help and but them out that Then stimulus is

Amrita Ahuja

you the thank so question. much for Tien-Tsin,

and growth benefited profit the we expect as on profit by Each impressive drivers. quarter, growth. There's Cash of drivers call gross drove over Let you out all growth we in App. year-over-year on key growth XXX% improvement XXX% in me July. these likely I'd Cash three Stimulus App's three gross in up noted, saw profit gross year-over-year second saying, off since month start March, here

Let's that unpack a little bit.

quarter, noted, new noted, engaged product an approximately Cash by my a we In seven the as months, active, monthly incremental day by you customer App, average driving XX% July keep which adoption over Cash second is to top transactions highest per second remains and and was actives is we're active was over million XX%, network second customers. which which essentially every here. here six at ago. up from continuing In quarter, we're costs. for followed across products here, which expand nearly other had acquisition, of And We've customers to increased month XX our we a our as continued First, the XX year added. driving App adoption. the utility Cash our daily we June, up low rapidly priority -- of XX% just this those for in we're point, cross-selling And in focused net past our month on had in App monthly

in was since active neared increased XXXX. basis the an annualized the per three is $XX customer volumes up Revenue saw monetization quarter times the driver Third, bitcoin, a flow products second across which customers per you in key quarter, basis of and on XXXX, excluding the second strong through. on

million the well benefited unemployment is and XXX are customers' payments drivers. quarter. likely as funds was unemployed meaningful deposit, Cash as stimulus stimulus, help funds in still extensive all of the inflows programs increased having to wide-ranging more we've is noted, in these From that these wallet. were million from access make our early, a So you of direct second into Obviously, individuals three -- seen uplift qualified use factor and which stimulus but reach. for simply stimulus to with portion our of CARES Act government a ecosystem: their the additional positioned customers June. nearly benefits XX App from a

spend and customer As around a at of stocks back February, from here business. March the that's the and Cash engagement Cash cohorts could This drives and is as their more, to going There which refund. through seen one that are growth forward and resembles unknown trends not a saw they're the our uplift pulling see in what you that in Card; is variability the we year. time. App real And effects, we the quarter. impact year. focusing second to frame resemble we're our on half time normalize -- here funds the in network we more the second and reasons rate saw able customers around lot, Cash historically others in may of App, providing stimulus The understanding higher send new doing instead, of with invest guidance, further half into the we've we're to inflows, money through tax on funds peer-to-peer, in the noted, tracking

Tien-Tsin Huang

interesting really sounds impressive. It you. Got pretty and

for thanks your So update.

Amrita Ahuja

you. Thank

Operator

from your And RBC. question Perlin next with Dan comes

Dan Perlin

attachment had morning. Cash good I here. Cash very and impressive results rates. I about, Thanks really Card App question And the agree and a

of the strategy, that one the is Given clearly least drivers this today. major at monetization of

in looks thinking order low should expectation I'm that to XXs. that we like higher? are it's still longer wondering rate you're drive that in the doing running opportunity So specifically, the of And how and and what it some attributes key factors be about, Thanks. maybe term?

Amrita Ahuja

last majority Cash continuing times to about million with five time. Cash our Card their active The At at Maybe I'll customers which where over we Today, Cash on faster Card shared who Cash monthly customers, you per active Card, million And of have on rate customers Cash off strategy. From an million, attachment had Card, then these of are we the doubled growing X.X the end our start rates. using from average attach spending you've on the week. an that of X spending as network. one June. are in X monthly year-over-year Card And Card an a actives which can Cash tool. overall with cover over had sit we we're increase than perspective, as App everyday seen Jack June, product four attachment customers, increasingly Cash customers,

as also So the Cash daily Card And utility again, primary using spending as over average increasingly time. per are here. that has spend focuses increased customer our customers tool, a on

growth to for XX% second to believe, able customers. We U.S. both down have Cash existing quarter. here X%, early spend want nearly card been it's in strong across and the adoption about As still up several new you and continue industry, been cards driving been with been -- issuers compared Card resilient, here, quarter-over-quarter. also quarter-over-quarter, to -- with has drive saw, We've able the we've

Jack Dorsey

Hi. Dan, this is Jack.

that basis looking out the everything peer-to-peer. critical And in the foremost, App a and then, haven't Cash had of most the we're ecosystem. for to of people like first the as with do access we past, utility starts way So services financial build to around our

very are that as inflows So part a they're our have into people to, deposit, we which strategy easy hooking their of making is the direct sure credible, payroll hooking service, such big then gets their friends family tax to refunds, checks send new stimulus us as money money, the they And using where which peer-to-peer, or check, well. unemployment request or customer an to. entirely

network services then efficient other within App. Cash answer So in all the it also question some make the there's itself. what incredibly to of is, app effect, stick, previous the the an built And

allows that by fact And glow the I a as Card for $XX. for Hood to I purchase card, can cards $X, which my we And So which customize. in equities, have glows day-to-day. buy one launched buy utilize Air well, bitcoin. and Cash investing in I now our I through all the dark people I can by can products. can yesterday, a this

continue had look service Cash elements, as viral to them aspect haven't we itself. bring look, of can people to all nature believe we past. roadmap, the with that we we with peer-to-peer begins forward to And in the and it the the So critical for access App. those the the easy But to financial

Dan Perlin

you. Thank Fantastic.

Jack Dorsey

you. Thank

Operator

Meats. question with Josh Evans from next comes Fulgham Your

Josh Fulgham

you Thank for there. taking question. my Hi,

be the pandemic. straightforward after just of of that, we at using hours to able easy, were to Square the sales. for and transition. online using We were found a seamlessly start super You the a it store matter hardware to Square able in start on-premise And start

areas to that of emphasize Now and updates, if planned and features you reporting. wondering of new use take your I'm any with ease like plan approach same

Jack Dorsey

any service to the us want challenges of the and There's Josh, reporting for remarkable time. are Hey, you aspect our inventory itself to of is this all, from payment you going gives and appreciate remarkable, every time We ultimately to uncertainty. being appreciate through that a is lot first you you, look something make our sure that, that making thank others that of that we're and I customer. all for about as Because it employees time fast the giving to feature, on grow also make and or back customer, we if will we focus use easy. which ours. ultimately, sure making we intuitive, your and your and and owner that for back your doing think it business time like we're new to you you can grow to

good we if think feel And that it. let really in there. and customer know, sales have please team, managers there's so anything is alignment a we So get But particular gap, we'll you account you or our thank on our weak support, much.

Josh Fulgham

Thank you. Operator: Your next Chiodo Suisse. question is with from Credit Timothy

Timothy Chiodo

taking Thanks so but angle. the for the on question. question around App, also an SMB Cash -- My

Card like And is bank monetization it sort So much like U.S., credit for when was as neobanks. consumer digital dynamics accounts, consumer could SMB leading really in Capital. could I digital better potentially Square digital think bank, for an about that Square digital relative it and Cash together would through App all already clearly But the the be business, be SMB neobank seems isn't or look all Square it to businesses. a neobank. start discussed wallet, of around an there opportunity small components seems offerings to for that have banks has tied or It but to if with an neobanks LTV there the

for this Square. wanted and just that in something to things payroll layer bit like explore and potentially it's could automation, little I potential if to opportunity see You could AP be a a longer-term other

Jack Dorsey

looking product well? role you a manager for as a as Are Tim. Thanks,

Timothy Chiodo

Yes, please.

Jack Dorsey

App, is if have exactly agree to you that huge idea. we lot what money of us store opportunity idea. place to opportunity ecosystem, having and save go a just we our sellers. us It's running these so We've without I ability Square bank loans are do they a I the able completely have believe, in branch up. ultimately, It's us connected spend of connected that in a to taken Capital to trips of allows with which great and a gives look mirror, a more is to offer parameters in them. right at And and Square And Cash phenomenal business, their to been actually get And the is, All for and with a that you branch traditional more intention Card have instant great business the that parts also we I together. for a for deposit. is will but the do number what to can think way to here. our said. our and our to tools Seller building sellers money see -- bank that you'll great customers' a open

Amrita Ahuja

XX network peer-to-peer financial service, These the can network rapidly that's times and cross-sell, fraction scale a got have annualized come cohorts, your at nearly growing. of because to banks years, this And cohorts Cash Cash has of customers basis customer strong services spend. new App which driving banks and can active neobanks the unit effects of network customers new cost Cash sort we efficiently and services since acquire Cash our active on basis than we to X X and aspect App model. of million some also economic economics Tim, of obviously financial we've XQ. have months of of to other leads App relative unit of less or to point Seller. there. the far we on, an is us a acquisition. What Cash in been sort now from And around yes, a that a App -- on per noted, where that digital XX around other ARPU effects, as strong products $XX of efficient model these strong these App times the up and acquisition we've three suite historically standpoint, than And had that differentiate enabled on out things from to over peer-to-peer And less it's so efficiently What business seen centered XXXX with a is on that to economics, around returns really similar monthly payback feel from then the business in a company, of monthly for

so more App valuable actually those products more monthly they as actives adopt time Cash within over And the become ecosystem.

So and the to the expand, the launching we're potential by App we opportunity products as new Cash our over as time continues and see existing drive base to products cross-selling eventually excited of growing by well. lifetime here value, grow higher and engagement higher

Timothy Chiodo

lot. a Thanks Great.

Operator

is Your next with from Darrin Peller Wolfe Research. question

Darrin Peller

enabling job. a But especially, a bit, making just helped think Nice the guys. just I pandemic. a the up the other online Thanks, differentiation as Store bit, during down if GPV, XX%, right. All from XX% and online being what we the you perhaps wondering obviously, see up channels Spend around of like that us you Online over a for around online? invest long store. break quite a What's delivery And Can plan really go lot. you to see Thanks up uses in set buy color CNP? And just this online, you little where where offerings further give where on-demand can more the headed, it guys? pick or differentiation term? just product

Amrita Ahuja

Yes. you, Thank Darrin.

with is. part take of each see others, if other, or a commerce you at lot look of it you in them you version it any I concert you compare don't a one where of But our strength online to If and that's think differences.

continue ecosystem customers else. approach of So more an from and apart business to we their work to a gets -- with of that everything building of sets tools and immediately what with and is as sophisticated the out box our unfold us their strategy more seller

there's this so online aspects especially for Square that without the during have notable, businesses been transition COVID has sellers. Checkout Online complete can website. various building a So with time important, been

for served us. has very Store well Online as an tool Our acquisition

quarter a X On-Demand in Delivery, using our entirely helped with -- their kebab second of delivery started like As could then We more able I here, Delivery. in that's on in said good cost were customers and of ecosystem, keep July. in to being they they important. making Store to apps, has Texas third-party chain a new sellers in Online the onboarded remain And at my and shop been Square fees tools and access On-Demand that a to sure increased X minimums, the provide what can and new drew remarks, they them afford. flexibilities but sales sellers also our little delivery was example giving which California, had them opening competitive And

apart. any that really part not can serve to even economics strategy It's cohesiveness. they It's sets the one shift a time want, in the uncertainty. that customers so sellers their and build around of have the especially the really it's our that flexibility that they So business

Jack Dorsey

would with doing I the hard some continuation add of up that XX% that channels, that is fairly XX% actually Darrin, pre-COVID. this now. trends work a online GPV, on just year-over-year to has are for of been we're noting time These these trends team really consistent Seller And

We've of which during -- For sellers to past the be buyers serving also And Square around Store obviously, were using sellers well, where and that, came these Store second increasingly about just more transactions that point one online an seen through online their our omnichannel. the to quickly time, channel cases serving the unique last half showing channels, much importance in-person from sell platform Online in as of are both joined Square, channels has and in multiple actually levels they as GPV is our front door underscores similar these then new seeing tool. I'd Jack's acquisition hard the six quarter are. of our share over working online sellers to being GPV their through we're And ecosystem. quarters, Online that increasing points obviously, our person, where who XX%. Square of adapting a as this But of growth sustained and use

Darrin Peller

sense makes Thank you. Right. That guys.

Operator

Your Lisa with MoffettNathanson. question from Ellis is next

Lisa Ellis

for Good morning, Thanks taking guys. questions. my Hi.

on were new sellers, XX% recovery ecosystem. time. you was Square far amazing that exceeds then growth you it's in closed Following to you. sources running have up bit was and bit it about in new Thank believe, think into GPV, more quantify a drill a means pretty a recovery, from, and lot joining little these of what's businesses seeing rate GPV the you That come growing is dimension, maybe during on and maybe X% you're and from Can the recovery economic I Seller trying must which in Darrin's just I I now bit July. which just sellers if think how this new the types wanted up down or April question, in in drill on a so uptick sellers not the or new joining new color seeing little in, you're sellers of different of other provide that when sustainable

Amrita Ahuja

Hey, Lisa, thanks for the question.

was of up to key of year-over-year. Seller trends year-over-year. obviously, I'd variability COVID We each improved April improvement the kind GPV first to GPV. by There's acquisition out GPV regions in in July, come was from ease so we related to a noted, and retrenchments. starting second And the point drivers as the second whereas I'll X% end in that Those saw couple restrictions had in happened, of obviously and quarter, customer year-over-year re-openings XX% month related So it, down we quarter. key to driver,

trended we improvement us, around we exclude that the was holiday. July, especially June July when for US to bump saw since largely June, due, as in saw at of international Specifically that modest the volumes growth from similar Xth rates you

the by Seller GPV couple basis, had U.S., with levels. and terms well July, New is the strength been in improvement of markets, which of the June, we international have particular in that in a an saw in still those affected year-over-year states that grew Australia from more an prolonged recovery in and below XX% On UK. states sharp California like particular, York pre-COVID have restrictions in So GPV, are

retention. around Second is make I'd point here

improving around As sellers. Seller of our retention we also trends improved, GPV trends saw existing

April. This while XX% late down the So down a being improvement, is to significant still overall significant down year-over-year. XX% GPV in XX% dollar-based Seller year-over-year, improvement was in from a July approximately retention

retail, we micro more beauty than were and retention food in health and fitness in the a drink So cohorts second including the July by which retention in this were sellers GPV Across generally year excluding our quarter, those but at July acquisition, the you last in size, seller impacted looks and moment. less existing GPV the services, look year, year-over-year churn, sellers sellers. come this larger I'll in saw while of and change GPV in from of to and sellers verticals, retention at generated in better impacted. by of And when then

terms So where strong over area in is in continue in could obviously, and lines, restrictions on consumer-driven or and some variability customer in the new on to acquisition, that saw ROIs we encouraged PPP of basis see an a seller here, trends the these finally, want the you Xx heard, easing of stimulus, the lean as retrenchment behind new on this of per we to as depending in depending trend but X aggregate years. growth by you second cohort heard, size or we We're quarter. recognize over of whether And stimulus.

our trend. of watchful remain we'll So up-to-date

Lisa Ellis

lot. Thanks Pretty you. a you. so Thank thank recovery, fantastic

Amrita Ahuja

you. Thank

Operator

Your Rawat with next Bernstein. Harshita comes from question

Harshita Rawat

monthly morning. Cash Hi. App. Good Thanks the for users on active update on

Can you in of Square I So at update X the changed months. added users Investor Are these users? digital in native? and towards App your the Cash per million last an world has update gave user demographics evolving December TAM March, give the you on three between And some also, know for now. or Day skewed underbanked the but more and App color Cash you they unbanked

to addressable your total the of light App's user what in seen, base? traction you. view could evolve you've So Cash be in Thank

Jack Dorsey

question. Yeah. the Thank you for

customers And overall these has active and So, are not monthly over mainstream App with do that's XX million accounts. a June. Cash believe we scale, reached in monthly active customers,

continue seeing strong of from XX, well. folks and to XX over as the new a In customers under age share terms also of see rising growth demographics, of we're we

in In also traction Cash a have strong terms on continues of has the and presence Midwest geography, and growing but both South, East Coast. West seen App to in the the

and through to expand folks global a our top a we and And to of one want which is continue United priorities, marketing, to as forward, As outside we service. continue we UK App around. the and inventive look excel States team, to reach Cash to innovative the be more

So a reach. adoption, and inform that's can something we're Cash about to the really actually important this that that people lot to our going to to help definitely and see base say App next moves. continues learn we But of year we're happy that mainstream us and will broadening

Amrita Ahuja

launches we billion today. we above that in grow And then, a Europe, with age XX small days made target see from back in But acquisition internationally TAM draw market early to that, as the obviously, numbers, obviously, were to in traction and addresses this in XX. to products $XX of time, Since and very March. people said service the serve our between XX. opportunity XXX back of million well as expanding And the had we a believe had back the some well. US that we App's you're ecosystem and US Verse And well, there. referencing groups Harshita still Cash opportunities outside a represented age over everyone expanding addressable you through was in over time to as then as What the through the in serve addressable eventually over we hearing US us we've market product

Harshita Rawat

very you much. Thank Great.

Operator

Josh from Beck with is next Your KBCM. question

Josh Beck

Thank you for taking the question and all the update.

App of that just at So that of might to that be the with want Boost. more the with perhaps like scale wanted could the you you're It Cash that seems platform. I ask to establishing about attention getting look advertisers

seems direct nice seeing follow-through an it and more love as payments. in deposit then So a with stimulus to uptick deposit, update the would case there. the really sense had well? traditional tied Any of it a direct And employment use it like maybe

Jack Dorsey

for Josh, you, Thank Yeah. the question.

of think Boost, a of as for there, construct Boost a to right the terms really in to So its ton customers. opportunity there's how excited we're there's believe we right can learning as about and real And the do quickly as But we we're platform there. do potential. we

gets And attention more more as on and capabilities add right. more to building itself. it even shine into and services But, and products. more this to it something and that we're the of their all we service So looking a our locations, taking is learnings you're star like attractive bright definitely businesses

deposits a higher deposit is use of improve the to across customers the work three products done actives. more customer typically and other using Card of In deposits. terms for direct earlier as App The ecosystem. lot priority to carrying Cash and customers see deposit answer, a the recently an are direct two spend engaged than said of much team. deposit, balances the in I awareness We any card the direct who that more times direct some awareness, We've Cash most on Cash of App direct

is interface, to be up your to maybe check tax incredible an check. inflow brought in your for lives plug Cash continues I to for and, and the of we becoming the and they're payroll everywhere, that validation peer-to-peer, paid investing. a and their us spend in to fabric of think system and just or including more unemployment your or And – online bitcoin going back course, they're card individuals' lot represents the or stimulus App system that into this So it easier using refund of more part

to is point we and great entry really want up. to So for it ecosystem something strengthen continue the build a and

Amrita Ahuja

was that increasing higher these on all the App, of correlation billion, which, in obviously penetration App has Cash $X.X focused that customers the as Josh, just number we've lifetime direct drives adoption We mentioned revenue. direct those more, add meaning I they since half that we funds the question, the deposit. direct pulled monetization that up in continued adopt of on store also well paycheck second with below of that quarter, And we App strong look stored in in back to to deposit were year. here. what to steady growth know And we funds products, this. month Cash into the account million deposits of of and over your customers in with value. they each with had really see balances, quarter-over-quarter would funds we're first quarter and more strength in deposit into seen to had XX% and But At more June. end direct obviously, then, over second routing deposits, spend XX We actives paycheck accounts, May pull saw April the deposits we which Cash is Obviously, numbers. quarter, receiving grown

steady make that back progress half and year to the of continuing the on as doing obviously, focused well. So,

Josh Beck

you, helpful. Thank both. Very

Operator

Jason Bank from with is Your next of question Kupferberg America.

Jason Kupferberg

the of that their increase the at that Hey. with measure by all volumes just that you. curious run Cash Obviously, And Thanks profit north that Thank of of you your number mentioned of difficult I resonate to guys. the did Good it's year-over-year one in peers but morning. wanted how about quarter uplift, you. Does I was card know month estimated to XX% was the stimulus. they then I in attributable to just know XXX%. App gross growth that with on June? fantastic, also But precisely July. in compare the guys?

Amrita Ahuja

that Jason, of growth we part in we last saw first, question your saw cash. through year-over-year improvements month each month, rate the On growth each month-over-month, for and

as And as July, to the there's, retention XX% the in share we do seen that talked I was as ecosystems term. meaningful quarter, longer in wallet wallet. June we've or a Cash as to which with to driven. that year-over-year impact both from part a our improvement We that from But ecosystem, of how terms a saw is key terms just in lot ecosystem, dollar-based We that that's in we funds which down stimulus as going additional XX% unknown noted, stimulus in an specific the saw we're saw about well, of App. reduced improvements additional But July second throughout we we terms April in increased in So there's We you we on XX% buyers. compared on why down much terms in probably is portion of deposit, what of rate to from funds number Cash again, here, stimulus capitalize having and customers July, potentially to watchful inflows through April, have saw we in through of that and try growth of on a in was more ended. GPV simply uplift recognize don't believe as their App quarter. here customers that uplift Seller a strong believe had having improvement obviously, their just direct mentioned for

Jason Kupferberg

Amrita. Thanks Okay.

Amrita Ahuja

you. Thank

Operator

Keane next Your Bryan from is Deutsche with Bank. question

Bryan Keane

how an million. be ask on the look, third guys incremental about on how that's the are And Hi, to it those And to guys. I want and and thinking return going the going the so investments, sounds about results. EBITDA, the it's fourth congrats morning $XXX Good cadence you investments, like to the just to the Thanks about in much. trying just quarter? it? think

Amrita Ahuja

believe customers, here. said, Thanks unique a Sure. COVID to We for both our during for Bryan. as Seller are to question, well both we Cash the help beyond. App and positioned us, time and businesses the It's invest

half. opportunity an see to we in the invest so And back

of to step-up QX, As $XXX QX. this compared non-GAAP to a relatively majority million both will slightly excluding we sales in step-up be ecosystems. $XXX significant QX, across in of at we'll in the least million QX. risk QX OpEx, see step-up expect be expect noted loss, we The and marketing down versus we to flat In investments

with For that growth a effects that others in outperformance we've us majority seen on marketing acquisition a has focus peer-to-peer what Cash App, that services Again, low got the channels. here, the network to pay. marketing viral relatively many and the fraction given space the cost reinvesting stable sustain focus paid the of the helped we've in on on a at intend have we acquisition financial on channels. the of our we've year paid strong And back of seen half

account half we a these Seller much But as App second to that really see we can a leads in respect these help those investments as From quarter-to-quarter see achieved further customers a got, growth opportunity perspective, in customer sellers. some network as entering spend. to to you that quarter, just positive and with awareness we'd ecosystem, marketing planned With acquisition EBITDA, teams. invest. strong go-to-market so And over variation so contemplated of is ROI engagement that the to and unique we today, gross landscape to year lifetime in heard for could despite in the grow back with our marketing. long-term And sales what on to an acquire to enhance sellers. believe effects new And And on that with you've these XXXX, now our year bring the out turbulent Seller opportunity see profitability. profit building heard we campaigns time, see as we've and investments, obviously, you our focus as which value we positioned the omnichannel strong well paid monetization you from ever the well back originally with on focused us remain management the do here, Cash

Bryan Keane

Great. Okay.

good. so Sounds Thanks question. the much for taking

Amrita Ahuja

Thank you.

Operator

Cowen. last And from the of your question comes Mihalos George line with

George Mihalos

wanted users to just can platforms Good question. going direct matter, of for a pursue coming of deposit forward? certainly, routing I'm an my you're their opportunity and it the just or Thanks user there to kind sort back impact another making the paycheck sort that should we deposit. the to million to opportunity to taking available consumer take that perspective with employer bank or morning, and employer of I number, have curious. partnering appreciate way? and it financial circle it the at contractors make an from there. angle And how quickly that guys. side of Amrita, going and and as XQ that available account perspective from for on the loans, relates $XXX think I can for then Cash of for employers PPP Is App

Jack Dorsey

for Okay. think question as an there's the I and idea George, the do thanks well. opportunity.

get seller where we especially And the of and actually going to can actually use can in be the driving product, is product from have they tested more which to workers in working we payroll might side on traditional the can to them get allows multiple Cash – with our employees, jobs that much money via App. We this to lot who a so definitely that the shifts or multiple opt a provider. have employees get our payroll payroll here seller actually paid goal faster part-time than access seller more App, to paid seller, their Cash

there, look opportunity more and beyond our do it. in certainly think and for ecosystem to going we there's certainly So

Amrita Ahuja

out can uncertainties. a sellers And a PPP their just our closing us example play PPP disbursing on communities is as economic been meaningful George, how powerful question, your facing for role of it's stimulus Square have – on and in funds,

of about So representing volume as quarter, This XX,XXX or second loan $XXX done and four for sellers. a capital of us, scale is XXXX million in you across months significant that half noted, XX% from six our almost weeks. got loans fairly we

or whether The sell the mechanics fees Regarding core these agencies on on partner we the these In bank originate the beyond earn categories, SBA. the used we flex of are market. that and loans secondary either by the the on at on we we lower loans. the revenue the would in are balance of PPP loans bring capped sheet PPP typical economics, we X%, our economics those overall capped have to loan the were a as loans receive than based

loans second the on the shared the those contribution loans portion we in $XXX we recognized as in we loan. the be economics economics held look of forward. for the upfront of that a million, revenue quarter. sheet, life we we and balance modest sold For and revenue retained There'll of a greater from most that investors, loans the of a to sort quarterly And recognize over

George Mihalos

Great. you. Thank

Amrita Ahuja

Thanks.

Operator

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

Jason Lee

hosting on call. everyone for you, our quarter call be our third XXXX earnings Xth. remind I to participating will Thank again joining that would November today. Thanks we everyone, like for

Operator

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

all disconnect. You may

Block (BSQKZ) 5 Aug 202020 Q2 Earnings call transcript