With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

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Future 50-2023-Block Inc

The fintech company formerly known as Square has been growing rapidly on the strength of its services for merchants—including credit card payment processing and data analytics—and its CashApp peer-to-peer payment tool. Net profits remain elusive as the company invests in building and marketing new features, but Block is still on pace to top $20 billion in revenue in 2023.

The Future 50

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

See which workplaces made this year's list.

GPTW Financial Services Industry Large 2022-Block

Employees say: 
 
“Square is truly the best company that I've ever worked for in my career. There is a shared sense of pride and responsibility around virtually everything that we do. Our People team and executives truly care about doing the right thing and building something that will far outlive each of us. There's no fear that prevents us from taking principled risks, and we are not afraid to experiment and try new things. We are a collection of the kind of people that can change the world.”

Best Large Workplaces in Financial Services and Insurance

Based on employee reports, Bay Area-headquartered companies excel at fostering wellness.

GPTW Bay Area Large 2022-Square

Employees say: 
 
“Management is generally very transparent and makes a good-faith effort to address any employee concerns. The most unique aspect is how open they are with providing safe spaces to discuss cultural or political events that impact people's lives outside of work. They understand that it's sometimes unreasonable to expect people to compartmentalize their emotional or personal selves and leave that at home, and are willing to have difficult conversations about a variety of issues.”

Best Large Workplaces in the Bay Area

To determine millennials' workplace preferences, Fortune's research partner Great Place to Work analyzed feedback representing more than 6.1 million U.S. employees.

GPTW 2022 Millennials List Large-Square

Employees say: 
 
“The culture of work-life balance. People are free to be who they are and interact in a way that is personable, but not forced. People of all different backgrounds and personalities are hired and encouraged to be themselves and bring their unique talents to the table. In terms of work-life balance, I've never worked somewhere that employees are encouraged to take time for themselves when they need it. The company talks the talk but also walks the walk. It's amazing and I feel privileged to be part of it.”

100 Best Large Workplaces for Millennials

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Resilience and the capacity for reinvention have never been more important.

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F500-2021-323-Square

The digital payments company runs two main businesses: point-of-sale technology for small and medium businesses, including its flagship Square Reader, and the Cash App, which features peer-to-peer financial transactions and cryptocurrency trading. In March, Square reached an agreement to acquire majority ownership in streaming service Tidal, and in May, the company announced it was expanding into Ireland. Square's first quarter 2021 report showed revenue increased more than 200% year over year.

Explore this year's ranking of the 50 companies with the best long-term growth potential.

Future 50-2020-Square

Square, which was once best known for its little white plug-in credit card swipers—as well as being Twitter CEO Jack Dorsey’s side hustle—has grown into a major force in payments and banking in its own right. With a stock price that has tripled so far in 2020, Square’s market value has surpassed that of Goldman Sachs. What has investors so revved up? Likely its shiny new banking license (approved in March) and its Cash App, a peer-to-peer payments and cryptocurrency-trading service whose rapid growth has made it a rival to PayPal’s Venmo. Next up: a possible acquisition of Credit Karma’s tax-preparation business.

This year's Fortune 500 marks the 66th running of the list.

Fortune's proprietary methodology allows us to zero in on the 50 global firms that are best poised to deliver—and continue delivering—above average gains.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

Future 50

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Cofounded by Twitter’s Jack Dorsey in 2009, Block has expanded from its initial point-of-sale company, Square, to offer a suite of products ranging from music streaming to Bitcoin mining. Dorsey previously split his time between Square and Twitter before resigning from the social media platform in 2021 and renaming the company Block that same year. While Square remains the conglomerate’s core business, its other flagship products include Cash App, a consumer payments rival to Venmo and Zelle, as well as Tidal, which competes against Spotify. Driven by Dorsey, Block also operates in the crypto space, including creating Bitcoin hardware wallets under the Bitkey brand.

Q2 2026

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Block (XYZ): Company Profile, Stock Price, News, Rankings

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Block

block

Good day, ladies and gentlemen, and welcome to the Block First Quarter twenty twenty five Earnings Conference Call. Today's call will be forty five minutes. I would now like to turn the call over to your host, Nikhil Dixit, Head of Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our first quarter twenty twenty five earnings call. We have Jack Namrito with us today. We will begin this call with some short remarks before opening the call directly to your questions. During Q and A, we will take questions from conference call participants.

We would also like to remind everyone that we will be making forward looking statements on this call. All statements other than statements of historical fact could be deemed to be forward looking. These forward looking statements include discussions of our outlook, strategy and guidance as well as our long term targets and goals. These statements are subject to risks and uncertainties, including changes in macroeconomic conditions. Actual results could differ materially from those contemplated by our forward looking statements.

Reported results should not be considered an indication of future performance. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. Also note that the forward looking statements, including earnings guidance for 2025, discussed on this call are based on information available to us and assumptions we believe are reasonable as of today's date. We disclaim any obligation to update any forward looking statements except as required by law. Further, any discussion during this call of our lending and banking products refer to products that are offered through Square Financial Services or our bank partners.

During this call, we will also provide a preliminary estimate of GPV growth for the month of April. Actual April results may differ from this estimate and may not be reflective of performance for this full second quarter. Within these remarks, we will also discuss metrics related to our investment framework, including Rule of 40. With Rule of 40, we are evaluating the sum of our gross profit growth and adjusted operating income margin. Also, we will discuss certain non GAAP financial measures during this call.

Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter and our historical financial information spreadsheet on our Investor Relations website. These non GAAP measures are not intended to be a substitute for our GAAP results. Finally,

call in its entirety is being audio webcast on our Investor Relations website. An audio replay of this call and the transcript for Jack and Amrita's opening remarks will be available on our website shortly. With that, I would like to turn it to Jack.

Thank you all for joining. My letter goes through what we've seen in our performance so far in 2025 and why we expect growth to accelerate in the second half of this year. Our work on product velocity and go to market is showing results as Square gained share this quarter. We'll keep pushing our roadmap forward at a faster pace and bring AI automation to more sellers. On Cash App, our growth this year will be driven by increasing engagement with our base, but we are focused focusing more of our efforts on expanding our network, including growing with teens and families, optimizing our product controls and increasing marketing spend where we'll see strong returns.

And with that, I'll turn it over to Ann Brita.

Thanks, Jack. In the first quarter, we delivered strong results in Square and demonstrated discipline across expenses, with our highest adjusted operating income and adjusted EBITDA ever. While Cash App gross profit came in below expectations, we have conviction in the growth drivers for the back half of the year and our ability to drive long term value. Let's talk about our results in the first quarter. Total Block gross profit was $2,290,000,000 up 9% year over year.

Square had a strong quarter with gross profit growth of 9% year over year, driven by GPV growth of 7.2, with constant currency GPV growth of 8.2% and increasing banking attach rates. We see our product and go to market strategies working as we expanded market share in our target verticals. We analyze incremental market share across various consumer spending and small business volume benchmarks. Across the verticals we operate in, we saw improved growth relative to these benchmarks. Our product innovation has been robust, and we're excited to host our first product release event in two weeks, where we'll showcase over 100 products and features such as new Square Online features, improved food delivery integrations and better support for sellers with large invoices.

From a go to market perspective, we signed several upmarket sellers and continue to add partners across horizontal, vertical, and third party sales organizations. Field sales and partnerships are key channels for us going forward, and we're very encouraged by recent success. Cash App gross profit was up 10% year over year. While gross profit per monthly transacting active reached $81 in the quarter, we saw changes to consumer spending behavior that we believe impacted inflows and Cash App card spend. Tax refunds are an important seasonal driver of Cash App inflows.

This year, we saw a pronounced shift in consumer behavior during the time period that we typically see the largest disbursements, late February and into March. This coincided with inflows coming in below our expectations. During the quarter, nondiscretionary Cash App card spend in areas like grocery and gas was more resilient, while we saw a more pronounced impact to discretionary spending in areas like travel and media. We believe this consumer softness was a key driver of our forecastness. From a profitability standpoint, adjusted EBITDA was $813,000,000 up 15% year over year, and adjusted operating income was $466,000,000 up 28% year over year.

For the trailing twelve months ending in March, adjusted free cash flow was $1,530,000,000 compared to $1,070,000,000 a year ago. So far this year, through the April, we have repurchased approximately $600,000,000 stock, and we intend to continue returning capital to shareholders over the course of the year. Let's talk about our outlook for the rest of the year, where we expect to accelerate growth across both Cash App and Square. We recognize we're operating in a more dynamic macro environment. So we've reflected a more cautious stance in the on the macro backdrop into our guidance.

We're now expecting gross profit growth of 12% for 2025 or September We expect gross profit growth of 9.5% in the second quarter. We continue to expect gross profit growth to accelerate in the back half of the year, into the low double digits in the third quarter and end the year with mid teens gross profit growth in the fourth quarter. Let's unpack some of our growth drivers. We hit a key milestone in March by receiving FDIC approval to use our bank, Square Financial Services, to issue consumer loans for Cash App Borrow nationwide. This unlocks two important benefits, which we expect to have a meaningful impact starting in the third and fourth quarters.

First, it roughly doubles the number of Cash App actives we can offer Borrow to by enabling us to offer loans across more states. And second, it enables significantly better unit economics as we can originate and service loans in house. Given our expectation for Borrow to be a meaningful contributor to gross profit acceleration in the second half, I want to take a moment to talk through why we have such high conviction in our ability to scale this product at attractive unit economics and margins. We have a world class underwriting team, and we've maintained healthy loss rates for borrow across historical cohorts. With a weighted average duration under thirty days, we are confident in our ability to adapt to changing macro conditions.

Our machine learning models leverage real time customer data, which we believe is one of the most reliable early indicators of credit quality. We monitor performance daily, enabling us to dynamically adjust originations and exposure based on our customer underwriting scores. Another driver of growth acceleration is our retroactive BNPL product, Cash App Afterpay, launched in late February. We've seen strong early conversion and adoption in April and are excited to continue ramping this product to more actives. For Square, we expect GPV growth to improve throughout the rest of the year.

We expect high single digit GPV growth in the second quarter, with April global GPV growth expected to be 9.6% on a year over year basis. Our seller acquisition payback periods continue to remain within five to seven quarters despite increasing levels of investment. We're seeing traction from our investments in field sales and partnerships, and we're leaning in more. These channels have delivered strong returns, exceeding our expectations for new volume and are foundational to our strategy of expanding upmarket and winning with more complex sellers. We expect that momentum to continue building as we move through the year.

Finally, in Proto, we continue to expect to deliver our first Bitcoin mining chips and systems in the second half of the year. These growth initiatives collectively drive nearly all of the gross profit growth acceleration required to achieve our guidance. As Jack noted in his letter, we're prioritizing efforts to expand Cash App's network with initiatives spanning product and go to market. We're confident this work will contribute to long term growth, but we haven't embedded these initiatives into our 2025 outlook. From a profitability perspective, we now expect adjusted operating income of $1,900,000,000 for the year or approximately 19% margin.

We've reflected continued investment in sales and marketing and risk loss into our profitability outlook as we expect to invest in high ROI growth initiatives across Cash App and Square. We understand the drivers behind our recent deceleration in growth and have incorporated updated views on the macro environment into our revised guidance for the year. We're ready to navigate a range of scenarios supporting our customers while responsibly growing our business as conditions evolve. Our path forward is clear. Square is moving faster, building relevant tools and getting them into more sellers' hands.

Cash App is becoming a fundamental part of people's financial lives through accessible credit and banking tools, and we are leaning in more on the power of our network to expand new actives growth. Taken together, we expect this to support sustainable growth for Block over the long run. We have the team, strategy and organizational strength to navigate potential short term volatility while continuing to build for our customers. I'll now turn it back to the operator to start the Q and A portion of the call.

Thank you. And we will now begin the question and answer If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question.

And our first question comes from the line of Tien Tsin Huang with JPMorgan. Your line is open.

Hey. Appreciate it. Jack, in your letter, you write quite clearly that the company is focused on all the right drivers, and you're saying that you're gonna call the bottom here and and you're looking for acceleration. And then, of course, there's a lot of macro uncertainty out there. So can you just give us a little more on on how you develop this view given what's happening on the ground, talking to customers, clients, employees?

I'm sure you're talking to your go to market teams and your product teams. Another Cash App surprised here, later in the quarter first quarter. So just trying to understand the path forward and and what's driving your conviction. Thanks.

Yep. Yeah. Thank thank you for the question. So as as we've been talking about for the for the past year, like, we have made a lot of changes internally and also to our systems or our engineering systems and technology platform. And we're finally starting to realize that in in Square, in in particular.

Like, Square is now gaining market share. And this is a result of all the work we did to consolidate, making sure that we're pushing on a unified interface, looking deeply at the dashboard, and also looking at go to market and starting field sales. So I'm very excited about that, and I know we can do do do more and also bring that mindset more to to Cash App. To be honest, I just don't think we are focused enough and had enough attention on the network and the network density. And that is our foundation.

That is our base. We we, of course, want to deepen engagement with our customers through banking services and borrow, and I have no doubt we will. But at the same time, we need to make sure that we continuously grow our network and that starts with peer to peer. And that's doing things like looking at the density and making sure that we're going full fully forward with, this focus on teams, which is a natural audience for us, the families, one that we believe is massively underserved. It means that we're looking at our product controls.

There are people that can't that don't see Cash App as a bank right now because they put their money in, and it blocks them from doing what they want. So there's really good customers there, that just aren't able to do what they wish, and that's where the trust piece comes in. And we need to turn that around and just look critically at all our all of our, velocity controls and making sure that we're really, we're there for good customers. And then third is just looking deeply at our marketing spend, and investing in in something that we know works. We know that, referrals is an area that works.

We wanna be smarter about it. The world has changed since we launched Cash App and since we launched peer to peer, and we need to update that view. But net net, I believe, we we just haven't put enough attention on make sure making sure that we do the, the natural long term strategic thing of increasing network, density and and also the, the expansion of such. Underpinning all this is our work on AI. As I said in my letter, we've we've built this tool called code named Goose, which allows, an autonomous autonomous way for agents to help our engineers be a lot more productive.

But we're seeing this, benefit the entire company. We have a huge number of people using this tool right now. It's model independent, so we're not dependent upon any one company for it to work. And, it's focused entirely on autonomy, which ultimately means productivity. And it's something that we think we can not only continue to increase our productivity around, but also make it customer faces customer facing.

And that's within Cash App itself, and that's within Square. We're starting to see some of that work, in Square today. Actually, we we rolled out, to a small percentage today. From work that helps sellers, allow to allows them to see their business in a much better way, get insights deeply by just asking a question. But there's a lot more in common.

What excites me the most is just the velocity at which we can move it, And that's what gives me the confidence about our growth ultimately, is that we are focused on the right things and that we have much better tools to go after them. Thank you.

And your next question comes from the line of Darrin Peller with Wolfe Research. Your line is open.

Hey guys, thanks. Amrita, maybe you can just give us a little bit more color on what changed over the past ninety days. I know GPV looked pretty good on the Square side. So I know it was more Cash App based, but really in the consumer you're referencing having changed behavior. And then more importantly, I think looking forward, if you can give us a little bit more context into and specifics into what macro assumptions are now embedded maybe above and beyond what you're already seeing even is there a more conservative approach in your outlook for the rest of the year in some ways given the guide change?

And any granularity on the segments or what you're including in there would be very helpful for us.

Sure, Darren. Happy to jump in here. So as I noted earlier in my prepared remarks, we saw a change in behavior in our Cash App customer base this tax refund season versus what we've seen in prior tax seasons. And our atypical approach for guidance is to align closely with our internal forecast, but we took a different approach this quarter. Our gross profit guidance here reflects the view that what we saw in Cash App in the first quarter may be a sign of a changing macro backdrop.

Given that uncertainty, we've embedded macro softening even beyond what we've seen so far more meaningfully into our growth outlook. We have not seen that materialize through April, but we thought this approach would be prudent given the wider error bars. From a cost perspective, we wanted to maintain flexibility in our guidance to invest in ways some of the ways that Jack was mentioning that fuel long term growth. So we're assuming we continue to invest throughout the with the remainder of the year, though, of course, we can be nimble here and believe we have the ability to change course on growth investments quickly if our ROI thresholds are not met. But based on what we see today, we see, meaningful opportunities to drive long term growth at strong returns across our business, and we'll be nimble to the environment as it evolves.

Your next question comes from the line of Tim Chiodo with UBS. Your line is open.

Great. Thank you for taking the question. I want to talk a little bit about the Cash Card Afterpay functionality and some of the early results you're seeing there. So to set the stage, we gather that you have a large base of Cash Card volumes that gives an opportunity for this functionality to be added into, meaning post transaction splitting of payments that are already being made or maybe even driving incremental payments. So the question that I think investors have is really the first part is for the early users that are using this, just a rough sense of the adoption or the penetration of their payments, meaning how much are they splitting or opting to split.

And then the second part is more of the longer term aspect, which is the the game plan to help to move some of these customers over to payroll direct deposit.

Yeah. I'll I'll take the the long term view. So so we do believe that this is a great incentive for moving customers over, and we think this is deeply strategic. We're we're super excited that Afterpay and, the Cash App card, are are together, as well. We we have this massive, distribution platform, and we see Cash App, we we see Afterpay, I I should say, as an evolution of a credit function and one that, has required, some iteration and and some invention.

And this is, you know, one step along that path, but not the not the last step. And this is even more critical for, a younger generation and specifically teens, who just want different options, in order to plan their their payments. It's really about cash flow management more than it is anything else. And the, the cards that have that flexibility and have the ability to help me get to my next paycheck, which is a post pay, environment that allows me to, do what I need to do, but not puts too much does not put too much burden on myself, that, I feel trapped or I don't wanna use it again. That's the sweet spot, and and that's what we're offering.

And, we're we're super excited to continue to build upon it now that we have this first go out, live.

Yeah. And I'll just add, Tim. You know, really, saw two meaningful integrations for Cash App and Afterpay in the first quarter. First, in February, as you know, we enabled eligible actives to split purchase purchases retroactively on their Cash App card for a small fee. We're really encouraged by the early results we've seen here with strong attach rates and healthy growth trends, and we intend to make, more actives eligible, Cash App Card actives eligible.

We'll obviously take a test and learn approach here starting small and scaling thoughtfully as we gather more data and build confidence behind this. But we're pretty excited by what we see in these first month or two of being out in market. The second integration, obviously, in March, we introduced Cash App Afterpay in The US, which is basically the integration of the two brands in a more meaningful way, allowing eligible actives within Cash App to use Afterpay's pay in for pay monthly products. It's a pretty meaningful unlock for us that deepens the connection between the ecosystems and exposes our buy now pay later products to the 57,000,000 monthly actives over time. Again, we'll start small and build.

This is something that we think could be a more meaningful driver as we think ahead to 2026 and as we continue to expose Afterpay's extensive merchant base and online checkout to to the large base of Cash App customers. So we're excited about both integrations, the product velocity that we're seeing between the two brands coming together in the recent months and, and what can be ahead as we continue to ramp them.

And your next question comes from the line of Ramsey El Assal with Barclays. Your line is open.

Hi, Jack and I'm Rita. Thanks for taking my question. Your roadmap to reaccelerate Cash App gross profit growth later this year really leans into borrow. And Amrita, it sounds like you're comfortable expanding borrow even if the macro deteriorates a bit further. Maybe you could comment a bit add a little bit on your commentary around sort of the macro resiliency of the borrower model and also your confidence level that your underwriting models are mature enough and well tuned enough to really support accelerating that loan volume growth?

Sure. You know, what I'd say, first of all, is that there are a couple of key factors that go into expanding Borrow. As you heard, some of them on the call, first is our TAM expansion. Expansion. That now that we're serving Borrow via Square Financial Services, our in house bank, we have the ability to expand the number of states and effectively double the number of actives that Borrow will be made available to.

That also improves our unit economics, which gives us more room within the p and l to experiment. We're also increasing Borrow limits for eligible customers who receive their direct deposit within cash Cash App and potentially additional eligible actives as we build greater signal and data into our models. So there are a number of different things that go into the broader based borrow expansion in the back half of the year. Why we have confidence in that? Ultimately, we believe underwriting through real time machine learning based models is a core competency of the companies.

We haven't seen any changes to underwriting outcomes. We've seen very consistent repayment rates. But if we did, we feel we have the ability to move quickly and manage underwriting outcomes. Not only, obviously, is the team world class and very experienced here, but the design of our lending products with shorter duration, smaller dollar loans, no revolving balances help us mitigate potential risk and support healthier underwriting performance. Maybe to go a click deeper on borrow specifically, loan durations are under 30, which provides us with fast feedback loops to observe customer repayment activity and adjust if needed.

Our models generate custom underwriting scores for our customers, which drives our underwriting decisions. Those scores are dynamic, constantly evolving based on real time data and new information that we we gather. We can take in those signals and move quickly if the risk profiles were to change. Ultimately, we have pretty early visibility into loan repayment as early as as seven days after origination. We have a good understanding of cohort level underwriting performance within a week after borrower loans are due.

All of that goes towards our ability to determine eligibility and pivot quickly if we were to see a change, which we have not yet.

And your next question comes from the line of Dan Dolev with Mizuho. Your line is open.

Hey guys. Thank you so much for taking my question. Can I ask you about Jack about Proto? You said you continue to expect to deliver it in the second half of the year. I think a lot of people, a lot of investors in Block are looking sort of for the next Cash App.

And this feels like it could be one of those things, kind of like a transformational product. Can you maybe talk a little bit more about the vision and how big it could be if it becomes as big as we think it will? Thank you.

Mister Dorsey, I don't know if you might be on mute.

Oh, I'm sorry. I was on mute. Sorry. Okay. Thank you.

So we're super excited about Proto. We're we're on track to deliver, our our chips and systems, later this year, as we said in the letter. And the reason we're so excited is because we've seen this huge opportunity with, with Bitcoin miners and and and the systems that they have to deal with on a regular basis. We focused ours on reliability. We focused it on flexibility, and we really, you know, went out and talked to the customers about what their actual needs are.

And, speed and technology were obviously at the top of that list as well. So we're in a very, very good position. We have very close relationships with our vendors and our manufacturers and building in The United States. So these are all things that add up to a pretty compelling product. We believe the Bitcoin hardware supply industry is is a $3.03 to 6,000,000,000 annual revenue industry.

And what's unique about Proto is that it's not just the common huge minor form factor, but it will allow even consumers and tinkerers to to play with mining and and build, novel platforms and experiments and products of their own. So we're we're this is our this is our first step. This is a completely open source, initiative as well, which allows us to get a lot of the, feedback from the community and also integrate any improvements, right away and just build an entirely new developer ecosystem around mining, which, really hasn't been done, at scale before, which, we're we're also super excited about.

And your next question comes from the line of Rayna Kumar with Oppenheimer. Your line is open.

Hi. Thanks for taking my question. Could you walk us through some of the products that will be the biggest driver behind Square's, gross profit acceleration this year? And also, give us a sense of how much of that Square, gross profit acceleration will come from The US versus international?

Hey, Rina. Happy to start on this one. You know, first, what I would say is what we've seen so far this year for Square is encouraging in terms of the share gains embedded in our Q1 numbers as we compare our growth in Q1 relative to Q4 compared to broader industry indices. We feel we're clearly gaining share, which gives us conviction to continue to invest here. Some of that growth in the first quarter was driven by strength in core verticals that are very strategic to us between food and beverage and retail and also with upmarket sellers or midmarket seller segments greater than $500,000 in annualized GPV.

So given the complex consumer spending backdrop, we're pretty excited by what we're seeing in the Square business. Ultimately, we think this comes down to product innovation and go to market enhancements. From a product innovation perspective, we've talked about some of the more recent releases that we have, whether it's the Square online enhancements, improved delivery, you know, courier delivery integrations, better banking and invoices experiences for our sellers. We'll have also a lot more to share about at our product release event in a few weeks' time, so we hope you tune in for that. We've got some things that we're pretty excited about.

And then from a go to market perspective, you know, we're we're improving our motion to get the message out to more sellers on these product innovations with more effective sales through our field sales channel, that we began really towards the end of last year and are looking to accelerate hiring around given the strong early returns, as well as the partnership motion, where, again, we are seeing, strong returns there. And and those two channels being paired with increased marketing, spend as well where we continue to be within our five to seven quarter payback thresholds. Those are kind of the key drivers that we're seeing in the near term. But clearly, the the improved cadence around product velocity, product innovations paired with more effective go to market channel between sales and partnerships is driving some early success here for Square.

And your next question comes from the line of Andrew Bach with Wells Fargo. Your line is open.

Hey, good evening. Thanks for taking the question. You guys beat operating income dollars, margin dollars in the quarter, I think by $30,000,000 roughly. However, you're lowering the full year expectation by $200,000,000 it looks like at the midpoint. Can you unpack the components of this guide down from macro conservatism, decremental margin, incremental reinvestment?

And are there any offsets that you're making on the cost savings side that are kind of bridging to that 200,000,000 guide down?

Sure. Let's talk through the different components, Andrew. So as I mentioned earlier, from a gross profit perspective, we are taking a different approach to our guidance this quarter. We're embedding incremental conservatism into our gross profit guidance, whereas previously, our typical approach is is to share a view that's much closer to our internal forecast. And that's just to reflect the wider error bars, frankly, in with a broader macro backdrop.

And through April, as I noted, we haven't yet seen that materialize, but we are taking an incrementally more cautious approach in our gross profit guidance. Obviously, our gross profit, the incremental margins on our gross profit are fairly high. And so that's part of what's reflected in the flow through to operating income along with strong returns on the investments that we're looking to make across go to market and in risk loss areas. Overall, just stepping back for a minute on our profitability guide, we now expect full year adjusted operating income margins of 19%. And so with despite the more cautious macro outlook, we continue to expect margins to expand this year versus last year.

That AOI guide gives us the flexibility to invest to drive long term growth, especially in go to market and risk loss where we continue to see strong returns. But, of course, we have the conviction opportunity to be prudent in how we manage the business if the macro environment begins to impact Square or underwriting products in ways that we have not yet seen. As we look at our cost structure, our variable costs, so things like go to market and risk loss, make up about 35% of our overall cost base. Again, we have the discretion to dial that back if warranted based on the returns that we see. And we maintain a disciplined approach across our fixed cost base and expect to get leverage out of our fixed cost base in 2025.

So those are some of the key puts and takes around the flow through of the high incremental margin gross profit dollars, the ability to invest in high return areas that should accrete to profitable growth into the future.

Yeah. Sounds like a pretty balanced mix. Thank you.

And your next question comes from the line of Will Nance with Goldman Sachs. Your line is open.

Hey, guys. Appreciate you taking the question. If I can maybe dovetail off that last question. I wanted to I wanted to maybe talk about your hiring on the Square side of the business and particularly on field sales and kinda and and direct distribution. Where are you on the process?

I I was wondering if there's anything you could share in terms of headcount today versus, you know, where you would like to be over time. And then just relating it back to that last question, I I didn't hear anything. Maybe I missed it on the headcount exercise, that was reported a couple of weeks ago. So can you just talk about that? Is that included in the end of the look?

And I think there was some there was some commentary around removing all outstanding, positions, unsold positions. So are you still hiring field sales? And what do you expect the pace to be, as we move through the year? Sure,

Will. Maybe starting on the second part of your question first, and then we'll come back to where we're leaning in from a sales and field sales perspective. We did have our recent reduction in force from about a month ago embedded in our earlier outlook that we had we had shared in February. That was consistent with our plans as we entered the year and really driven by, you know, some strategic principles around aligning our teams to our strategy and our focus, you know, raising the bar on performance and flattening the organization, reducing the number of managers in the organization. We do, still have areas of investment across the business.

And some of those areas of investment are related to where we're seeing strong returns. And that, you know, is clearly in our field sales team, where we plan to accelerate the pace of hiring for field sales in the second half of this year on the back of the strong early returns that we're seeing. We first launched the field sales efforts late last year, and we started to see those efforts pay off. As you saw in the letter, some of the recent larger sellers that we signed in the first quarter, you know, that were signed by our field sales team. Bamboo Dessert and Drink is a 60 location seller that's expanding across The US this year, and they chose Square due to our ability to provide more advanced control over the franchise's back end menu and loyalty options.

That's where you see the breadth of our portfolio, helping us win sales, when coupled with a strong channel that's now beginning to work for us. And we've made operational changes to maximize the performance of this channel and have continued to ramp field sales hiring through q one, and as I noted, intend to accelerate that hiring on the back of strong returns in the second half of this year. And maybe I'll also just quickly note that we're seeing also strong returns in our partnership channels where, we exceeded our expectations for partner driven leads and partner driven volume in the first quarter. We're continuing to sign new vertical horizontal and third party sales partnerships globally. And in April, we actually began piloting our first US ISO partnership.

It's obviously still early, but it's a channel we're excited to start exploring. So we're on track here as well to grow the number of leads and the amount of closed GPV from partners by five to 10 times in 2025.

Awesome. Sounds exciting. Appreciate taking the question.

And your next question comes from the line of Adam Frisch with Evercore. Your line is open.

Thanks. Just to continue along the lines of the lending theme, two parts. Are you lending on are you planning on getting more aggressive with the entire base for borrow or just the consumers with direct deposit? And is Square Capital also going to lend more to the seller side? And then my second question is, in prior quarters, you've disclosed the direct deposit users.

I think it was 2,500,000.0 last quarter and it was growing 25% year over year. So sorry if I missed it in the release, but what was what were these data points for the March? Thanks.

Sure. So, for borrow, you know, I wouldn't really characterize it as getting more aggressive with our, with offers around borrow. The mechanics of allowing, Square Financial Service to originate cash up borrow loans is that we can expand borrow to more states. We were only in a subset of of the states in The United States that we could offer borrow to. And now by expanding to more states, we can actually double the number of potentially, you know, borrow eligible actives.

So that's really it's not really about getting more aggressive. It's just the mechanics of Square Financial Services being our originator and servicer for borrow versus the external third party banks that we had. There are elements of borrow expansion that are around providing guaranteed access for borrow. If you're a paycheck deposit active, we think that there is a strong tie between providing credit and becoming someone's primary bank or overall bank to base strategy. These two elements of our business are inherently connected, and we think Borrow being such a compelling product for many of our customers can provide an incentive for customers to explore our deeper banking features, including direct deposit.

There are elements of being able to increase limits around borrow for existing actives, And I think those are in line with normal course business for us, as we improve our underwriting models and gather more data about, about these customers. From a bank to base perspective, we're continuing to make progress here across our banking, attach rates. And with paycheck deposit active, we continue to grow, that on a year over year basis. It's really about exposing more of our customers to the full set of offerings that we now have. And in the first quarter, we launched our first major brand campaign for Cash App focused on banking and targeting markets where we already have strong network effects in place.

And so we're excited to see what more we can do here, only exposing greater awareness to our banking features, but also bringing the credit elements around borrow more directly tied to direct deposit, providing guaranteed access and higher limits in a way that we know our customers are pretty excited about.

Okay. So what what was the number on the in the quarter of the the number of people using direct deposit,

We didn't provide a number this quarter. What we're sharing is the growth on a year over year basis for a paycheck deposit active.

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