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

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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.

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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.”

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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.

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

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

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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.

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Q3 2024

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

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Block

block

Good day, ladies and gentlemen, and welcome to the Block Third Quarter 2024 Earnings Conference Call. Today's call will be 45 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 Q3 2024 earnings call. We have Jack and Amrita 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. 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 on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward looking statements except as required by law. Further, discussion during this call of our lending and banking products, including those offered through our bank partners.

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, this 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 over to Jack.

Thank you all for joining us. My shareholder letter this quarter explains our ecosystem of lending products, our methodology, how we address risks and our competitive advantage. We are focused on increasing access with Square Loans, Afterpay, Buy Now Pay Later and Cash App Borrow through better technology, transparency and simplicity. If you haven't yet, please read the letter for more details. And with that, I'll turn it over to Amrita for some highlights from the quarter.

Thanks, Jack. We delivered strong results across the company during the Q3. Gross profit was $2,250,000,000 up 19% year over year with 16% growth for Square and 21% growth for Cash App. We delivered a significant increase in profitability on a year over year basis with meaningful margin improvement and our highest quarterly profitability ever for both adjusted operating income and adjusted EBITDA on a dollar and margin basis. For the 12 months ending in September, adjusted free cash flow was $1,500,000,000 compared to $945,000,000 in the prior 12 months.

For full year 2024, we have raised our guide on adjusted operating income and adjusted EBITDA, and we have maintained the gross profit guidance we outlined in August. For the Q4 of 2024, we expect gross profit of $2,310,000,000 or 14% growth year over year. Let's unpack a few real time dynamics. For Square, we've seen an improvement in underlying GPV trends in recent months. In October, we saw higher year over year growth for both U.

S. And global GPV compared to the Q3, with global GPV showing double digit growth. For Cash App, we've seen strong momentum on gross profit and improved attach rates on paycheck deposits. Looking at our 4th quarter guidance, while underlying trends in the business are stable to improving and we expect Square GPV growth to improve modestly compared to the 3rd quarter, there are a few discrete items that impact gross profit growth by about 3 points. In Cash App, we shifted out the expansion of Cash App borrow into new customer segments.

And in Square, we had a delay in a one time transaction cost benefit from a partner. We now expect both of these benefits to land in 2025. Our adjusted operating income guide in the Q4 reflects plans for a step up in sales and marketing for both Square and Cash App as we invest behind attractive unit economics in each business to drive growth into 2025. Our updated full year 2024 guidance implies rule of 36, a significant improvement of 6 points compared to 2023 and 7 points compared to our initial 2024 guide, which is composed of 3 points from growth outperformance and 4 points from margin outperformance. Finally, while we are still in the planning process for next year, we wanted to provide a preliminary view into our expectations for 2025.

As we shared previously, we plan to reach rule of 40 in 2026 with a composition of at least mid teens gross profit growth and a mid-twenty percent adjusted operating income margin. We expect strong gross profit growth in 2025 of at least 15% consistent with that target, driven by broad momentum across block. We have a number of initiatives recently launched or launching soon and we expect them to compound through the year, driving stronger growth in the second half of the year compared to the first half. We expect TPV growth to improve next year and to end 2025 at a meaningfully higher growth rate than where we exit 2024. On the profitability side, we're committed to expanding margins on an adjusted operating income basis next year, although we expect the pace of expansion to be less than this year as we invest in growth opportunities with attractive returns, particularly around go to market.

Our guide assumes a stable macro environment and is based on the momentum we're seeing in our business as we execute on our strategy and scale product innovations for our customers in 2025. We've rolled out Square's order platform and we're leveraging this to bring new features to sellers like pre authorization. We're currently testing a new and enhanced Square for Restaurants point of sale experience with a growing number of sellers and we'll make this available to all sellers in 2025. We're also rolling out our single app experience to new sellers now and expect to launch that more broadly in 2025. We've seen tangible momentum in partnerships and early signs of success in sales.

We grew our Square brand and performance marketing investments more than 20% year over year in Q3 and began ramping sales hiring, including field sales. We will be scaling these and other go to market efforts more meaningfully into next year. For Cash App, we're about to transform 24,000,000 Cash App cards into a better alternative to credit cards when we launch Afterpay on Cash App card. We're leaning into go to market spend to drive paycheck deposit actives in 2025 across performance marketing, brand awareness and incentives. We've driven performance in 2024 by focusing our strategies and by operating with expense discipline across personnel, structural costs and corporate overhead costs.

We have seen constraints breed creativity and drive continuous improvement in how we serve customers. We intend to build upon our execution in 2025 and beyond. With that, I'll now turn it back to the operator to start the Q and A portion of the call.

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

Hi, thanks. Yes, I want to ask on the Square side, if you don't mind. Really encouraged here to hear that you're expecting growth to accelerate on the GPV front in the U. S. Next year.

Can you just give us a little bit more on visibility there and the building blocks that are needed to get to that?

Hey, Tianjin. Thanks so much for the question. I'll start on what we're seeing from a GPV perspective. And what leads us to the confidence to say that we expect to see modestly improved growth in the Q4 relative to the Q3 and further acceleration in growth from current levels into 2025. So what we saw, 1st of all, just to start in the Q3 was growth at 7.5%, which is a modest moderation of the 7.8% growth we saw in the 2nd quarter with the U.

S. About 4.9% and obviously there we saw some modest impact from weather and hurricanes at the end of September, while international growth was strong in the Q3 at 20%. Now since then what we've seen has been an improvement. When we look at Square GPV adjusting for differences in day of the week compared to prior period, we've seen an improvement in year over year Square U. S.

GPV growth each month since July. And through October, in the U. S, we've seen year over year growth improve by a couple percentage points compared to that 4.9% growth in Q3. And we've already seen strong growth in international markets also accelerate into October. We believe this improvement in the U.

S. Has been driven by same store growth across our verticals. We're also seeing encouraging trends on customer acquisition, though we know that it's early and we have a lot of room for improvement, which we expect to see as our product innovations and go to market initiatives ramp into 2025.

I'll just add one thing, Simpson. We as you know, like we completed our orders migration and this was the biggest unlock for us to really go after all the table stakes features that have been holding us back with respect to our biggest competitors. So excited about that.

That came in on time and that means we can move much faster to build out these features and then build out new features and ideally new products. But the area that I would point to for 2025 that I believe is going to be the most interesting is around Cash App Local. We're one of the few companies that have both sides of the counter. And we have this now unique ability to drive store traffic and drive orders and drive sales to our merchants in a compelling way on the Cash App platform itself. And the experience we've been testing is pretty great because it allows for people to walk into a store and discover this, but also over time discover it from Cash App itself, which really amounts to sort of a network for the neighborhood where we can actually drive new traffic to these merchants.

We can allow merchants to capitalize and build loyalty for the customers they already have through Cash App and do things that others haven't been able to do, which is things like real time cashback, which is a tool for a merchant that they've just not had access to in the past. And we think it will be a great network effect feature that provides a new foundation both for Cash App and also for Square. But on the Square side, like everything that we're looking at after this migration is making sure that we get to the table stakes and we unblock ourselves from competitors and then get that back to building new features and really focus on that in store experience and how people think about omnichannel and spanning multiple verticals at once, which is one of the reasons they choose Square in the 1st place.

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

Great. Thank you for taking the question. Some on the line with Jack, what you were just talking about finishing the orders migration and then Amrita, you mentioned this in your prepared remarks. But we noticed on the job posting site that you did begin hiring some of the local end market sales folks. So we noticed specifically that the job description stated that these people will be selling 80% of the time face to face, so very much local in market sales people.

And while the job postings number didn't seem overly large, we gather this as more sort of the initial team. So wanted to see

if you could talk a little bit about, 1, that initial team and then 2, the plans for expansion. And then, of course, just more broadly across the hybrid approach, there's lots of distribution partnerships announced. And in the shareholder letter, you even mentioned an ISO outside the U. S. So would appreciate any of that context.

Hey, Tim, thanks for the question. I can get us started here on our broader sort of sales strategy for Square, which we're pretty encouraged about. There's really obviously 2 key pieces of this. One is how we drive acquisition of new sellers and volumes from new sellers. And then the second is how we drive long lifetime value and retention from our existing sellers.

And we see opportunities on both sides. With respect to new sellers, obviously ramping our field sales, hiring is a key piece of that as you note. Also driving productivity with our existing sales team is a big opportunity for us, one that we've made some traction on, but we see that we have even more opportunity on. With respect to field sales hiring, we do have our first group of dedicated field sales reps in market now, and we plan to continue hiring here in the 4th quarter and into next year. We think that by putting resources, by putting people on the ground in local markets that that helps not only support our brand perception, but also some of this partnership and broader marketing motion that I'll come back to in a moment.

On the productivity point for our existing sales team, we've seen about a 10% to 20% improvement in per rep productivity year to date and we believe we can increase that even further. We think that this team is generating 100 of 1,000,000 of dollars in lifetime value per annual cohort with healthy payback periods and with even more opportunity as we lean into marketing and partnerships to drive more efficient lead generation as we see these product investments that we're making enable us to serve more upmarket sellers and drive larger deal sizes. And then from a sales enablement standpoint with greater tooling and incentives, things like contracts that have really driven higher retention for us with newer sellers. From an existing seller standpoint, this is a really key piece as well because our account management team has done a really good job in driving enhanced lifetime value. So we're investing here as well to drive retention and cross sell across these cohorts.

We've seen that cohorts of sellers that come through our account management team have a 40% increase in net promoter score. So that gives us the confidence to invest more. And that's on the back of, as you note, much broader strategy that involves marketing and partnerships. We just obviously announced in our shareholder letter today that we've got partnerships with T Mobile in the U. S.

As well as Salon Centric. And we've got a much more diversified strategy in how we go to market across these partners when you look at our international markets as well where we see a tremendous opportunity to innovate and to test different ways of going to market.

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

Thanks, guys. Just given the backdrop of all the regulation going on around FinTech Banks in particular in the industry, maybe you could just touch on how it may or may not be impacting you guys, what you're doing around compliance and addressing capacity around these the banking infrastructure.

to see the outlook for 25% at that 15% gross profit level. Maybe it seems like this whatever it is friction wise isn't impacting your ability to grow. So help us understand if that if there is any implications and maybe even on a sub segment level, do you see Cash App sustaining strong growth into 25.2? Thanks guys.

I'll just start by saying, I mean, obviously, there was just an election and we have no idea what's going to happen with the broader regulatory. So we're focused on what we can control and making sure that we continue to build stronger systems as the horizon evolves and as more and more people come on to the financial network. We're thinking about this by applying better technology. A big reason we functionalize the company and really focus on engineering is we'd see opportunity to really leverage technology a lot more in our approach and make sure that we're way ahead of the regulatory asks and everything happening with compliance and risk. This is something that we've made a strong discipline from day 1 of the company.

It's the only reason we exist as a company is because of this focus. And I think that will only increase And then we just have to see what the variables are as the year goes on and how we react to it. But I think the most important thing is to really focus on the control what we control and make sure that we're doing all the right things by building better technology and leading with technology instead of just purely a human based approach.

And I'll add to that Darren too to just say with that backdrop of an evolving regulatory environment, we feel well positioned. We've got significant scale. We've got strength and diversity in our partnerships. And we have the ability, as Jack noted, to truly innovate and invest in our compliance programs and broader technology machine learning programs that support all of these efforts. We also longer term, if you think about the banking as a service model, have a great optionality with our internal bank with Square Financial Services.

We have strong partners across the full stack of our payment products and banking products. And out one of the things as Jack noted that we look to control is how we build redundancy across our business. And this year, we've onboarded a number of new partners as we're building resilience and redundancy across key parts of our platform. So I think that's a key piece of how we focus on an evolving regulatory environment. I want to come back to your other question about 2025 and our preliminary guidance there.

So first, what I'd say, obviously, we are committed to achieving rule of 40 in 2026 and sustaining it beyond that. And as I noted, we expect to see that as a mix of at least mid teens gross profit growth, mid-twenty percent adjusted OI margin. So our preliminary guidance for 2025 of at least 15% gross profit growth is consistent with that longer term gross profit expectation. We're also committed to expanding our margins next year. And a lot of this comes down to the efforts that we're making across the you've heard so far on the call across go to market and product velocity from both the Square and Cash App perspective, and the drumbeat of build for that throughout the year.

And as a result of that, we'd expect to see each of those innovations and improvements compound and benefit growth as we progress through 2025 with more of the improvement coming in the second half of twenty twenty five.

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

Hi, Jack and Amrita. Thanks for taking my question this evening. Amrita, you mentioned some timing related impacts to Q4 gross profit. Can you give us a little more color on what those items are? And also any thoughts about when they might flow in more precisely next year?

Sure. Happy to take that, Ramzi. So first, on the specific items that shifted out of Q4 and we now expect to materialize in 2025, there's really kind of 2 key pieces to it. First on the Square side, there's some partner benefits that we had expected to land in Q4 that would benefit our transaction costs and we now expect them to land during 2025. From a Cash App perspective, secondly, we've shifted the expansion of Cash App borrow to new customer segments into 2025.

One example of this sort of expansion that we're talking about is that we're planning to use borrow as an incentive to drive paycheck deposit adoption, which we'll now expect to scale during the year next year. We're super excited about the potential here. We started some early testing on it. We've also delayed some expansion around underwriting criteria. As you saw in Jack's letter, lending has tremendous value to the broader ecosystem by driving engagement and retention and product adoption.

So we're excited about the opportunities with borrow, some of which we had previously expected to materialize in Q4, but now we expect to see from a timing perspective in 2025. Just to level up briefly on the overall Q4 guide, we're raising the bottom line guidance and that's even as we expect to continue ramping our go to market spend to drive growth into 2025. And we see underlying sort of healthy trends and momentum across each of the ecosystems based on what we're seeing so far in October. With Square strong signals as noted earlier in GPV growth, With Cash App healthy year over year growth in inflows per active through October, which we expect to continue through Q4 and encouraging momentum around paycheck direct deposit actives as well. And then as you've heard execution across a number of different new product launches, whether it's Square pre authorization or enhanced restaurant point of sale with more to come, things like Afterpay and the Cash App card and our single app within Square, all of which we expect to grow, support our growth into next year.

So some healthy underlying momentum that we're seeing even in early Q4.

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

Hey, I appreciate you taking the question today. I wanted to ask just on some of the trends in Cash App and just how you guys are thinking about balancing the user growth algorithm versus the ARPU expansion? And maybe you can kind of talk through some of the trends you saw this quarter. I think MAUs were relatively stable. What's sort of the expectation over the next year or so?

Well, I can get us started on this. So what we saw from an MAU standpoint was $57,000,000 monthly actives relatively consistent with the end of the second quarter, up 3% year over year. Maybe let's just talk about some of the drivers for that and where we are seeing real growth from an engagement perspective. So first, we think longer term, there is a significant opportunity to continue to drive growth with active. We've got room to grow around our digital native audiences, millennials and Gen Z customers and real resonance there.

In the near term, from a year over year growth perspective, we do expect to see more moderated growth and likely will end the year as well in that sort of $57,000,000 monthly active range. There's two reasons for this that are part of our deliberate strategy in our banks of base strategy. First is our focus is around engagement. As you've noted with our ARPU trend lines at $75 in the Q3 versus $65 last year, growth of 16% year over year, we're seeing strong engagement on the platform. And we've put emphasis on driving product adoption, driving share of wallet.

You see that come through in products like Cash App Card or Cash App Borrow or Buy Now Pay Later, where we've seen transactions increase, where we've seen cash up card spend increase on a year over year basis and strong engagement inflows per active up 9%. The second key piece of our strategy is driving enhancements to the platform where our focus is on promoting a healthy ecosystem. As we're working to build a primary banking relationship with customers, building a healthy and safe platform are critical to that work for both existing customers as well as new. And so we've made some adjustments around onboarding flow limits and other controls, which enable us to create greater access and opportunities for cross selling, but do have some trade offs in terms of new actives growth. And we think those trade offs are worthwhile as we're building the deepening trust and engagement with our customers.

Great. Appreciate you taking the question tonight.

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

Hey guys, good evening. Thanks for taking my question. I want to ask like a bigger strategic question, Jack. Like I saw the shareholder letter, it looks like a lot of nice returns on the lending products. Can we touch on it a little bit long term as you think about how these different lending products are enhancing the entire ecosystem as you continue to scale?

Yes, absolutely. I think this is one of the things that will ultimately set both Square and Cash App apart. It certainly did for Square in the early days when we launched what we call back then Square Capital. Just having an easy option for sellers to potentially increase their sales by getting an appropriately sized loan right to their email inbox and an invite to opt into it and then paying back through just making sales to their customers really took off. And it kind of guides how we think about all of our lending products.

We want to lead with technology and that means that we have a deep understanding of our sellers, our Cash App customers, our Afterpay customers and merchants. And we want to make it very transparent and upfront, so they know exactly what they're going to pay. There's no hidden fees and Everything is visible, so they know what they're taking part of. And then finally is simplicity and specifically around the payback experience. That's where it really matters.

Because with a simple payback experience, it doesn't really feel like a loan. It feels like something that you can use right in time to do whatever you need to do, whether it be buy a new salon chair to double your sales or just hold you over for the week before your paycheck in the cash up case. So this will be a reason that people stay and that's traditionally one of the big reasons why people do is because they have access to something like this built right into the point of sale, built right into their app that they started with peer to peer and have moved on to banking and using the Cash App card. I think the most exciting thing for us is putting Afterpay on the Cash App card and then just how that extends the potential. And obviously, the scale of the cash card is meaningful enough that like it really changes the game for our customers and obviously our business as well.

And we think these are great options for investors in these products, but we have a lot of flexibility in the future, including SFS as we think about these products and as we move forward. But in terms of the ecosystem today, it's really focused on retaining through providing entirely new utility, which is extremely useful for these customer bases. And then little by little as people understand the benefits, I think it becomes an acquisition channel for us, a reason why people want to download Cash App and use it, a reason why people want to download Square as a point of sale and use it for their business, whether that be one location or multiple. So, it's banking as a category is a huge differentiator for us and something that we'll continue to invest in. But it also is a complement to everything else.

We need to lead with all the other features that provide other utility and other revenue streams for us. We think there's a lot there, both on the Cash App side and also on the Square side, especially since we completed our orders migration, we can get back to building new things and new innovations for our sellers, whether that be software, hardware or services. And we've looked very deeply across our entire ecosystem for those connection points, which had even more utility and entirely new network effects like Cash App to Square Merchants.

And your next question comes from the line of Alex Margraf with KBCM. Your line is open.

Hey, everyone. Thanks for taking my question. Earlier in the year, you had indicated marketing around Cash App incentives will start in the back half. Just sort of curious to what extent this has started in some of the early learning so far considering the bank, the base efforts. And then Amrita, maybe just bring it all together for us with your earlier comments around activity levels that you're seeing among the active space more recently.

I'm happy to get us started here. I think what we're seeing from our bank to base strategy is really sort of coming together. 1st, from a product perspective, we believe the suite of tools, financial tools that we've built is compelling relative to what's out there with traditional banks. And we're intending to increase our investment behind go to market to bring awareness around that. Maybe just to unpack kind of what's going on in here.

We've got benefits that help drive paycheck direct deposit acquisition and improve retention, a number of which are enumerated in the shareholder letter in which we've been building upon throughout the year and continue to build upon. We recently rolled out free paper money deposits as a new benefit. And as I mentioned earlier, we're testing access to borrow as a way to drive direct direct deposit, paycheck direct deposit actives, encouraging signs still early. We're also bringing greater visibility to these benefits in the app. We started rolling out a new in app experience, a new version of our Money tab within Cash App in October that makes our direct deposit offering and all these sort of related benefits way more visible.

We're only obviously a few weeks into this, but we're seeing high engagement and uplift in customers setting up direct deposit through that. And Cash App Card is I think another key piece of bringing visibility to our broader set of banking offerings and ultimately direct deposit. Obviously, as you've heard, we have a lot of excitement about bringing Afterpay to the Cash App card and we see that as an opportunity to drive engagement and ultimately attach to our banking products and direct deposit. Specifically within go to market, our focus is on scaling several channels, including performance marketing, incentives, referrals and brand marketing. And you'll see us do that in the Q4 included in our guide is a step up in marketing related to that and into 2025 with the intent of ultimately building trust and awareness around all of these financial services products.

So we're pretty excited about what we're seeing as you noted earlier, strong engagement even so far without driving a step up in marketing. But with now bringing it all together from an awareness standpoint, we're excited to see what lays ahead.

And your next question comes from the line of Jeff Cantwell with Seaport Research. Your line is open.

Hey, thank you very much. Question is for Jack. Your company has been focused on Bitcoin for many years. I want to pivot a little bit away from Square and Cash App and ask about that because at the moment in increasingly sounding like there's potential opportunity for greater regulatory clarity on crypto in the U. S.

But first of all, do you agree with that statement? And can you maybe talk a little bit about Block's Bitcoin strategy and how you might capitalize on that development? Also, can you remind us how much BDC you have on the balance sheet and talk about whether you might be adding to that in the future? And then lastly, I'll ask all mine upfront. Can you just give us your thoughts on what greater regulatory clarity might mean for crypto in general?

Does that kind of open up the possibility for more acceptance and usage here in the U. S. And globally? Thanks.

Yes. I think greater clarity will definitely be extremely helpful because it allows us to move much faster because we know what the rules are and what the common understanding is, especially in the U. S. So I think this is generally a net positive for the industry. We're only focused on Bitcoin and we're only focused on Bitcoin because we want the Internet to have a native currency.

And the reason we want that is because we want to accelerate our business. If we have a native currency for the Internet, it means we can move money much faster and we can offer Cash App products and Square products in every single market instead of the market by market push that we have to do today. So what we're focused on in terms of our strategy overall on Bitcoin is making it more accessible, making sure that more people can access Bitcoin, buy, sell it obviously, but also send it peer to peer. We want to make it more secure. Our manifestation of this is around Viki and making sure that we help in every way possible to better secure the network.

Mining and our mining initiative is a big part of this. And ultimately, we want to make it usable every day. This is a longer term strategy. This is where we get into actual payments on the Internet and having an open protocol for payments on the Internet, which it needs and it's going to happen at some point. It's just a matter of time.

And Bitcoin has the strongest adoption, it has the strongest belief system and it has all the attributes necessary to trust it as a currency, including having no security issues, never being down and having a significant developer community behind it that makes it stronger and more secure and faster every day. If there are 2 areas I'd point you to in terms of manifestation of Bitcoin, it'd probably be the Cash App exchange, number 1, because it's the starting point for people participating in this future currency. And then second is mining. Mining is we think going to be pretty large for us because we've been developing ASICs for quite some time. There's a specialized version of an ASIC.

Our competitors only one main competitor here and a lot of mining folks just want another option, believe it at that. But they want another option that is reliable, that is configurable, that they can customize to their needs and whether that be buying the chip or the hash board or even an entire system, having other options out there is significant. And you probably saw our announcement of one of those deals and there are more to come, because there's a huge gap in the market in terms of quality of these machines and also focus on it. And we have a team that can do both fortunately. So we will continue to look at the space and continue to work on products and features that help across those three things, accessibility, making more secure and making it more usable every day.

And Jeff, just on your question about bitcoin on the balance sheet, we have just over 8,300 bitcoin on the balance sheet, which as of the end of the quarter was worth $530,000,000 and obviously current trading values is worth about $100,000,000 more than that.

Great. Thanks for all that. Appreciate it.

And your next question comes from the line of Harshita Rawat with Bernstein. Your line is open.

Hi, good afternoon. I want to ask about OpEx. This year you exceeded your objectives here and also came in below the constraints you placed on yourself. Amrita, how do you think about further efficiency gains here from kind of streamlining resources, which you'd be doing? And how does that balance against some of your go to market investments in Square and also marketing spend on Cash App?

Sure, Harshita. What I would say is that, we still see significant opportunity across building leverage in multiple areas of our operating expense base, maybe 3 key areas to call out, so that we can make room for our go to market initiatives where we are seeing high returns in which we do expect to accrete in terms of long term profitable growth. But those three key areas being personnel expenses, structural costs and corporate overhead. From a personnel perspective, we've got a people cap in place. We believe that that's sort of a constraint, affords us creativity around and prioritization around how we focus our efforts against our strategies against delivering value to customers.

And with 19% growth this quarter, 15% growth, at least 15% growth next year, you see a tremendous amount of leverage on that fixed expense base as we remain under our people cap. Secondly, from a structural cost perspective, we see further opportunities around unit costs when we look at how we operate our products, whether in partnership with others or we run our machine learning models from an underwriting and risk loss perspective. And then 3rd, corporate overhead. It's a multiyear effort to examine each of our sort of key pieces around corporate overhead from TNE to professional services to cloud to software to travel and entertainment. And we think that there is more opportunity for us to ensure that we can put as many of our investment dollars towards our customers as possible.

And we also, as noted in the shareholder letter, make decisions against our own progress and hold ourselves accountable to a high bar. And as a relate to that, have made some recent decisions with respect to some of our emerging initiatives where we are reducing our team size on title and winding down our TBD efforts. But in an effort to be able to put more investment against the areas that are working that have found product market fit like our Bitcoin mining initiative as you heard from Jack, where we have a healthy pipeline of demand or things like our self custody wallet for Bitcoin Bitkey, which is recently named to one of the best inventions of 2024 by Time. So we are continuously evaluating ourselves, our performance and holding ourselves to high bar and I think that's how we expect to drive further margin improvement next year.

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

Hey, thank you for taking the question. I know it's been asked before, but just wanted to hone in on GPV again. And you said that growth was double digit in October, but we're only expecting kind of a modest improvement in Q4 versus Q3. So maybe you can kind of just help us understand why only a modest instead of something more robust?

Yes. Well, look, we're still in the early days of November. So we'll know more obviously as we get through November December. November December typically are months that are more impacted by holiday and seasonal spending, which we don't yet have a view on, and maybe more discretionary verticals is related to that. So obviously update you as we know more.

Block (XYZ) Q3 2024 Earnings Call Transcript

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