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.

Industries included in the sector are advertising, diversified outsourcing services, and financial data services.

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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.

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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 Fourth Quarter twenty twenty four Earnings Conference Call. Today's call will be forty five minutes. I would now like to turn the call over to your host, Nikhil Dixie, Head of Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our fourth quarter twenty twenty four 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, 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.

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.

Thanks for joining. The letter this quarter walks through the progress we made in 2024. We expanded Square from a payments tool into a full commerce platform, enhanced Cash App's financial services offerings, and restructured our organization to move faster against our roadmap. Looking ahead, we're focused on connecting local communities block by block through our neighborhood network strategy, investing in AI automation, open source innovation, and Bitcoin infrastructure, all with the goal of expanding financial access globally. If you haven't yet, please read our letter for more details.

And with that, I'll turn it over to Amrita for some highlights for the quarter.

Thanks, Jack. In 2024, we drove gross profit growth at scale while dramatically improving efficiency across our business. We ended 2024 with $8,890,000,000 in gross profit, representing 18 year over year growth with Square up 15% and Cash App up 21%. Similar to prior years, we saw gross profit retention of more than 100% in 2024 for both Square and Cash App as we deepened engagement with our customers. We saw an acceleration in two key metrics as we exited the year.

Square GPV grew 10% year over year in the fourth quarter with improvements in same store sales and customer retention as year over year growth in The U. S. Increased 200 basis points sequentially to 6.9. For Cash App, paycheck deposit actives reached $2,500,000 in December, growing 25% year over year, and we saw an increase in momentum in the second half of the year. Our focus on disciplined execution led to a significant increase in profitability and operating leverage in 2024.

Adjusted EBITDA was $3,030,000,000 up 69% year over year and adjusted operating income was $1,610,000,000 a more than 4.5 times increase on a year over year basis, delivering 13 points of margin expansion. And for the twelve months ending in December, adjusted free cash flow was $2,070,000,000 compared to $515,000,000 a year ago. We achieved 36.5 on a rule of 40 basis in 2024, up seven points from the year prior. Let's look ahead to our guidance for 2025 and share why we're excited about the trajectory of our business across both growth and profitability. Consistent with what we called out last quarter and assuming a stable macro environment, we expect strong gross profit growth of at least 15% year over year or at least $10,220,000,000 in gross profit.

We're maintaining our gross profit guidance for 2025 despite absorbing an incremental 50 basis points of headwinds from FX rates compared to our preliminary guide in early November. Given the unique growth dynamics during the year, including lapping LEAP year last February and tougher FX comparisons in the early part of twenty twenty five, we expect our first quarter guide to be the low point for both gross profit growth and adjusted operating income throughout the year. Our full year guidance implies a meaningful inflection in growth during the year and we have clear visibility into the key drivers of that acceleration as we scale recent product launches and execute on go to market. We expect a more pronounced acceleration in Cash App as we broaden access to Cash App borrow, launch and scale Afterpay on Cash App card and invest in marketing. Cash App has sustained strong gross profit growth for years by driving product velocity and successfully stacking new S curves onto its existing product set to deliver more value to customers.

We believe we're at the start of another exciting growth phase as we bank our base and with the ability to stack future building blocks of growth from both borrow and Afterpay on cash up card. We ended 2024 with 5,000,000 cash up borrow monthly actives. This year, we plan to expand to additional customers and offer higher limits by improving underwriting, refining unit economics, expanding to more states, and integrating borrow with direct deposit. Afterpay on Cash App Card launched this week, and we are rolling it out to new customers now after a year of strong testing. We see this product as another way for customers to manage their money and to drive increased spending through Cash App Card.

Beyond these specific products, we're focused on driving more customers to Cash App Card, a gateway to our broader banking offerings, and further growth in paycheck deposit actives. For Square, we expect both TPV and gross profit to improve throughout the year, driven by a combination of both retention and acquisition. We meaningfully ramped marketing investments in the second half of twenty twenty four, and the strong returns we've sustained here give us conviction that these will compound as the year progresses. We also continue to invest behind our partnership and field sales strategies, and we expect growth contributions from these initiatives to increase compared to 2024. The platform investments we made last year across onboarding, orders and single app are still expected are all expected to drive strength in Square this year.

Many of the launches we highlighted this quarter were enabled by our recent platform enhancements. We have an extensive portfolio of growth initiatives across Square and Cash App and we're excited for those to help drive accelerating growth in 2025. From a profitability perspective, we expect adjusted operating income of $2,100,000,000 or approximately 21% margin, expanding two forty basis points year over year. Even as we grow acquisition spend by more than 20% year over year across Square and Cash App. We remain committed to disciplined growth and driving cost efficiencies.

We were below our 12,000 person cap at the end of the year and we intend to remain below for the foreseeable future. In 2024, we built the foundation for our next era of growth and we're excited about our momentum heading into 2025. Our goal across both Square and Cash App in the year ahead is to make sure we're balancing continued growth investments on product and go to market with increased efficiency across our organization. With this, we expect to exit 2025 at a rule of 40 run rate and remain on track to achieve our target of rule of 40 in 2026. As Jack said in his letter, we're excited to host you for an Investor Day in the second half of this year to show you more of our progress in these areas.

And with that, I'll turn it back to the operator to start the Q and A portion of the call.

Your first question comes from the line of Tianjin Huang with JPMorgan. Please go ahead.

Thanks a lot here, Jack. It feels like I've been thinking about Glock a lot and it feels like a big execution year for you guys in 2025. You talked about I'm ready to talk about building a foundation in '24. So I'm curious from your standpoint beyond the numbers and the guide and all that good stuff. What proof points are you focused on to gauge progress on execution in 2025?

And how might this year be different than the last couple of years from an execution standpoint?

Yes. So I mean, we intend to double our growth rate across our business and a lot of that has to do with how we configure ourselves. So as you said, we spent the majority of last year not only doing but talking about how we've reconfigured and reorganized the company. And to set us up for rapid acceleration this year.

And I guess the biggest proof point I would look towards is development velocity, how quickly we can now move and how quickly we can ship things and how quickly we can see the impact or that they're not having impact so we can make changes or end those things. I would I would point you to one early proof point, which is this project we we released called Codename Goose, which is a AI assistant for, engineers to to start, but it can expand to any discipline. We built this for ourselves internally. This team was less than 10 people, they did it in months and not years, and we put it out and we now have a pretty sizable ecosystem of developers, building extensions for it and expanding it that we also get better for and we can use. And it points to a pretty foundational move for us where we are now in the conversation with a lot of these AI companies.

And I think there's a few areas within that where we can take a leadership position as well. So we're excited to to take that on, but that's all a function of us reorganizing our company. This would not be possible by at the beginning of last year, but it is now. So you should expect us to to see those throughout, the company and across all of our our surface areas. We have much better go to market clarity and excellence, in Nick and team, especially on Square, but certainly for for Cash App as well.

So So we intend to flex that muscle, significantly this year and pair it with our better products. We have we can we have reconsidered how we release products at Square. We wanna be a lot more open with our road map so that we can give sellers time to decide and more information to decide versus, us versus other competitors. And they can get a lot more predictability around, installing us or upgrading, certain aspects of our our system. And then for the first time as a company, since we founded the company, we have a prioritized roadmap across our entire company and all of our product services and surface areas.

This is stack ranked. We have a directly responsible individual on on task for each one. That gives us a lot more accountability. It gives us a lot more information around how we're investing internally. Gives us a lot more clarity around what we're experimenting with and what we're trying to accelerate and what we're trying to refine and and make better.

But most importantly, it also gives us clarity and the org clarity on what we need to stop, and redeploy our resources, our people, our our finances for things that we need to reconsider. So I'm just running out to the whole company, and we're starting to run with it, but, that will also help a lot with our execution, which will ultimately result in just much better product development velocity, much better learning so we can quickly adapt to the market and what our customers want and ideally be ahead of them with all these new tools that we're building such as the AI agent systems we're focused on.

And, Jin Chen, I'd just add a couple of thoughts on KPIs, metrics that we're going to be looking at and do look at on a daily and weekly basis. For our two most established businesses, I think it's very clearly acceleration and square GPV and for Cash App, it's the ramp of our paycheck deposit active and then more broadly engagement across each of those platforms with a broader set of products. From an investment framework perspective, so when we think about the enterprise across block, we want to see two things. We're laser focused on being a rule of 40 company in 2026, and now believe that we can get to that run rate by the end of this year and positive customer retention across each of our ecosystems. That means our existing customers continue to grow and we continue to add more and more value to them.

And then finally, I'd say, I think we want to see some build on, the signals for our next big building blocks, the next S curves that we're stacking. And I think what you hear from us today is that there's some near term S curve opportunities, you know, with cash up borrow and after pay on cash up card. And then the links between Square and Cash App, the neighborhood network will be laying important proof points behind in 2025, which should benefit us in the years to come.

Your next question comes from the line of Tim Chiodo with UBS. Please go ahead.

Great. Thank you. I want to talk about 2025 Square GPB growth. When we think about the major building blocks or components, they are same store sales growth, churn or retention, the size of the new cohort coming on, and then lastly, the annualization of last year's cohort that was brought on. So you made some comments already around exiting the year with some good signs on improved same store sales and some of the retention metrics getting a little bit better.

And MKE may be a part of that if maybe that's getting better or maybe less bad. And then in terms of the size of the new cohort, clearly there's the sales and marketing spend, there's the new partnerships and some of the good signs you're seeing there. Cognizant though that that last part on the marketing, there's a little bit of a cumulative effect there, meaning it's a little bit more beneficial as it layers in into the second half of the year. So putting that all together, I was hoping you could touch on some of those components and really what it means for the exit rate for GPV within the seller ecosystem as we look into the latter part of 2025?

Sure. Thanks for the question, Tim. So let's start with where we exited the year, with Square GPV in the fourth quarter up 10% year over year and U. S. Growth of 6.9%, both an improvement from the third quarter sequentially, with U.

S. Growth up 200 basis points relative to where we were in the third quarter and international growth up five points to 25% relative to where we were in the third quarter. That acceleration in the fourth quarter, was driven primarily by two key metrics, same store growth across our verticals, as well as improved seller retention. The two verticals that I would call it in particular driving the acceleration are the two that we're most focused on, which is food and beverage and retail. When we look to 2025, assuming a stable macro environment, we expect GPV to accelerate from these current levels, driven by the product and go to market initiatives that we've been talking about for the past few quarters now.

We expect to see a meaningful uplift in customer acquisition as we move throughout the year and as these investments compound. Now when we look at it from Q1 to Q4, there's a bit of noise in Q1. We expect Q1 square GPV growth when you isolate for that constant currency and leap year to be in the high single digits building to low double digits as we exit the year. As I said, there's some noise with that Q1 comparison because of FX and leap year, but we expect the core underlying growth of Square to be roughly in line with Q4 and improve from here for the rest of the year on the back of a stable macro environment, driving better same store growth, slightly better retention and stronger acquisition. Maybe just to quickly unpack what some of those customer acquisition and retention drivers are to accelerate growth.

We've grown marketing spend significantly over the past two quarters with strong early ROIs, and we intend to invest behind that in 2025 as well. We expect continued investment across the combination of sales, marketing and partnerships to drive new seller acquisition. We're seeing better coordinated strategy across these three levers than we've seen before. Our retention is strong today, but we expect account management and investments into our product to increase that further. And then we believe we have the opportunity to gain wallet share and drive same store growth higher.

You know, an example of that being kiosk, which is a product that we expect to increase wallet share. And we'll have more, we expect to launch throughout 2025 to continue to drive that important retention metric for us.

Your next question comes from the line of Darren Peller with Wolfe Research. Please go ahead.

Hey, guys. Thank you. Maybe I could just jump in quickly on Q4 first, the spread between GPB growth and the gross profit growth now. Just if you could help

of the dynamics there. But then more importantly, just the building blocks of the gross profit growth ramp expected through the year. I understand a lot of the initiatives will kick in, but if you're starting off at I think you said 11% for Q1, '15 percent for the year, maybe just help us a little bit more a little more granularity of the building blocks to get from that starting point to the 15% for the full year. Thanks, guys.

Sure, Darren. Maybe just to quickly hit off on the first part of your question for Q4. Keep in mind when you're thinking about GPV versus gross profit, the banking ecosystem had a tougher compare in the fourth quarter. So we saw, right, so we had 12% growth overall from a gross profit perspective in the fourth quarter. From a banking perspective, we had 13% growth in the fourth quarter.

And as a reminder, our banking products grew by 28% in the fourth quarter of twenty twenty three driven by some elevated loan volume growth. So it's a tougher compare from a banking perspective. As we look to this year 2025, let me start with sort of the dynamics that we see in the first quarter and then the line of sight, the clear visibility that we have to the drivers of gross profit accelerating throughout the year. So first, we recognize the growth rate dynamics as we start the year are unique for a couple of different reasons, some idiosyncratic headwinds like FX and leap year, and then some tougher compares like the banking one I mentioned. So in the first quarter, leap year is expected to create a roughly one point headwind to gross profit growth for both Square and Cash App with an additional approximate one point headwind to Square's gross profit growth from FX.

And then in addition to that, we have Square banking with an incredibly strong Q1 in 2024 where it grew by 36% as we grew originations at an accelerated rate as a tougher comp for us this Q1. And then from a cash out perspective, again, a tougher compare related to some pricing changes for Bitcoin, where we had the full quarter benefit of that last Q1, as well as some benefits from the price appreciation of Bitcoin. Now with those Q1 dynamics in mind, let's turn to where we have confidence that we can build upon these compounding benefits that we see of our product and go to market initiatives into the remainder of the year. So for Square, we expect gross profit growth trends to align closely with GPV trends in 2025. We'd see GPV growth acceleration drivers that we've talked about go to market investments, new products to gain traction and compound during the year and as a result expect to see gross profit accelerating off the Q1 levels.

We're also growing our marketing spend here, again behind strong ROIs and are continuing to add sales and partnership resources, all of which we expect to result in accelerating new customer acquisition. We have much higher expectations for our sales and partnership investments this year than we did last year. And we met and exceeded our targets last year and we intend to do the same this year. From a cash out perspective, we expect the acceleration throughout the year to be more pronounced exiting 2025 well above the Q1 gross profit growth rate. We think we have a unique opportunity here on this next phase of growth for Cash App between borrow and Afterpay on Cash App card.

Afterpay on Cash App card, we are after a year of sort of methodically testing this now launching this week, allowing customers more ways to manage their money, and giving them more optionality at checkout. Cash up card at 25,000,000 monthly actives in December is an amazing distribution surface for us to launch these sorts of product features into. And it's one that we saw really resonate with customers as we were in testing over this past year with nearly $150,000,000 in originations just in the beta alone. And then for borrow this product that has scaled meaningfully in 2024, we believe that there is a tremendous amount of opportunity left for growth in a variety of different areas this year. As I mentioned earlier, making borrow available to more customers with higher limits by improved underwriting, better unit economics and expanding into additional states.

Also enabling borrow to be a driver for paycheck deposits by creating greater integrations there. And then finally, I'd say as I point to looking at our exit out of 2025 is that we'd expect to see Proto, our Bitcoin mining initiative to start benefiting growth in the second half of the year as well.

Your next question comes from the line of Dan Dolev with Mizuho. Please go ahead.

Hey guys, great quarter. Thanks for taking my question. I have a long term strategic question maybe for Jack on your on Proto, the open Bitcoin mining system, it looks really interesting. Could it maybe could it be the next Cash App? Like how big is the upside from that and what's the long term vision and strategy for that product?

Yes. This is one we're really excited about. We do think the market is large and we do think we're poised to take a significant percentage of it because there is one player, really in this space and customers want other options. We want we we did a bunch of research. We talked with a bunch of these mining customers and we found that they they didn't have the reliability they needed.

They didn't have the customization they needed. They didn't have the ability to upgrade and build their own custom systems around their rigs. And some of them wanted just like a full system that just worked off the shelf, that was built in The US. And, the fact that it's open source, and we're on a three nanometer process allows us to have much better performance and a much stronger roadmap looking forward. So we do think we're poised well.

We're manufacturing our chips now. They're going to be rolling out this year, along with our full systems. And this year is going to be one of I think like unexpected upside in this business and one that we significantly changed the market dynamics because of just how well our system works and how configurable it is. So within this space, yes, I do think it's a massive opportunity and one that's well, well, well overdue.

Definitely seems like that. Thanks again, Jack.

Your next question comes from the line of Robbie Bamberger with Baird.

Yes. Thanks for taking my question. Cash up MAUs have been flattish at around $57,000,000 the last several quarters. I guess, what would it take for these to start growing again? Is it incremental marketing spend, new products or something else?

Hey, I'm happy to start us off here. Thanks for the question, Robbie. So let's start I think the short answer is we think that there is significant opportunity for growth longer term. But there's some deliberate decisions that we've made as part of our banker based strategy in the near term that have resulted in the consistent sort of 57,000,000 monthly actives, which grew 2% year over year in December. You know, this is a part of our continuous enhancements to drive healthy customer engagement.

As we bake our base, we've made investments in critical areas like compliance, support and risk. And as we've done that, we've progressed more of our actives through our identity verification process, which in turn unlocks greater access to those actives to our full suite of financial tools. So as we've made those investments, we've seen benefits come through in a couple different places. First, from a product growth perspective, we've seen that accrete to engagement and attach on products like cash up card, direct deposit and borrow, all of which you've heard about today, obviously, but also accrete to benefits to our unit economics. Risk loss for us has been an area of operating expense leverage, on both peer to peer and cash up card risk loss over the past year.

And I think that's critically tied to the enhancements we've made to the platform here. In the near term this year, we expect the biggest drivers of Cash App gross profit growth should be metrics like inflows, proactive and monetization rate or ARPU. Whereas we'd expect active growth to be relatively flat on a year over year basis this year. Now longer term, to your question, we see a significant opportunity to grow active, particularly among that digital native audience like millennial and gen Z. We also see powerful network effect connections across our audiences, you know, amongst teams and families and across our other brands, Afterpay customers, many of whom will be introduced to Cash App through the integrations like the one that we're launching this week with bringing Afterpay functionality into Cash App cards, as well as Square buyers, the more we can execute on our neighborhood network strategy to connect these two ecosystems.

Your next question comes from the line of Andrew Bauch with Wells Fargo. Please go ahead.

Hey, thanks for taking the question. I wanted to hit on the Cash App flywheel and how you called out the rolling monetization opportunities by stacking these multiple S curves. And now that we have Afterpay functionality live in the cash card, I guess, how would you characterize the potential of this S curve compared to innovation and products you've introduced in the past? And then if there are any high level thoughts you can provide around goals for Attach, monetization contributions, all would be super helpful. Thank you.

Yeah. I can start this. I think it's a huge escrow because there's entire companies focused on just this one thing. And what matters most for Cash App and the Cash App card is that these all stack together, but they actually positively reinforce one another as well. So we have, as Amrita said earlier, we have a huge base of Cash Card customers that we can deploy this to.

We can do that extremely quickly. It's easy to roll out for us and alert people proactively of entirely new utility that they can use, that day instantly. And, ultimately, that provides a flywheel into more spend and and more usage of other, adjacent aspects of of Cash App, which we continue to look to deepen and and broaden that ecosystem. And ultimately, connected with Square ecosystem, which speaks to what I believe is our two superpowers that we have both these ecosystems at scale with both sides of the counter. And now we can bring more financial tools and more financial utility that people can't find elsewhere as connected, to every single person that's already using Cash App and the Cash App card, but also there will be a significant reason to use Cash App and not have to go to the App Store for, 10 different apps and everything is in one app and it will be the Cash App.

And I'll just add a couple of points to help contextualize as well, Andrew, both on, Afterpay and Cash App card and then I want to speak a bit to borrow. But, you know, similar to how we've ramped Cash Up Borrow with Afterpay and Cash Up card, as Jack said, we see a tremendous opportunity as we always do. We'll start small, you know, expecting millions of monthly actives to be eligible this year and then ramp those offerings where we determine eligibility, obviously, based on adoption and improvements to our underwriting models as we gather more data. So we'd expect Afterpay and Cash App card to benefit gross profit, and compound in that benefit throughout the year benefiting our growth more in the second half of the year, as we've called out, related to the acceleration in Cash App gross profit throughout the year. I think it's also for speaking about you know, S curves for Cash App, important for us to talk about Cash App borrow as well.

And when you look at the growth and attraction that this product has achieved, what we're seeing is that our customers really value the optionality, to manage their cash flows that cash up borrow provides. And I think that's similar to what Afterpay will provide as well in cash up card. But, you know, we shared last quarter in a recent survey, 43% of our borrow actives, which we now, you know, ended the year with 5,000,000 cash up borrow monthly active 43% reported that the loans helped them pay their bills. 38% said that these loans help them smooth cash flows between paychecks. It's a part of how they're managing their money.

And, products like borrow help deepen that customer relationship. We've seen borrow actives bring in 13% more inflows and conduct 6% more transactions than non borrow actives and drive 10% higher variable profit to us on a proactive basis, even excluding the profit generated from borrow. So we saw strong growth in borrow this past year, but we think we have an opportunity to expand it further, as I've mentioned already into 2025, and continue to compound the benefits beyond the 5,000,000 borrow monthly actives that we had at the end of the year. Maybe a final point I'll make here is, you know, in 2024, about 25% of actives chose to take out a borrower loan after getting an offer. And that number is significantly higher for paycheck deposit actives, which gives us confidence that access to credit ultimately is an important part of our much broader banker base strategy going forward.

Your next question comes from the line of Jason Kupferberg with Bank of America. Please go ahead.

Yes. Hi, guys. I was hoping you could just put a finer point on the gross profit guide by segment for Q1 and for the full year. And then if you can just talk about maybe the top two or three square initiatives that you really think will move the needle, on GPV in 2025? Thank you.

Sure. Happy to start off on the gross profit question. As we said, we expect to see ramping gross profit growth through the year with Cash App's acceleration throughout the year being more pronounced relative to Square's, albeit we expect to see growth trends improve throughout the year. And we expect Q1 to be the lower point throughout the year in terms of gross profit growth and profitability. Again, some of the key initiatives that we've talked about in terms of sales marketing product launches and, the ramp of products like borrow or after paying on cash up card are the key elements that compound and drive the more meaningful growth rate as we exit the year relative to where we start in Q1?

On the Square side, in terms of drivers, the, as we talked about for quite some time, we, wanted to really simplify our go to market and also add a lot of strength there. We've had a lot of strength by changing the team, making a lot more efficient, being more open to partnerships and new ways to market. And then we have a bunch of product in that initiatives that we think will will help us verify the message including, bringing the the Square app into the five Square apps into one Square app. So it's just much easier to onboard people and that it is customizable as you tell us more information. As you use it more, it just flexes to your to your needs.

Second, like, we we are we've completed our transition from a technology sector. We, that means far greater reliability. That means far greater development velocity. That means we're not just a payments platform. We're actually in orders and commerce platform, which gives us more flexibility in terms of what we can build.

And, just some examples of this, we have bar tabs, which we don't have for forever. It went to, GA. We rolled out scan and pay functionality, introduced house accounts, onto other features to bolster our food and beverage offerings, which is a big focus for us. And we roll out instant payouts for marketplace delivery orders, which is helping customers with the task of managing their cash flow. But the net of it is, we have a much stronger go to market.

We have a lot more focus and simpler call to action on that. We completely changed our platform to allow us a lot more flexibility to build the features that we have been gaps. And it also allows us to create entirely new features that we're super excited about. Another big driver that we talk a little bit about in the letter is going to be the neighborhood network. This is utilizing Cash App to drive more people and Cash App customers in particular, to Square merchants, give them new tools to offer cash back instantly to their customers, build loyalty to do remote ordering.

And, that continues to be in beta and we will continue to expand it this year.

Your next question comes from the line of Ramsey El Assal with Barclays. Please go ahead.

Hi, Jack and Amrita. Thank you for taking my question. I wanted to actually follow-up, Jack, on the last thing that you mentioned, which is the neighborhood network strategy. I'm trying to think through or maybe you could help us think through you know, sizing the opportunity, how much investment or build is required here? And also, any thoughts on timing, so size, investment and timing of the neighborhood network?

Yeah. Well, first and foremost, we're the only company at scale to have full size of the counter like this. So we have the seller side and we have the individual side. And we've tried to do this in the past and really capitalize on the opportunity, but we just didn't have the the scale on the consumer side to the degree that we needed. A lot a lot of you who've been following us for quite some time, right, might remember Square Wallet or what we called card case way back in the day.

Now we do have the scale on Cash App, and now we can actually act on it. And we see a number of, of problems the sellers are facing with the current offerings for pickup, for reservations, for remote ordering that we can help with. We can also give them entirely new tools, to give things like boost or instant cashbacks immediately to their customers, which builds loyalty and to give them more discovery through the lens of the of the Cash App app itself. This represents a very easy selling point for our sales team because it means that, we're turning on this massive faucet of Cash App customers to potentially discover the business, but also give them, these great tools, to retain their customers. And to your question of, in terms of building entirely new things, most of this is more of a connection and just, prioritizing the right connections, to get the experience correct.

A lot of the work is going to be more around converting our existing Square customers, to online entities. And that benefits us, and it benefits them, and benefits our customers and it certainly makes this neighborhood network a lot more possible. So we're gonna be thinking deeply about how to migrate folks easily and allow them to have a storefront that they're proud of that can work with the system and, in which would which allows more more commerce and more more sales on their side. In terms of timeline, we are in beta right now in a few cities. We're making sure that we get the experience right before expanding it.

And of course, we want it to be a lot more self serve. So that goes to that migration point that I was talking about and ideally one button push so that sellers can just turn this on and they're in business and they get new traffic. That's the goal. So look for more of these proof points early this year and all the way to the end of the year.

Ramsey, I would just add on your question about investment. You know, we've already got, significant investment deployed across each of these ecosystems. It's really about bringing the strategy together in support of the two ecosystems working together. So an example of that is in Square, we're already building a field sales team. We're hiring that out.

We've seeded our first territories. We're doing that in areas where we have strong partnership strategy, but we're also prioritizing cities with high cash app density to drive the ecosystem connections. You know, an example city would be Atlanta, where we see strong Square seller presence as well as cash app presence. And the two can feed off of each other. So it's not even necessarily about incremental investments.

It's about a coordinated approach and strategy as we deploy those investments.

Your next question comes from the line of Reina Kumar with Oppenheimer. Please go ahead.

Hi, Jack and Amrita. Thanks for taking my question. Could you elaborate on any feedback that you're getting from vendors on your initial testing on your enhanced Square for Restaurants point of sale experience? Thank you.

Yes. I mean, we're getting pretty good feedback from, from the focus. I mean, that that things like the bar tabs and, everything that we've built to shift from just being a payments platform to a commerce platform are working because we're building the features that sellers before, especially food and beverage sellers could only find in our competitors. And the most important part of us being able to close those gaps is that we can introduce people to the broader Square ecosystem, including all of our banking. Square, I think continues to excel in our product offering because of our quality, because it is more self serve and owners of these businesses and their employees can do more of the things that they need to do without having to reach out to support, or having a sales or executive account agent, who's hand holding them along the way.

And that's where our technology led approach leads, and and really matters. And we're going to continue to to push that and give people better and better tools, to help automate some of the more mechanical aspects of the business, so they can really focus on their customers and and building their business. But thus far, it's it's been good. We have much stronger feedback loops now that we functionalize the company between customer support and sales and our product teams, and our development teams so that we can act on feedback much faster. And as I talked about in the first part of the call, what matters most is the development of velocity so that we can quickly make changes, we can learn from experiments much faster, and we can deploy technology in a way that addresses customer needs and hopefully predicts them ahead of their ask and also ahead of our competitors, which we intend to do.

Yeah, Reina, I'll just add that I think, what you see from us is a greater rate of product velocity as we shifted from a payments platform to an orders platform. And you see that firsthand in the restaurant point of sale, enhancements that we've rolled out and are continuing to roll out, to all of our sellers this year between kiosk, bar tabs, scan to pay house accounts, items splitting instant payouts. These are all launches over the past six months. And we've got more to come, for this really critical vertical. And I think what you see is that when we're able to get that into people's hands and demonstrate as we are with our field sales efforts, what a larger seller and in the food and beverage space can do.

And even a QSR like Bluestone Lane that we mentioned in our letter, it's a pretty powerful demonstration and one that frankly flies in the face of the perception of Square being the little reader company. And so, that's what we're doing with, you know, investing into our partnerships, field sales and marketing approach to be able to expand, and bring awareness to the much more expansive set of offerings that we have for QSR and FSR. And I think that's starting to bear fruit now with some of these larger seller wins. But there's a lot more for us to do behind that. And I expect you'll also see greater product velocity again behind that platform shift that we completed last year.

We will now take our last question from Brian Keane with Deutsche Bank. Please go ahead.

Hi, guys. Thanks for taking the question. Wanted to ask about the strength in Afterpay in the quarter, what you saw there. And as we think about the rollout of Afterpay on the cash card, I guess it's almost in lieu of a credit card. The growth there can be pretty material, I assume, going forward.

How do we think about the profitability of that card as we seriously ramp it this year and into next? Thanks.

Block (XYZ) Q4 2024 Earnings Call Transcript

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