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What changed in Block, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Block, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+509 added−506 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-22)

Top changes in Block, Inc.'s 2024 10-K

509 paragraphs added · 506 removed · 397 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

91 edited+29 added−16 removed80 unchanged
Biggest changeWe believe that this transition will allow us to better focus on consumer based commerce as well as the development of its financial tools within Cash App. Square Ecosystem We started Block with the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, an important capability that was previously inaccessible to many businesses.
Biggest changeSquare Ecosystem We started Block with the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, an important capability that was previously inaccessible to many businesses. As our company grew, we recognized that sellers need a variety of solutions to thrive and saw how we could apply our strength in technology and innovation to help sellers.
Financial Services We serve our customers through a broad suite of financial services, and earning their trust is a key factor in how we can deepen our financial relationship with them. The breadth of our financial service offerings allows us to increase our share of wallet as well as expand our customer base to serve a wider variety of demographics.
Trust We serve our customers through a broad suite of financial services, and earning their trust is a key factor in how we can deepen our financial relationship with them. The breadth of our financial service offerings allows us to increase our share of wallet as well as expand our customer base to serve a wider variety of demographics.
Anti-Money Laundering, Anti-Corruption, and Sanctions We are subject to anti-money laundering ("AML"), anti-corruption, and economic, trade and sanctions laws and regulations in the United States and other jurisdictions in which we operate. The anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K.
Anti-Money Laundering, Anti-Corruption, and Sanctions We are subject to anti-money laundering ("AML"), anti-corruption, and economic and trade sanctions laws and regulations in the United States and other jurisdictions in which we operate. The anti-corruption laws, such as the U.S. Foreign Corrupt Practices Act and the U.K.
Customers can also purchase and send gift cards at specific merchants to other customers, and recipients can spend them with their Cash App Card. • Direct deposit capabilities, in alliance with our partner bank and system processor, allow customers to receive their recurring paycheck, tax refund, or government disbursement into their Cash App account, which they can then use to send, spend, store, or invest. 13 • Savings allows customers to hold a separate savings balance at our bank partner, and easily set and track towards financial goals.
Customers can also purchase and send gift cards at specific merchants to other customers, and recipients can spend them with their Cash App Card. • Direct deposit capabilities, in alliance with our bank partner and system processor, allow customers to receive their recurring paycheck, tax refund, or government disbursement into their Cash App account, which they can then use to send, spend, store, or invest. • Savings allows customers to hold a separate savings balance at our bank partner, and easily set and track towards financial goals.
We can enable this type of robust offering through our technology and by improving the onboarding process through sales and account management. • Artificial Intelligence (AI): We are focused on enabling growth by leveraging AI to increase productivity and outcomes for our sales and marketing, customer service, and engineering efforts, in addition to building features that help sellers grow their businesses. • Banking: Our robust banking offering primarily helps our sellers manage cash flow and grow their business through our lending capabilities.
We can enable this type of robust offering through our technology and by improving the onboarding process through sales and account management. • Artificial Intelligence (AI): We are focused on enabling growth by leveraging AI to increase productivity and outcomes for our sales and marketing, customer service, and engineering efforts, in addition to building features that help sellers grow their businesses. 8 • Banking: Our robust banking offering primarily helps our sellers manage cash flow and grow their business through our lending capabilities.
Available Information Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available, free of charge, on our investor relations website as soon as reasonably practicable after we electronically file or furnish such material with the Securities and Exchange Commission ("SEC").
Available Information Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available, free of charge, on our investor relations website as soon as reasonably practicable after we electronically file or furnish such material with the SEC.
Sellers can set up recurring automated campaigns to welcome new customers, wish them a happy birthday, send abandoned-cart reminders, or reach out to lapsed customers. • Square Gift Cards help sellers bring in new buyers when their customers purchase gift cards for their friends and family. Staff Square's staff management products give sellers digital tools to streamline their operations.
Sellers can set up recurring automated campaigns to welcome new customers, wish them a happy birthday, send abandoned-cart reminders, or reach out to lapsed customers. • Square Gift Cards help sellers bring in new buyers when their customers purchase gift cards for their friends and family. 10 Square's staff management products give sellers digital tools to streamline their operations.
Historically, our Cash App ecosystem has experienced improvements in revenue and gross profit related to the distribution of government funds as customers have deposited more funds into Cash App during these times, including during the first quarter when U.S. tax refunds are typically distributed.
Historically, our Cash App ecosystem has experienced improvements in revenue, gross profit, and inflows related to the distribution of government funds as customers have deposited more funds into Cash App during these times, including during the first quarter when U.S. tax refunds are typically distributed.
Business Accounts Cash App allows business accounts to collect payments for their business by accepting peer-to-peer transactions for a fee, while allowing higher weekly limits and providing relevant tax reporting forms. 15 Sales and Marketing Square Ecosystem The Square ecosystem has a strong brand affinity among its sellers.
Business Accounts Cash App allows business accounts to collect payments for their business by accepting peer-to-peer transactions for a fee, while allowing higher weekly limits and providing relevant tax reporting forms. Sales and Marketing Square Ecosystem The Square ecosystem has a strong brand affinity among its sellers.
For instance, we hold an Australian Financial Services License issued by the Australian Securities and Investments Commission to provide non-cash payments in Australia, and we are licensed as an Electronic Money Institution to provide payments services and electronic money in the United Kingdom by the Financial Conduct Authority and in the European Union by the Central Bank of Ireland and the Bank of Lithuania.
For instance, we hold an Australian Financial Services License issued by the Australian Securities and Investments Commission to provide non-cash payments in Australia, and we are licensed as an Electronic Money Institution to provide payments services and electronic money in the United Kingdom by the Financial Conduct Authority and in the European Union by the Central Bank of Ireland.
Our products are designed to be self-serve and intuitive to make initial setup and new employee training fast and easy, although we also offer full-service setup and support. They are also flexible enough to serve the needs of both small, single location and large, complex multi-location sellers.
Our products are designed to be self-serve and intuitive to make initial setup and new employee training fast and easy, although we also offer full-service setup and support. Our products are also flexible enough to serve the needs of both small, single location and large, complex multi-location sellers.
Our hardware is designed and developed in-house, and we contract with third-party manufacturers for production. Our Competition Square Ecosystem The markets in which our Square ecosystem operates are competitive and evolving. Our competitors range from large, well-established vendors to smaller, earlier-stage companies.
Our hardware is designed and developed in-house, and we contract with third-party manufacturers for production. 16 Our Competition Square Ecosystem The markets in which our Square ecosystem operates are competitive and evolving. Our competitors range from large, well-established vendors to smaller, earlier-stage companies.
Our principal executive office, which we are required to identify under Securities and Exchange Commission rules, is 1955 Broadway, Suite 600 Oakland, CA 94612. Our telephone number is (415) 375-3176. Our website is located at www.block.xyz, and our investor relations website is located at investors.block.xyz.
Our principal executive office, which we are required to identify under Securities and Exchange Commission ("SEC") rules, is 1955 Broadway, Suite 600 Oakland, CA 94612. Our telephone number is (415) 375-3176. Our website is located at www.block.xyz, and our investor relations website is located at investors.block.xyz.
We will continue to drive trust with our sellers, and build products and features that help with sellers accessing funds securely and timely. 8 Commerce Square's commerce products help sellers make sales and track orders, inventory, and fulfillment across in-person and online channels, as well as first-party and third-party channels.
We will continue to drive trust with our sellers, and build products and features that help with sellers accessing funds securely and timely. Commerce Square's commerce products help sellers make sales and track orders, inventory, and fulfillment across in-person and online channels, as well as first-party and third-party channels.
The dedicated hardware consists of two screens: a seller display and a customer display with a built-in card reader that accepts tap, dip, and swipe payments. 10 • Square Terminal is a portable, all-in-one payments device and receipt printer to replace traditional keypad terminals.
The dedicated hardware consists of two screens: a seller display and a customer display with a built-in card reader that accepts tap, dip, and swipe payments. • Square Terminal is a portable, all-in-one payments device and receipt printer to replace traditional keypad terminals.
We use our inflows framework to assess the performance of Cash App across actives, inflows per active, and the monetization rate on inflows. Strategic Priorities Cash App sits at the intersection of three traditionally-distinct use cases: financial services, community based transactions (peer-to-peer payments) and commerce.
We use our inflows framework to assess the performance of Cash App across transacting actives, inflows per active, and the monetization rate on inflows. Strategic Priorities Cash App sits at the intersection of three traditionally-distinct use cases: financial services, community based transactions (peer-to-peer payments) and commerce.
Order Manager enables tracking open orders, managing prep times and busy times, and marking orders as completed. • Payment APIs (application programming interfaces) and SDKs (software development kits) support in-person, online, and mobile payments.
Order Manager enables tracking open orders, managing prep times and busy times, and marking orders as completed. 9 • Payment APIs (application programming interfaces) and SDKs (software development kits) support in-person, online, and mobile payments.
Customers can add money to Savings using their Cash App balance, a linked debit card, or through Round Ups on purchases with Cash App Card. • Cash Boost is a free and instant rewards program that offers customers discounts at specific businesses (e.g., 10% off a purchase on DoorDash) or at certain business types (e.g., grocery stores).
Customers can add money to Savings using their Cash App balance, a linked debit card, or through Round Ups on purchases with Cash App Card. 13 • Cash Offers (formerly Boost) is a free and instant rewards program that offers customers discounts at specific businesses (e.g., 10% off a purchase on DoorDash) or at certain business types (e.g., grocery stores).
These tools seamlessly integrate with other Square products eliminating the latent, time-consuming, and error-prone processes typically used to copy and sync data between disparate systems. We typically monetize these products via software fees. • Square Team Management makes it easy to schedule staff and view team performance and sales analytics in real time.
These tools are designed to seamlessly integrate with other Square products eliminating the latent, time-consuming, and error-prone processes typically used to copy and sync data between disparate systems. We typically monetize these products via software fees. • Square Team Management makes it easy to schedule staff and view team performance and sales analytics in real time.
These lending licenses subject us to the supervision and examination authority of state regulators, and our partnerships with FDIC-insured financial institutions to offer certain lending products to customers subjects us to federal regulatory supervision. Outside the United States, we provide localized versions of some of our lending services to customers, including through our various foreign subsidiaries.
These lending licenses subject us to the supervision and examination authority of state regulators, and our partnerships with FDIC-insured financial institutions to offer certain lending products to customers subjects us to federal regulation and supervision. Outside the United States, we provide localized versions of some of our lending services to customers, including through our various foreign subsidiaries.
Machine-learning algorithms automatically identify fraud patterns and adapt to fit a seller's operations. • Order Manager allows sellers to manage online orders that originate from Square Online, their own website on another platform, and third-party websites including online marketplaces such as DoorDash.
Machine-learning algorithms are designed to automatically identify fraud patterns and adapt to fit a seller's operations. • Order Manager allows sellers to manage online orders that originate from Square Online, their own website on another platform, and third-party websites including online marketplaces such as DoorDash.
The Afterpay Card allows consumers to shop in-store at Afterpay merchants and is free for the consumer. The Afterpay Plus Card is currently available to select Afterpay consumers for a monthly fee and allows them to shop in-store anywhere that Apple Pay or Google Pay is accepted.
The Afterpay Card allows consumers to shop in-store at Afterpay merchants and is free for the consumer. The Afterpay Plus Card is currently available to select Afterpay consumers in certain regions for a monthly fee and allows them to shop in-store anywhere that Apple Pay or Google Pay is accepted.
Costs related to the Cash Boost rewards program that are funded by Cash App are recognized as reductions to revenue. Lending We believe credit is an area within our financial services offerings where we can provide simple, fair, and accessible products that promote financial health.
Costs related to the Cash App rewards program that are funded by Cash App are recognized as reductions to revenue. • Cash App Borrow: We believe credit is an area within our financial services offerings where we can provide simple, fair, and accessible products that promote financial health.
The information contained in, or accessible through, our website is not part of or incorporated into, this Annual Report on Form 10-K. We use various trademarks and trade names in our business, including “Block,” “Square,” “Cash App” and “Afterpay,” which we have registered in the United States and in various other countries.
The information contained in, or accessible through, our website (including any referenced reports or documents) is not part of or incorporated into, this Annual Report on Form 10-K. We use various trademarks and trade names in our business, including “Block,” “Square,” “Cash App” and “Afterpay,” which we have registered in the United States and in various other countries.
Customers can select the Cash Boost they want to apply to their Cash App Card, and the discount is instantly applied to their Cash App balance for eligible transactions. Some Cash Boosts are selected and funded by Cash App, while others are funded by our partners.
Customers can select the Cash Offers they want to apply to their Cash App Card, and the discount is instantly applied to their Cash App balance for eligible transactions. Some Cash Offers are selected and funded by Cash App, while others are funded by our partners.
TIDAL is a global platform for musicians and their fans that uses unique content, experiences, and features to bring fans closer to artists and to provide artists with tools to succeed as entrepreneurs. TIDAL offers an extensive catalog of more than 132 million songs and 774,000 high-quality videos.
TIDAL is a global platform for musicians and their fans that uses unique content, experiences, and features to bring fans closer to artists and to provide artists with tools to succeed as entrepreneurs. TIDAL offers an extensive catalog of more than 162 million songs and 927,000 high-quality videos.
We are also increasingly serving mid-market sellers, which we define as sellers that generate more than $500,000 in annualized Square Gross Payment Volume (“Square GPV”), due to our ability to offer more flexible and complex solutions than traditional alternatives, as well as a growing product suite.
We have also increasingly served mid-market sellers, which we define as sellers that generate more than $500,000 in annualized Square Gross Payment Volume (“Square GPV”), due to our ability to offer more flexible and complex solutions than traditional alternatives, as well as a growing product suite.
While Cash App started with the single ability to send and receive money, it now provides an ecosystem of financial services focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, borrow or save their money with Cash App.
While Cash App started with the single ability to send and receive money, it now provides an ecosystem of financial services focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, buy now, pay later ("BNPL"), borrow or save their money with Cash App.
It includes table, order, and course management; a kitchen display system; and revenue and cost reporting. • Square Appointments is a vertical solution tailored for appointment-based businesses that need a point-of-sale application with integrated booking capabilities. Square Appointments includes a free online booking site so buyers can easily schedule appointments and select their preferred time, service, and staff member.
It includes table, order, and course management; a kitchen display system; and revenue and cost reporting. • A vertical solution tailored for appointment-based businesses that need a point-of-sale application with integrated booking capabilities. Our features include a free online booking site so buyers can easily schedule appointments and select their preferred time, service, and staff member.
It is also integrated with Square Assistant, an AI-enabled automated messaging tool that responds to buyers efficiently and professionally, saving sellers' time and helping prevent missed appointments. • Square for Retail is a vertical solution tailored for sellers in the retail industry.
It is also integrated with Square Assistant, an AI-enabled automated messaging tool designed to respond to buyers efficiently and professionally, saving sellers' time and helping prevent missed appointments. • A vertical solution tailored for sellers in the retail industry.
We currently fund a majority of these loans from arrangements with institutional third-party investors who purchase these loans on a forward-flow basis, which mitigates our balance sheet and liquidity risk. Since its public launch in May 2014, Square Loans has facilitated more than 2.2 million loans and advances, representing more than $16.2 billion in principal amount loaned or advanced.
We currently fund a majority of these loans from arrangements with institutional third-party investors who purchase these loans on a forward-flow basis, which mitigates our balance sheet and liquidity risk. Since its public launch in May 2014, Square Loans has facilitated more than 3.1 million loans and advances, representing more than $25.8 billion in principal amount loaned or advanced.
For the years ended December 31, 2023, 2022, and 2021, none of our customers accounted for greater than 5% of Square GPV. We define Square GPV as the total dollar amount of all card payments processed by sellers using Square, net of refunds, and ACH transfers.
For the years ended December 31, 2024, 2023, and 2022, none of our customers accounted for greater than 5% of Square GPV. We define Square GPV as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds.
Given our network scale, we believe Cash App can help bitcoin evolve beyond an asset class to an investment that possesses real transactional utility, which is why we launched our offering in 2018 with the ability to deposit and withdraw bitcoin across the blockchain.
Given our network scale, we believe Cash App can help bitcoin evolve beyond an asset class and enable transactional utility, which is why we launched our offering in 2018 with the ability to deposit and withdraw bitcoin across the blockchain.
Our lending services may be, or may become, subject to regulation by other applicable authorities or jurisdictions, and the laws and regulations applicable to the lending industry in any given jurisdiction are always subject to interpretation and change.
Our lending services have been and may continue to be subject to regulation by other applicable authorities or jurisdictions, and the laws and regulations applicable to the lending industry in any given jurisdiction are always subject to interpretation and change.
Customers Square’s Customer capabilities help sellers grow their business. By linking customer data together with online and in-person commerce data, Square can offer sellers integrated omnichannel capabilities to acquire, engage, and retain customers. Square transaction data and reporting allows sellers to easily assess performance and return on investment.
By linking customer data together with online and in-person commerce data, Square can offer sellers integrated omnichannel capabilities to acquire, engage, and retain customers. Square transaction data and reporting allows sellers to easily assess performance and return on investment.
Features such as Cash App Card and Boost rewards, bitcoin buying and selling, investing in stocks and ETFs, cross-border payments, Cash App Pay, and a tax preparation service enhance Cash App’s utility for customers and provide reasons for consumers to try Cash App.
Features such as Cash App Card and Offers rewards, bitcoin buying and selling, investing in stocks and ETFs, Cash App Pay, and a tax preparation service enhance Cash App’s utility for customers and provide reasons for consumers to try Cash App.
The charts below show the percentage mix of our Square GPV by seller industry and seller size for the year ended December 31, 2023: 5 Our Cash App Customers As of December 2023, Cash App had 56 million monthly transacting actives across the United States and the U.K.
The charts below show the percentage mix of our Square GPV by seller industry and seller size for the year ended December 31, 2024: 5 Our Cash App Customers As of December 2024, Cash App had 57 million monthly transacting actives across the United States.
It accepts tap, dip, and swipe payments and has a battery that lasts all day, enabling payments anywhere in the store. • Square Stand enables an iPad to be used as a payment terminal or full point-of-sale solution.
It accepts tap, dip, and swipe payments, enabling payments anywhere in the store. • Square Stand enables an iPad to be used as a payment terminal or full point-of-sale solution.
Product Development and Technology We design both our Square and Cash App products and services to be cohesive, fast, self-serve, and elegant, and we organize our product teams accordingly, combining individuals from product management, engineering, data science, analytics, design, and product marketing. Our products and services are platform-agnostic with most supporting iOS, Android, and web.
Product Development and Technology We design both our Square and Cash App products and services to be cohesive, fast, self-serve, and elegant, and product development is a cross-functional effort combining individuals from product management, engineering, data science, analytics, design, and product marketing. Our products and services are platform-agnostic with most supporting iOS, Android, and web.
Buyers that enroll in a Square Loyalty program are twice as likely to be repeat customers and spend 50% more, on average. • Square Marketing helps sellers drive traffic by sending emails or texts to promote in-store events, new products, last-minute deals, or seasonal offers.
We have found that buyers that enroll in a Square Loyalty program have been more than three times as likely to be repeat customers and spend 50% more on average. • Square Marketing helps sellers drive traffic by sending emails or texts to promote in-store events, new products, last-minute deals, or seasonal offers.
These tactics include online search engine optimization and marketing, online display advertising, direct mail campaigns, direct response television advertising, mobile advertising, and affiliate and seller referral programs. Our direct sales and account management teams also contribute to the acquisition and support of larger sellers.
Direct marketing, online and offline, has also been an effective customer acquisition channel. These tactics include online search engine optimization and marketing, online display advertising, direct mail campaigns, direct response television advertising, mobile advertising, and affiliate and seller referral programs. 15 Our direct sales and account management teams also contribute to the acquisition and support of larger sellers.
As a broker-dealer, Cash App Investing is subject to SEC and FINRA laws and regulations including, without limitation, how it markets its services, handles customer assets, keeps records, and reports to the SEC and FINRA. Cash App Investing is also registered in each state where we conduct business, and subject to those states’ securities laws and regulations.
As a broker-dealer, Cash App Investing is subject to SEC and FINRA rules and regulations concerning matters that include, without limitation, how it markets its services, handles customer assets, keeps records, and reports to the SEC and FINRA. Cash App Investing is also registered in each state where it conducts business, and subject to those states’ securities laws and regulations.
This could represent, among other things, one customer with multiple accounts or multiple customers sharing one alias identifier (for example, families). 6 7 Our Products and Services Square Ecosystem Our Square ecosystem consists of more than 30 distinct software, hardware, and financial services products that provide cohesive Commerce, Customer Relationship Management, Staff Management, and Banking capabilities.
This could represent, among other things, one customer with multiple accounts or multiple customers sharing one alias identifier (for example, families). 6 7 Our Products and Services Square Ecosystem Our Square ecosystem consists of more than 30 distinct software, hardware, and financial services products.
Cash App Borrow, our first credit product for consumers, allows customers to access short-term loans for a small fee. The product offers eligible Cash App customers up to $500 during a given month that they can pay back in scheduled installments or as a percentage of what they receive into Cash App.
Cash App Borrow, our first credit product for consumers, allows customers to access short-term loans for a small fee. The product offers eligible Cash App customers up to $1,000 at any one time that they can pay back in scheduled installments or as a percentage of what they receive into Cash App.
Human Capital Our employees are a driving force behind our purpose of economic empowerment. Attracting, developing, and retaining top talent remain a focus in the development of our human capital programs. As of December 31, 2023, we had 12,985 full-time employees worldwide with 3,154 full-time employees outside the US.
Human Capital Our employees are a driving force behind our purpose of economic empowerment. Attracting, developing, and retaining top talent remain a focus in the development of our human capital programs. As of December 31, 2024, we had 11,372 full-time employees worldwide with 2,627 full-time employees outside the US.
Through the Square App Marketplace, Square partners are able to expand their own addressable market by reaching the millions of sellers using Square. As of December 31, 2023, Square had nearly 1,000 managed partners connected to its platform.
Through the Square App Marketplace, Square partners are able to expand their own addressable market by reaching the millions of sellers using Square. As of December 31, 2024, Square had more than 900 managed partners connected to its platform.
The Square ecosystem drives competitive differentiation for our Payroll product with the ability to use Payroll in conjunction with our point-of-sale products, Team Management, and Cash App.
The Square ecosystem drives competitive differentiation for our Payroll product with the ability to use Payroll in conjunction with our point-of-sale products, Team Management, and Cash App. Financial Services Through our wholly-owned subsidiary bank, Square Financial Services, Inc.
We determine a Cash App customer’s eligibility based on prudent risk management by using our unique data set that includes a customer’s inflows and engagement on Cash App. The average Cash App Borrow loan was repaid in less than four weeks in 2023.
We determine a Cash App customer’s eligibility based on prudent risk management by using our unique data set that includes a customer’s inflows and engagement on Cash App. The average Cash App Borrow loan was repaid in less than four weeks in 2024. BNPL Platform Cash App is focused on driving greater commerce between consumers and merchants.
We also engage temporary employees and consultants as needed to support our operations. In November 2023, we announced we would implement an absolute cap of 12,000 on the number of employees we have at our company.
We also engage temporary employees and consultants as needed to support our operations. In November 2023, we announced we would implement an absolute cap of 12,000 on the number of employees we have at our company. We expect to keep this cap in place until we believe the growth of the business has meaningfully outpaced the growth of our company.
Since our start in 2009 with the Square business, we have added Cash App, TIDAL, and TBD as businesses. Our two reportable segments are Square, formerly referred to as Seller, and Cash App, which reflects our two primary ecosystems and the manner in which the Company's chief operating decision maker ("CODM") reviews and assesses performance.
Our two reportable segments are Square, formerly referred to as Seller, and Cash App, which reflects our two primary ecosystems and the manner in which the Company's chief operating decision maker ("CODM") reviews and assesses performance.
The online store is mobile responsive, delivering an app-like ordering experience on a buyer’s phone. With integrated support for QR code ordering, sellers can also streamline their in-store operations by posting the QR code and having their buyers order from their own phones. Fulfillment options include pickup, delivery managed by our sellers, and integrations with partner delivery platforms.
With integrated support for QR code ordering, sellers can also streamline their in-store operations by posting the QR code and having their buyers order from their own phones. Fulfillment options include pickup, delivery managed by our sellers, and integrations with partner delivery platforms.
In the year ended December 31, 2023, more than 4 million sellers used the Square ecosystem to make 4.0 billion individual sales transactions totaling $209.6 billion of Square GPV. These sales transactions originated from 733 million payment cards, across 271 million buyer profiles.
In the year ended December 31, 2024, more than 4 million sellers used the Square ecosystem to make 5.2 billion individual sales transactions totaling $228 billion of Square GPV. These sales transactions originated from more than 800 million payment cards, across more than 300 million buyer profiles.
Our primary focus with Cash App, in alliance with our bank partners, is on earning the primary banking relationship of our existing customer base in the U.S. 12 Customers can use Cash App to inflow funds in a variety of ways, including by receiving money from another Cash App customer through the app’s core peer-to-peer transfer service, transferring money from a bank account, depositing mobile checks, adding physical cash at participating retailers, receiving a recurring paycheck by direct deposit, and through other inflow channels.
Inflows and Outflows Customers can use Cash App to inflow funds in a variety of ways, including by receiving money from another Cash App customer through the app’s core peer-to-peer transfer service, transferring money from a bank account, depositing mobile checks, adding physical cash at participating retailers, receiving a recurring paycheck by direct deposit, and through other inflow channels.
TIDAL has a global presence with listeners in more than 60 countries and relationships with more than 200 labels and distributors. 4 Bitcoin Ecosystem Our bitcoin ecosystem includes TBD, which is an open developer platform focused on making the decentralized financial world accessible for everyone, our bitcoin hardware projects, which include Bitkey, a self-custody bitcoin wallet, a bitcoin mining system, Spiral, an independent team focused on contributing to bitcoin open source work.
TIDAL has a global presence with listeners in more than 60 countries and relationships with more than 300 labels and distributors. 4 Bitcoin Ecosystem Our bitcoin ecosystem includes our bitcoin hardware projects, which include Bitkey, a self-custody bitcoin wallet, Proto, a bitcoin mining system, as well as Spiral, an independent team focused on contributing to bitcoin open source work.
In 2023, each Cash App monthly transacting active brought in an average of $384 of inflows in a given month during the year. A transacting active is a Cash App account that has at least one financial transaction using any product or service within Cash App during the specified period.
In the fourth quarter of 2024, our Cash App monthly transacting actives brought in an average of $1,255 of inflows during the quarter. A transacting active is a Cash App account that has at least one financial transaction using any product or service within Cash App during the specified period.
Our Net Promoter Score (“NPS”) has averaged 54 over the past four quarters, which is nearly double the average score for banking providers. Our high NPS means Square sellers recommend our services to others, which we believe strengthens the Square brand and helps drive efficient customer acquisition. Direct marketing, online and offline, has also been an effective customer acquisition channel.
Our Net Promoter Score (“NPS”) has averaged 53 over the past four quarters, which is notably higher than the average score for banking providers. Our high NPS means Square sellers recommend our services to others, which we believe strengthens the Square brand and helps drive efficient customer acquisition.
Generally, loan repayment occurs automatically through a fixed percentage of every card transaction a seller takes. Loans are sized to be less than 20% of a seller's expected annual Square GPV and, by simply running their business, sellers historically have repaid their loans within nine months on average.
Loans are sized to be less than 20% of a seller's expected annual Square GPV and, by simply running their business, sellers historically have repaid their loans within nine months on average.
Instant Transfer is an important tool for sellers that need faster access to their funds in order to better manage their cash flow or working capital. • Square Checking provides sellers with an FDIC-insured account that gives them instant access to their sales and the ability to immediately use those funds via a debit card (Square Debit Card), withdraw funds from an ATM, or transfer funds via ACH. • Square Savings is a high-yield business savings account, with no monthly fees or minimums, designed to make cash flow management easier for sellers.
Square Checking gives sellers instant access to their sales and the ability to immediately use those funds via a debit card (Square Debit Card), withdraw funds from an ATM, or transfer funds via ACH. • Square Savings is an FDIC-insured, interest earning business savings account at Square Financial Services, with no monthly fees or minimums, designed to make cash flow management easier for sellers.
With Square Savings, sellers can easily and automatically put aside a portion of their sales in their savings account while also organizing their money within folders, streamlining the process of saving funds for specific goals and priorities, such as quarterly tax obligations.
With Square Savings, sellers can easily and automatically put aside a portion of their sales in their savings account while also organizing their money within folders, streamlining the process of saving funds for specific goals and priorities, such as quarterly tax obligations. 11 Hardware Square custom-designs hardware that can process all major card payment forms, including magnetic stripe, EMV chip, and NFC (contactless).
Banking We offer a growing number of banking services that make it easier for sellers to manage cash flow and get faster access to funds. 11 • Square Lending provides a platform of lending products to qualified Square sellers . Square Loans (formerly Square Capital) facilitates loans to qualified Square sellers through our subsidiary Square Financial Services, Inc.
(“Square Financial Services”) and with our third-party bank partners, we offer a growing number of banking services that make it easier for sellers to manage cash flow and get faster access to funds. • Square Lending provides a platform of lending products to qualified Square sellers.
Department of the Treasury’s Office of Foreign Assets Controls and equivalent applicable foreign authorities prohibit or restrict transactions to or from, or dealings with, specified countries, governments, individuals and entities that are specially designated nationals of those countries, including narcotics traffickers and terrorists or terrorist organizations.
Department of the Treasury’s Office of Foreign Assets Controls and equivalent applicable foreign authorities prohibit or restrict transactions to or from, or dealings with, specified countries, governments, individuals and entities, including narcotics traffickers and terrorists or terrorist organizations. We have implemented compliance programs and controls designed to comply with the laws and regulations to which we are subject.
Orders, items, inventory, and customer data stay in sync when selling both online and in-person. • Square Online Checkout makes it easy to sell online without a website by allowing sellers to create a checkout link with only a name and price for their good or service. 9 • Square Invoices is a customizable digital invoicing solution with integrated and secure online payment acceptance.
The system is designed for orders, items, inventory, and customer data to stay in sync when selling both online and in-person. • Square Online Checkout makes it easy to sell online without a website by allowing sellers to create a checkout link with only a name and price for their good or service. • Square Virtual Terminal allows sellers to use a computer as a card terminal.
Most of our Square software products have a free tier (without a subscription fee), which we monetize only through transaction fees on card payments.
Most of our Square commerce products have a free tier (without a subscription fee), which we monetize only through transaction fees on card payments. Some commerce products also have premium tiers with additional functionality, which we monetize through subscription fees in addition to transaction fees on payments.
Tax Preparation Cash App Taxes provides a seamless, mobile-first solution for consumers to file their taxes for free. Stock Brokerage Customers can also use Cash App to invest their funds for free in U.S. listed stocks and ETFs.
The Lightning Network is a second layer technology applied to the bitcoin blockchain that enables faster transactions with little to no fees. Tax Preparation Cash App Taxes provides a seamless, mobile-first solution for consumers to file their taxes for free. Stock Brokerage Customers can also use Cash App to invest their funds for free in U.S. listed stocks and ETFs.
Cash App’s goal is to redefine the world’s relationship with money by making it more relatable, instantly available, and universally accessible.
Cash App Ecosystem Cash App provides an ecosystem of financial products and services to help consumers manage their money. Cash App’s goal is to redefine the world’s relationship with money by making it more relatable, instantly available, and universally accessible.
Our BNPL platform facilitates commerce between retail merchants and consumers by allowing its retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis.
Our BNPL platform facilitates commerce between retail merchants and consumers by allowing its retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis. Our BNPL platform provides consumers the ability to get desired items now but pay for them later, while simultaneously helping merchants increase sales and order values.
The structure of the product includes no late fees and no compounding interest with a cap on total interest owed. • Advertising and affiliate: Our BNPL platform generates hundreds of millions of leads each year for merchants and has channeled this demand towards scaling an ads and affiliate program for its merchants: for affiliate relationships, we receive a commission when a consumer begins their shopping journey in the Afterpay App and makes a purchase.
Similar to Pay in 4, we pay retail merchants the full order value up front (less a percentage fee) and assume the risk of non-payment from the consumer. • Advertising and affiliate: Our BNPL platform generates hundreds of millions of leads each year for merchants and has channeled this demand towards scaling an ads and affiliate program for its merchants: for affiliate relationships, we receive a commission when a consumer begins their shopping journey in the Afterpay App and makes a purchase.
Our services are built on a scalable technology platform, and we place a strong emphasis on data analytics and machine learning to maximize the efficacy, efficiency, and scalability of our services. 16 In our Square ecosystem, this technology platform enables us to capture and analyze billions of transactions per year and automate risk assessment for more than 99.95% of all transactions.
In our Square ecosystem, this technology platform enables us to capture and analyze billions of transactions per year and automate risk assessment for more than 99.95% of all transactions.
The opening of Square Financial Services, Inc., our ILC, in March 2021 subjects us to direct state and federal regulatory supervision and requires compliance with applicable banking regulations and requirements. 18 Lending Regulation Various laws and regulations govern lending in the United States and internationally.
Bank Regulation We obtained approval from the Federal Deposit Insurance Corporation ("FDIC") and the Utah Department of Financial Institutions to open an ILC. The opening of Square Financial Services, Inc., our ILC, in March 2021 subjects us to direct state and federal regulatory supervision and requires compliance with applicable banking regulations.
Cash App has a diverse mix of customers, and in the United States, Cash App had monthly transacting actives in each of the 50 states and nearly every county as of December 2023. In 2023, Cash App transacting actives brought more than $248 billion in inflows into Cash App.
In 2024, Cash App was the number one finance app on Google Play and number two finance app on iOS based on downloads in the United States. Cash App has a diverse mix of customers and, in the United States, had monthly transacting actives in each of the 50 states and nearly every county as of December 2024.
When customers use peer-to-peer, they are inviting their friends, family, and coworkers to download Cash App so that they can send each other money. Peer-to-peer becomes more useful for our customers as their communities expand, so our customers are naturally incentivized to bring more people into their networks.
Peer-to-peer becomes more useful for our customers as their communities expand, so our customers are naturally incentivized to bring more people into their networks.
Cash App Pay Cash App Pay is a simple, mobile-friendly way for Cash App customers to pay at merchants across online and in-person channels.
We believe our customer base values fast access to funds, and this speed is one example of how we differentiate our ecosystem. Cash App Pay Cash App Pay is a simple, mobile-friendly way for Cash App customers to pay at merchants across online and in-person channels.
We have developed a patent program and strategy to identify, apply for, and secure patents for innovative aspects of our products, services, and technologies where appropriate. We also actively pursue registration of our trademarks, logos, service marks, trade dress, and domain names in the United States and in other jurisdictions.
We also actively pursue registration of our trademarks, logos, service marks, trade dress, and domain names in the United States and in other jurisdictions.
Square hardware can be integrated with additional accessories such as cash drawers, receipt printers, scales, and barcode scanners to provide sellers with a comprehensive point-of-sale solution. Square's hardware portfolio includes the following: • Square Register is an all-in-one offering that combines our hardware, point-of-sale software, and payments technology.
Square's hardware portfolio includes the following: • Square Register is an all-in-one offering that combines our hardware, point-of-sale software, and payments technology.
Cash App also uses paid marketing, including referrals, advertising spend, partnerships, and social media campaigns, to expand its network, as these programs help reach new customers, enhance its brand, and improve retention among existing customers. Additionally, we see the launch and advertising of new Cash App features as an important way to attract new customers and engage existing customers.
Cash App also uses paid marketing, including referrals, advertising spend, partnerships, and social media campaigns, to expand its network, as these programs help reach new customers, enhance its brand, and improve retention among existing customers. Cash App has a dedicated sales team focused on products like BNPL, Monthly Payment Solution, Cash App Pay, and other new and emerging products.
We believe building and maintaining deep trust with our customers will drive greater product adoption and increased inflows into our ecosystem. Banking Services • Cash App Card is a debit card, issued by our bank partner, and linked directly to a customer’s Cash App balance.
We believe building and maintaining deep trust with our customers will drive greater product adoption and increased inflows into our ecosystem.
Our approach for Cash App is to combine these three areas together in a unique manner to define a new product category and reinvent banking for our customers.
Our approach for Cash App is to combine these three areas together in a unique manner to define a new product category and reinvent banking for our customers. With its bank partners, Cash App aims to become one of the top providers of banking services to households in the United States that earn up to $150,000 per year.
(“SFS Financial Services”), which is an industrial loan company (“ILC"). Square Loans eliminates the lengthy (and often unsuccessful) loan application process. We are able to approve sellers for these loans by using our unique data set of the seller’s Square transactions to help facilitate loan underwriting and collections, which mitigates risks.
We are able to approve sellers for these loans by using our unique data set of the seller’s Square transactions to help facilitate loan underwriting and collections, which mitigates risks. Generally, loan repayment occurs automatically through a fixed percentage of every card transaction a seller takes.
This eliminates the need to print and mail statements to customers and wait for checks to arrive. Sellers use Square Invoices for upcoming, recurring, or previously delivered goods and services, such as catering orders, contractor services, lessons, and retail orders.
Sellers use Square Invoices for upcoming, recurring, or previously delivered goods and services, such as catering orders, contractor services, lessons, and retail orders. Square Invoices also lets sellers send estimates and collect partial payments for goods and services.
Our direct, ongoing interactions with our sellers help us tailor offerings to them, at scale, and in the context of their usage.
In the fourth quarter of 2024, we began hiring a field sales team to focus exclusively on in-person seller outreach to further increase acquisition of larger sellers. Our direct, ongoing interactions with our sellers help us tailor offerings to them, at scale, and in the context of their usage.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur bylaws provide that (1) the Delaware Court of Chancery or another state court or federal court located within the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and (2) the federal district courts of the U.S. will be the exclusive forum for all causes of action arising under the Securities Act, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
Biggest changeAny provision of our certificate of incorporation, bylaws, or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our Class A common stock. 58 Our bylaws provide that (1) the Delaware Court of Chancery or another state court or federal court located within the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders and (2) the federal district courts of the U.S. will be the exclusive forum for all causes of action arising under the Securities Act, which could limit our stockholders’ ability to choose the judicial forum for disputes with us or our directors, officers, or employees.
In addition, as a provider of payments solutions and other financial services, we are subject to increased scrutiny by regulators that may require specific business continuity and disaster recovery plans and more rigorous testing of such plans. This increased scrutiny may be costly and time-consuming and may divert our resources from other business priorities.
In addition, as a provider of payments solutions and other financial services, we are subject to increased scrutiny by regulators that require specific business continuity and disaster recovery plans and more rigorous testing of such plans. This increased scrutiny may be costly and time-consuming and may divert our resources from other business priorities.
The highly automated nature of, and liquidity offered by, our payments and peer-to-peer services make us and our customers a target for illegal or improper uses, including scams and fraud directed at our customers, fraudulent or illegal sales of goods or services, money laundering, and terrorist financing.
The highly automated nature of, and liquidity offered by, our payments and peer-to-peer services make us and our customers a target for illegal or improper uses, including scams and fraud directed at us and our customers, fraudulent or illegal sales of goods or services, money laundering, and terrorist financing.
From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction processed using their networks. In some cases, we have negotiated favorable pricing with acquiring processors and networks that are contingent on certain business commitments and other conditions.
From time to time, payment card networks have increased, and may in the future increase, the interchange fees and assessments that they charge for each transaction processed using their networks. In some cases, we have negotiated favorable pricing with acquiring processors and networks that are contingent on certain business commitments and other conditions.
While we believe that our existing cash and cash equivalents, marketable debt securities, and availability under our line of credit are sufficient to meet our working capital needs and planned capital expenditures, and service our debt, there is no guarantee that this will continue to be true in the future.
While we believe that our existing cash and cash equivalents, marketable debt securities, and availability under our line of credit are sufficient to meet our working capital needs, planned capital expenditures, and service our debt, there is no guarantee that this will continue to be true in the future.
Although we have a compliance program focused on the laws, rules, regulations, and standards applicable to our business, we have been and are still subject to audits, inspections, inquiries, investigations, fines, or other actions or penalties in one or more jurisdictions levied by regulators, including federal agencies, state Attorneys General and private plaintiffs who may be acting as private attorneys general pursuant to various applicable laws, as well as those levied by foreign regulators, authorities, and governing bodies.
Although we have a compliance program focused on the laws, rules, regulations, and standards applicable to our business, we have been and are still subject to audits, inspections, inquiries, investigations, fines, or other actions or penalties in one or more jurisdictions levied by regulators, including federal and state agencies, state Attorneys General and private plaintiffs who may be acting as private attorneys general pursuant to various applicable laws, as well as those levied by foreign regulators, authorities, and governing bodies.
Our subsidiary Cash App Investing is a broker-dealer registered with the SEC and a member of FINRA, and therefore is subject to extensive regulation and scrutiny. Our subsidiary Cash App Investing facilitates transactions in shares and fractionalized shares of publicly-traded stock and exchange-traded funds by users of our Cash App through a third-party clearing and carrying broker, DriveWealth LLC (“DriveWealth”).
Our subsidiary Cash App Investing is a broker-dealer registered with the SEC and a member of FINRA, and therefore is subject to extensive regulation and scrutiny. Our subsidiary Cash App Investing facilitates transactions in shares and fractionalized shares of publicly-traded stock and exchange-traded funds by users of our Cash App through a third-party clearing and carrying broker-dealer, DriveWealth LLC (“DriveWealth”).
Our Class A common stock is listed to trade on more than one stock exchange, and this may result in price variations. Our Class A common stock is listed for trade on the NYSE and as CDIs on the ASX. Dual-listing may result in price variations between the exchanges due to a number of factors.
Our Class A common stock is listed to trade on more than one stock exchange, and this may result in price variations between the exchanges. Our Class A common stock is listed for trade on the NYSE and as CDIs on the ASX. Dual-listing may result in price variations between the exchanges due to a number of factors.
The convertible note hedge transactions are expected generally to reduce the potential dilution to our Class A common stock upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be.
The convertible note hedge transactions are expected generally to offset the potential dilution to our Class A common stock upon any conversion of the Convertible Notes and/or reduce any cash payments we are required to make in excess of the principal amount of converted Convertible Notes, as the case may be.
Our bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court in Delaware or federal district court for the District of Delaware) is the exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employees to us or to our stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine, in all cases subject to the court having jurisdiction over the claims at issue and the indispensable parties.
Our bylaws provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court in Delaware or the federal district court for the District of Delaware) is the exclusive forum for (i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employees to us or to our stockholders; (iii) any action asserting a claim arising pursuant to the Delaware General Corporation Law, our certificate of incorporation or our bylaws; or (iv) any action asserting a claim governed by the internal affairs doctrine, in all cases subject to the court having jurisdiction over the claims at issue and the indispensable parties.
In particular, our continued growth will increase the challenges involved in: 39 • improving existing and developing new internal administrative infrastructure, particularly our operational, financial, communications, and other internal systems and procedures; • successfully expanding and implementing internal controls as they relate to our new lines of business and any acquired businesses; • identifying and mitigating new and developing risks; • installing enhanced management information and control systems; and • preserving our core values, strategies, and goals and effectively communicating these to our employees worldwide.
In particular, our continued growth will increase the challenges involved in: • improving existing and developing new internal administrative infrastructure, particularly our operational, financial, communications, and other internal systems and procedures; • successfully expanding and implementing internal controls as they relate to our new lines of business and any acquired businesses; • identifying and mitigating new and developing risks; • installing enhanced management information and control systems; and • preserving our core values, strategies, and goals and effectively communicating these to our employees worldwide.
In particular, it is possible that tax authorities at the international, federal, state, and local levels may attempt to regulate our transactions or levy new or revised sales and use taxes, gross receipts, franchise, VAT, digital services taxes, digital advertising taxes, income taxes, loan taxes, or other taxes relating to our activities, which would likely increase the cost of doing business.
In particular, it is possible that tax authorities at the international, federal, state, and local levels may attempt to regulate our transactions or levy new or revised sales and use taxes, gross receipts, franchise, VAT, digital services taxes, digital advertising taxes, income taxes, loan taxes, streaming taxes, or other taxes relating to our activities, which would likely increase the cost of doing business.
In particular, with laws and regulations such as the GDPR in the EU and the CCPA, CPRA, and other laws in the U.S. imposing new and relatively burdensome obligations, and with the interpretation and application of these and other laws and regulations subject to evolving and uncertain interpretation and application, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and we may incur significant costs and expenses in an effort to do so.
In particular, with laws and regulations such as the GDPR in the EU and the CCPA, and other laws in the U.S. imposing new and relatively burdensome obligations, and with the interpretation and application of these and other laws and regulations subject to evolving and uncertain interpretation and application, we may face challenges in addressing their requirements and making necessary changes to our policies and practices, and we may incur significant costs and expenses in an effort to do so.
Additionally, due to political uncertainty and military actions associated with Russia’s invasion of Ukraine, we and our service providers are vulnerable to heightened risks of security incidents and security and privacy breaches from or affiliated with nation-state actors, including attacks that could materially disrupt our systems, operations, supply chain, products, and services.
Additionally, due to political uncertainty and military actions, including those associated with Russia’s invasion of Ukraine, we and our service providers are vulnerable to heightened risks of security incidents and security and privacy breaches from or affiliated with nation-state actors, including attacks that could materially disrupt our systems, operations, supply chain, products, and services.
For example, prior to our adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), our bitcoin was accounted for as an indefinite-lived intangible asset and for each reporting period, we were required to evaluate our bitcoin for impairment and record impairment losses if the fair value decreased below the carrying value during the assessed period.
Prior to our adoption of ASU 2023-08, Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), our bitcoin was accounted for as an indefinite-lived intangible asset and for each reporting period, we were required to evaluate our bitcoin for impairment and record impairment losses if the fair value decreased below the carrying value during the assessed period.
In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, including risks that: • the transaction may not advance our business strategy or may harm our growth, profitability, or reputation; • we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • the transaction may subject us to additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • we may not realize a satisfactory return on our investment or increase our revenue; • we may experience difficulty, and may not be successful in, integrating technologies, IT or business enterprise systems, culture, or management or other personnel of the acquired business; • we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business; • we may not realize the expected benefits or synergies from the transaction in the expected time period, or at all, which may result in impairment charges, costs of winding down acquired operations or other negative impacts to our business; • we may be unable to retain key personnel; • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and information security, and our due diligence process may not identify compliance issues or other liabilities.
In addition to transaction and opportunity costs, these transactions involve large challenges and risks, whether or not such transactions are completed, including risks that: • the transaction may not advance our business strategy or may harm our growth, profitability, or reputation; • we may not be able to secure required regulatory approvals or otherwise satisfy closing conditions for a proposed transaction in a timely manner, or at all; • the transaction may subject us to additional regulatory burdens that affect our business in potentially unanticipated and significantly negative ways; • we may not realize a satisfactory return on our investment or increase our revenue; • we may experience difficulty, and may not be successful in, integrating technologies, IT or business enterprise systems, culture, or management or other personnel of the acquired business; • we may incur significant acquisition costs and transition costs, including in connection with the assumption of ongoing expenses of the acquired business; • we may not realize the expected benefits or synergies from the transaction in the expected time period, or at all, which may result in impairment charges, costs of winding down acquired operations or other negative impacts to our business; • we may be unable to retain key personnel; • acquired businesses or businesses that we invest in may not have adequate controls, processes, and procedures to ensure compliance with laws and regulations, including with respect to data privacy, data protection, and cybersecurity, and our due diligence process may not identify compliance issues or other liabilities.
In addition, from time to time we have reduced expenses and needed to restructure or reorganize certain portions of our operations in order to align our business with market conditions and our strategies, any of which can result in near term expense and harm to our growth prospects. We are currently subletting some of our office space.
In addition, from time to time we have reduced expenses and needed to restructure or reorganize certain portions of our operations in order to align our business with market conditions and our strategies, any of which can result in near term expense and harm to our growth prospects. 41 We are currently subletting some of our office space.
In addition, upon a default by any option counterparty, we may suffer adverse tax consequences and dilution with respect to our Class A common stock. We can provide no assurance as to the financial stability or viability of any option counterparty. 44 Our bitcoin investment is subject to volatile market prices.
In addition, upon a default by any option counterparty, we may suffer adverse tax consequences and dilution with respect to our Class A common stock. We can provide no assurance as to the financial stability or viability of any option counterparty. Our bitcoin investment is subject to volatile market prices.
These and other such hedging activities may not eliminate our exposure to foreign exchange fluctuations. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments. We may have exposure to greater-than-anticipated tax liabilities, which may materially and adversely affect our business.
These and other such hedging activities may not eliminate our exposure to foreign exchange fluctuations. Moreover, the use of hedging instruments may introduce additional risks if we are unable to structure effective hedges with such instruments. 44 We may have exposure to greater-than-anticipated tax liabilities, which may materially and adversely affect our business.
We have experienced and will likely continue to experience denial-of-service and other cyber-attacks, system failures, outages, security incidents, and other events or conditions that interrupt the availability, data integrity, or reduce the speed or functionality of our products and services. These events have resulted and likely will result in loss of revenue.
We have experienced and will likely continue to experience denial-of-service and other cyber-attacks, system failures and disruptions, outages, security incidents, and other events or conditions that interrupt the availability, data integrity, or reduce the speed or functionality of our products and services. These events have resulted and likely will result in loss of revenue.
To provide our products and services, we rely on third parties that we do not control, such as the payment card networks, our acquiring and issuing processors, the payment card issuers, a carrying broker, bank partners, various financial institution partners, systems like the Federal Reserve Automated Clearing House, and other partners.
To provide our products and services, we rely on third parties that we do not control, such as the payment card networks, our acquiring and issuing processors, the payment card issuers, a carrying broker-dealer, bank partners, various financial institution partners, systems like the Federal Reserve Automated Clearing House, and other partners.
Square Financial Services is also subject to the requirements in Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve Board’s implementing Regulation W, which regulate loans, extensions of credit, purchases of assets, and certain other transactions between an insured depository institution (such as Square Financial Services) and its affiliates.
Square Financial Services is subject to the requirements in Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve Board’s implementing Regulation W, which regulate loans, extensions of credit, purchases of assets, and certain other transactions between an insured depository institution (such as Square Financial Services) and its affiliates.
Moreover, acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures. • we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, legal, regulatory, or tax exposure and may subject us to additional controls, policies, procedures, liabilities, litigation, costs of compliance or remediation, or other adverse effects on our business, operating results, or financial condition; • we may have difficulty entering into new market segments or new geographic territories; • we may be unable to retain the customers, vendors, and partners of acquired businesses; • there may be lawsuits or regulatory actions resulting from the transaction; 28 • there may be risks associated with undetected security weaknesses, cyberattacks, or security breaches or incidents at companies that we acquire or with which we may combine or partner; • there may be local and foreign regulations applicable to the international activities of our business and the businesses we acquire; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of debt.
Moreover, acquired businesses’ technology stacks may add complexity, resource constraints, and legacy technological challenges that make it difficult and time consuming to achieve such adequate controls, processes, and procedures; • we may fail to identify or assess the magnitude of certain liabilities, shortcomings, or other circumstances prior to acquiring or investing in a business, which could result in additional financial, legal, regulatory, or tax exposure and may subject us to additional controls, policies, procedures, liabilities, litigation, costs of compliance or remediation, or other adverse effects on our business, operating results, or financial condition; • we may have difficulty entering into new market segments or new geographic territories; • we may be unable to retain the customers, vendors, and partners of acquired businesses; • there may be lawsuits or regulatory actions resulting from the transaction; 28 • there may be risks associated with undetected security weaknesses, cyber-attacks, or security breaches or incidents at companies that we acquire or with which we may combine or partner; • there may be local and foreign regulations applicable to the international activities of our business and the businesses we acquire; and • acquisitions could result in dilutive issuances of equity securities or the incurrence of additional debt.
If the FDIC were to increase Square Financial Services’ capital requirements, it could negatively impact our business and operations and those of Square Financial Services. The FDIC’s approval is also contingent on us maintaining a Capital and Liquidity Maintenance Agreement as well as a Parent Company Agreement.
If the FDIC were to increase Square Financial Services’ capital requirements, it could negatively impact our business and operations and those of Square Financial Services. 52 The FDIC’s approval is also contingent on us maintaining a Capital and Liquidity Maintenance Agreement as well as a Parent Company Agreement.
Such expansion, and the ongoing operation of our global business, subject our business to substantial risks, including: • difficulty in attracting sellers and customers, or a lack of acceptance of our products and services in foreign markets; • failure to anticipate competitive conditions and competition with service providers or other market-players that have greater experience in the foreign markets than we do; • failure to conform with applicable business customs, including translation into foreign languages, cultural context, and associated expenses; • increased costs and difficulty in protecting intellectual property and sensitive data; • changes to the way we do business as compared with our current operations; • inability to support and integrate with local third-party service providers; • difficulties in staffing and managing foreign operations in an environment of diverse cultures, laws, and customs, challenges caused by distance, language, and cultural differences, and the increased travel, infrastructure, and legal and compliance costs associated with global operations; • difficulties in recruiting and retaining qualified employees and maintaining our company culture; • difficulty in gaining acceptance and maintaining compliance with industry self-regulatory bodies; • compliance with multiple complex, potentially conflicting and changing governmental laws and regulations, including with respect to payments, privacy, data protection, information security, and tax; • compliance with U.S. and foreign anti-corruption, anti-bribery, and anti-money laundering laws; • enactment of tariffs, sanctions, fines, or other trade restrictions; • exchange rate risk; 30 • increased exposure to public health issues such as pandemics, and related industry and governmental actions to address these issues; and • regional economic and political instability and other geopolitical risks.
Such expansion, and the ongoing operation of our global business, subject our business to substantial risks, including: • difficulty in attracting sellers and customers, or a lack of acceptance of our products and services in foreign markets; • failure to anticipate competitive conditions and competition with service providers or other market-players that have greater experience in the foreign markets than we do; • failure to conform with applicable business customs, including translation into foreign languages, cultural context, and associated expenses; • increased costs and difficulty in protecting intellectual property and sensitive data; • changes to or restrictions on the way we do business as compared with our current operations; • inability to support and integrate with local third-party service providers; • difficulties in staffing and managing foreign operations in an environment of diverse cultures, laws, and customs, challenges caused by distance, language, and cultural differences, and the increased travel, infrastructure, and legal and compliance costs associated with global operations; 29 • difficulties in recruiting and retaining qualified employees and maintaining our company culture; • difficulty in gaining acceptance and maintaining compliance with industry self-regulatory bodies; • compliance with multiple complex, potentially conflicting and changing governmental laws and regulations, including with respect to payments, privacy, data protection, information security, and tax; • compliance with U.S. and foreign anti-corruption, anti-bribery, and anti-money laundering laws; • enactment of or increases in tariffs, sanctions, fines, or other trade restrictions; • exchange rate risk; • increased exposure to public health issues such as pandemics, and related industry and governmental actions to address these issues; and • regional economic and political instability and other geopolitical risks.
If we were unable to accept payment cards or were limited in our ability to do so, our business would be materially and adversely affected. We are required to pay interchange and assessment fees, processing fees, and bank settlement fees to third-party payment processors, payment networks, and financial institutions.
If we were unable to accept payment cards or were limited in our ability to do so, our business would be materially and adversely affected. 37 We are required to pay interchange and assessment fees, processing fees, and bank settlement fees to third-party payment processors, payment networks, and financial institutions.
In addition to the factors discussed in this Risk Factors section and elsewhere in this Annual Report on Form 10-K, factors that could cause fluctuations in the market price of our Class A common stock include the following: • general economic, regulatory, and market conditions, in particular conditions that adversely affect our sellers’ business and the amount of transactions they are processing; • public health crises and related measures to protect the public health; • sales of shares of our common stock by us or our stockholders; • issuance of shares of our Class A common stock, whether in connection with an acquisition or upon conversion of some or all of our outstanding Convertible Notes; • short selling of our Class A common stock or related derivative securities; • from time to time we make investments in equity that is, or may become, publicly held, and we may experience volatility due to changes in the market prices of such equity investments; • fluctuations in the price of bitcoin, and potentially any impairment charges in connection with our investments in bitcoin; • reports by securities or industry analysts, media or other third parties, that are interpreted either negatively or positively by investors, failure of securities analysts to maintain coverage and/or to provide accurate consensus results of us, changes in financial estimates by securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • the financial or other projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products or services; 56 • rumors and market speculation involving us or other companies in our industry; • actual or perceived security incidents that we or our service providers may suffer; and • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally.
In addition to the factors discussed in this Risk Factors section and elsewhere in this Annual Report on Form 10-K, factors that could cause fluctuations in the market price of our Class A common stock include the following: • general economic, regulatory, and market conditions, in particular conditions that adversely affect our sellers’ business and the amount of transactions they are processing; • public health crises and related measures to protect the public health; • sales of shares of our common stock by us or our stockholders; • issuance of shares of our Class A common stock, whether in connection with an acquisition or upon conversion of some or all of our outstanding Convertible Notes; • short selling of our Class A common stock or related derivative securities; • from time to time we make investments in equity that is, or may become, publicly held, and we may experience volatility due to changes in the market prices of such equity investments; • fluctuations in the price of bitcoin; • reports by securities or industry analysts, media or other third parties, that are interpreted either negatively or positively by investors, failure of securities analysts to maintain coverage and/or to provide accurate consensus results of us, changes in financial estimates by securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • the financial or other projections we may provide to the public, any changes in those projections, or our failure to meet those projections; • announcements by us or our competitors of new products or services; • rumors and market speculation involving us or other companies in our industry; • actual or perceived security incidents that we or our service providers may suffer; and • actual or anticipated developments in our business, our competitors’ businesses, or the competitive landscape generally.
Differences in the trading schedules, as well as volatility in the exchange rate of the two currencies, among other factors, may result in different trading prices for our Class A common stock on the two exchanges. The convertible note hedge and warrant transactions may affect the value of our Class A common stock.
Differences in the trading schedules, as well as volatility in the exchange rate of the two currencies, among other factors, may result in different trading prices for our Class A common stock on the two exchanges. 57 The convertible note hedge and warrant transactions may affect the value of our Class A common stock.
In addition, increases in our seller base could cause us to incur increased losses because costs associated with new sellers are generally incurred up front, while revenue is recognized in future periods as our products and services are used by our sellers.
In addition, increases in our seller base could cause us to incur increased costs because costs associated with new sellers are generally incurred up front, while revenue is recognized in future periods as our products and services are used by our sellers.
As a licensed money transmitter, we are subject to obligations and restrictions with respect to the investment of customer funds, reporting requirements, bonding requirements, and inspection by state and federal regulatory agencies concerning those aspects of our business considered money transmission.
As a licensed money transmitter, we are subject to obligations and restrictions including with respect to the investment of customer funds, reporting requirements, bonding requirements, and inspection by state and federal regulatory agencies concerning those aspects of our business considered money transmission.
We have made, and may make additional, investments in bitcoin. The price of bitcoin has been highly volatile and may continue to be volatile in the future, due to market factors, regulatory developments and other risks that are outside of our control.
We have made, and expect to make additional, investments in bitcoin. The price of bitcoin has been highly volatile and may continue to be volatile in the future, due to market factors, regulatory developments and other risks that are outside of our control.
Miscalculation of consumers’ repayment ability or a material increase in repayment failures, whether due to inflation, macroeconomic uncertainty and downturn, market volatility, or otherwise, may adversely affect our business, results of operations, and financial condition.
Miscalculation of repayment ability or a material increase in repayment failures, whether due to inflation, macroeconomic uncertainty and downturn, market volatility, or otherwise, may adversely affect our business, results of operations, and financial condition.
If there are additional bank or financial institution failures, we may be required to pay higher deposit insurance assessments or higher fees associated with FDIC-insured products offered through our bank partnerships, or we may be subject to higher capital requirements imposed by the FDIC, our bank partners, or federal banking regulators with authority over our bank partners, which could reduce our profitability, and negatively impact our business and operations. 31 We intend to continue to explore other products, models, and structures for our product offerings, including with bank partners.
If there are additional bank or financial institution failures, we may be required to pay higher deposit insurance assessments or higher fees associated with FDIC-insured products offered through our bank partnerships, or we may be subject to higher capital requirements imposed by the FDIC, our bank partners, or federal banking regulators with authority over our bank partners, which could reduce our profitability, and negatively impact our business and operations. 30 We intend to continue to explore other products, models, and structures for our product offerings, including with bank partners.
We have incurred costs related to our investigation and response to this incident, and we could incur other losses, costs, and liabilities in connection with such incident. 33 Under payment card rules and our contracts with our card processors and other counterparties, if there is a breach of payment card information that we store or that is stored by our sellers or other third parties with which we do business, we could be liable to the payment card issuing banks for certain of their costs and expenses.
We have incurred costs related to our investigation and response to this incident, and we could incur other losses, costs, and liabilities in connection with such incident. 32 Under payment card rules and our contracts with our card processors and other counterparties, if there is a breach of payment card information that we store or that is stored by our sellers or other third parties with which we do business, we could be liable to the payment card issuing banks for certain of their costs and expenses.
Additionally, any loss of private keys relating to, or hack or other compromise of, digital wallets used by third parties to store bitcoin or other cryptocurrencies could have negative reputational effects on us and harm customer trust in us and our products and could materially and adversely affect our business, operating results, and financial condition. 36 Our risk management efforts may not be effective, which could expose us to losses and liability and otherwise harm our business.
Additionally, any loss of private keys relating to, or hack or other compromise of, digital wallets used by third parties to store bitcoin or other cryptocurrencies could have negative reputational effects on us and harm customer trust in us and our products and could materially and adversely affect our business, operating results, and financial condition. 35 Our risk management efforts may not be effective, which could expose us to losses and liability and otherwise harm our business.
The indentures pursuant to which our 2026 Senior Notes and 2031 Senior Notes (collectively, the “Senior Notes”) were issued contain covenants that restrict or could restrict, among other things, our business and operations.
The indentures pursuant to which our 2026 Senior Notes, 2031 Senior Notes, and 2032 Senior Notes (collectively, the “Senior Notes”) were issued contain covenants that restrict or could restrict, among other things, our business and operations.
The introduction and promotion of new products and services, as well as the promotion of existing products and services, may be partly dependent on our visibility on third-party advertising platforms, such as Google, Facebook, or X.
The introduction and promotion of new products and services, as well as the promotion of existing products and services, may be partly dependent on our visibility on third-party advertising platforms, such as Google or Facebook.
Moreover, to the extent that any system failure or similar event results in damages to customers or contractual counterparties, these customers and contractual counterparties could seek compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. 35 A significant natural or man-made disaster could have a material and adverse impact on our business.
Moreover, to the extent that any system failure or similar event results in damages to customers or contractual counterparties, these customers and contractual counterparties could seek compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address. 34 A significant natural or man-made disaster could have a material and adverse impact on our business.
Rapid and significant technological changes continue to confront the industries in which we operate, including developments in omnichannel commerce, proximity payment devices (including contactless payments via NFC technology), digital banking, mobile financial apps, cryptocurrencies, tokenization (e.g., replacing sensitive data such as payment card information with symbols (tokens) to keep the data safe), blockchain, and artificial intelligence ("AI"), including machine learning.
Rapid and significant technological changes continue to confront the industries in which we operate, including developments in omnichannel commerce, proximity payment devices (including contactless payments via NFC technology), digital banking, mobile financial apps, cryptocurrencies, tokenization (e.g., replacing sensitive data such as payment card information with symbols (tokens) to keep the data safe), blockchain, and AI, including machine learning.
The recording of any future increases in our valuation allowance could have a material impact on our reported results, and both the recording and release of the valuation allowance could cause fluctuations in our quarterly and annual results of operations. 46 Legal, Regulatory, and Compliance Risks Our business is subject to extensive regulation and oversight in a variety of areas, all of which are subject to change and uncertain interpretation.
The recording of any future increases in or release of all or any portion of our valuation allowance could have a material impact on our reported results, and both the recording and release of the valuation allowance could cause fluctuations in our quarterly and annual results of operations. 46 Legal, Regulatory, and Compliance Risks Our business is subject to extensive regulation and oversight in a variety of areas, all of which are subject to change and uncertain interpretation.
Further, in the event a court finds either exclusive forum provision contained in our bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. 58 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Further, in the event a court finds either exclusive forum provision contained in our bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations. 59 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
These laws, rules, regulations, and standards are enforced by multiple authorities and governing bodies in the United States, including federal agencies, such as the FDIC, the SEC, the Consumer Financial Protection Bureau ("CFPB"), and Office of Foreign Assets Control, self-regulatory organizations, and numerous state and local agencies, such as the Utah Department of Financial Institutions.
These laws, rules, regulations, and standards are enforced by multiple authorities and governing bodies in the United States, including federal agencies, such as the FDIC, the SEC, the Consumer Financial Protection Bureau ("CFPB"), the Department of Justice ("DOJ") and Office of Foreign Assets Control, self-regulatory organizations, and numerous state and local agencies, such as the Utah Department of Financial Institutions.
As our hardware and software services continue to increase in size and complexity, and as we integrate new, acquired subsidiaries with different technology stacks and practices, these risks may correspondingly increase as well. 34 In addition, we provide frequent incremental releases of product and service updates and functional enhancements, which increase the possibility of errors.
As our hardware and software services continue to increase in size and complexity, and as we integrate new, acquired subsidiaries with different technology stacks and practices, these risks may correspondingly increase as well. 33 In addition, we provide frequent incremental releases of product and service updates and functional enhancements, which increase the possibility of errors.
For example, generative AI has become more publicly available and enterprise adoption of generative AI has grown. We have incorporated and expect to continue to incorporate AI features into our products and technologies and our success will depend in part on our ability to do so in a way that is compelling to our customers.
For example, generative AI has become more publicly available and enterprise adoption of generative AI has grown. We have incorporated and expect to continue to incorporate AI features into our products and technologies and our success will depend in part on our ability to do so in a way that is compelling to our customers and cost-effective.
Should our internal or third-party developers experience or cause a breach, incident, or technological bug, that could lead to a compromise of the content of data held by such sellers, including personal data, our reputation may be harmed and we may be subject to significant fines, penalties or judgments.
Should our internal or third-party developers experience or cause a breach, incident, technological bug, or similar event, that could lead to a compromise of the content of data held by such sellers, including personal data, our reputation may be harmed and we may be subject to significant fines, penalties or judgments.
In addition, because the servicing fees we receive from third-party investors depend on the collectability of the business loans, if there is an increase in sellers who utilize Square Loans who are unable to repay their business loans, we will be unable to collect our entire servicing fee for such loans.
In addition, because the servicing fees we receive from third-party investors depend on the repayment of the business loans, if there is an increase in sellers who utilize Square Loans who are unable to repay their business loans, we will be unable to collect our entire servicing fee for such loans.
Some of the laws and regulations affecting the internet, mobile commerce, payment processing, BNPL, bitcoin and equity investing, streaming service, business financing, and employment were not written with businesses like ours in mind, and many of the laws and regulations, including those affecting us have been enacted relatively recently.
Some of the laws and regulations affecting the internet, mobile commerce, dispute resolution, payment processing, BNPL, bitcoin and equity investing, streaming service, business financing, and employment were not written with businesses like ours in mind, and many of the laws and regulations, including those affecting us have been enacted relatively recently.
If the cryptocurrency environment deteriorates, our customers may wish to sell their bitcoin at a price or volume that exceeds the market demand for bitcoin, which could cause disruptions in our operations and have a material and adverse effect on our business and financial condition.
If the cryptocurrency environment either deteriorates or improves, our customers may wish to sell their bitcoin at a price or volume that exceeds the market demand for bitcoin, which could cause disruptions in our operations and have a material and adverse effect on our business and financial condition.
There can be no assurance that we will be able to obtain any such licenses, and, even if we were able to do so, there could be substantial costs and potential product changes involved in maintaining such licenses, which could have a material and adverse effect on our business.
There can be no assurance that we will be able to obtain or maintain any such licenses, and, even if we were able to do so, there could be substantial costs and potential product changes involved in maintaining such licenses, which could have a material and adverse effect on our business.
If the costs associated with acquiring and supporting new or larger sellers, attracting and supporting new Cash App customers, or with developing and supporting our products and services materially increase in the future, including the fees we pay to third parties to advertise our products and services, our expenses may rise significantly.
If the costs associated with acquiring and supporting new or larger sellers, attracting and supporting new Cash App customers, or with developing and supporting products, services and technologies materially increase in the future, including the fees we pay to third parties to advertise our products and services and compliance costs, our expenses may rise significantly.
We serve sellers across a variety of industry verticals and in an economic downtown, certain verticals, particularly those that may be viewed as discretionary by consumers, may be impacted to a greater degree than others, which may harm our business and financial results.
We serve sellers across a variety of industry verticals and in an economic downturn, certain verticals, particularly those that may be viewed as discretionary by consumers, may be impacted to a greater degree than others, which may harm our business and financial results.
Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under our existing credit facility or our senior notes and any future financing agreements into which we may enter.
Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under our existing credit agreement or our Senior Notes and any future financing agreements into which we may enter.
In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.
In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. Such litigation could result in substantial costs and a diversion of our management’s attention and resources.
In addition, when we introduce new products or services, expand existing services, including online payment acceptance and expanded methods of instantly moving money, focus on new business areas, including consumer financing and loans, or begin to operate in markets where we have a limited history of fraud loss, we may be less able to forecast and carry appropriate reserves on our books for those losses.
In addition, when we introduce new products or services, expand existing services or products to new or different cohorts of customers, including online payment acceptance and expanded methods of instantly moving money, focus on new business areas, including consumer financing and loans, or begin to operate in markets where we have a limited history of fraud loss, we may be less able to forecast and carry appropriate reserves on our books for those losses.
If our management team, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed. Competition for highly skilled personnel is intense.
If our management team or management structure, including any new hires that we make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed. Competition for highly skilled personnel is intense.
These laws, regulations, and standards govern numerous areas that are important to our business, and include, or may in the future include, those relating to banking, lending, deposit-taking, cross-border and domestic money transmission, foreign exchange, payments services (such as payment processing and settlement services), cryptocurrency, trading in shares and fractional shares, personal income tax filing, fraud detection, consumer protection, anti-money laundering, anti-bribery and anti-corruption, escheatment, sanctions regimes and export controls, privacy, data protection and information security, fiscalization and compliance with the Payment Card Industry Data Security Standard, a set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data.
These laws, regulations, and standards govern numerous areas that are important to our business, and include, or may in the future include, those relating to or placing restrictions upon banking, lending, deposit-taking, cross-border and domestic money transmission, foreign exchange, payments services (such as payment processing and settlement services), cryptocurrency, trading in shares and fractional shares, personal income tax filing, fraud detection, consumer protection, anti-money laundering, anti-bribery and anti-corruption, escheatment, sanctions regimes and export controls, AI, privacy, data protection and cybersecurity, fiscalization and compliance with the Payment Card Industry Data Security Standard, a set of requirements designed to ensure that all companies that process, store, or transmit payment card information maintain a secure environment to protect cardholder data.
We rely on these third parties for a variety of services, including the transmission of transaction data, processing of chargebacks and refunds, settlement of funds to our sellers, certain brokerage services, storing customer funds, authorizing payment transactions under our various card programs, originating loans to customers, provide liquidity for Cash App’s feature that permits our customers to buy and sell bitcoin, and the provision of information and other elements of our services.
We rely on these third parties for a variety of services, including the transmission of transaction data, processing of chargebacks and refunds, settlement of funds to our sellers, certain brokerage services, storing customer funds, authorizing payment transactions under our various card programs, originating loans to customers, providing liquidity for Cash App’s feature that permits our customers to buy and sell bitcoin, and providing information and other elements of our services.
Finally, because Cash App Investing is subject to such net capital requirements, we may be required to inject additional capital into Cash App Investing from time to time and as such, we may have liability and/or our larger business may be affected by any of these outcomes.
Finally, because Cash App Investing is subject to such net capital requirements, we may be required to provide additional capital into Cash App Investing from time to time and as such, we may have liability and/or our larger business may be affected by any of these outcomes.
Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively hold more than a majority of the combined voting power of our common stock, and therefore such holders are able to control all matters submitted to our stockholders for approval.
Because of the ten-to-one voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively hold more than a majority of the voting power of our outstanding common stock, and therefore such holders are able to control all matters submitted to our stockholders for approval.
For example, several states in the U.S. have proposed or enacted laws that contain obligations similar to the CCPA and CPRA that have taken effect or will take effect in coming years. The U.S. federal government also is contemplating federal privacy legislation.
For example, several states in the U.S. have proposed or enacted laws that contain obligations similar to the CCPA that have taken effect or will take effect in coming years. The U.S. federal government also is contemplating federal privacy legislation.
Operational risks: • real or perceived improper or unauthorized use of, disclosure of, or access to sensitive data; • real or perceived security breaches or incidents or human error in administering our software, hardware, and systems; • systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our products or services or those of our sellers; • any failure to safeguard the bitcoin we hold on behalf of ourselves and other parties; • our risk management efforts; • our dependence on payment card networks and acquiring processors; • our reliance on third parties and their systems for a variety of services, including the processing of transaction data and settlement of funds; • our dependence on key management and any failure to attract, motivate, and retain our employees; • our operational, financial, and other internal controls and systems; • any shortage, price increases, tariffs, changes, delay or discontinuation of our key components; • the integration of our services and our products with a variety of operating systems; and • difficulties estimating the amount payable under TIDAL's license agreements. 22 Economic, financial, and tax risks: • a deterioration of general macroeconomic conditions; • any inability to secure financing on favorable terms, or at all, or comply with covenants in our existing credit agreement, the indentures, or future agreements; • our ability to service our debt, including our convertible notes and our Senior Notes (as defined below); • counterparty risk with respect to our convertible note hedge transactions; • our bitcoin investments being subject to volatile market prices, impairment, and other risks of loss; • foreign exchange rates risks; and • any greater-than-anticipated tax liabilities or significant valuation allowances on our deferred tax assets.
Operational risks: • real or perceived improper or unauthorized use of, disclosure of, or access to sensitive data; • real or perceived security breaches or incidents or human error in administering our software, hardware, and systems; • systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our products or services or those of our sellers; • any failure to safeguard the bitcoin we hold on behalf of ourselves and other parties; • our risk management efforts; • our dependence on payment card networks and acquiring processors; • our reliance on third parties and their systems for a variety of services, including the processing of transaction data and settlement of funds; • our dependence on key management and any failure to attract, motivate, and retain our employees; • our operational, financial, and other internal controls and systems; • any shortage, price increases, tariffs, changes, delay or discontinuation of our key components; and • the integration of our services and our products with a variety of operating systems. 22 Economic, financial, and tax risks: • a deterioration of general macroeconomic conditions; • any inability to secure financing on favorable terms, or at all, or comply with covenants in our existing credit agreement, the indentures, or future agreements; • our ability to service our debt, including our Convertible Notes and our Senior Notes (each as defined below); • counterparty risk with respect to our convertible note hedge transactions; • our bitcoin investments being subject to volatile market prices and other risks of loss; • foreign exchange rates risks; and • any greater-than-anticipated tax liabilities or significant valuation allowances on our deferred tax assets.
If a merchant ceases its operations, closes some or all of its locations, or fails to deliver goods or services to our consumers, the merchant may not be able to reimburse us for chargebacks or refunds or may not be able to repay the funds we have advanced to them, all of which could result in higher charge-off rates than anticipated.
If a merchant ceases its operations, closes some or all of its locations, or fails to deliver goods or services to our BNPL customers, the merchant may not be able to reimburse us for chargebacks or refunds or may not be able to repay the funds we have advanced to them, all of which could result in higher charge-off rates than anticipated.
If we are unable to encourage broader use of our products and services within each of our ecosystems by our existing sellers and customers, our growth may slow or stop, and our business may be materially and adversely affected.
If we are unable to increase broader use of our products and services within each of our ecosystems by our existing sellers and customers, our growth may slow or stop, and our business may be materially and adversely affected.
Further, variances in these laws and regulations or their interpretations may increase our compliance costs. 49 We have incurred, and may continue to incur, significant expenses to comply with evolving privacy, data protection, and information security standards and protocols imposed by law, regulation, industry standards, shifting consumer expectations, or contractual obligations.
Further, variances in these laws and regulations or their interpretations may increase our compliance costs. 49 We have incurred, and may continue to incur, significant expenses to comply with evolving privacy, data protection, and cybersecurity standards and protocols imposed by law, regulation, industry standards, shifting consumer expectations, or contractual obligations.
Certain of our current product offerings subject us to reporting requirements, bonding requirements, and inspection by applicable federal or state regulatory agencies, and our future product offerings may potentially require, or be deemed to require, additional data, procedures, partnerships, licenses, regulatory approvals, or capabilities that we have not yet obtained or developed.
Certain of our current product offerings subject us to reporting requirements, bonding requirements, and inspection by applicable federal or state regulatory agencies, and our future product offerings and models and structures for our product offerings may potentially require, or be deemed to require, additional data, procedures, partnerships, licenses, regulatory approvals, or capabilities that we have not yet obtained or developed.
Square Financial Services, as the originator of the loans provided by Square Loans in the U.S., is subject to risks in addition to those described elsewhere in this Annual Report on Form 10-K. Maintaining and growing our Square Loans business is dependent on institutional third-party investors purchasing the eligible business loans originated by us.
Square Financial Services, as the originator of the loans provided by Square Loans in the U.S., is subject to additional risks described elsewhere in this Annual Report on Form 10-K. Maintaining and growing our Square Loans business is dependent on institutional third-party investors purchasing the eligible business loans originated by us.
More generally, if our privacy, data protection, or information security measures or those of third-party developers or vendors are inadequate or are breached or otherwise compromised, and, as a result, there is improper disclosure of or someone obtains unauthorized access to or exfiltrates funds, bitcoin, investments, or other assets, or other sensitive data on our systems or our partners’ systems, or if we, our third-party developers or vendors suffer a ransomware or advanced persistent threat attack, or if any of the foregoing is reported or perceived to have occurred, our reputation and business could be damaged, and we could face liability and financial losses.
More generally, if our privacy, data protection, or cybersecurity measures or those of third-party developers or vendors are inadequate or are breached or otherwise compromised, and, as a result, there is improper disclosure of or someone obtains unauthorized access to or exfiltrates funds, bitcoin, investments, or other assets, or other sensitive data on our systems or our partners’ systems, or if we, our third-party developers or vendors suffer a cyber-attack, including a ransomware or advanced persistent threat attack, or if any of the foregoing is reported or perceived to have occurred, our reputation and business could be damaged, and we could face liability and financial losses.
In addition, regulatory requirements with respect to carbon emissions disclosures and other aspects of ESG may result in increased compliance requirements on our business and supply chain, and may increase our operating costs.
Further, regulatory requirements with respect to carbon emissions disclosures and other aspects of ESG may result in increased compliance requirements on our business and supply chain, and may increase our operating costs.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of Class B common stock, including certain of our executive officers, employees, and directors and their affiliates, held approximately 52.14% of the voting power of our combined outstanding capital stock as of December 31, 2023.
Our Class B common stock has ten votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of Class B common stock, including certain of our executive officers, employees, and directors and their affiliates, held approximately 52% of the voting power of our combined outstanding capital stock as of December 31, 2024.
In the future, we may require additional capital to respond to business opportunities, refinancing needs, business and financial challenges, regulatory surety bond requirements, acquisitions, or unforeseen circumstances and may decide to engage in equity, equity-linked, or debt financings or enter into additional credit facilities for other reasons.
In the future, we may require or seek additional capital to respond to business opportunities, refinancing needs, business and financial challenges, regulatory surety bond requirements, acquisitions, or unforeseen circumstances and may decide to engage in equity, equity-linked, or debt financings or enter into additional credit agreements for other reasons.
We may also face pricing pressures from competitors. Some competitors may offer lower prices by cross-subsidizing certain services that we also provide through other products they offer. Such competition may result in the need for us to alter our pricing and could reduce our gross profit.
Some competitors may offer lower prices by cross-subsidizing certain services that we also provide through other products they offer. Such competition may result in the need for us to alter our pricing and could reduce our gross profit.
Our credit facility contains affirmative and negative covenants, including customary limitations on the incurrence of certain indebtedness and liens, restrictions on certain intercompany transactions, and limitations on dividends and stock repurchases.
Our credit agreement contains affirmative and negative covenants, including customary limitations on the incurrence of certain indebtedness and liens, restrictions on certain intercompany transactions, and limitations on dividends and stock repurchases.
In addition, if consumers who have purchased products or services using our BNPL platform do not receive the products or services, they may cease payment on their outstanding balances or request a refund on previous payments, and our business may be negatively impacted.
If consumers who have purchased products or services using our BNPL platform do not receive the products or services, they may also cease payment on their outstanding balances or request a refund on previous payments, and our business may be negatively impacted.
We cannot be certain that our insurance coverage will be adequate for data handling or information security liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
We cannot be certain that our insurance coverage will be adequate for data handling or cybersecurity liabilities actually incurred, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
A number of factors have affected and could negatively affect Cash App customer growth, inflows, and engagement levels, including our ability to introduce new products and services that are compelling to our customers and that they adopt, changes to our systems, processes or other technical or operational requirements that impact how customers use or access our products and services, the impact on our network of other customers choosing whether to use Cash App, our decision to expand into or exit certain markets, technical or other problems that affect customer experience, failure to provide sufficient customer support, fraud and scams targeting Cash App customers, and harm to our reputation and brand.
A number of factors have affected and could negatively affect Cash App customer growth, inflows, and engagement levels, including our ability to introduce new products and services that are compelling to our customers and that they adopt, changes to our systems, processes or other technical or operational requirements that impact how customers use or access our products and services, the impact on our network of other customers choosing whether to use Cash App, our decision to expand into or exit certain markets, technical or other problems that affect customer experience, failure to provide sufficient customer support, fraud and scams targeting Cash App customers, changes in the regulatory environment or regulations applicable to us, and harm to our reputation and brand.
Our net deferred tax assets relate predominantly to the United States federal and state tax jurisdictions. The need for a valuation allowance requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis.
Our deferred tax assets relate predominantly to the United States federal and state tax jurisdictions. The need for a valuation allowance requires an assessment of both positive and negative evidence to determine whether it is more likely than not that deferred tax assets are recoverable; such assessment is required on a jurisdiction-by-jurisdiction basis.
Moreover, businesses we acquire may have different profitability than our existing business, which may affect our overall profitability, particularly until we are able to realize expected synergies. For example, prior to its acquisition, Afterpay historically generated net losses.
Moreover, businesses we acquire may have different profitability than our existing business, which may affect our overall profitability, particularly until we are able to realize expected synergies. For example, prior to our acquisition of Afterpay, it historically generated net losses.
For example, from time to time, we have implemented expense cuts and reduced the size of our workforce to, among other things, align our cost structure with our business and longer term strategies, which may increase expenses in the short term and impact our ability to grow or quickly develop and introduce products.
For example, we have implemented, and may in the future implement, expense cuts and reduced the size of our workforce to, among other things, align our cost structure with our business and longer term strategies, which may increase expenses in the short term and impact our ability to grow or quickly develop and introduce products.
We have funded our operations since inception primarily through debt and equity financings, bank credit facilities, finance lease arrangements, and cash from operations.
We have funded our operations since inception primarily through debt and equity financings, bank credit agreements, finance lease arrangements, and cash from operations.
The effects of recently proposed or enacted legislation potentially are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
The effects of recently proposed or enacted laws and regulation potentially are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO provides updates on significant or potentially significant threats and incidents to our Block Head and leadership team, in addition to the audit and risk committee and our board of directors as appropriate and in accordance with the processes detailed in the prior paragraph.
Biggest changeOur CISO provides updates on significant or potentially significant threats and incidents to our Block Head and leadership team, in addition to the audit and risk committee and our board of directors as appropriate and in accordance with the processes detailed in the prior paragraph. Our CISO is primarily responsible for assessing and managing our material risks from cybersecurity threats.
The updates also include significant legal and legislative developments concerning data privacy and security, our approach to complying with applicable law, and significant engagement with regulators concerning data privacy and cybersecurity. Our audit committee provides regular updates to the board of directors on such reports.
The updates also include significant legal and legislative developments concerning data privacy and security, our approach to complying with applicable law, and significant engagement with regulators concerning data privacy and cybersecurity. Our audit and risk committee provides regular updates to the board of directors on such reports.
Our Deputy CISO has over 20 years of experience in information security, including serving as head of cybersecurity and privacy response at a global public company and information security leadership positions with the United States government.
Our CISO has over 20 years of experience in information security, including serving as head of cybersecurity and privacy response at a global public company and information security leadership positions with the United States government.
Our Deputy CISO holds undergraduate and graduate degrees in computer information systems and computer science with an information security focus and possesses various certifications, including the Information Systems Security Professional (NSTISSI No. 4011) and Information Systems Security Officer (CNSSI No. 4014) certifications.
Our CISO holds undergraduate and graduate degrees in computer information systems and computer science with an information security focus and possesses various certifications, including the Information Systems Security Professional (NSTISSI No. 4011) and Information Systems Security Officer (CNSSI No. 4014) certifications.
Our CISO oversees our cybersecurity policies and processes, including those described in “Risk Management and Strategy” above. Our foundational engineering, data security governance, infrastructure security, product security and security operations teams report directly to our CISO and provide regular updates on significant or potentially significant threats and incidents.
Our CISO oversees our cybersecurity policies and processes, including those described in “Risk Management and Strategy” above. Our data security governance, infrastructure security, product security, applied security engineering and security operations teams report directly to our CISO and provide regular updates on significant or potentially significant threats and incidents.
Our audit and risk committee receives updates, at least quarterly, from our CISO and CPO on significant data privacy and security risks, including any significant incidents, relevant industry developments, threat vectors and significant risks identified in periodic penetration tests or vulnerability scans.
Our audit and risk committee receives updates, at least quarterly, on significant data privacy and security risks, including any significant incidents, relevant industry developments, threat vectors and significant risks identified in periodic penetration tests or vulnerability scans.
The audit and risk committee assists the board of directors in enhancing its understanding of data privacy and cybersecurity issues by overseeing our data privacy and information security programs, strategy, policies, standards, architecture, processes, and significant risks, as well as overseeing responses to security and data incidents, as appropriate. 59 The full board of directors undergoes annual information security and privacy training by our Chief Information Security Officer (“CISO”) and our Chief Privacy Officer (“CPO”), which covers, among other matters, our privacy and cybersecurity programs and risks.
The audit and risk committee assists the board of directors in enhancing its understanding of data privacy and cybersecurity issues by overseeing our data privacy and information security programs, strategy, policies, processes, and material risks, as well as overseeing responses to security and data incidents, as appropriate. 60 The full board of directors receives an annual information security update by our Chief Information Security Officer (“CISO”) and an annual privacy update, which covers, among other matters, our privacy and cybersecurity programs and risks.
Our CISO reports directly to our Chief Financial Officer and Chief Operating Officer and indirectly to our audit and risk committee.
Our CISO reports directly to our Technology + Engineering Lead and indirectly to our audit and risk committee.
Removed
Our CISO and Deputy CISO are primarily responsible for assessing and managing our material risks from cybersecurity threats. Our CISO has served in various roles building and securing enterprise platforms across retail, corporate and investment banking financial services as well as consumer experiences and data at multiple Fortune 500 companies for over 25 years.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn January 2023, we informed the landlord of this property of our intention to exercise an early termination option of the lease with respect to approximately 50% of the leased space effective December 31, 2023. In addition, we also have offices in several other locations and believe our facilities are sufficient for our current needs.
Biggest changeWe also lease space in St Louis, Missouri, for a business operations office under a lease that expires in 2036 with two renewal options to extend the lease for an additional term of 5 years each. We also have offices in several other locations and believe our facilities are sufficient for our current needs.
We also lease space in New York, New York for a product development, sales, and business operations office under a lease that expires in 2025 and office space in Oakland, California for general corporate purposes under a lease that expires in 2031.
ITEM 2. PROPERTIES We do not designate a headquarters location as we have adopted a distributed work model. We lease space in New York, New York for a product development, sales, and business operations office under a lease that expires in 2028 and office space in Oakland, California for general corporate purposes under a lease that expires in 2031.
Removed
ITEM 2. PROPERTIES We do not designate a headquarters location as we have adopted a distributed work model. We lease space in San Francisco, California, for product development, sales, marketing, and business operations and vacated most of the space at the end of 2023.
Removed
In July 2019, the Company entered into a lease arrangement for office space in St Louis, Missouri, for a term of 15.5 years with options to extend the lease term for two 5-year terms.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are currently a party to, and may in the future be involved in, various litigation matters (including intellectual property litigation), legal claims, and government investigations. Refer to Note 20, Commitments and Contingencies within Notes to the Consolidated Financial Statements for further information.
Biggest changeITEM 3. LEGAL PROCEEDINGS We are currently a party to, and may in the future be involved in, various legal matters, investigations, subpoenas, inquiries, audits, claims, lawsuits and disputes, including with regulatory bodies and governmental agencies.
While we do not believe, at this time, that any ultimate liability resulting from any of these other matters will have a material adverse effect on our results of operations, financial position, or liquidity, we cannot give any assurance regarding the ultimate outcome of these other matters, and their resolution could be material to our operating results for any particular period. 60 ITEM 4.
While we do not believe, at this time, that any ultimate liability resulting from any of these other matters will have a material adverse effect on our results of operations, financial position, or liquidity, we cannot give any assurance regarding the ultimate outcome of these other matters, and their resolution could be material to our operating results for any particular period.
In addition, from time to time, we are involved in various other legal matters, investigations, claims, and disputes arising in the ordinary course of business. We cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these other matters.
In addition, from time to time, we are involved in various other legal matters, investigations, subpoenas, inquiries, audits, claims, lawsuits and disputes arising in the ordinary course of business. We cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability with respect to these other matters.
MINE SAFETY DISCLOSURES Not applicable. 61 PART II
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 61 PART II
Added
For information regarding legal proceedings in which we are involved, see "Litigation and Regulatory Matters" in Note 19, Commitments and Contingencies within Notes to the Consolidated Financial Statements, which is incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. 62 The following table summarizes the share repurchase activity for the three months ended December 31, 2023 (in thousands, except per share amounts): Period Total Number of Shares Purchased Average price paid per share (i) Total number of shares purchased as part of publicly announced plans or program Approximate dollar value of shares that may yet be purchased under the plans or programs October 1, 2023 - October 31, 2023 — — — 1,000,000 November 1, 2023 - November 30, 2023 1,345 56.21 1,345 924,423 December 1, 2023 - December 31, 2023 1,121 72.44 1,121 843,238 Total 2,466 2,466 (i) Average price paid per share for open market purchases includes broker commissions.
Biggest changeThe following table summarizes the share repurchase activity for the three months ended December 31, 2024 (in thousands, except per share amounts): Period Total Number of Shares Purchased Average price paid per share (i) Total number of shares purchased as part of publicly announced plans or program Approximate dollar value of shares that may yet be purchased under the plans or programs October 1, 2024 - October 31, 2024 1,090 $ 70.44 1,090 $ 2,779,232 November 1, 2024 - November 30, 2024 653 $ 82.50 653 $ 2,725,360 December 1, 2024 - December 31, 2024 567 $ 92.61 567 $ 2,672,850 Total 2,310 2,310 (i) Average price paid per share for open market purchases includes broker commissions. 62 Unregistered Sales of Equity Securities None. 63 Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Block, Inc. under the Exchange Act or the Securities Act of 1933, as amended.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on the last trading day for the fiscal year ended December 31, 2018 and its relative performance is tracked through December 31, 2023.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on the last trading day for the fiscal year ended December 31, 2019 and its relative performance is tracked through December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our Class A common stock trades on the New York Stock Exchange under the symbol “SQ”. Our CDIs are traded on the ASX under the symbol “SQ2”. There is no public trading market for our Class B common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Our Class A common stock trades on the New York Stock Exchange and our CDIs are traded on the ASX, both under the symbol “XYZ”. There is no public trading market for our Class B common stock.
Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our Class A common stock represented by these record holders.
Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our Class A common stock represented by these record holders. As of February 18, 2025, we have approximately 39,934 holders of record of our CDIs.
As of February 16, 2024, we estimate that we have approximately 41,547 holders of record of our CDIs. Dividend Policy We have never declared nor paid any cash dividends on our capital stock. We do not expect to pay any dividends on our capital stock in the foreseeable future.
Dividend Policy We have never declared nor paid any cash dividends on our capital stock. We do not expect to pay any dividends on our capital stock in the foreseeable future.
Holders of Record As of February 16, 2024, there were 637 holders of record of our Class A common stock and 26 holders of record of our Class B common stock.
Holders of Record As of February 18, 2025, there were 504 holders of record of our Class A common stock and 24 holders of record of our Class B common stock.
The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock and may be suspended at any time at the Company’s discretion.
Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock and may be suspended at any time at the Company’s discretion.
Issuer Purchases of Equity Securities In October 2023, the Company's Board of Directors authorized the repurchase of up to $1 billion of the Company’s Class A common stock. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors.
Issuer Purchases of Equity Securities In October 2023, the Company's board of directors authorized the repurchase of up to $1 billion of the Company’s Class A common stock.
Removed
Unregistered Sales of Equity Securities During the three months ended December 31, 2023, we issued a total of 171,691 shares of our Class A common stock in connection with the acquisition of an artist-centric financial technology company, pursuant to exemptions from registration provided by Section 4(a)(2). 63 Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Block, Inc. under the Exchange Act or the Securities Act of 1933, as amended.
Added
On July 25, 2024, the Company's board of directors authorized an increase to the Company's share repurchase program to repurchase up to an additional $3 billion of the Company’s Class A common stock, for a total overall authorization of $4 billion.
Removed
Company/Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Block, Inc. $ 100.00 $ 111.54 $ 388.02 $ 287.95 $ 112.03 $ 137.90 S&P 500 $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 S&P North American Technology $ 100.00 $ 142.68 $ 207.11 $ 261.79 $ 169.22 $ 272.66 ITEM 6. [RESERVED] 64
Added
The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.
Added
Company/Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Block, Inc. $ 100.00 $ 347.89 $ 258.17 $ 100.45 $ 123.64 $ 135.85 S&P 500 $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 S&P North American Technology $ 100.00 $ 145.15 $ 183.47 $ 118.60 $ 191.10 $ 260.04 64 ITEM 6. [RESERVED] 65

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeBecause of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. 77 The following table presents a reconciliation of operating income (loss) to Adjusted Operating Income (Loss) for each of the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Operating income (loss) $ (278,839) $ (624,532) $ 161,112 Amortization of acquired technology assets 72,829 70,194 22,645 Acquisition-related and integration costs 11,422 105,518 15,474 Restructuring and other charges 239,582 51,746 20,000 Goodwill impairment 132,313 — — Bitcoin impairment losses — 46,571 71,126 Amortization of customer and other acquired intangible assets 174,044 138,758 15,747 Acquisition-related share based acceleration costs — 66,337 — Adjusted Operating Income (Loss) $ 351,351 $ (145,408) $ 306,104 The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (in thousands): Year Ended December 31, 2023 2022 2021 Net income (loss) attributable to common stockholders $ 9,772 $ (540,747) $ 166,284 Net loss attributable to noncontrolling interests (30,896) (12,258) (7,458) Net income (loss) (21,124) (553,005) 158,826 Share-based compensation expense 1,276,097 1,069,289 608,042 Depreciation and amortization 408,560 340,523 134,756 Acquisition-related and integration costs 11,422 105,518 15,474 Restructuring and other charges 239,582 51,746 20,000 Goodwill impairment 132,313 — — Interest expense (income), net (47,221) 36,228 33,124 Other income, net (202,475) (95,443) (29,474) Bitcoin impairment losses — 46,571 71,126 Benefit for income taxes (8,019) (12,312) (1,364) Loss on disposal of property and equipment 3,186 1,619 2,633 Acquired deferred revenue and cost adjustment 99 230 514 Adjusted EBITDA $ 1,792,420 $ 990,964 $ 1,013,657 78 The following table presents a reconciliation of net income (loss) to Adjusted Net Income (Loss) Per Share for each of the periods indicated (in thousands, except per share data): Year Ended December 31, 2023 2022 2021 Net income (loss) attributable to common stockholders $ 9,772 $ (540,747) $ 166,284 Net loss attributable to noncontrolling interests (30,896) (12,258) (7,458) Net income (loss) (21,124) (553,005) 158,826 Share-based compensation expense 1,276,097 1,069,289 608,042 Acquisition-related and integration costs 11,422 105,518 15,474 Restructuring and other charges 239,582 51,746 20,000 Goodwill impairment 132,313 — — Amortization of intangible assets 246,873 208,952 40,522 Amortization of debt discount and issuance costs 11,904 15,162 9,822 Loss (gain) on revaluation of equity investments 16,523 (73,457) (35,493) Bitcoin remeasurement (207,084) — — Bitcoin impairment losses — 46,571 71,126 Loss on disposal of property and equipment 3,186 1,619 2,633 Acquired deferred revenue and cost adjustment 99 230 514 Tax effect of non-GAAP net income adjustments (582,703) (264,523) (222,104) Adjusted Net Income - basic $ 1,127,088 $ 608,102 $ 669,362 Cash interest expense on convertible notes 3,554 5,014 6,099 Adjusted Net Income - diluted $ 1,130,642 $ 613,116 $ 675,461 Weighted-average shares used to compute Adjusted Net Income Per Share: Basic 608,856 578,949 458,432 Diluted 628,320 615,034 525,725 Adjusted Net Income Per Share: Basic $ 1.85 $ 1.05 $ 1.46 Diluted $ 1.80 $ 1.00 $ 1.28 Diluted Adjusted Net Income Per Share is computed by dividing Adjusted Net Income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.
Biggest changeBecause of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. 77 The following table presents a reconciliation of operating income (loss) to Adjusted Operating Income (Loss) for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Operating income (loss) $ 892,327 $ (278,839) $ (624,532) Amortization of acquired technology assets 68,364 72,829 70,194 Acquisition-related and integration costs 49,019 11,422 105,518 Contingencies, restructuring and other charges 302,446 239,582 51,746 Restructuring share-based compensation expense 8,071 — — Goodwill and intangible asset impairment 133,854 132,313 — Bitcoin impairment losses — — 46,571 Amortization of customer and other acquired intangible assets 154,709 174,044 138,758 Acquisition-related share based acceleration costs — — 66,337 Adjusted Operating Income (Loss) $ 1,608,790 $ 351,351 $ (145,408) The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (in thousands): Year Ended December 31, 2024 2023 2022 Net income (loss) attributable to common stockholders $ 2,897,047 $ 9,772 $ (540,747) Net loss attributable to noncontrolling interests (30,550) (30,896) (12,258) Net income (loss) 2,866,497 (21,124) (553,005) Share-based compensation expense 1,264,486 1,276,097 1,069,289 Restructuring share-based compensation expense 8,071 — — Depreciation and amortization 376,127 408,560 340,523 Acquisition-related and integration costs 49,019 11,422 105,518 Contingencies, restructuring and other charges 302,446 239,582 51,746 Goodwill and intangible asset impairment 133,854 132,313 — Interest expense (income), net 9,302 (47,221) 36,228 Remeasurement gain on bitcoin investment (420,918) (207,084) — Other expense (income), net (53,211) 4,609 (95,443) Bitcoin impairment losses — — 46,571 Benefit from income taxes (1,509,343) (8,019) (12,312) Loss on disposal of property and equipment 2,634 3,186 1,619 Acquired deferred revenue and cost adjustment 67 99 230 Adjusted EBITDA $ 3,029,031 $ 1,792,420 $ 990,964 78 The following table presents a reconciliation of net income (loss) to Adjusted Net Income (Loss) Per Share for each of the periods indicated (in thousands, except per share data): Year Ended December 31, 2024 2023 2022 Net income (loss) attributable to common stockholders $ 2,897,047 $ 9,772 $ (540,747) Net loss attributable to noncontrolling interests (30,550) (30,896) (12,258) Net income (loss) 2,866,497 (21,124) (553,005) Share-based compensation expense 1,264,486 1,276,097 1,069,289 Restructuring share-based compensation expense 8,071 — — Acquisition-related and integration costs 49,019 11,422 105,518 Contingencies, restructuring and other charges 302,446 239,582 51,746 Goodwill and intangible asset impairment 133,854 132,313 — Amortization of intangible assets 223,072 246,873 208,952 Amortization of debt discount and issuance costs 14,413 11,904 15,162 Loss (gain) on revaluation of equity investments (32,245) 16,523 (73,457) Remeasurement gain on bitcoin investment (420,918) (207,084) — Bitcoin impairment losses — — 46,571 Loss on disposal of property and equipment 2,634 3,186 1,619 Acquired deferred revenue and cost adjustment 67 99 230 Tax effect of one-time income tax benefits from deferred tax assets (1,909,848) — — Tax effect of non-GAAP net income adjustments (360,782) (582,703) (264,523) Adjusted Net Income - basic $ 2,140,766 $ 1,127,088 $ 608,102 Cash interest expense on convertible notes 2,711 3,554 5,014 Adjusted Net Income - diluted $ 2,143,477 $ 1,130,642 $ 613,116 Weighted-average shares used to compute Adjusted Net Income Per Share: Basic 616,993 608,856 578,949 Diluted 636,390 628,320 615,034 Adjusted Net Income Per Share: Basic $ 3.47 $ 1.85 $ 1.05 Diluted $ 3.37 $ 1.80 $ 1.00 Diluted Adjusted Net Income Per Share is computed by dividing Adjusted Net Income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.
Investments in marketable debt securities were held primarily in cash deposits, money market funds, reverse repurchase agreements, U.S. government and agency securities, commercial paper, and corporate bonds. We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Our investments in marketable debt securities are classified as available-for-sale.
Investments in marketable debt securities were held primarily in certificates of deposits, money market funds, reverse repurchase agreements, U.S. government and agency securities, commercial paper, and corporate bonds. We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Our investments in marketable debt securities are classified as available-for-sale.
Restructuring and other costs that are not reflective of our core business operating expenses may include severance costs, contingent losses, impairment charges, and certain litigation and regulatory charges. We also add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting.
Contingencies, restructuring and other costs that are not reflective of our core business operating expenses may include severance costs, contingent losses, impairment charges, and certain litigation and regulatory charges. We also add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting.
These expenses include, but are not limited to, Cash App peer-to-peer processing costs and transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways that are expensed as incurred. General and Administrative Expenses General and administrative expenses consist primarily of expenses related to our customer support, finance, legal, risk operations, human resources, and administrative personnel.
These expenses include, but are not limited to, Cash App peer-to-peer processing costs and transaction losses, card issuance costs, customer referral bonuses, and promotional giveaways that are expensed as incurred. 69 General and Administrative Expenses General and administrative expenses consist primarily of expenses related to our customer support, finance, legal, risk operations, human resources, and administrative personnel.
Instant Deposit is a functionality within the Cash App and our managed payment solutions that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. 66 Cash App Card offers Cash App customers the ability to use their stored funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App.
Instant Deposit is a functionality within the Cash App and our managed payment solutions that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. Cash App Card offers Cash App customers the ability to use their stored funds via a Visa prepaid card that is linked to the balance the customer stores in Cash App.
Cash Flows from Investing Activities For the year ended December 31, 2023, cash provided by investing activities was $683.2 million, primarily due to the net proceeds from investments of marketable securities of $600.3 million and a net inflow related to consumer receivables of $272.9 million.
For the year ended December 31, 2023, cash provided by investing activities was $683.2 million, primarily due to the net proceeds from investments of marketable securities of $600.3 million and a net inflow related to consumer receivables of $272.9 million.
In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, bitcoin investment impairment losses (prior to the adoption of ASU 2023-08), acquisition-related accelerated share-based compensation expenses, acquisition-related and integration costs, restructuring and other costs, and goodwill impairment charges.
In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, bitcoin investment impairment losses (prior to the adoption of ASU 2023-08), acquisition-related accelerated share-based compensation expenses, acquisition-related and integration costs, contingencies, restructuring and other costs, and goodwill and intangible asset impairment charges.
In addition to total net revenue, operating income (loss), net income (loss), and other results under GAAP, the following table sets forth key operating metrics and non-GAAP financial measures we use to evaluate our business.
In addition to total net revenue, operating income (loss), net income (loss), and other results reported under GAAP, the following table sets forth key operating metrics and non-GAAP financial measures we use to evaluate our business.
Certain loans, for which we have the intention and ability to hold through maturity, are not immediately sold to third-party investors, in which case, interest and fees earned are recognized as revenue using the effective interest method. Cash App Borrow, the Company’s first credit product for consumers, allows customers to access short-term loans for a small fee.
Certain loans, for which we have the intention and ability to hold through maturity, are not immediately sold to third-party investors, in which case, interest and fees earned are recognized as revenue using the effective interest method. Cash App Borrow, the first credit product for Cash App customers, allows customers to access short-term loans for a small fee.
For some of the loans, it is our intention to sell the rights, title, and interest to third-party investors for an upfront fee. We are retained by the third-party investors to service the loans and earn a servicing fee for facilitating the repayment of these loans through our payments solutions.
For some of the loans, it is our intention to sell the rights, title, and interest to a third-party investor for an upfront fee. We are retained by the third-party investor to service the loans and earn a servicing fee for facilitating the repayment of these loans through our payments solutions.
The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K ("Form 10-K"). This section of this Form 10-K generally discusses fiscal 2023 compared to fiscal 2022.
The following discussion and analysis should be read in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K ("Form 10-K"). This section of this Form 10-K generally discusses fiscal 2024 compared to fiscal 2023.
Bitcoin is considered an indefinite-lived intangible asset, and upon adoption of Accounting Standards Update No. 2023-08, Accounting for and Disclosure of Crypto Assets , effective January 1, 2023, our bitcoin investment is remeasured at fair value at each reporting date with changes recognized in net income through “Other expense (income), net” in the consolidated statements of operations.
Bitcoin is considered an indefinite-lived intangible asset, and upon adoption of Accounting Standards Update No. 2023-08, Accounting for and Disclosure of Crypto Assets , effective January 1, 2023, our bitcoin investment is remeasured at fair value at each reporting date with changes recognized in net income through the consolidated statements of operations.
We have included these non-GAAP financial measures in this Form 10-K because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources.
We have included these non-GAAP financial measures in this Annual Report on Form 10-K because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources.
TIDAL primarily generates revenue from subscriptions to customers, and such subscriptions allow access to the song library, video library, and improved sound quality. Customers can subscribe to services directly from the TIDAL website or through the Apple store. With both offerings, we charge customers a monthly fee for those subscription services.
TIDAL primarily generates revenue from subscriptions to customers, and such subscriptions allow access to the song library, video library, and improved sound quality. Customers can subscribe to services directly from the TIDAL website or through the Apple store. For both subscription channels, we charge customers a monthly fee for those subscription services.
Square GPV is defined as the total dollar amount of all card payments processed by sellers using Square, net of refunds, and ACH transfers. Cash App Business GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card.
Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds. Cash App Business GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card.
Additionally, for purposes of calculating diluted Adjusted EPS, we add back cash interest expense on convertible notes, as if converted at the beginning of the period, if the impact is dilutive. 76 • We exclude the following from non-GAAP financial measures because we do not believe that these items are reflective of our ongoing business operations: gain or loss on the disposal of property and equipment; gain or loss on revaluation of equity investments; gain or loss from the remeasurement of our bitcoin investment, and bitcoin impairment losses on our bitcoin investment (prior to the adoption of ASU 2023-08), as applicable. • To aid in comparability of our results across periods, we also exclude certain acquisition-related and integration costs associated with business combinations, various restructuring and other costs, and goodwill impairment charges, each of which are not normal operating expenses.
Additionally, for purposes of calculating diluted Adjusted EPS, we add back cash interest expense on convertible notes, as if converted at the beginning of the period, if the impact is dilutive. 76 • We exclude the following from non-GAAP financial measures because we do not believe that these items are reflective of our ongoing business operations: gain or loss on the disposal of property and equipment; gain or loss on revaluation of equity investments; remeasurement gain or loss of our bitcoin investment, bitcoin impairment losses on our bitcoin investment (prior to the adoption of ASU 2023-08), and one-time income tax impacts from deferred taxes, as applicable. • To aid in comparability of our results across periods, we also exclude certain acquisition-related and integration costs associated with business combinations, various restructuring and other costs, and goodwill and intangible asset impairment charges, each of which are not normal operating expenses.
We recognize revenue when customers purchase bitcoin and it is transferred to the customer's account. We purchase bitcoin from private broker dealers or from Cash App customers and apply a small margin before selling it to our customers.
Bitcoin Revenue Our Cash App customers have the ability to purchase bitcoin, a cryptocurrency. We recognize revenue when customers purchase bitcoin and it is transferred to the customer's account. We purchase bitcoin from private broker dealers or from Cash App customers and apply a small margin before selling it to our customers.
The comparison of the fiscal 2022 results with the fiscal 2021 results that are not included in this Form 10-K can be found in the "Management's Discussion and Analysis Results of Operations" section in the Company's fiscal 2022 Annual Report within Part II, Item 7 of Form 10-K, filed on February 23, 2023.
The comparison of the fiscal 2023 results with the fiscal 2022 results that are not included in this Form 10-K can be found in the "Management's Discussion and Analysis Results of Operations" section in the Company's fiscal 2023 Annual Report within Part II, Item 7 of Form 10-K, filed on February 22, 2024.
We intend to continue focusing on our long-term business initiatives and believe that our available funds are sufficient to meet our liquidity needs for the foreseeable future, including the $1.0 billion share repurchase program. As of December 31, 2023, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes.
We intend to continue focusing on our long-term business initiatives and believe that our available funds are sufficient to meet our liquidity needs for the foreseeable future, including our share repurchase program. As of December 31, 2024, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes.
On May 15, 2023, we paid $461.8 million in cash to settle the outstanding principal balance and interest on the 2023 Convertible Notes upon maturity. Revolving Credit Facility We have entered into a revolving credit agreement with certain lenders, as subsequently amended, which provides a $500.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in May 2024.
On May 15, 2023, we paid $461.8 million in cash to settle the outstanding principal balance and interest on the 2023 Convertible Notes upon maturity. Revolving Credit Facility We have entered into a revolving credit agreement with certain lenders, as subsequently amended, which provides a $775.0 million senior unsecured revolving credit facility (the "2020 Credit Facility") maturing in June 2028.
Refer to Note 9, Acquisitions within Notes to the Consolidated Financial Statements for further details. On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes ("2023 Convertible Notes").
Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details. On May 25, 2018, the Company issued an aggregate principal amount of $862.5 million of convertible senior notes ("2023 Convertible Notes").
Cash Flows from Financing Activities For the year ended December 31, 2023, cash used in financing activities was $240.1 million, primarily as a result of a cash payment of $461.8 million to settle the 2023 Convertible Notes in May 2023, stock repurchases of $156.8 million, a net outflow for other financing activities of $20.0 million, and the repayment and forgiveness of PPP loans of $16.8 million.
For the year ended December 31, 2023, cash used in financing activities was $240.1 million, primarily as a result of a cash payment of $461.8 million to settle the 2023 Convertible Notes in May 2023, stock repurchases of $156.8 million, a net outflow for other financing activities of $20.0 million, and the repayment and forgiveness of Paycheck Protection Program loans of $16.8 million.
Acquisition related costs include amounts paid to redeem acquirees’ unvested share-based compensation awards, and legal, accounting, valuation, and due diligence costs. Integration costs include advisory and other professional services or consulting fees necessary to integrate acquired businesses.
Acquisition related costs include amounts paid to redeem acquirees’ unvested share-based compensation awards, charges associated with holdback liabilities, and legal, accounting, valuation, and due diligence costs. Integration costs include advisory and other professional services or consulting fees necessary to integrate acquired businesses.
Refer to the Key Operating Metrics and Non-GAAP Financial Measures section below for reconciliations of non-GAAP financial measures to their nearest generally accepted accounting principles ("GAAP") equivalents. 65 In 2023, we sharpened our focus on our organizational structure and expenditures with a view to identifying areas where we can be more cost efficient as we focus on disciplined growth and pursuing cost efficiencies and we expect to continue these efforts in 2024.
Refer to the Key Operating Metrics and Non-GAAP Financial Measures section below for reconciliations of non-GAAP financial measures to their nearest generally accepted accounting principles ("GAAP") equivalents. 66 Starting in 2023, we sharpened our focus on our organizational structure and expenditures with a view to identifying areas where we can be more cost efficient as we focus on disciplined growth and pursuing cost efficiencies.
Operating expenses also include allocated overhead costs for facilities, human resources, and IT. 68 Product Development Expenses Product development expenses currently represent the largest component of our operating expenses and consist primarily of expenses related to our engineering, data science, and design personnel; fees and supply costs related to maintenance at third-party data center facilities; hardware related development and tooling costs; software and cloud computing infrastructure fees; and fees for software licenses, consulting, legal, and other services that are directly related to growing and maintaining our portfolio of products and services.
Product Development Expenses Product development expenses currently represent the largest component of our operating expenses and consist primarily of expenses related to our engineering, data science, and design personnel; fees and supply costs related to maintenance at third-party data center facilities; hardware related development and tooling costs; software and cloud computing infrastructure fees; and fees for software licenses, consulting, legal, and other services that are directly related to growing and maintaining our portfolio of products and services.
As of December 31, 2023, we held approximately 8,038 bitcoins for investment purposes ("bitcoin investment") with a fair value of $339.9 million based on observable market prices, which is included within “Other non-current assets” on the consolidated balance sheets. We believe cryptocurrency is an instrument of economic empowerment that aligns with our corporate purpose.
As of December 31, 2024, we held approximately 8,485 bitcoins for investment purposes ("bitcoin investment") with a fair value of $792.3 million based on observable market prices, which is included within “Other non-current assets” on the consolidated balance sheets. We believe cryptocurrency is an instrument of economic empowerment that aligns with our corporate purpose.
Bitcoin costs of revenue, which increased by $2.3 billion, was the primary driver of the increase in total cost of revenue, with the remaining increase related to an increase in GPV.
Bitcoin costs of revenue, which increased by $617.3 million, was the primary driver of the increase in total cost of revenue, with the remaining increase related to an increase in GPV.
We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM. We also earn interchange fees when a Cash App Card is used to make a purchase. These transaction and interchange fees are treated as revenue when charged.
We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM. We also earn interchange fees when a Cash App Card is used to make a purchase.
Additionally, we had $99.4 million available to be withdrawn under our warehouse funding facilities. Refer to Note 15, Indebtedness within Notes to the Consolidated Financial Statements for more details.
Additionally, we had $253.9 million available to be withdrawn under our warehouse funding facilities. Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for more details.
The increase was primarily due to growth in Cash App's financial service-related products, including Cash App Card usage, Cash App Instant Deposit volumes, as well as revenue from the BNPL platform and interest earned on customer funds.
The increase was primarily due to growth in Cash App's financial service-related products, including Cash App Card usage, Cash App Borrow, Cash App Instant Deposit volumes, and Cash App Pay, as well as revenue from the BNPL platform.
As of December 31, 2023, we have invested $44.3 million in aggregate towards this initiative, of which $12.3 million and $10.1 million were invested in the years ended December 31, 2023 and 2022, respectively. Our principal commitments consist of convertible notes, senior notes, revolving credit facility, warehouse funding facilities, operating leases, capital leases, and purchase commitments.
As of December 31, 2024, we have invested $67.9 million in aggregate towards this initiative, of which $23.6 million and $12.3 million were invested in the years ended December 31, 2024 and 2023, respectively. 81 Our principal commitments consist of convertible notes, senior notes, our revolving credit facility, warehouse funding facilities, operating leases, capital leases, and purchase commitments.
The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors. 81 Cash, Restricted Cash, and Working Capital We believe that our existing cash and cash equivalents, investment in marketable debt securities, and availability under our line of credit will be sufficient to meet our working capital needs, including any expenditures related to strategic transactions and investment commitments that we may from time to time enter into, and planned capital expenditures for at least the next 12 months.
Cash, Restricted Cash, and Working Capital We believe that our existing cash and cash equivalents, investment in marketable debt securities, and availability under our line of credit will be sufficient to meet our working capital needs, including any expenditures related to strategic transactions and investment commitments that we may from time to time enter into, and planned capital expenditures for at least the next 12 months.
In January 2022, we completed the acquisition of Afterpay, a buy now, pay later ("BNPL") platform that facilitates commerce between retail merchants and consumers by allowing retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis.
In January 2022, we completed the acquisition of Afterpay, a buy now, pay later ("BNPL") platform that facilitates commerce between retail merchants and consumers by allowing retail merchant clients to offer their customers the ability to buy goods and services on a BNPL basis. In addition, our nascent businesses include TIDAL and two bitcoin businesses, Bitkey and Proto.
Square Loans originates loans to sellers that are generally repaid through withholding a percentage of the collections of the seller's receivables processed by us or a specified monthly amount. In April 2021, we began originating loans in the U.S. through our wholly-owned subsidiary bank, Square Financial Services.
These transaction and interchange fees are treated as revenue when charged. 67 Square Loans originates loans to sellers that are generally repaid through withholding a percentage of the collections of the seller's receivables processed by us or a specified monthly amount. In April 2021, we began originating loans in the U.S. through our wholly-owned subsidiary bank, Square Financial Services.
Transaction-based revenue also includes amounts we charge our Cash App customers for peer-to-peer transactions to business accounts and payments sent from a credit card.
We also selectively offer custom pricing for certain larger sellers. Transaction-based revenue also includes amounts we charge our Cash App customers for peer-to-peer transactions to business accounts and payments sent from a credit card.
When we were last rated, in the second half of 2023, we received a non-investment grade rating by S&P Global Ratings (BB+), Fitch Ratings, Inc. (BB+), and Moody's Corporation (Ba2). We expect that these credit rating agencies will continue to monitor our performance, including our capital structure and results of operations.
During 2024, we received a non-investment grade rating by S&P Global Ratings (BB+), Fitch Ratings, Inc. (BB+), and Moody's Corporation (Ba2). We expect that these credit rating agencies will continue to monitor our performance, including our capital structure and results of operations.
We ended 2023 with $7.7 billion in available liquidity, with $6.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility.
We ended 2024 with $10.7 billion in available liquidity, with $9.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility. This represents an increase of $3.0 billion from the end of 2023.
Transaction-based revenue for the year ended December 31, 2023 increased by $613.8 million, or 11%, compared to the year ended December 31, 2022. This increase in revenue was largely in line with the increase in Gross Payment Volume ("GPV") of 12% for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Transaction-based revenue for the year ended December 31, 2024 increased by $298.4 million, or 5%, compared to the year ended December 31, 2023. This increase in revenue was largely in line with the increase in Gross Payment Volume ("GPV") of 6% for the year ended December 31, 2024, compared to the year ended December 31, 2023.
On October 26, 2023, the board of directors of the Company authorized the repurchase of up to $1 billion of the Company’s Class A common stock, which commenced in the fourth quarter of 2023.
On October 26, 2023, our board of directors authorized the repurchase of up to $1 billion of the Company’s Class A common stock.
Refer to Note 1, Description of Business and Summary of Significant Accounting Policies and Note 6, Consumer Receivables, net within Notes to the Consolidated Financial Statements for further details. Recent Accounting Pronouncements See “Recent Accounting Pronouncements” described in Note 1, Description of Business and Summary of Significant Accounting Policies within Notes to the Consolidated Financial Statements.
Recent Accounting Pronouncements See “Recent Accounting Pronouncements” described in Note 1, Description of Business and Summary of Significant Accounting Policies within Notes to the Consolidated Financial Statements. 85
The increase was due to the items referenced within the revenue discussion. Excluding bitcoin cost of revenue, Cash App cost of revenue increased $235.1 million, or 28%. 75 Key Operating Metrics and Non-GAAP Financial Measures We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources, and assess our performance.
Excluding bitcoin cost of revenue, Cash App cost of revenue increased $33.4 million, or 3%. 75 Key Operating Metrics and Non-GAAP Financial Measures We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources, and assess our performance.
GAAP requires us to make certain estimates and judgments that affect the amounts reported in our financial statements. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to be reasonable under the circumstances. Because these accounting estimates require significant judgment, our actual results may differ materially from our estimates.
We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to be reasonable under the circumstances. Because these accounting estimates require significant judgment, our actual results may differ materially from our estimates.
The timing and amount of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. In the fourth quarter of 2023, we repurchased $156.8 million under this program.
The timing and amount of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.
Year Ended December 31, 2023 2022 2021 Gross Payment Volume (GPV) (in millions) $ 227,699 $ 203,536 $ 167,720 Adjusted Operating Income (Loss) (in thousands) $ 351,351 $ (145,408) $ 306,104 Adjusted EBITDA (in thousands) $ 1,792,420 $ 990,964 $ 1,013,657 Adjusted Net Income Per Share: Basic $ 1.85 $ 1.05 $ 1.46 Diluted $ 1.80 $ 1.00 $ 1.28 Gross Payment Volume ("GPV") GPV includes Square GPV and Cash App Business GPV.
Year Ended December 31, 2024 2023 2022 Gross Payment Volume (GPV) (in millions) $ 240,812 $ 227,699 $ 203,536 Adjusted Operating Income (Loss) (in thousands) $ 1,608,790 $ 351,351 $ (145,408) Adjusted EBITDA (in thousands) $ 3,029,031 $ 1,792,420 $ 990,964 Adjusted Net Income Per Share: Basic $ 3.47 $ 1.85 $ 1.05 Diluted $ 3.37 $ 1.80 $ 1.00 Gross Payment Volume ("GPV") GPV includes Square GPV and Cash App Business GPV.
While the Warehouse SPEs are included in our consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold.
While the Warehouse SPEs are included in our consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold. The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors.
Excluding bitcoin revenue, Cash App net revenue increased $1.3 billion, or 32%, compared to the year ended December 31, 2022. Cost of Revenue Cost of revenue for the Cash App segment for the year ended December 31, 2023 increased by $2.6 billion compared to the year ended December 31, 2022.
Excluding bitcoin revenue, Cash App net revenue increased $865.3 million, or 17%, compared to the year ended December 31, 2023. Cost of Revenue Cost of revenue for the Cash App segment for the year ended December 31, 2024 increased by $650.6 million compared to the year ended December 31, 2023.
Long-term restricted cash of $71.8 million as of December 31, 2023 is primarily related to cash held as collateral as required by the FDIC for Square Financial Services.
Long-term restricted cash of $69.9 million as of December 31, 2024 is primarily related to cash held as collateral as required by the Federal Deposit Insurance Corporation ("FDIC") for Square Financial Services.
Our effective tax rate fluctuates from period to period due to changes in the mix of income and losses in jurisdictions with a wide range of tax rates, the effect of acquisitions, changes resulting from the amount of recorded valuation allowance, permanent differences between U.S. generally accepted accounting principles and local tax laws, certain one-time items, and changes in tax contingencies. 70 Results of Operations Revenue (in thousands, except for percentages) Year Ended December 31, 2023 2022 $ Change % Change Transaction-based revenue $ 6,315,301 $ 5,701,540 $ 613,761 11 % Subscription and services-based revenue 5,944,842 4,552,773 1,392,069 31 % Hardware revenue 157,178 164,418 (7,240) NM (i) Bitcoin revenue 9,498,302 7,112,856 2,385,446 34 % Total net revenue $ 21,915,623 $ 17,531,587 $ 4,384,036 25 % (i) Not meaningful ("NM") Total net revenue for the year ended December 31, 2023, increased by $4.4 billion, or 25%, compared to the year ended December 31, 2022.
Our effective tax rate fluctuates from period to period due to changes in the mix of income and losses in jurisdictions with a wide range of tax rates, the effect of acquisitions, changes resulting from the amount of recorded valuation allowance, permanent differences between U.S. generally accepted accounting principles and local tax laws, certain one-time items, and changes in tax contingencies. 70 Results of Operations Revenue (in thousands, except for percentages) Year Ended December 31, 2024 2023 $ Change % Change Transaction-based revenue $ 6,613,680 $ 6,315,301 $ 298,379 5 % Subscription and services-based revenue 7,164,799 5,944,842 1,219,957 21 % Hardware revenue 143,369 157,178 (13,809) NM (i) Bitcoin revenue 10,199,205 9,498,302 700,903 7 % Total net revenue $ 24,121,053 $ 21,915,623 $ 2,205,430 10 % (i) Not meaningful ("NM") Total net revenue for the year ended December 31, 2024, increased by $2.2 billion, or 10%, compared to the year ended December 31, 2023.
This was partially offset by amortization of discounts and premiums and other non-cash adjustments of $984.4 million; bitcoin remeasurement of $207.1 million; a change in deferred income taxes of $85.9 million; and a net outflow related to changes in other assets and liabilities of $1.2 billion due to timing of period end, including a $350.0 million deposit held by a processor to meet requirements related to processing volumes.
These were partially offset by the amortization of discounts and premiums and other non-cash adjustments of $984.4 million; net outflows from loan products of $553.6 million; bitcoin remeasurement of $207.1 million; a change in deferred income taxes of $85.9 million; as well as changes in other assets and liabilities, including settlements receivable and customers payable, of $685.3 million due to timing of period end, including a $350.0 million deposit held by a processor to meet requirements related to processing volumes.
This involves implementing greater expense discipline and reassessing certain contractual vendor arrangements. In November 2023, we announced we would implement an absolute cap of 12,000 on the number of employees we have at our company. We plan to operate below this cap through a combination of performance management, centralizing teams and functions to reduce duplication, and prioritization of our scope.
In 2023, we also announced we would implement an absolute cap of 12,000 on the number of employees we have at our company, which we have achieved in 2024, and we plan to continue to operate below this cap through a combination of performance management, centralization of teams and functions to reduce duplication, and prioritization of our scope.
The following table summarizes our available liquidity (in thousands): December 31, 2023 December 31, 2022 Cash and cash equivalents $ 4,996,465 $ 4,544,202 Short-term restricted cash (i) 770,380 639,780 Long-term restricted cash 71,812 71,600 Investments in short-term debt securities 851,901 1,081,851 Investments in long-term debt securities 251,127 573,429 Revolving credit facility 775,000 600,000 Total liquidity $ 7,716,685 $ 7,510,862 (i) As of December 31, 2023, the Company has invested $291.4 million of restricted cash into a money market fund.
The following table summarizes our available liquidity (in thousands): December 31, 2024 December 31, 2023 Cash and cash equivalents $ 8,075,247 $ 4,996,465 Short-term restricted cash (i) 902,478 770,380 Long-term restricted cash 69,915 71,812 Investments in short-term debt securities 403,426 851,901 Investments in long-term debt securities 471,977 251,127 Revolving credit facility 775,000 775,000 Total liquidity $ 10,698,043 $ 7,716,685 (i) As of December 31, 2024, the Company has invested $319.8 million of restricted cash into a money market fund.
For the year ended December 31, 2022, cash provided by operating activities was $175.9 million, primarily due to net loss of $553.0 million, adjusted for non-cash expenses of $2.0 billion consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; depreciation and amortization; non-cash interest; and bitcoin impairment losses.
For the year ended December 31, 2023, cash provided by operating activities was $101.0 million, comprised of net loss of $21.1 million, adjusted for non-cash expenses of $2.6 billion, consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; depreciation and amortization; non-cash lease expense; and goodwill impairment, all of which contributed positively to operating activities.
Refer to Note 10, Goodwill within Notes to the Consolidated Financial Statements for more details.
Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.
Subscription and Services-based Costs Subscription and services-based costs consist primarily of processing and partnership fees related to Cash App including Instant Deposit and Cash App Card, and our BNPL platform, as well as costs associated with TIDAL.
Cost of Revenue Transaction-based Costs Transaction-based costs consist primarily of interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. 68 Subscription and Services-based Costs Subscription and services-based costs consist primarily of processing and partnership fees related to Cash App including Instant Deposit and Cash App Card, and our BNPL platform, as well as costs associated with TIDAL.
Third-party peripherals include cash drawers, receipt printers, scales, and barcode scanners, all of which can be integrated with Square Stand, Square Register, or Square Terminal to provide a comprehensive point-of-sale solution. 67 Bitcoin Revenue Our Cash App customers have the ability to purchase bitcoin, a cryptocurrency.
Hardware Revenue Hardware revenue includes revenue from sales of magstripe readers, contactless and chip readers, Square Stand, Square Register, Square Terminal, and third-party peripherals. Third-party peripherals include cash drawers, receipt printers, scales, and barcode scanners, all of which can be integrated with Square Stand, Square Register, or Square Terminal to provide a comprehensive point-of-sale solution.
Amortization of Customer and Other Acquired Intangible Assets Amortization of customer and other acquired intangible assets is primarily as a result of the intangible assets from the Afterpay acquisition. 69 Interest Expense, net, and Other Income, net Interest and other income and expense, net consists primarily of gains or losses arising from remeasurements of our investments in equity securities, bitcoin investment, interest expense related to our long-term debt, interest income on our investments in marketable debt securities, and foreign currency-related gains and losses.
Interest Expense (Income), net Interest expense (income), net consists primarily of interest expense related to our long-term debt and interest income on our investments in marketable debt securities. Remeasurement Loss (Gain) on Bitcoin Investment Remeasurement loss (gain) on bitcoin investment is the result of gains or losses arising from remeasurements of our bitcoin investment.
Amortization of customer and other acquired intangible assets increased $35.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily as a result of the revision of certain intangibles' useful lives as well as the timing of the acquisition of Afterpay in the first quarter of fiscal year 2022 and the related intangible assets and measurement period adjustments.
Amortization of customer and other acquired intangible assets decreased $19.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily as a result of the revision of certain intangibles' useful lives in the third quarter of 2023.
The following table presents a reconciliation of the tax effect of non-GAAP net income adjustments to our provision (benefit) for income taxes (in thousands, except effective tax rate): Year Ended December 31, 2023 2022 2021 Benefit for income taxes, as reported $ (8,019) $ (12,312) $ (1,364) Tax effect of non-GAAP net income adjustments 582,703 264,523 222,104 Adjusted provision for income taxes, non-GAAP $ 574,684 $ 252,211 $ 220,740 Non-GAAP effective tax rate 34% 29% 25% We determined the adjusted provision for income taxes by calculating the estimated annual effective tax rate based on adjusted pre-tax income and applying it to Adjusted Net Income before income taxes. 79 Liquidity and Capital Resources As of December 31, 2023, we had approximately $7.7 billion in available liquidity, with $6.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $775.0 million available under our revolving credit facility subject to compliance with our covenants.
In periods when we reported an Adjusted Net Loss, diluted Adjusted Net Income Per Share is the same as basic Adjusted Net Income Per Share because the effects of potentially dilutive items were anti-dilutive. 79 The following table presents a reconciliation of the tax effect of non-GAAP net income adjustments to our provision for (benefit from) income taxes (in thousands, except effective tax rate): Year Ended December 31, 2024 2023 2022 Benefit from income taxes, as reported $ (1,509,343) $ (8,019) $ (12,312) Tax effect of one-time income tax benefits from deferred tax assets 1,909,848 — — Tax effect of other non-GAAP net income adjustments 360,782 582,703 264,523 Adjusted provision for income taxes, non-GAAP $ 761,287 $ 574,684 $ 252,211 Non-GAAP effective tax rate 26 % 34 % 29 % We determined the adjusted provision for income taxes by calculating the estimated annual effective tax rate based on our adjusted provision for income taxes, non-GAAP and applying it to Adjusted Net Income before income taxes. 80 Liquidity and Capital Resources As of December 31, 2024, we had approximately $10.7 billion in available liquidity, with $9.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, which includes net proceeds of approximately $2.0 billion from the issuance of our 2032 Senior Notes in the second quarter of 2024, as well as an undrawn amount of $775.0 million available under our revolving credit facility subject to compliance with the terms of the credit facility, including our covenants.
Excluding bitcoin costs of revenue, total cost of revenue increased by approximately $534.7 million, or 12%, in the year ended December 31, 2023, compared to the year ended December 31, 2022.
Excluding bitcoin costs of revenue, total cost of revenue increased by approximately $204.0 million, or 4%, in the year ended December 31, 2024, compared to the year ended December 31, 2023. Transaction-based costs for the year ended December 31, 2024 increased by $179.0 million, or 5%, compared to the year ended December 31, 2023.
As bitcoin revenue is the total sale amount of bitcoin sold to customers, the amount of bitcoin revenue recognized will fluctuate depending on customer demand as well as changes in the market price of bitcoin.
Bitcoin revenue for the year ended December 31, 2024 increased by $700.9 million, or 7%, compared to the year ended December 31, 2023. As bitcoin revenue is the total sale amount of bitcoin sold to customers, the amount of bitcoin revenue recognized will fluctuate depending on customer demand as well as changes in the market price of bitcoin.
Short-term restricted cash of $770.4 million as of December 31, 2023 primarily includes cash held by the Warehouse SPEs used in the Warehouse Facilities funding arrangements that will be used to pay the borrowings under the Warehouse Facilities or will be distributed to us.
Our liquidity, access to capital, and borrowing costs could be adversely impacted by declines in our credit rating. 82 Short-term restricted cash of $902.5 million as of December 31, 2024 primarily includes cash held by the Warehouse SPEs used in the Warehouse Facilities funding arrangements that will be used to pay the borrowings under the Warehouse Facilities or will be distributed to us.
Cash Flow Activities The following table summarizes our cash flow activities (in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 100,961 $ 175,903 Net cash provided by investing activities 683,201 1,225,696 Net cash provided by (used in) financing activities (240,137) 97,580 Effect of foreign exchange rate on cash and cash equivalents 29,156 (38,363) Net increase in cash, cash equivalents, restricted cash, and customer funds $ 573,181 $ 1,460,816 Cash Flows from Operating Activities For the year ended December 31, 2023, cash provided by operating activities was $101.0 million, primarily due to net loss of $21.1 million, adjusted for non-cash expenses of $2.6 billion consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; depreciation and amortization; non-cash interest and lease expense; and goodwill impairment.
Holidays and day-of-week may also cause significant volatility in daily GPV amounts. 83 Cash Flow Activities The following table summarizes our cash flow activities (in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 1,707,350 $ 100,961 Net cash provided by investing activities 649,952 683,201 Net cash provided by (used in) financing activities 1,952,662 (240,137) Effect of foreign exchange rate on cash and cash equivalents (88,539) 29,156 Net increase in cash, cash equivalents, restricted cash, and customer funds $ 4,221,425 $ 573,181 Cash Flows from Operating Activities For the year ended December 31, 2024, cash provided by operating activities was $1.7 billion, primarily due to net income of $2.9 billion, adjusted for non-cash expenses of $2.6 billion consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; depreciation and amortization; goodwill and intangible asset impairments; and non-cash lease expense, each of which contributed positively to cash provided by operating activities.
Subscription and services-based costs for the year ended December 31, 2023 increased by $213.4 million, or 25%, compared to the year ended December 31, 2022.
Subscription and services-based revenue for the year ended December 31, 2024 increased by $1.2 billion, or 21%, compared to the year ended December 31, 2023.
Segment Results Square Results The following tables provide a summary of the revenue and gross profit for our Square segment for the year ended December 31, 2023 and 2022 (in thousands, except for percentages): Year Ended December 31, 2023 2022 $ Change % Change Segment net revenue $ 7,033,384 $ 6,294,137 $ 739,247 12 % Segment cost of revenue 3,904,730 3,587,236 317,494 9 % Segment gross profit $ 3,128,654 $ 2,706,901 $ 421,753 16 % 74 Revenue Revenue for the Square segment for the year ended December 31, 2023 increased by $739.2 million compared to the year ended December 31, 2022.
Segment Results Square Results The following tables provide a summary of the revenue and gross profit for our Square segment for the year ended December 31, 2024 and 2023 (in thousands, except for percentages): Year Ended December 31, 2024 2023 $ Change % Change Segment net revenue $ 7,681,656 $ 7,033,384 $ 648,272 9 % Segment cost of revenue 4,082,744 3,904,730 178,014 5 % Segment gross profit $ 3,598,912 $ 3,128,654 $ 470,258 15 % 74 Revenue Revenue for the Square segment for the year ended December 31, 2024 increased by $648.3 million compared to the year ended December 31, 2023.
Refer to Note 15, Indebtedness and Note 20, Commitments and Contingencies within Notes to the Consolidated Financial Statements for more details on these commitments. 80 Senior Notes and Convertible Notes As of December 31, 2023, we held $4.2 billion in aggregate principal amount of debt, comprised of, $1.0 billion in aggregate amount of convertible senior notes that mature on March 1, 2025 ("2025 Convertible Notes"), $575.0 million in aggregate amount of convertible senior notes that mature on May 1, 2026 ("2026 Convertible Notes"), and $575.0 million in aggregate amount of convertible senior notes that mature on November 1, 2027 ("2027 Convertible Notes," collectively referred to as the “Convertible Notes”).
Senior Notes and Convertible Notes As of December 31, 2024, we held $6.2 billion in aggregate principal amount of debt, comprised of, $1.0 billion in aggregate amount of convertible senior notes that mature on March 1, 2025 ("2025 Convertible Notes"), $575.0 million in aggregate amount of convertible senior notes that mature on May 1, 2026 ("2026 Convertible Notes"), and $575.0 million in aggregate amount of convertible senior notes that mature on November 1, 2027 ("2027 Convertible Notes," collectively referred to as the “Convertible Notes”), as well as an outstanding $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2026 ("2026 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), and $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes" and, together with the 2026 Senior Notes and 2031 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”).
Transaction-based costs for the year ended December 31, 2023 increased by $338.0 million, or 10%, compared to the year ended December 31, 2022, largely in line with the growth of GPV of 12%.
Transaction-based costs were largely in line with the growth of GPV of 6%, partially offset by more favorable interchange economics for the year ended December 31, 2024. Subscription and services-based costs for the year ended December 31, 2024 increased by $60.7 million, or 6%, compared to the year ended December 31, 2023.
Sales and marketing expenses for the year ended December 31, 2023, decreased by $38.9 million, or 2%, compared to the year ended December 31, 2022, primarily due to: • a decrease of $163.4 million in advertising costs, primarily from decreased online and television campaigns as we focused on expense discipline; partially offset by • an increase of $87.7 million in sales and marketing personnel costs to maintain initiatives and $52.7 million in Cash App marketing.
Sales and marketing expenses for the year ended December 31, 2024, decreased by $34.7 million, or 2%, compared to the year ended December 31, 2023, primarily due to a decrease of $49.5 million in marketing and other advertising costs from decreased online campaigns as we focused on expense discipline as well as a release of estimated chargeback losses of $27.3 million in the first quarter of 2024.
The increase was driven by: • growth in Cash App's financial service-related products, including Cash App Card and related processing costs and fees, which is partially offset by favorable terms on such processing costs due to a contract renewal executed during the third quarter of fiscal year 2023; and • the cost of revenues associated with the BNPL platform, which were $286.6 million for the year ended December 31, 2023 and $223.2 million from the date of acquisition through December 31, 2022.
The increase was driven by growth in Cash App's financial service-related products, including Cash App Card and related processing costs and fees as well as the cost of revenues associated with the BNPL platform. Cost of revenues associated with the BNPL platform were $311.6 million and $286.6 million for the years ended December 31, 2024 and December 31, 2023, respectively.
Interest Expense (Income), Net, and Other Expense (Income), Net (in thousands, except for percentages) Year Ended December 31, 2023 2022 $ Change % Change Interest expense (income), net $ (47,221) $ 36,228 $ (83,449) (230) % Other income, net (202,475) (95,443) (107,032) 112 % Interest income, net, of $47.2 million for the year ended December 31, 2023 was primarily due to an increase in interest income received as a result of both higher interest rates and investment balances, which more than offset interest expense in the period.
Interest Expense (Income), Net (in thousands, except for percentages) Year Ended December 31, 2024 2023 $ Change % Change Interest expense (income), net $ 9,302 $ (47,221) $ 56,523 (120) % Interest expense, net, of $9.3 million for the year ended December 31, 2024 was primarily due to an increase in interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, which more than offset an increase in interest income received as a result of higher investment balances.
For the year ended December 31, 2022, cash provided by financing activities was $97.6 million, primarily as a result of net proceeds from warehouse facilities borrowings of $1.2 billion, a change in customer funds of $349.3 million, as well as proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $81.8 million.
These were partially offset by the purchase of property and equipment of $151.2 million and purchases of other investments of $38.8 million. 84 Cash Flows from Financing Activities For the year ended December 31, 2024, cash provided by financing activities was $2.0 billion, primarily due to approximately $2.0 billion of net proceeds related to the issuance of the 2032 Senior Notes in the second quarter of 2024, a change in customer funds of $1.0 billion, and proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $154.8 million.
Transaction, loan, and consumer receivable losses for the year ended December 31, 2023, increased by $110.0 million, or 20%, compared to the year ended December 31, 2022, primarily due to the following: • an increase in loan losses of $89.0 million compared to the year ended December 31, 2022, primarily due to increased loan volumes; and • an increase in transaction losses of $21.0 million for the year ended December 31, 2023, primarily due to an operational outage as well as growth in Cash App Card and Square GPV.
Transaction, loan, and consumer receivable losses for the year ended December 31, 2024, increased by $133.6 million, or 20%, compared to the year ended December 31, 2023, primarily due to the following: • an increase in loan losses of $221.3 million compared to the year ended December 31, 2023, primarily due to increased loan volumes; partially offset by • a decrease in transaction losses of $87.7 million for the year ended December 31, 2024.
While bitcoin contributed 43% and 41% of the total revenue in 2023 and 2022, respectively, gross profit generated from bitcoin was only 3% of the total gross profit in both 2023 and 2022. 71 Cost of Revenue (in thousands, except for percentages) Year Ended December 31, 2023 2022 $ Change % Change Transaction-based costs $ 3,702,016 $ 3,364,028 $ 337,988 10 % Subscription and services-based costs 1,075,129 861,745 213,384 25 % Hardware costs 267,650 286,995 (19,345) NM (i) Bitcoin costs 9,293,113 6,956,733 2,336,380 34 % Amortization of acquired technology assets 72,829 70,194 2,635 NM (i) Total cost of revenue $ 14,410,737 $ 11,539,695 $ 2,871,042 25 % (i) Not meaningful ("NM") Total cost of revenue for the year ended December 31, 2023 increased by $2.9 billion, or 25%, compared to the year ended December 31, 2022.
While bitcoin contributed 42% and 43% of the total revenue in 2024 and 2023, respectively, gross profit generated from bitcoin was only 3% of the total gross profit in both 2024 and 2023. 71 Cost of Revenue (in thousands, except for percentages) Year Ended December 31, 2024 2023 $ Change % Change Transaction-based costs $ 3,881,013 $ 3,702,016 $ 178,997 5 % Subscription and services-based costs 1,135,813 1,075,129 60,684 6 % Hardware costs 236,441 267,650 (31,209) NM Bitcoin costs 9,910,386 9,293,113 617,273 7 % Amortization of acquired technology assets 68,364 72,829 (4,465) NM Total cost of revenue $ 15,232,017 $ 14,410,737 $ 821,280 6 % Total cost of revenue for the year ended December 31, 2024 increased by $821.3 million, or 6%, compared to the year ended December 31, 2023.
Square GPV growth was driven by improvements in both card-present and card-not-present volumes as a result of growth from in-person and online channels, as well as growth in our international markets, and Cash App Business GPV growth was driven by increases in peer-to-peer transactions received by business accounts as well as peer-to-peer payments sent from a credit card.
GPV increased due to overall Square GPV growth. Square GPV growth was driven by improvements in both card-present and card-not-present volumes as a result of growth from in-person and online channels, as well as growth in our international markets. See below in Key Operating Metrics and Non-GAAP Financial Measures for further discussion of GPV.
We reflect additions to the reserve in current operating results, while realized losses are offset against the reserve.
We reflect additions to the reserve in current operating results, while realized losses are offset against the reserve. Amortization of Customer and Other Acquired Intangible Assets Amortization of customer and other acquired intangible assets is primarily as a result of the intangible assets from the Afterpay acquisition.
Bitcoin revenue increased by $2.4 billion and represented the primary driver of the increase in total net revenue. Excluding bitcoin revenue, total net revenue increased by $2.0 billion, or 19%, in the year ended December 31, 2023, compared to the year ended December 31, 2022.
Bitcoin revenue increased by $700.9 million compared to the year ended December 31, 2023. Excluding bitcoin revenue, total net revenue increased by $1.5 billion, or 12%, in the year ended December 31, 2024, compared to the year ended December 31, 2023.
Refer to Note 11, Acquired Intangible Assets within Notes to the Consolidated Financial Statements for more details.
Refer to Note 14, Indebtedness and Note 19, Commitments and Contingencies within Notes to the Consolidated Financial Statements for more details on these commitments.
This increase for the year ended December 31, 2023 was driven primarily by the quantity of bitcoin sold to customers compared to the year ended December 31, 2022. The prevailing bitcoin prices fluctuated significantly within each year, but the average price for 2023 was only approximately 2% higher than 2022.
This increase for the year ended December 31, 2024 was driven by an increase in the average market price of bitcoin, partially offset by a decrease in the quantity of bitcoin sold to customers, compared to the year ended December 31, 2023.
The increase was primarily due to growth in Square GPV from both card-present and card-not-present volumes. Cost of Revenue Cost of revenue for the Square segment for the year ended December 31, 2023 increased by $317.5 million compared to the year ended December 31, 2022.
The increase was primarily due to the Square items referenced within the Company's overall revenue discussion. Cost of Revenue Cost of revenue for the Square segment for the year ended December 31, 2024 increased by $178.0 million compared to the year ended December 31, 2023.
Provision (Benefit) for Income Taxes The provision for income taxes consists primarily of federal, state, local, and foreign tax.
Other Expense (Income), net Other expense (income), net consists primarily of gains or losses arising from remeasurements of our investments in equity securities and foreign currency-related gains and losses. Provision for (Benefit from) Income Taxes The provision for (benefit from) income taxes consists primarily of federal, state, local, and foreign tax.
These were offset by the payment to redeem convertible notes assumed upon the acquisition of Afterpay of $1.1 billion and the repayment and forgiveness of PPP loans of $480.7 million. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP.
Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. GAAP requires us to make certain estimates and judgments that affect the amounts reported in our financial statements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAdjustments are recorded in net income through “other expense (income), net” on the consolidated statements of operations. As of December 31, 2023, the fair value of our bitcoin investment included in other non-current assets was $339.9 million.
Biggest changeAs of December 31, 2024, the fair value of our bitcoin investment included in other non-current assets was $792.3 million, and for the year ended December 31, 2024 and 2023, we recognized a $420.9 million and $207.1 million gain, respectively, from the remeasurement of our bitcoin investment.
Equity Price Risk Marketable Equity Investments Our marketable equity investments are investments held in publicly-traded companies and are measured using quoted prices in active markets which could result in volatility in our financial results in future periods. As of December 31, 2023, our marketable equity investments were immaterial.
Equity Price Risk Marketable Equity Investments Our marketable equity investments are investments held in publicly-traded companies and are measured using quoted prices in active markets which could result in volatility in our financial results in future periods. As of December 31, 2024, our marketable equity investments were immaterial.
As such, we could lose our entire investment in these companies. Adjustments are recorded in other expense (income), net on the consolidated statements of operations and establish a new carrying value for the investment. As of December 31, 2023, the aggregate carrying value of our non-marketable equity investments included in other non-current assets was $205.3 million.
As such, we could lose our entire investment in these companies. Adjustments are recorded in other expense (income), net on the consolidated statements of operations and establish a new carrying value for the investment. As of December 31, 2024, the aggregate carrying value of our non-marketable equity investments included in other non-current assets was $245.6 million.
Gains and losses from foreign currency transactions, as well as foreign exchange forward contracts, were not significant for any period presented in the consolidated financial statements included in this Annual Report on Form 10-K. We did not have any material gains and losses from foreign currency derivatives outstanding as of December 31, 2023.
We do not use derivative financial instruments for trading or speculative purposes. Gains and losses from foreign currency transactions, as well as foreign exchange forward contracts, were not significant for any period presented in the consolidated financial statements included in this Annual Report on Form 10-K.
A hypothetical 10% increase or decrease in the carrying value of our non-marketable equity investments would not have a material effect on our financial results. 85 Bitcoin Market Price Risk Our bitcoin investment is measured using observed prices from active exchanges which could result in volatility in our financial results in future periods.
A hypothetical 10% increase or decrease in the carrying value of our non-marketable equity investments would not have a material effect on our financial results. Bitcoin Market Price Risk Our bitcoin investment is measured using observed prices from active exchanges and adjustments are recorded in net income through “other expense (income), net” on the consolidated statements of operations.
Our results of operations and cash flows are, therefore, subject to fluctuations in foreign currency exchange rates and may cause us to recognize transaction gains and losses on our financial statements.
Our results of operations and cash flows are, therefore, subject to fluctuations in foreign currency exchange rates and may cause us to recognize transaction gains and losses on our financial statements. 86 From time to time, we use foreign exchange derivative contracts to hedge a portion of our exposure to changes in currency exchange rates, which result from our global operating and financing activities.
A hypothetical 10% increase or decrease in the fair value of our bitcoin investment would not have a material effect on our financial results. Interest Rate Sensitivity Our cash and cash equivalents, and marketable debt securities as of December 31, 2023 were held primarily in cash deposits, money market funds, U.S. government and agency securities, commercial paper, and corporate bonds.
Interest Rate Sensitivity Our cash and cash equivalents, and marketable debt securities as of December 31, 2024 were held primarily in certificates of deposits, money market funds, U.S. government and agency securities, commercial paper, and corporate bonds.
A hypothetical 10% increase or decrease in current exchange rates on our financial instruments would not have a material effect on our financial results. 86
We did not have any material gains and losses from foreign currency derivatives outstanding as of December 31, 2024. A hypothetical 10% increase or decrease in current exchange rates on our financial instruments would not have a material effect on our financial results. 87
Removed
From time to time, we use foreign exchange derivative contracts to hedge a portion of our exposure to changes in currency exchange rates, which result from our global operating and financing activities. We do not use derivative financial instruments for trading or speculative purposes.
Added
The bitcoin market price may fluctuate significantly and a decline in the market price of bitcoin could result in a material and adverse effect on our financial results in future periods.

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