Block, Inc. (XYZ)

CIK: 0001512673. SIC: 7372 Services-Prepackaged Software. Latest 10-K as of: 2026-02-26.

SIC breadcrumb: Services > Business Services > SIC 7372 Services-Prepackaged Software

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1512673. Latest filing source: 0001628280-26-012254.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001512673.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Macro Cross-References

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• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
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• BOPGSTB - U.S. International Trade in Goods and Services: Balance

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-26. Report date: 2025-12-31.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This management's discussion and analysis provides a review of the results of operations, key operating metrics and non-GAAP financial measures, and liquidity and capital resources of Block, Inc. on a historical basis and outlines the factors that have affected recent earnings, as well as those factors that may affect future earnings. 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 2025 compared to fiscal 2024. The comparison of the fiscal 2024 results with the fiscal 2023 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 2024 Annual Report within Part II, Item 7 of Form 10-K, filed on February 24, 2025.

The statements in this discussion regarding our expectations of our future performance, liquidity, and capital resources; our plans, estimates, beliefs, and expectations that involve risks and uncertainties; and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under Item 1A. Risk Factors and elsewhere in this Form 10-K. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Overview

We launched the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, a critical capability that had previously been inaccessible to many businesses. We have since expanded to provide sellers additional products and services and to give them access to a cohesive ecosystem of tools to help them start, run, and grow their businesses. Similarly, with Cash App, we have built an ecosystem of financial products and services to help consumers manage their money. Cash App now provides an ecosystem of commerce solutions, financial services, and bitcoin capabilities focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, BNPL, borrow, or save their money. In addition, our nascent ecosystems include TIDAL as well as Bitcoin, which includes businesses such as Proto and Bitkey.

In 2025, we generated gross profit of $10.4 billion, up 17% year over year. Cash App generated gross profit of $6.3 billion in 2025, up 21% year over year, primarily driven by growth in Cash App Borrow. Square generated gross profit of $3.9 billion in 2025, up 9% year over year, driven by financial solutions, most notably Square Loans.

In 2025, operating income was $1.7 billion and Adjusted Operating Income was $2.1 billion, compared to operating income of $892.3 million and Adjusted Operating Income of $1.6 billion in 2024. Net income attributable to common stockholders was $1.3 billion compared to net income attributable to common stockholders of $2.9 billion for the same period in 2024, and Adjusted EBITDA was $3.5 billion, an increase of 14% year over year. Net income for 2025 and 2024 included a loss of $55.9 million and gain of $420.9 million, respectively, from the remeasurement of our bitcoin investment. In 2024, we released our valuation allowance associated with certain federal and state deferred tax assets, as well as recognized deferred tax assets as part of internal legal entity restructuring efforts, which resulted in benefits to net income for 2024 of $1.9 billion. 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.

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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. We made progress on our cost efficiency goals in 2025, and we expect to continue these efforts. For the year ended December 31, 2025 and 2024, we recorded $78.6 million and $26.8 million of severance and other expenses related to these efforts, respectively. In February 2026, we announced a workforce reduction restructuring plan (the “Workforce Plan”) designed to better align our organizational structure with our operating model and strategic priorities. As part of the Workforce Plan, we expect to reduce our current workforce by more than 40%. We expect that the execution of the Workforce Plan will be substantially complete by the end of the second quarter of fiscal 2026. We will continue to incur expenses, including additional restructuring costs, in the short term to implement these initiatives. We expect to realize benefits related to our focus on disciplined growth and cost efficiencies, and we expect to continue to benefit from these actions in future periods. We plan to continue to operate at this smaller size and are continuing to look at ways to improve our efficiency through a combination of AI automation, prioritization of our scope, performance management, and centralization of teams and functions to reduce duplication.

During the third quarter of 2025, we issued $2.2 billion in aggregate principal amount of senior unsecured notes comprised of $1.2 billion in aggregate principal amount of senior notes due 2030 ("2030 Senior Notes") and $1.0 billion in aggregate principal amount due 2033 ("2033 Senior Notes"). We ended 2025 with $9.2 billion in available liquidity, with $8.4 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, which was amended on January 14, 2026 to, among other things, increase the unsecured revolving loan facility to $900 million. This represents a decrease of $1.5 billion from the end of 2024, primarily due to a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025 and $2.3 billion of share repurchases in 2025, partially offset by $2.2 billion cash received related to the issuance of the 2030 Senior Notes and 2033 Senior Notes.

In November 2025, the board of directors of the Company authorized an increase to the Company's share repurchase program to repurchase up to an additional $5 billion of the Company's Class A common stock, for a total authorization of $9 billion. The goal of the program is to return capital to shareholders. 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. As of December 31, 2025, we have repurchased $3.7 billion of our Class A common stock under the program, of which $2.3 billion was purchased in 2025.

Components of Results of Operations

Revenue

Commerce Enablement Revenue

Commerce enablement revenue is primarily comprised of revenue generated from Square payments, software, and hardware, Cash App Card, Cash App Pay, the Company’s BNPL products, Cash App Business accounts, and TIDAL. Commerce enablement revenue also includes various other software as a service (“SaaS”) products offered through Square. Our other SaaS products include subscription fees on our vertical software solutions, operational tool products (including Square Team Management and Square Payroll), and other products.

We charge our sellers a transaction fee that is generally calculated as a percentage of the total transaction amount processed. We also selectively offer custom pricing for certain larger sellers. We also charge transaction fees to Cash App Business customers for peer-to-peer transactions or funding transactions with a credit card.

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. 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.

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Revenue from our BNPL products include merchant fees generated from consumer receivables, late fees, gift cards, and certain affiliate and advertising fees. Through the use of our BNPL products, consumers can pay for their purchases over time by splitting their purchase price generally into three or four installments, typically due in two-week increments, without paying fees (if payments are made on time). For the majority of our BNPL products, we do not charge consumers interest or fees, other than late fees, which may be charged in certain regions as an incentive to encourage consumers to pay their outstanding balances as and when they fall due. We also offer the ability for consumers to pay for larger transaction sizes over a three-, six-, twelve-, or twenty-four-month period using a monthly payment option, which includes no late fees and no compounding interest with a cap on total interest owed. We may sell the rights, title, and interest to a third-party investor for an upfront consideration subsequent to origination of some of the loans. 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.

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.

Revenue from Square hardware 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.

Financial Solutions Revenue

Financial solutions revenue is primarily comprised of revenue the Company generates from Cash App Borrow, Cash App Instant Deposit, ATM withdrawal fees, interest earned on customer funds, and Square Loans.

Cash App Borrow allows customers to access short-term loans for a fee. The loans are repaid at the end of the loan term and customers may elect to prepay all or a part of the outstanding balance. If the outstanding balance is not paid when due, late fees in the form of interest may be charged. Historically, all Cash App Borrow loans were facilitated through a partnership with a third-party industrial bank. Beginning in the second quarter of 2025, the Company also began originating Cash App Borrow loans through our wholly-owned subsidiary bank, Square Financial Services. For loans originated by the bank partner, the Company purchases the loans obtaining all rights, title, and interest. Net amounts paid to the bank partner are recorded as the cost of the loans purchased, and amounts collected in excess of the carrying value are recognized as revenue over the life of the loans. For loans originated through our wholly-owned subsidiary bank, Square Financial Services, the Company records the loans at the amount originated and amounts collected in excess of the originated amount are recognized as revenue over the life of the loans.

Instant Deposit is a functionality within Cash App and our managed payment solutions that enables customers, including individuals and sellers, to instantly deposit funds into their bank accounts. We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM.

Square Loans to sellers that are originated by Square Financial Services are generally repaid through withholding a percentage of the seller's receivables collected and processed by us or a specified monthly amount. We also originate loans to the customers of certain sellers, which are generally repaid via ACH. For some of the loans, it is our intention to sell the rights, title, and interest to third-party investors for an upfront consideration. 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. Certain loans, for which we have the intention and ability to hold through maturity, are not immediately sold to third-party investors. Interest and fees earned on these loans are recognized as revenue using the effective interest method. The Company records the amounts advanced to the customers or the net amounts paid to purchase the loans as cost of the loans.

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Bitcoin Ecosystem Revenue

Bitcoin ecosystem revenue is primarily comprised of revenue the Company generates from customer purchases of bitcoin within Cash App, Proto, and bitcoin withdrawal fees. 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 sale amounts received from our customers are recorded as revenue on a gross basis and the associated bitcoin cost as cost of revenues, as we are the principal in the bitcoin sale transaction. Bitcoin revenue may fluctuate as a result of changes in customer demand or the market price of bitcoin. Bitcoin withdrawal is a functionality within Cash App that enables customers to withdraw bitcoin stored on Cash App to a third-party wallet. We charge customers a fee for the option of faster withdrawal speeds.

Cost of Revenue

Commerce Enablement Costs

Commerce enablement costs consist primarily of interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions, as well as costs associated with the Company’s BNPL products, TIDAL, and Square hardware and software.

Financial Solutions Costs

Financial solutions costs consist primarily of partnership fees related to Cash App including ATM withdrawals and Instant Deposit.

Bitcoin Ecosystem Costs

Bitcoin ecosystem costs consist primarily of the amounts we pay to purchase bitcoin that is sold to customers, which fluctuate in line with bitcoin revenue, as well as costs associated with Proto.

Amortization of Acquired Technology Assets

Amortization of acquired technology assets is primarily comprised of amortization related to the acquired technology assets from the acquisition of Afterpay.

Operating Expenses

Operating expenses consist of product development; sales and marketing; general and administrative expenses; transaction, loan, and consumer receivable losses; and amortization of customer and other acquired intangible assets. For product development and general and administrative expenses, the largest single component is personnel-related expenses, including salaries, commissions and bonuses, employee benefit costs, severance-related expenses, and share-based compensation. In the case of sales and marketing expenses, a significant portion is related to Cash App peer-to-peer transactions and Cash App Card issuance costs, in addition to paid advertising and personnel-related expenses. Operating expenses also include allocated overhead costs for facilities, human resources, and IT.

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; Square 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. Additionally, product development expenses include the depreciation of product-related infrastructure and tools, including data center equipment, internally developed software, and computer equipment. We continue to focus our product development efforts on adding new features and expanding our apps, and on enhancing the functionality and ease of use of our offerings. Our ability to realize returns on these investments is substantially dependent upon our ability to successfully address current and emerging requirements of sellers, buyers, and customers through the development and introduction of these new products and services.

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Sales and Marketing Expenses

Sales and marketing expenses are aggregated into two main components. The first component consists of traditional advertising costs incurred such as direct sales expense, account management, local and product marketing, retail and e-commerce, partnerships, and communications personnel. The second component of sales and marketing expenses consists of costs incurred for services, incentives, and other costs that are not directly related to revenue generating transactions that we consider to be marketing costs to encourage the usage of Cash App. 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. General and administrative expenses also include costs related to fees paid for professional services, including legal, tax, and accounting services.

Transaction, Loan, and Consumer Receivable Losses

Transaction losses include chargebacks for unauthorized credit card use and the inability to collect on disputes between buyers and sellers over the delivery of goods or services, as well as losses on Cash App activity related to peer-to-peer payments sent from a credit card, Cash App Business, and Cash App Card. We base our reserve estimates on prior chargeback history and current period data points indicative of transaction loss. We reflect additions to the reserve in current operating results, while realized losses are offset against the reserve. The establishment of appropriate reserves for transaction losses is an inherently uncertain process, and ultimate losses may vary from the current estimates. We regularly update our reserve estimates as new facts become known and events occur that may affect the settlement or recovery of losses.

Loan losses primarily relate to Square Loans, Cash App Borrow, and BNPL products. For loans classified as held for sale, losses are recorded whenever the amortized cost of a loan exceeds its fair value. Such charges are reversed for subsequent increases in fair value, but only to the extent that such reversals do not result in the amortized cost of a loan exceeding its fair value. For loans classified as held for investment and consumer receivables, losses relate to management's estimate of expected credit losses in the outstanding portfolios. 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.

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.

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.

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Provision for (Benefit from) Income Taxes

The provision for (benefit from) income taxes consists primarily of federal, state, local, and foreign tax. 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.

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Results of Operations

Revenue (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Commerce enablement revenue

$

11,514,162 

$

10,512,453 

$

1,001,709 

10 

%

Financial solutions revenue

4,176,734 

3,250,817 

925,917 

28 

%

Bitcoin ecosystem revenue

8,502,787 

10,357,783 

(1,854,996)

(18)

%

Total net revenue

$

24,193,683 

$

24,121,053 

$

72,630 

— 

%

Total net revenue for the year ended December 31, 2025, increased by $72.6 million, compared to the year ended December 31, 2024. Bitcoin ecosystem revenue decreased by $1.9 billion compared to the year ended December 31, 2024. Excluding bitcoin ecosystem revenue, total net revenue increased by $1.9 billion, or 14%, in the year ended December 31, 2025, compared to the year ended December 31, 2024.

Commerce enablement revenue for the year ended December 31, 2025 increased by $1.0 billion, or 10%, compared to the year ended December 31, 2024. This increase in revenue was driven by growth in Square processing, which increased by $541.2 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, as well as growth in Cash App Card usage and revenue from Afterpay Post-Purchase of $278.0 million and $88.0 million, respectively. The growth in Square processing was in line with Square GPV growth of 10%, driven primarily by strength in Food and Beverage sellers. See below in Key Operating Metrics and Non-GAAP Financial Measures for further discussion of GPV.

Financial solutions revenue for the year ended December 31, 2025 increased by $925.9 million, or 28%, compared to the year ended December 31, 2024. The increase was primarily due to growth in Cash App's financial service-related products, specifically Cash App Borrow volumes. For the year ended December 31, 2025 compared to the year ended December 31, 2024, Cash App Borrow revenue increased by $686.8 million as we continue to expand access to the product. Growth in Square's financial services-related products of $169.7 million, primarily related to Square Lending, also contributed to the increase in revenue in 2025.

Bitcoin ecosystem revenue for the year ended December 31, 2025 decreased by $1.9 billion, or 18%, compared to the year ended December 31, 2024. As bitcoin ecosystem revenue is primarily the total sale amount of bitcoin sold to customers, the amount of bitcoin ecosystem revenue recognized will fluctuate depending on customer demand as well as changes in the market price of bitcoin. For the year ended December 31, 2025, the decrease in the total sale amount of bitcoin sold to customers was driven by a decrease in trading volume, partially offset by an increase in the average market price of bitcoin, compared to the year ended December 31, 2024. While the bitcoin ecosystem contributed 35% and 43% of the total revenue in 2025 and 2024, respectively, gross profit generated from the bitcoin ecosystem was only 4% and 5% of the total gross profit in 2025 and 2024, respectively.

Cost of Revenue (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Commerce enablement costs

$

5,353,254 

$

4,913,124 

$

440,130 

9 

%

Financial solutions costs

339,878 

311,209 

28,669 

9 

%

Bitcoin ecosystem costs

8,083,772 

9,939,320 

(1,855,548)

(19)

%

Amortization of acquired technology assets

56,850 

68,364 

(11,514)

NM (i)

Total cost of revenue

$

13,833,754 

$

15,232,017 

$

(1,398,263)

(9)

%

(i) Not meaningful ("NM")

Total cost of revenue for the year ended December 31, 2025 decreased by $1.4 billion, or 9%, compared to the year ended December 31, 2024. Bitcoin ecosystem costs of revenue, which decreased by $1.9 billion, was the primary driver of the decrease in total cost of revenue. Excluding bitcoin ecosystem costs of revenue, total cost of revenue increased by approximately $457.3 million, or 9%, in the year ended December 31, 2025, compared to the year ended December 31, 2024, largely related to an increase in Square GPV.

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Commerce enablement costs for the year ended December 31, 2025 increased by $440.1 million, or 9%, compared to the year ended December 31, 2024. Commerce enablement costs for the year ended December 31, 2025 were primarily driven by growth in Square processing costs, which were in line with the growth of Square GPV of 10%, as well as an increase in Square hardware costs.

Financial solutions costs for the year ended December 31, 2025 increased by $28.7 million, or 9%, compared to the year ended December 31, 2024. The increase was primarily driven by growth in Cash App's financial service-related products on Cash App Card, including Instant Deposit, ATM, and related processing costs. While financial solutions revenue increased by 28% for the year ended December 31, 2025, compared to the year ended December 31, 2024, the costs of revenues increased by 9% for the same comparative period. This gross margin expansion is primarily due to more favorable economics in Cash App's financial services-related products.

Bitcoin ecosystem costs for the year ended December 31, 2025 decreased by $1.9 billion, or 19%, compared to the year ended December 31, 2024. Bitcoin ecosystem costs are primarily comprised of the total amounts we pay to purchase bitcoin, which fluctuates in line with bitcoin ecosystem revenue. The decrease in bitcoin ecosystem costs in the year ended December 31, 2025 was partially offset by costs related to Proto.

Operating Expenses (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Product development

$

2,907,889 

$

2,914,415 

$

(6,526)

— 

%

% of total net revenue

12 

%

12 

%

% of total gross profit

28 

%

33 

%

Sales and marketing

$

2,273,072 

$

1,984,265 

$

288,807 

15 

%

% of total net revenue

9 

%

8 

%

% of total gross profit

22 

%

22 

%

General and administrative

$

1,997,587 

$

2,149,099 

$

(151,512)

(7)

%

% of total net revenue

8 

%

9 

%

% of total gross profit

19 

%

24 

%

Transaction, loan, and consumer receivable losses

$

1,337,246 

$

794,221 

$

543,025 

68 

%

% of total net revenue

6 

%

3 

%

% of total gross profit

13 

%

9 

%

Amortization of customer and other acquired intangible assets

$

135,729 

$

154,709 

$

(18,980)

(12)

%

% of total net revenue

1 

%

1 

%

% of total gross profit

1 

%

2 

%

Total operating expenses

$

8,651,523 

$

7,996,709 

$

654,814 

8 

%

Product development expenses for the year ended December 31, 2025, decreased by $6.5 million compared to the year ended December 31, 2024. The decrease in expenses was driven by impairment charges of certain assets related to our TIDAL reporting unit of $60.3 million recognized in the fourth quarter of 2024 that did not recur during the year ended December 31, 2025, as well as a decrease of $21.7 million in personnel expenses due to a decrease in headcount, which is a result of executing on our cost efficiency goals and employee headcount cap. These decreases in expenses were partially offset by an increase in allocated facilities, human resources, and IT expenses of $43.5 million as well as an increase of $32.1 million, primarily related to amortization of internally developed software and Proto hardware development.

Sales and marketing expenses for the year ended December 31, 2025, increased by $288.8 million, or 15%, compared to the year ended December 31, 2024, primarily driven by higher marketing and advertising costs of $249.7 million as we prioritize marketing investments to support the growth of Cash App and Square. Further, for the year ended December 31, 2025, personnel costs increased by $27.7 million, which were impacted by restructuring costs, including severance and other related expenses.

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General and administrative expenses for the year ended December 31, 2025, decreased by $151.5 million, or 7%, compared to the year ended December 31, 2024, primarily due to the following:

•a decrease in expenses related to litigation and regulatory matters for the year ended December 31, 2025. These expenses during the year ended December 31, 2024 were primarily driven by estimated and settled amounts in connection with certain litigation and regulatory matters that did not recur during the year ended December 31, 2025;

•impairment charges recognized during the year ended December 31, 2024 related to our TIDAL reporting unit that did not recur during the year ended December 31, 2025; partially offset by

•an increase in personnel costs of $71.4 million, primarily driven by increased employee travel as well as restructuring costs, including severance and other related expenses, recognized during the year ended December 31, 2025.

Transaction, loan, and consumer receivable losses for the year ended December 31, 2025, increased by $543.0 million, or 68%, compared to the year ended December 31, 2024, as detailed below:

Year Ended December 31,

2025

2024

$ Change

% Change

Loan losses

$

820,810 

$

322,962 

$

497,848 

154 

%

Consumer receivable losses (i)

314,422 

273,249 

41,173 

15 

%

Transaction losses

202,014 

198,010 

4,004 

NM

Total transaction, loan, and consumer receivable losses

$

1,337,246 

$

794,221 

$

543,025 

68 

%

(i) Amounts do not include reserves for certain receivables, such as late fees. Consumer receivables losses also includes provision for charge-back losses that are realized and written-off within the same period, rather than through the allowance for consumer receivable losses.

•Loan losses increased by $497.8 million, or 154%, compared to the year ended December 31, 2024. The increase in loan losses was driven by significant growth in loan volumes, particularly from Cash App Borrow, which increased 143% compared to the year ended December 31, 2024, as well as Square Loans, while loan loss rates remained stable. Additionally, beginning in the second quarter of 2025, Cash App Borrow, along with certain other loan products, were retained on our balance sheet and classified as held for investment, resulting in upfront recognition of expected credit losses upon origination.

•Consumer receivable losses increased by $41.2 million, or 15%, compared to the year ended December 31, 2024, aligning with growth of our BNPL products, while loss rates remained stable.

Amortization of customer and other acquired intangible assets decreased $19.0 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to the impairment of certain assets in the fourth quarter of 2024, which resulted in no corresponding amortization in 2025. Refer to Note 10, Acquired Intangible Assets within Notes to the Consolidated Financial Statements for further details.

Interest Expense (Income), Net (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Interest expense, net

$

129,363 

$

9,302 

$

120,061 

1,291 

%

Interest expense, net, of $129.4 million for the year ended December 31, 2025 was primarily due to interest expense related our 2030 and 2033 Senior Notes issued in the third quarter of 2025, which more than offset interest income received on invested funds. Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details. Interest expense, net, of $9.3 million for the year ended December 31, 2024 was primarily due to interest expense related to our 2032 Senior Notes issued in the second quarter of 2024, offset by interest income received on invested funds.

72

Remeasurement Loss (Gain) on bitcoin investment (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Remeasurement loss (gain) on bitcoin investment

$

55,900 

$

(420,918)

$

476,818 

(113)

%

Remeasurement loss on bitcoin investment of $55.9 million for the year ended December 31, 2025 and gain of $420.9 million for the year ended December 31, 2024, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date. Refer to Note 13, Bitcoin within Notes to the Consolidated Financial Statements for further details regarding the remeasurement of our bitcoin investment.

Other Expense (Income), Net (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Other income, net

$

(166,768)

$

(53,211)

$

(113,557)

213 

%

Other income, net, of $166.8 million for the year ended December 31, 2025 was primarily due to the revaluation of certain equity investments, partially offset by losses from the currency revaluation of intercompany loans. In the third quarter of 2025, one of the Company's investments closed on an additional financing round, which the Company assessed as an observable price change. The Company recorded a $171.6 million upward adjustment to the carrying value of this investment. Other income, net, of $53.2 million for the year ended December 31, 2024 was comprised of unrealized gains of $37.7 million arising from the revaluation of certain equity investments as well as accretion of investments in marketable debt securities.

Provision for (Benefit from) Income Taxes (in thousands, except for percentages)

Year Ended December 31,

2025

2024

$ Change

% Change

Provision for (benefit from) income taxes

$

385,701 

$

(1,509,343)

$

1,895,044 

(126)

%

Provision for income taxes of $385.7 million for the year ended December 31, 2025, compared to a benefit from income taxes of $1.5 billion for the year ended December 31, 2024, was primarily due to a benefit of $1.9 billion related to both the release of the valuation allowance associated with certain federal and state deferred tax assets as well as the recognition of deferred tax assets as part of internal legal entity restructuring efforts in the fourth quarter of 2024. These benefits were partially offset by $487.7 million related to current and deferred tax provisions associated with 2024 activity. Refer to Note 15, Income Taxes within Notes to the Consolidated Financial Statements for further details.

Segment Results

Square

The following tables provide a summary of the revenue and gross profit for our Square segment for the year ended December 31, 2025 and 2024 (in thousands, except for percentages):

Year Ended December 31,

2025

2024

$ Change

% Change

Segment net revenue

$

8,451,911 

$

7,681,656 

$

770,255 

10 

%

Segment cost of revenue

4,516,870 

4,082,744 

434,126 

11 

%

Segment gross profit

$

3,935,041 

$

3,598,912 

$

336,129 

9 

%

Revenue

Revenue for the Square segment for the year ended December 31, 2025 increased by $770.3 million compared to the year ended December 31, 2024. The increase was primarily due to the Square items referenced within the Company's overall revenue discussion.

73

Cost of Revenue

Cost of revenue for the Square segment for the year ended December 31, 2025 increased by $434.1 million compared to the year ended December 31, 2024. The increase was primarily due to the Square items referenced within the Company's overall cost of revenue discussion.

Cash App

The following tables provide a summary of the revenue and gross profit for our Cash App segment for the year ended December 31, 2025 and 2024 (in thousands, except for percentages):

Year Ended December 31,

2025

2024

$ Change

% Change

Segment net revenue

$

15,425,043 

$

16,247,880 

$

(822,837)

(5)

%

Segment cost of revenue

9,089,500 

11,008,869 

(1,919,369)

(17)

%

Segment gross profit

$

6,335,543 

$

5,239,011 

$

1,096,532 

21 

%

Revenue

Revenue for the Cash App segment for the year ended December 31, 2025 decreased by $822.8 million compared to the year ended December 31, 2024. The decrease was due to the Cash App items referenced within the Company's overall revenue discussion. While bitcoin ecosystem revenue contributed 54% and 64% of Cash App revenue in 2025 and 2024, respectively, gross profit generated from bitcoin ecosystem was only 6% and 8% of Cash App gross profit in 2025 and 2024, respectively.

Excluding bitcoin ecosystem revenue, Cash App net revenue increased $1.2 billion, or 20%, compared to the year ended December 31, 2024.

Cost of Revenue

Cost of revenue for the Cash App segment for the year ended December 31, 2025 decreased by $1.9 billion compared to the year ended December 31, 2024. The decrease was due to the items referenced within the Company's overall revenue and cost of revenue discussion. Excluding bitcoin ecosystem cost of revenue, Cash App cost of revenue increased $48.4 million, or 5%.

74

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. 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. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business, and to facilitate comparisons of our performance to that of other payment solution providers.

Year Ended December 31,

2025

2024

2023

Gross Payment Volume (GPV) (in millions)

$

259,631 

$

240,812 

$

227,699 

Adjusted Operating Income (in thousands)

$

2,083,813 

$

1,608,790 

$

351,351 

Adjusted EBITDA (in thousands)

$

3,466,568 

$

3,029,031 

$

1,792,420 

Adjusted Net Income Per Share:

Basic

$

2.41 

$

2.01 

$

0.43 

Diluted

$

2.37 

$

1.95 

$

0.42 

Change in Non-GAAP Financial Measures

Beginning in fiscal 2025, we revised our definition of Adjusted Net Income Per Share ("Adjusted EPS") to include share-based compensation. We believe this change provides a more comprehensive view of our operating performance and also aligns with our non-GAAP measure of Adjusted Operating Income. Prior period amounts have been recast to reflect the updated presentation.

Gross Payment Volume

GPV includes Square GPV and Cash App GPV. 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 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. GPV does not include transactions related to our BNPL products.

Adjusted EBITDA, Adjusted EPS, and Adjusted Operating Income

Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per share, adjusted to eliminate the effect of items as described below. Adjusted Operating Income is a non-GAAP financial measure that represents our operating income (loss), adjusted to eliminate the effect of items as described below.

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. Accordingly, we believe these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain variable charges that do not vary with our operations.

•We believe it is useful to exclude certain non-cash charges, such as amortization of intangible assets, from our non-GAAP financial measures because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

75

•We believe that excluding the expense related to amortization of debt discount and issuance costs from our non-GAAP measures is useful to investors because such incremental non-cash interest expense does not represent a current or future cash outflow for the Company and is therefore not indicative of our continuing operations or meaningful when comparing current results to past results. 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 of the note conversion is dilutive.

•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 discrete benefits from the release of valuation allowances on our deferred tax assets, 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. 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. 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.

In addition to the items above, Adjusted EBITDA also excludes depreciation and amortization, other cash interest income and expense, and other income and expense.

Non-GAAP financial measures have limitations, should be considered as supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:

•the intangible assets being amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; and

•non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs.

In addition to the limitations above, Adjusted EBITDA does not reflect the effect of share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy, depreciation and amortization expense and related cash capital requirements, income taxes that may represent a reduction in cash available to us, and the effect of foreign currency exchange gains or losses, which is included in other income and expense.

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, acquisition-related accelerated share-based compensation expenses, and acquisition-related, integration, and other costs, and goodwill and intangible asset impairment charges. Adjusted Operating Income (Loss) and Adjusted EPS include the effect of share-based compensation expense, as well as depreciation expense.

Other companies, including companies in our industry, may calculate the non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Because 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.

76

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,

2025

2024

2023

Operating income (loss)

$

1,708,406 

$

892,327 

$

(278,839)

Amortization of acquired technology assets

56,850 

68,364 

72,829 

Acquisition-related and integration costs

2,059 

49,019 

11,422 

Contingencies, restructuring and other charges

168,509 

302,446 

239,582 

Restructuring share-based compensation expense

12,260 

8,071 

— 

Goodwill and intangible asset impairment

— 

133,854 

132,313 

Amortization of customer and other acquired intangible assets

135,729 

154,709 

174,044 

Adjusted Operating Income

$

2,083,813 

$

1,608,790 

$

351,351 

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,

2025

2024

2023

Net income attributable to common stockholders

$

1,305,636 

$

2,897,047 

$

9,772 

Less: Net loss attributable to noncontrolling interests

(1,426)

(30,550)

(30,896)

Net income (loss)

1,304,210 

2,866,497 

(21,124)

Share-based compensation expense

1,203,220 

1,264,486 

1,276,097 

Restructuring share-based compensation expense

12,260 

8,071 

— 

Depreciation and amortization

369,529 

376,127 

408,560 

Acquisition-related and integration costs

2,059 

49,019 

11,422 

Contingencies, restructuring and other charges

168,509 

302,446 

239,582 

Goodwill and intangible asset impairment

— 

133,854 

132,313 

Interest expense (income), net

129,363 

9,302 

(47,221)

Remeasurement loss (gain) on bitcoin investment

55,900 

(420,918)

(207,084)

Other expense (income), net

(166,768)

(53,211)

4,609 

Provision for (benefit from) income taxes

385,701 

(1,509,343)

(8,019)

Loss on disposal of property and equipment

2,546 

2,634 

3,186 

Acquired deferred revenue and cost adjustment

39 

67 

99 

Adjusted EBITDA

$

3,466,568 

$

3,029,031 

$

1,792,420 

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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,

2025

2024

2023

Net income attributable to common stockholders

$

1,305,636 

$

2,897,047 

$

9,772 

Less: Net loss attributable to noncontrolling interests

(1,426)

(30,550)

(30,896)

Net income (loss)

1,304,210 

2,866,497 

(21,124)

Acquisition-related and integration costs

2,059 

49,019 

11,422 

Contingencies, restructuring and other charges

168,509 

302,446 

239,582 

Restructuring share-based compensation expense

12,260 

8,071 

— 

Goodwill and intangible asset impairment

— 

133,854 

132,313 

Amortization of intangible assets

192,579 

223,072 

246,873 

Amortization of debt discount and issuance costs

13,499 

14,413 

11,904 

Loss (gain) on revaluation of equity investments

(172,256)

(32,245)

16,523 

Remeasurement loss (gain) on bitcoin investment

55,900 

(420,918)

(207,084)

Loss on disposal of property and equipment

2,546 

2,634 

3,186 

Acquired deferred revenue and cost adjustment

39 

67 

99 

Income tax benefits from deferred tax assets

(58,196)

(1,909,848)

— 

Tax effect of non-GAAP net income adjustments

(43,761)

2,854 

(173,748)

Adjusted Net Income - basic

$

1,477,388 

$

1,239,916 

$

259,946 

Cash interest expense on convertible notes

1,244 

2,711 

3,554 

Adjusted Net Income - diluted

$

1,478,632 

$

1,242,627 

$

263,500 

Weighted-average shares used to compute Adjusted Net Income Per Share:

Basic

612,243 

616,993 

608,856 

Diluted

622,838 

636,390 

628,320 

Adjusted Net Income Per Share:

Basic

$

2.41 

$

2.01 

$

0.43 

Diluted

$

2.37 

$

1.95 

$

0.42 

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. 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.

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,

2025

2024

2023

Provision for (benefit from) income taxes, as reported

$

385,701

$

(1,509,343)

$

(8,019)

Income tax benefits from deferred tax assets

58,196

1,909,848

—

Tax effect of other non-GAAP net income adjustments

43,761

(2,854)

173,748

Adjusted provision for income taxes, non-GAAP

$

487,658

$

397,651

$

165,729

Non-GAAP effective tax rate

25

%

24

%

39

%

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.

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Liquidity and Capital Resources

As of December 31, 2025, we had approximately $9.2 billion in available liquidity, with $8.4 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. Additionally, we had $323.9 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. 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, 2025, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes. None of our warehouse funding facilities contain financial covenants.

The following table summarizes our available liquidity (in thousands):

December 31,

2025

December 31,

2024

Cash and cash equivalents

$

6,564,092 

$

8,075,247 

Short-term restricted cash (i)

1,071,574 

902,478 

Long-term restricted cash

73,786 

69,915 

Investments in short-term debt securities

517,777 

403,426 

Investments in long-term debt securities

188,887 

471,977 

Revolving credit facility

775,000 

775,000 

Total liquidity

$

9,191,116 

$

10,698,043 

(i) As of December 31, 2025, the Company has invested $293.5 million of restricted cash into a money market fund. See Note 5, Fair Value Measurements.

Our principal sources of liquidity are our cash and cash equivalents, and investments in marketable debt securities. Customer funds cash and cash equivalents are excluded from our liquidity as these are funds we hold on behalf of customers that are separate from our corporate funds and are not available for corporate purposes. 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.

As of December 31, 2025, we held approximately 8,883 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $777.5 million based on observable market prices, which is included within “Bitcoin investment” on the consolidated balance sheets. We believe cryptocurrency is an instrument of economic empowerment that aligns with our corporate purpose. We expect to hold these investments for the long term but will continue to reassess our bitcoin investment relative to our balance sheet. 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 "Remeasurement loss (gain) on bitcoin investment" within the consolidated statements of operations. We purchased approximately 398 bitcoins with a cost basis of $41.1 million during the year ended December 31, 2025 for investment purposes. We did not sell any of our bitcoin investment during the year ended December 31, 2025 and 2024. We recognized a loss of $55.9 million and gain of $420.9 million from the remeasurement of our bitcoin investment during the year ended December 31, 2025 and 2024, respectively.

In September 2020, we announced our intent to invest $100.0 million towards impact investments that further our purpose of economic empowerment. As of December 31, 2025, we have invested $75.9 million in aggregate towards this initiative, of which $7.9 million and $23.6 million were invested in the years ended December 31, 2025 and 2024, respectively.

Our principal commitments consist of convertible notes, senior notes, our revolving credit facility, warehouse funding facilities, operating leases, capital leases, and purchase commitments. Refer to Note 14, Indebtedness and Note 19, Commitments and Contingencies within Notes to the Consolidated Financial Statements for more details on these commitments.

79

In February 2026 we announced the Workforce Plan designed to better align our organizational structure with our operating model and strategic priorities. We currently expect to incur charges of $450 million to $500 million in connection with the Workforce Plan, consisting primarily of cash expenditures for notice period and severance payments, employee benefits, and related costs as well as non-cash expenses related to vesting of share-based awards. We expect that the majority of the restructuring charges will be incurred in the first quarter of fiscal 2026, and that the execution of the Workforce Plan will be substantially complete by the end of the second quarter of fiscal 2026. The Company’s estimates are subject to a number of assumptions, and the actual costs incurred may differ materially from those initial estimates.

Senior Notes and Convertible Notes

As of December 31, 2025, we held $7.4 billion in aggregate principal amount of debt, comprised of $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"), $1.2 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2030 ("2030 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes), and $1.0 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2033 ("2033 Senior Notes" and, together with the 2026 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, and 2032 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”). Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.

On March 5, 2020, we issued an aggregate principal amount of $1.0 billion of convertible senior notes ("2025 Convertible Notes"). On March 1, 2025, we paid $1.0 billion in cash to settle the outstanding principal balance and interest on the 2025 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 (as amended, the "Credit Agreement") maturing in June 2028. On January 14, 2026, we amended and restated its Credit Agreement (the "Restated Credit Agreement") to, among other things, increase the unsecured revolving loan facility to $900 million. The Restated Credit Agreement matures on January 14, 2031, provided that if on the date that is 91 days prior to the maturity date of any of our existing convertible notes or senior notes, the aggregate amount of liquidity (as defined in the Restated Credit Agreement) would be less than $250 million after giving pro forma effect to the repayment of such existing convertible notes or such senior notes at maturity, then the maturity date of the revolving loan facility shall be modified to be such date. Refer to Note 14, Indebtedness within Notes to the Consolidated Financial Statements for further details.

Warehouse Funding Facilities

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.7 billion on a revolving basis, of which $1.4 billion was drawn as of December 31, 2025. The Warehouse Facilities have been arranged utilizing wholly-owned and consolidated entities (collectively, the Warehouse Special Purpose Entities ("Warehouse SPEs")) formed for the sole purpose of financing the origination of consumer receivables to partly fund certain BNPL products. Borrowings under the Warehouse Facilities are secured against the respective consumer receivables. 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.

80

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 and warehouse funding facilities 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, short-term debt repayments, shares repurchased through our share repurchase program, and planned capital expenditures for at least the next 12 months. From time to time, we have raised capital by issuing equity, equity-linked, or debt securities such as our Convertible Notes and Senior Notes; and we may do so in the future. However, such funding may not be available on terms acceptable to us or at all.

During 2025, we received an investment grade rating by Fitch Ratings, Inc. (BBB-) and a non-investment grade rating from Moody's Corporation (Ba1), and our non-investment grade rating from S&P Global Ratings (BB+) was affirmed. We expect that these credit rating agencies will continue to monitor our performance, including our capital structure and results of operations. Our liquidity, access to capital, and borrowing costs could be adversely impacted by declines in our credit rating.

Short-term restricted cash of $1.1 billion as of December 31, 2025 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. It also includes pledged cash deposits in accounts at the financial institutions that process our sellers' payment transactions and collateral pursuant to various agreements with banks relating to our products. We use restricted cash to secure letters of credit with the related financial institutions to provide collateral for cash flow timing differences in the processing of payments. We have recorded these amounts as current assets on our consolidated balance sheet given the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted.

Long-term restricted cash of $73.8 million as of December 31, 2025 is primarily related to cash held as collateral as required by the Federal Deposit Insurance Corporation ("FDIC") for Square Financial Services. We have recorded these amounts as non-current assets on our consolidated balance sheet as the requirement by the FDIC specifies a time frame of 12 months or longer during which the cash must remain restricted.

We experience significant day-to-day fluctuations in our cash and cash equivalents due to fluctuations in settlements receivable, and customers payable, and hence working capital. These fluctuations are primarily due to:

•Timing of period end. For periods that end on a weekend or a bank holiday, our cash and cash equivalents, settlements receivable, and customers payable balances typically will be higher than for periods ending on a weekday, as we settle to our sellers for payment processing activity on business days; and

•Fluctuations in daily GPV. When daily GPV increases, our cash and cash equivalents, settlements receivable, and customers payable amounts increase. Typically our settlements receivable and customers payable balances at period end represent one to four days of receivables and disbursements to be made in the subsequent period. Customers payable, excluding amounts attributable to Cash App stored funds, and settlements receivable balances typically move in tandem, as pay-out and pay-in largely occur on the same business day. However, customers payable balances will be greater in amount than settlements receivable balances due to the fact that a subset of funds are held due to unlinked bank accounts, risk holds, and chargebacks. Customer funds obligations, which may be impacted by the timing of period end, number of processors used and processing times, are included in customers payable and may also cause customers payable to trend differently than settlements receivable. Holidays and day-of-week may also cause significant volatility in daily GPV amounts.

81

Cash Flow Activities

The following table summarizes our cash flow activities (in thousands):

Year Ended December 31,

2025

2024

Net cash provided by operating activities

$

2,579,714 

$

1,707,350 

Net cash provided by (used in) investing activities

(2,801,932)

649,952 

Net cash provided by (used in) financing activities

(613,099)

1,952,662 

Effect of foreign exchange rate on cash and cash equivalents

86,081 

(88,539)

Net increase (decrease) in cash, cash equivalents, restricted cash, and customer funds

$

(749,236)

$

4,221,425 

Cash Flows from Operating Activities

For the year ended December 31, 2025, cash provided by operating activities was $2.6 billion, primarily due to net income of $1.3 billion, adjusted for non-cash expenses of $3.4 billion consisting primarily of transaction, loan, and consumer receivable losses; share-based compensation; depreciation and amortization; changes in deferred income taxes; non-cash lease expense; and losses on bitcoin remeasurement, each of which contributed positively to cash provided by operating activities. Additionally, there were net inflows from loans originally classified as held for sale of $57.3 million. These were partially offset by amortization of discounts and premiums and other non-cash adjustments on consumer receivables of $1.1 billion; gains on the revaluation of certain equity investments of $172.3 million; and net outflows related to changes in other assets and liabilities, including settlements receivable, customers payable, and prepaid expenses, of $841.5 million due to timing of period end.

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. Additionally, there were net inflows related to changes in other assets and liabilities, including settlements receivables, customers payable, and prepaid expenses, of $207.3 million due to timing of period end. These were partially offset by a change in deferred income taxes of $1.7 billion; amortization of discounts and premiums and other non-cash adjustments on consumer receivables of $1.1 billion; net outflows from loan products of $797.5 million; bitcoin remeasurement of $420.9 million; and gains on the revaluation of certain equity investments of $32.2 million.

Cash Flows from Investing Activities

Beginning in the second quarter of 2025, we began originating Cash App Borrow loans through Square Financial Services, which are classified as loans held for investment. Additionally, beginning July 1, 2025, Cash App Borrow loans and certain other customer loan products purchased from our bank partner, along with customer loan products originated through Square Financial Services, are retained on the Company's balance sheet and classified as held for investment. Cash flows associated with these loans, including originations and principal repayments, are included within cash flows from investing activities.

For the year ended December 31, 2025, cash used in investing activities was $2.8 billion, primarily due to net outflows of $3.5 billion related to loans originally classified as held for investment, particularly Cash App Borrow, as well as purchases of property and equipment of $155.0 million. These were partially offset by net inflows of consumer receivables of $789.0 million and proceeds from investments of marketable securities of $177.6 million.

For the year ended December 31, 2024, cash provided by investing activities was $650.0 million, primarily due to a net inflow related to consumer receivables of $604.0 million and net proceeds from investments of marketable securities of $253.9 million. These were partially offset by the purchase of property and equipment of $153.9 million and purchases of other investments of $53.9 million.

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Cash Flows from Financing Activities

For the year ended December 31, 2025, cash used in financing activities was $613.1 million, primarily due to $2.3 billion of share repurchases; a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025; net repayments under Warehouse Facility borrowings of $151.6 million; and a net outflow for other financing activities of $35.3 million. These were partially offset by approximately $2.2 billion of net proceeds related to the issuance of the 2030 and 2033 Senior Notes in the third quarter of 2025; an increase in customer funds of $589.0 million; proceeds from issuances of common stock from the exercise of options and purchases under our employee share purchase plan of $88.9 million; and an increase in interest-bearing deposits of $55.5 million.

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. These were partially offset by repurchases of common stock of $1.2 billion, a net outflow from warehouse facilities borrowings of $74.0 million, and a net outflow for other financing activities of $18.5 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. 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 believe accounting policies and the assumptions and estimates associated with the determination of valuation allowances for deferred taxes could potentially have a material effect on our consolidated financial statements, and therefore are critical accounting policies and estimates.

Deferred Tax Valuation Allowance

Deferred income tax assets represent amounts available to reduce income taxes payable on taxable income in future years. Such assets arise because of temporary differences between the financial reporting and tax bases of assets and liabilities, as well as from net operating loss, capital loss, and tax credit carryforwards. We evaluate the realizability of our deferred tax assets on a quarterly basis to determine whether a valuation allowance is necessary and reduce such assets to the amount that is more likely than not to be realized. This evaluation requires significant judgment and involves the consideration of all available positive and negative evidence, including our historical operating results, the existence of cumulative losses in recent years, ongoing prudent and feasible tax planning strategies, and projections of future taxable income. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying business. Actual operating results in future years could differ from our current assumptions, judgments and estimates.

Refer to Note 15, Income Taxes within the 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.