Block, Inc. Q2 FY2025 earnings call

• Jack Dorsey mentioned the focus on increasing product velocity and ramping up go-to-market investment, with products like Pools launched quickly. - Amrita Ahuja noted strong second quarter results, exceeding gross profit and adjusted operating income guidance. Discussed Cash App's scale, including $218 billion in peer-to-peer volume in the last 12 months, and Square's GPV and gross profit growth, with strong performance in food and beverage, retail, and international. Talked about the 4 pillars of the business: peer-to-peer network, broad commerce capabilities, banking solutions, and Bitcoin buying/selling. Mentioned Rule of 40 and non-GAAP financial measures.

Cash App: Second quarter gross profit was $2.5 billion, up 14% year-over-year, with gross profit growth reaccelerating to 16% year-over-year. Square: Year-over-year GPV growth accelerated to 10% in the second quarter, delivering 11% gross profit growth; international GPV growth accelerated to 25% year-over-year.

• Raising full year guidance and expectations for the back half of the year. Q3 expected gross profit of $2.6 billion, growing 16% year-over-year; adjusted operating income of $460 million or 18% margin. Full year expected gross profit of $10.17 billion or over 14% year-over-year growth; adjusted operating income of $2.03 billion or 20% margin. - For Square, expects low double-digit GPV growth in third and fourth quarters, accelerating modestly from the 10% growth in the second quarter.

• Changes in macroeconomic conditions could cause actual results to differ materially from forward-looking statements.

Q: Really impressive growth here in the quarter and the outlook. So I just want to maybe check on conviction and visibility, of course, into the second half acceleration that you're talking about. I think, Jack, you mentioned you're shipping product faster. So given what you've seen and observed, I'm curious, are you more bullish in certain areas versus what we last talked about? And where might you be a little bit more cautious with more work to do than, say, 90 days ago?

A: Yes. I think this is all a function of our shipping velocity. And I think the biggest indicator of this is of the recent Pools launch. It's a pretty complicated feature just to do on network, and the team did an amazing job not just doing that within ideation to execution and shipping to customers within 3 months but also made it possible for us to go out of network as well, meaning that you can create a pool and you can invite friends who don't -- are not on Cash App currently, and they can use Apple Pay or Google Pay to contribute to the pool and ideally see that functionality in the utility and then sign up themselves. So these are the sorts of features that we're now able to ship much faster. And it directly contributes to our overall network growth, which contributes to our overall virality and really, really strengthens what made Cash App, Cash App in the first place, which is this inherent network effect that we have. The products we can build on top of that just get stronger because of it. And it's -- and then it's all a function of us being able to show our customers everything that Cash App has to offer in the ecosystem. But I've never been more confident of our ability to do that better than I am today. It's a function of our focus but also the tools we have access to today with all of our AI coding tools. Goose is being used by nearly everyone in the company. It's accelerating our developers. It's accelerating our designers. It's allowing us to experiment a near 0 cost so that we can actually get to the right answer much faster, and we can get the customer feedback much faster, too. So we can double down and pull the thread on what resonates with people. So I'm super excited and super bullish on our ability to ship faster, which will make every single thing about Cash App and also Square that much better and more usable.

Q: I want to dig in a little bit more on Cash Card post-purchase BNPL. So this topic comes up a lot because investors are now very confident in the ramp in Borrow in the second half and the lapping dynamics, those are supportive of gross profit growth heading into at least the first half of 2026 as well. So we're often asked what's the next big product that can help drive the growth in the second half of 2026 and beyond? Of course, there's a long list of items, and many of them are highlighted in the shareholder letter. But one that stands out is Cash Card post-purchase BNPL. You just mentioned some of the stats, the 1 million, the attach rates, the loss rates. I was hoping you could just elaborate a little bit more on this product in terms of those attach rates and just anything else that can help us to better quantify that opportunity in 2026 and beyond?

A: Sure. Thanks for the question, Tim. So we released the product in March, and it's been one of the key drivers of growth acceleration for Cash App and also what you saw overall for the BNPL platform. If you look across the second quarter, GMV for BNPL accelerated to 17% on a reported basis, 18% constant currency, up from 13% and 16%, respectively, in the first quarter. We also saw gross profit accelerate to 22% year-over-year growth, so part -- an accelerating story for BNPL overall. The early signs that we've seen for post-purchase BNPL have been really strong, strong conversion, strong adoption. As I mentioned, we crossed the 1 million monthly actives mark. We also crossed the $2 billion originations run rate mark in July and expect to continue to expand eligibility and increase attach rates as we look at the back half of the year. As I noted earlier, we're really taking the learnings from Borrow. And as we stack up post-purchase BNPL against Borrow's early trajectory, both in terms of origination volume and margin profile, because we're able to leverage our infrastructure around the Cash App credit score, we've been able to track ahead of where Borrow is and we know that that's become a successful product for us. So we're encouraged about these early signs that we're seeing on BNPL. If I step back and if I think about 2026, obviously, we'll have a lot more to say later in the year and at Investor Day. But I think about the nascent products that are still ramping, like post-purchase BNPL, which we'd expect to contribute more in '26. Our traditional Pay- in-Four bringing that more into Cash App and seeing that ramp into '26 Cash App Pay, some of the newer products that we've talked about like Tap to Pay on Cash for Business, all these newer products continuing to ramp end of 2026 for Cash App. I'd expect Borrow to continue to be a growth driver for us as well. It's not just about the back half of this year. And there's also, as we look ahead into 2026, compounding effects of these go-to-market investments we're making across each of Cash App and Square. So there are a number of drivers of growth as we look at '26 that we get excited about. And then most importantly, the key takeaways from this call, as you heard from Jack, is really around product velocity increasing, and so there's even more coming than what we have today.