XYZ 10-K & 10-Q changes, risk factors and insider trading

•our ability to develop products and services to address the rapidly evolving market for paymentscommerce and financial services;

•risks related to the banking ecosystem, including through Square Financial Services ("Square Financial Services"),Services, our bank partnerships, and FDIC and other regulatory obligations;

•risks related to our loan products such as the availability of capital, repayments,repayments and general macroeconomic conditions; and

•real or perceived improper or unauthorized use of, disclosure of, or access to sensitive data;

•any inability to secure financing on favorable terms, or at all, or comply with covenants in our existing credit agreement, the indentures, or future agreementsall;

•litigation, including intellectual property claims, government investigations or inquiries, and legal and regulatory matters or disputes;

•obligations and restrictions as a licensed money transmitter and virtual currency business;

•regulatory scrutiny or changes in the buy now pay later ("BNPL") space;

Our rate of revenue and gross profit growth has slowed at times and may decline in the future, and it may slow or decline more quickly than we expect for a variety of reasons, including the risks described in this Annual Report on Form 10-K. Additionally, our rate of revenue and gross profit growth may vary between our reporting segments. For example, in recent periods our Cash App segment revenue and gross profit growth has varied and may continue to vary from the growth rate of our Square segment. Our sellers and customers have no obligation to continue to use our services, and we cannot assure you that they will. We generally do not have long-term contracts with our sellers and customers, and the difficulty and costs associated with switching to a competitor may not be significant for many of the services we offer. Our sellers’ activity with us may decrease for a variety of reasons, including sellers’ level of satisfaction with our products and services, our pricing and the pricing and quality of competing products or services, conditions impacting their businesses, including the effects of economic conditions, or reductions in the aggregate spending of our sellers’ customers. Growth in transacting actives on Cash App and customers’ level of engagement with our products and services on Cash App are important to our success and long-term financial performance. However, the growth rate of transacting actives has fluctuated over time, has slowed in recent quarters,time and may slow or decline in the future. 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, competitive offerings in the market, 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. Further, certain events or programs, such as government stimulus programs may correlate with periods of significant growth, but such growth may not be sustainable. Additionally, the growth rate of Cash App revenue may be distorted by the prices of bitcoin, as bitcoin revenue may increase or decrease due to changes in the price of, and demand for, bitcoin and may not correlate to customer or engagement growth rates.

The growth of our business depends in part on our existing sellers and customers expanding their use of our products and services. If we are unable to increase broader use of our products and services within each of our ecosystems by our existing sellers and customers,services, our growth may slow or stop, and our business may be materially and adversely affected. The growth of our business also depends on our ability to attract new sellers and customers, to encourage sellers and customers to use our products and services, and to introduce successful new products and services. We have invested and will continue to invest in our business in order to offer better or new features, products, and services and to adjust our product offerings to changing economic conditions, but if those features, products, services, and changes fail to be successful on the expected timeline or at all, our growth may slow or decline.

We have generated significant net losses in the past, and we intend to continue to invest in our business. Thus, we may not be able to maintain profitability or our profitability may decline.

We intend to continue to make investments in our business, including with respect to our employee base, sales and marketing, development of new products, services, and features; acquisitions; infrastructure; expansion of international operations, and general administration, including legal, finance, and other compliance expenses related to our business. We also plan to continue to invest in the development of new technologies and initiatives, which may not be successful or may not generate sufficient returns to offset the investment. 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 total expenses may rise significantly. In addition, increases in our seller base could causeresult us to incurin increased costsexpenses 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. 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.profitability. If we are unable to generate adequate revenue growth and manage our expenses with respect to acquired businesses or our business as a whole, we may incur significant losses and may not maintain profitability on a consistent basis.

From time to time, we have made and we may in the future make decisions that will have a negative effect on our short-term operating results if we believe those decisions will improve our operating results over the long-term. For example, we have implemented, and may in the future implement, expense cuts and reducedreductions in the size of our workforce to, among other things, align our cost structure with our business and longer term strategies,strategies. whichIn mayFebruary increase2026 we announced a workforce reduction restructuring plan designed to better align our organizational structure with our operating model and strategic priorities. We expect these actions and decisions will result in increased expenses in the short termterm, could materially impact our operating results in the periods incurred, may impact our ability to generate and increase revenue and may impact our ability to grow or quickly develop and introduce products. TheseActual costs related to these changes may also exceed our estimates due to changes in assumptions, additional actions, or unforeseen circumstances. Similarly, any future actions and decisions could likewise result in increased expenses and may impact our ability to grow or quickly develop and introduce products. Further, these decisions may not be consistent with the expectations of investors and may not produce the long-term benefits that we expect, in which case our business may be materially and adversely affected.

Having a strong and trusted brand has contributed significantly to the success of our business. We believe that maintaining, promoting, and enhancing the Square, Cash App, TIDAL, Afterpay, Proto, and our other brands, in a cost-effective mannerbrands is critical to achieving widespread acceptance of our products and services and expanding our base of customers. Maintaining and promoting our brands will depend largely on our ability to continue to provide useful, reliable, secure, and innovative products and services, as well as our ability to maintain trust and be a technology leader. We may introduce, or make changes to, features, products, services, privacy practices, or terms of service that customers do not like, which may materially and adversely affect our brands. Our brand promotion activities may not generate customer awareness or increase revenue, and even if they do, any increase in revenue may not offset the expenses we incur in building our brands. If we fail to successfully promote and maintain our brands or if we incur excessive expenses in this effort, our business could be materially and adversely affected.

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. Changes in the way these platforms operate or changes in their advertising prices, data use practices or other terms could make the maintenance and promotion of our products and services and our brands more expensive or more difficult. If we are unable to market and promote our brands on third-party platforms effectively, our ability to acquire new customers would be materially harmed. We also use retail partners to sell hardware and acquire sellers for Square. Our ability to acquire new sellers could be materially harmed if we are unable to enter into or maintain these partnerships on terms that are commercially reasonable to us, or at all.

Harm to our brands can arise from many sources, including failure by us or our partners and service providers to satisfy expectations of service and quality; inadequate protection or misuse of sensitive information; fraud committed by third parties using our products or applications; compliance failures and claims; litigation, regulatory claims, investigations, enforcement actions, settlements or consent orders; errors caused by us or our partners; and misconduct by our partners, service providers, or other counterparties. Even allegations regarding the foregoing may harm our reputation and brands and have an adverse impact on the market price on our Class A common stock. Our recent significant workforce reduction may create uncertainty regarding our financial condition, growth prospects, or operational stability. Sellers, customers and business partners may delay or reconsider relationships, and investors may react negatively, which could adversely affect our reputation, relationships, and stock price. We have also been from time to time in the past, and may in the future be, the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our reputation and brands and deter customers from adopting our services or our products. In addition, negative statements about us can cause and have caused a decline in the market price of our Class A common stock, divert our management’s attention and resources, and could cause other adverse impacts to our business. Partners and influencersinfluencers, employees, former employees or other third parties with whom we maintain relationships or have maintained relationships with could engage in behavior or use their platforms to communicate directly with our sellers and customers in a manner that reflects poorly on our brands and such behavior or communications may adversely affect us. Further, negative publicity or commentary regarding the partners and influencers or other third parties who are, or are perceived to be, or have been affiliated with us may also damage our reputation, even if the negative publicity or commentary is not directly related to us. Any negative publicity about the industries we operate in or our company, the qualityquality, andreliability, reliabilityor ofthe way in which we market, disclose, or represent our products and services, our risk management processes, changes to our products and services, our ability to effectively manage and resolve customer complaints, our privacy, data protection, and information security practices, litigation, regulatory activity, policy positions, and the experience of our sellerssellers, customers, employees and customersformer employees with us, our products or services could adversely affect our reputation and the confidence in and use of our products and services. If we do not successfully maintain, protect or enhance our brands, our business could be materially and adversely affected.

We intend to continue to broaden the scope of products and services we offer. However, we may not be successful in maintaining or growing our revenue, or deriving any significant new revenue streams from these products and services. Failure to successfully broadenintroduce thenew scopeor ofenhanced products and services that are attractive may inhibit our growth and harm our business. Furthermore, we expect to continue to expand our markets in the future, and we may have limited or no experience in such newer markets. We cannot assure you that any of our products or services will be widely accepted in any market or that they will grow in revenue or contribute to our profitability. Our offerings may present new and difficult technological, operational, and regulatory risks, and other challenges, and if we experience service disruptions, failures, or other issues, our business may be materially and adversely affected. Our expansion into newer markets may not lead to growth and may require significant investment of financial resources and of management time and attention, and we may not be able to recoup our investments in a timely manner or at all. In addition, our reduced headcount, any future reduction in headcount or the attrition of key talent may limit our capacity to pursue new product development, geographic expansion, acquisitions, or other growth initiatives. If we are unable to allocate sufficient resources to key priorities, our competitive position and long-term growth prospects could be adversely affected. If any of this were to occur, it could damage our reputation, limit our growth, and materially and adversely affect our business.

Our long-term success depends on our ability to develop products and services to address the rapidly evolving market for paymentscommerce and financial services, and, if we are not able to implement successful enhancements and new features for our products and services, our business could be materially and adversely affected.

Our success willdepends dependin part on our ability to develop new technologies, to adapt to technology changes and evolving industry standards, to incorporate new technologies into our products and services, and to provide products and services that are tailored to specific needs and requirements of 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. ItWe isare difficultunable to predict all of the risks related to the use of AI because laws, rules, directives, and regulations governing the use of AI are evolving rapidly and our ability to develop or use AI may be adversely affected. Refer to the risk factor titled “Our recently announced workforce reduction and related reorganization, including the potential for increased reliance on proactive intelligence and artificial intelligence tools, may not achieve their intended benefits and could adversely affect our business, financial condition and results of operations.” for additional risks related to our expected and planned use of AI. If we are unable to provide enhancements and new features for our products and services or to develop new products and services that achieve market acceptance or that keep pace with rapid technological developments and evolving industry standards, our business would be materially and adversely affected.

We compete in markets characterized by vigorous competition, changing technology, evolving industry standards, changing customer needs, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. For example, companies not traditionally associated with the payments industry have introduced products or services that are or may become competitive with our business. We compete against many companies to attract customers across our products and services, and some of these companies have greater financial resources and substantially larger bases of customers than we do, which may provide them with significant competitive advantages. These companies may devote greater resources to the development, promotion, and sale of products and services, may achieve economies of scale due to the size of their customer bases, and may more effectively introduce their own innovative products and services that adversely impact our growth. For example, we offer Cash App customers access to banking services and products through our bank partners.partners, as well as through Square Financial Services. We compete with established banks, neobanks, and other financial technology companies that provide access to similar offerings, some of which have larger established customer bases or provide customers with a different range of offerings than we do. We also compete in the BNPL market and a number of our competitors have introduced or offer BNPL products. Competitors in the BNPL space have engaged in, and may continue to engage in, aggressive consumer acquisition campaigns, may develop superior technology offerings, or consolidate with other entities and achieve benefits of scale. Such competitive pressures may materially erode our existing market share in the BNPL space and may hinder our expansion into new markets. In addition, mergers and acquisitions by, and collaborations between, the companies we compete against may lead to even larger competitors with more resources.

Our investments in bitcoin, our bitcoin ecosystem, and our Cash App featureand Square features that permitsfacilitate transactions in bitcoin by our customers toand transactsellers in bitcoin,each subject us to additional risks related to any further developments in the cryptocurrency markets and the resulting impact on customer and investor behavior. WeActions taken by regulators, legislatures, and other government actors, including the current U.S. administration, in the cryptocurrency industry, may experience adverse impacts to our business as a result of the downstream effects of the bankruptcies filed by certain cryptocurrencyimpact market participantsdemand for bitcoin and the actions taken by regulators to address their impact. Enforcement actions by U.S. regulators against major crypto asset platformssupply and negativepricing publicityfor associated with crypto asset activities may, among other things, result in a decline in confidence or interest in crypto assets.bitcoin. If the cryptocurrency environment either deteriorates or improves,improves based on these or other factors, 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. For example, ifIf demand increases sharply, either to buy or to sell,sell bitcoin, we may not be able to fulfill that demand in a timely manner or at all, which could result in customer frustration or movement to other platforms. If our customers experience losses due to market fluctuations in the prices of bitcoin, they may reduce or cease their use of Cashour App,product features that facilitate transactions in bitcoin, or other bitcoin-related products, andwhich could adversely impact our results of operations may be adversely impacted.operations. Further, our customers could attempt to seek compensation from us for their financial investment losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

DeteriorationAny deterioration in the cryptocurrency markets may also have an adverse effect on our reputation, and any negative perception by our customers of one or more cryptocurrencies, or our bitcoin operations, may lead to a loss of customer demand for our products and services, any of which could have an adverse impact on our business and financial condition. We may also suffer a decline in the market price of our Class A common stock due to any negative perception by our customers, investors, or the general public, of bitcoin or the cryptocurrency markets.

We have in the past, and may in the future, also choose to divest certain businesses or product lines. If we decide to sell assets or a business, we may have difficulty obtaining terms acceptable to us in a timely manner, or at all. Additionally, we may experience difficulty separating out portions of, or entire, businesses, incur loss of revenue or experience negative impact on margins, or we may not achieve the desired strategic and financial benefits. Such potential transactions may also delay achievement of our strategic objectives, cause us to incur additional expenses, disrupt customer or employee relationships, and expose us to unanticipated or ongoing obligations and liabilities, including as a result of our indemnification obligations. Further, during the pendency of a divestiture, we may be subject to risks such as a decline in the business to be divested, loss of employees, customers, or suppliers and the risk that the transaction may not close, any of which would have a material adverse effect on the business to be divested and our retained business. If a divestiture is not completed for any reason, we may not be able to find another buyer on the same terms, and we may have incurred significant costs without any corresponding benefit.

•enactment of or increases in tariffs, sanctions, fines, or other trade restrictionsrestrictions, including retaliatory actions;

•regional economic and political instability and other geopolitical risks.

Volatility in the banking and financial services sectors may impact our bank partnerships and could negatively impact our business. For example, we offer access to deposit products that are eligible for FDIC pass-through insurance coverage through our partnerships with banks that are members of the FDIC. To ensure deposits are insured by the FDIC on a pass-through basis, we and our bank partners must meet certain conditions established by the FDIC, such as appropriately maintaining records of customers’ ownership of funds. We believe our banking programs, including records maintained by us and our bank partners, satisfy all applicable regulatory conditions for each eligible participant's deposits to be covered by FDIC insurance, up to the applicable maximum deposit insurance amount. However, if the FDIC were to disagree, the FDIC may not recognize the participants’ claims as covered by deposit insurance in the event a bank partner fails and enters receivership proceedings under the Federal Deposit Insurance Act (“FDIA”). If the FDIC were to determine that funds held at a bank partner are not covered by deposit insurance, or if one or more of our bank partners were to fail and enter receivership proceedings under the FDIA, our sellers and customers may seek to withdraw their funds, or may not be able to withdraw all their funds in a timely manner, which could adversely affect our brand, business and results of operations, and may lead to claims or litigation, which may be costly to address. Additionally, in instances where we are a service-provider to or are otherwise in a third-party relationship with our bank partners in connection with these programs, we are subject to certain risk-management standards for third-party relationships in accordance with federal bank regulatory guidance and examinations by the federal and state banking regulators. Should we or our bank partners be unable to satisfy these standards, we may have to discontinue certain product offerings or discontinue certain third-party relationships, and our business and operations may be materially and adversely affected.

Further, as a FDIC-insured institution, our subsidiary Square Financial Services is subject to regulatory obligations, including the assessment of a quarterly deposit insurance premium, calculated based on its average consolidated total assets. We are generally unable to control the amount of premiums that we are required to pay for FDIC insurance. If there are additional bank or financial institution failures, weSquare Financial Services may be required to pay higher deposit insurance assessments or we may be required to pay 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.

Our loan products are subject to risks related to availability of capital and general macroeconomic conditions,conditions and increase our exposure to customer defaults.

RevenueAdverse generatedchanges byin the macroeconomic environment or the credit quality of our loansellers productscould cause some sellers who utilize Square Loans to cease operations or to experience a decline in their payment processing volume, thereby rendering them unable to make payment on the Square Loans and/or extend the repayment period beyond the contractual repayment terms. Similarly, economic factors such as Squareinterest Loans,rate aschanges, wellmarket asvolatility Cashor Apprising Borrow,unemployment rates could negatively impact loan repayment rates, increase our risk of loss, and our BNPL products depends on our ability to recoup the loan amount. Loan products are generally unsecured obligations of our borrowers,materially and they are not guaranteed or insured in any way. Although we rely on technology to assess repayment capability for these loan products, there can be no guarantee that such processes will always accurately predict repayments. 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 affectimpact our business, results of operations, and financial condition. If consumers who have purchased products or services using our BNPL platformproducts do not receive the products or services, they may also cease payment on their outstanding BNPL balances or request a refund on previous payments, and our business may be negatively impacted. 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.

TIDAL’s business is dependent on the various rights holders. We cannot provide assurances that we or TIDAL will be able to maintain or expand arrangements with partners and other third parties on acceptable terms, if at all. Under TIDAL’s license agreements and relevant statutes, we must pay all required royalties to record labels, music publishers, and other copyright owners in order to stream, distribute, and display content. The determination of the amount and timing of such royalty payments is complex and subject to a number of variables. Failure to accurately pay our royalties may damage our business relationships, our reputation, and adversely affect our business, operatingresults results,of operations, and financial condition.

We, our sellers, our partners, and others who use our services obtain and process a large amount of sensitive data. Any real or perceived improper or unauthorized use of, disclosure of, or access to such data could harm our reputation as a trusted brand, as well as have a material and adverse effect on our business.

We, our sellers, and our partners, including third-party vendors and data centers that we use, obtain and process large amounts of sensitive data, including data related to our customers, our sellers’ customers, and their transactions. We face risks, including to our reputation as a trusted brand, in the handling and protection of this data. These risks will increase as our business continues to expand to include new products and technologies, such as AI, and as we and our third-party vendors rely on an increasingly distributed workforce. Our operations involve the storage and transmission of sensitive data of individuals and businesses using our services, including their names, addresses, social security/tax ID numbers (or foreign equivalents), government IDs, payment card numbers and expiration dates, bank account information, loans they have applied for or obtained, and data regarding the performance of our sellers’ businesses. Additionally, certain of our products and services are subject to the Health Insurance Portability and Accountability Act of 1996 (and the rules and regulations thereunder, as amended, including with respect to the HITECH Act), and therefore we are required to take measures to safeguard protected health information of our health care entity-sellers' customers when using those products and services. Our services also provide third-party developers the opportunity to provide applications to sellers in the Square and Weebly app marketplaces. Sellers who choose to use such applications can grant permission allowing the applications to access content created or held by sellers in their Square or Weebly account. 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. The growing use of AI in our products and services presents additional risks. AI algorithms or automated processing of data may be flawed, and datasets may be insufficient or may use third partythird-party AI with unclear intellectual property rights or interests. Inappropriate or controversial data practices by us or others could subject us to lawsuits, regulatory investigations, legal and financial liability, or reputational harm. Additionally, our use of AI may create additional, or increase the risk of, cybersecurity breaches and incidents.

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 or other processing or handling 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. If the sensitive data or assets are lost or improperly accessed, misused, disclosed, destroyed, altered, or alteredotherwise processed or handled, or threatened to be improperly accessed, misused, disclosed, destroyed, altered, or altered,otherwise processed or handled, we could incur significant financial losses and costs and liability associated with remediation and the implementation of additional security measures and be subject to claims, litigation, regulatory scrutiny, and investigations. For example, in April 2022 we announced that we determined that a former employee downloaded certain reports of our subsidiary Cash App Investing in December 2021 that contained some U.S. customer information without permission after the former employee’s employment ended, as disclosed in our Current Report on Form 8-K filed with the SEC on April 4, 2022. 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.

Our software, hardware, systems, and processes may contain undetected errors or vulnerabilities that could have a material adverse effect on our business, particularly to the extent such errors or vulnerabilities are not detected and remedied quickly. We have from time to time found defects and errors in our customer-facing software and hardware, internal systems, external facing communications, manual processes, and technical integrations with third-party systems, including as a result of ordinary course updates to our software and systems, and new errors or vulnerabilities may be introduced in the future. From time to time, such errors or defects in our software, hardware, systems, or external facing communications, including as a result of human errors, have negatively impacted our customers’ experience with us and led to negative publicity and harm to our brand and reputation. In connection with any such defects or errors, we may also face government inquiries or investigations, claims and litigation, and we may incur additional costs or expenses to remediate the issues. Additionally, we rely on a limited number of component and product suppliers located outside of the U.S. to manufacture our products. As a result, our direct control over production and distribution is limited, and it is uncertain what effect such diminished control will have on the quality of our products. If there areAny defects in the manufacture of our hardware products,products wecould mayresult face similarin negative publicity, investigations, and litigation, and we may not be fully compensated by our suppliers for any financial or other liability that we suffer as a result. 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.

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.services, including reductions in data integrity and disruptions in our risk management processes. These events have resulted and likely will result in loss of revenue. In addition, we may incur significant expense to repair or replace damaged equipment and remedy resultant data loss or corruption. The risk of security incidents is increasing as we experience an increase in electronic payments, e-commerce, and other online activity. Additionally, due to political uncertainty and military actions,actions includingaround thosethe associated with Russia’s invasion of Ukraine,world, 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. We cannot provide assurances that our preventative efforts against such incidents will be successful. A prolonged interruption in the availability or reduction in the speed or other functionality of our products or services could materially harm our reputation and business. Frequent, persistent or significant interruptions in our products and services could cause customers to believe that our products and services are unreliable, leading them to switch to our competitors or to avoid our products and services, and could permanently harm our reputation and 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.

Significant natural or other disasters, including pandemics, and severe weather events such as storms, flooding, or wildfires could also have a material and adverse impact on our sellers or other customers, which, in the aggregate, could in turn adversely affect our business, financial condition, and results of operations.

We offer payments and other products and services to a large number of customers. We have programs to vet and monitor these customers and the transactions we process for them as part of our risk management efforts, but such programs require continuous improvement and may not be effective in detecting and preventing fraudfraud, andbad actors, or illegitimate transactions. When our payments services are used to process illegitimate transactions, and we settle those funds to customers and are unable to recover them, we suffer losses and liability. As a greater number of larger sellers use our services, our exposure to material risk losses from a single seller, or from a small number of sellers, will increase. Illegitimate transactions and bad actors can also expose us to governmental and regulatory enforcement actions, which may impair or otherwise limit our ability to operate or provide certain services, products, or features and potentially prevent us from satisfying our contractual obligations to our third-party partners, which may cause us to be in breach of our obligations. 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. Identity thieves and those committing fraud using stolen or fabricated credit card, debit card, or bank account numbers, or other deceptive or malicious practices such as account takeovers, potentially can steal significant amounts of money from businesses like ours or from our customers or third parties. Our risk management policies, procedures, techniques, and processes may not be sufficient to identify all of the risks to which we are exposed, to enable us to prevent or mitigate the risks we have identified, or to identify additional risks to which we may become subject in the future. Our current business, the changing and uncertain economic, geopolitical and regulatory environment, and our anticipated domestic and international growth will continue to place significant demands on our risk management and compliance efforts. As our ecosystems grow and our business becomes more complex, we will need to continue developing, improving, and making investments into our risk management infrastructure, techniques, and processes. 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, offering existing products to borrowers on different repayment terms or expanding product eligibility, 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. Additionally, certain Cash App functions are available to customers betweenunder the ages of 13 through 1718 with the authorization of a parent or guardian. The risks and the potential harm to our reputation are magnified in instances of fraud or unauthorized or inappropriate transactions involving minors.

We are currently, and will continue to be, exposed to risks associated with chargebacks and refunds in connection with payment card fraud or relating to the goods or services provided by our sellers. In the event that a billing dispute between a cardholder and a seller is not resolved in favor of the seller, including in situations where the seller engaged in fraud, the transaction is typically “charged back” to the seller and the purchase price is credited or otherwise refunded to the cardholder. The risk of chargebacks is typically greater with our sellers that promise future delivery of goods and services. Moreover, chargebacks typically increase during economic downturns due to sellers becoming insolvent or bankrupt or otherwise unable to fulfill their commitments for goods or services. Global supply chain disruptions and shortages and heightened tariffs may also negatively affect sellers' ability to deliver goods and services on time or at all, which increases the risk of chargebacks. If we are unable to collect chargebacks or refunds from the seller’s account, or if the seller refuses to or is unable to reimburse us for chargebacks or refunds due to closure, bankruptcy, or other reasons, we, as the merchant of record, may bear the loss for the amounts paid to the cardholder. We collect and hold reserves for a limited number of sellers whose businesses are deemed higher risk in order to help cover potential losses from chargebacks and refunds, but this practice is limited and there can be no assurances that we will be successful in mitigating such losses. Our financial results would be adversely affected to the extent sellers do not fully reimburse us for the related chargebacks and refunds. In addition, if more of our sellers, or a number of our larger sellers, become insolvent or bankrupt, our potential losses from chargebacks and refunds may increase and exceed our reserves, in which case we may suffer financial losses and our business may be adversely affected. Moreover, businesses that cannot process EMV chip cards are held financially responsible for certain fraudulent transactions conducted using chip-enabled cards. Not all of the readers we offer to merchants are EMV-compliant. If we are unable to maintain our losses from chargebacks at acceptable levels, the payment card networks could fine us, increase our transaction-based fees, or terminate our ability to process payment cards. Any increase in our transaction-based fees could damage our business, and if we were unable to accept payment cards, our business would be materially and adversely affected. If any of our risk management policies and processes, including our insurance coverage, self-insurance or holding seller reserves, are ineffective,ineffective or insufficient, we may suffer large financial losses, we may be subject to civil and criminal liability, and our businessbusiness, results of operations, or financial condition may be materially and adversely affected.

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. 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. For example, we rely on a limited number of acquiring processors in some of the jurisdictions in which we offer our services. We frequently review and assess third-party partners that provide services. Adding or transitioning to new acquiring or issuing processors, bank partners, or other third-party providers may significantly disrupt our business or increase our costs. We have also in the past experienced outages with third parties, which have affected our ability to provide services and process payments, including for cards issued under our own brands. In the event these third parties fail to provide these services adequately, including as a result of financial difficulty or insolvency, errors in their systems, outages or events beyond their control, or refuse to provide these servicesservices, increases their fees significantly, or refuse to renew our agreements with them on terms acceptable to us or at all, and we are not able to find suitable alternatives, our business may be materially and adversely affected.

To maintain and grow our business, we will need to identify, attract, hire, develop, motivate, and retain highly skilled employees. This requires significant time, expense, and attention. In addition, we have made and may in the future make changes in our management team or management structure that may be disruptive to our business. 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. We may need to invest significant amounts of cash and equity to attract and retain new employees, and we may never realize returns on these investments. Further, our plan to continue to cap our employee base at approximately 12,000,recent changes in our organizational structure, and anyrestructurings other future plans to restructureof our employee base towe improvehave operational efficienciesundertaken and operatingmay costs,undertake in the future may adversely impact employee morale, and adversely affect our ability to retain or attract highly skilled employees. Refer to the risk factor titled “Our recently announced workforce reduction and related reorganization, including the potential for increased reliance on proactive intelligence and artificial intelligence tools, may not achieve their intended benefits and could adversely affect our business, financial condition and results of operations.” for additional risks related to our recently announced workforce reduction.

We launched the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, ana importantcritical capability that washad 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 managestart, run, and grow their businesses. Similarly, with Cash App, we have built an ecosystem of financial products and services to help individualsconsumers manage their money. InCash JanuaryApp 2022,now weprovides completedan the acquisitionecosystem of Afterpay, a buy now, pay later ("BNPL") platform that facilitates commerce betweensolutions, retailfinancial merchantsservices, and bitcoin capabilities focused on helping consumers make their money go further by allowingenabling retail merchant clientscustomers to offerstore, send, receive, spend, invest, BNPL, borrow, or save their customers the ability to buy goods and services on a BNPL basis.money. In addition, our nascent businessesecosystems include TIDAL andas twowell bitcoinas businesses,Bitcoin, Bitkeywhich includes businesses such as Proto and Proto.Bitkey.

WeIn delivered2025, strongwe growth across our primary ecosystems in 2024, withgenerated gross profit of $8.9$10.4 billion, up 18%17% year over year. Cash App generated gross profit of $5.2$6.3 billion in 2024,2025, up 21% year over year.year, Performance wasprimarily driven by growth in inflowsCash perApp active as we execute on our Bank Our Base strategy, which prioritizes engaging customers with more products across our ecosystem and increasing paycheck deposit actives.Borrow. Square generated gross profit of $3.6$3.9 billion in 2024,2025, up 15%9% year over year, asdriven weby continuedfinancial tosolutions, increasemost productnotably velocitySquare and optimize our go-to-market strategies.Loans.

In 2024,2025, 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 wasof $1.6 billion,billion in 2024. Net income attributable to common stockholders was $1.3 billion compared to an operating loss of $278.8 million and Adjusted Operating Income of $351.4 million in 2023. For the same period, net income attributable to common stockholders wasof $2.9 billion comparedfor tothe $9.8same million,period in 2024, and Adjusted EBITDA was $3.0$3.5 billion, an increase of 69%14% year over year. Net income for 20242025 and 20232024 included a loss of $55.9 million and gain of $420.9 million and $207.1 million, respectively, from the remeasurement of our bitcoin investment. Additionally,In as a result of our improved profitability in the United States,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 one-time benefits to net income for 2024 of $1.9 billion. TheseRefer one-timeto taxthe benefitsKey hadOperating aMetrics correspondingand impactNon-GAAP Financial Measures section below for reconciliations of $3.10non-GAAP andfinancial $3.00measures perto sharetheir onnearest ourgenerally basicaccepted andaccounting dilutedprinciples net("GAAP") income per share, respectively, for the year ended December 31, 2024.equivalents.

During the secondthird quarter of 2024,2025, we issued $2.0$2.2 billion in aggregate principal amount of senior unsecured notes comprised of $1.2 billion in aggregate principal amount of senior notes due 20322030 ("20322030 Senior Notes") and $1.0 billion in aggregate principal amount due 2033 ("2033 Senior Notes"). We ended 20242025 with $10.7$9.2 billion in available liquidity, with $9.9$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.facility, which was amended on January 14, 2026 to, among other things, increase the unsecured revolving loan facility to $900 million. This represents ana increasedecrease of $3.0$1.5 billion from the end of 2023.2024, 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.

OnIn OctoberNovember 26,2025, 2023, ourthe board of directors authorized the repurchase of up to $1 billion of the Company’s Class A common stock. On July 25, 2024, our board of directorsCompany authorized an increase to thisthe Company's share repurchase program to repurchase up to an additional $3$5 billion of ourthe Company's Class A common stock, for a total overall authorization of $4$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, 2024,2025, we have repurchased $1.3$3.7 billion of our Class A common stock under the program, of which $1.2$2.3 billion was purchased in 2024.2025.

SubscriptionCommerce and services-basedenablement revenue is primarily comprised of revenue we generategenerated from Square payments, software, and hardware, Cash App,App SquareCard, LoansCash (formerlyApp knownPay, asthe Square Capital), ourCompany’s BNPL platform,products, TIDAL,Cash App Business accounts, and TIDAL. Commerce enablement revenue also includes various other software as a service (“SaaS”) products that we offeroffered through Square. Cash App subscription and services-based revenue is primarily comprised of transaction fees from Cash App Instant Deposit, Cash App Card, bitcoin withdrawal fees, and other Cash App financial services offerings. Our other SaaS products include subscription fees on our vertical software solutionssolutions, (includingoperational Square for Restaurants, Square Appointments, and Square for Retail), Customer Engagement products (including Square Loyalty, Square Marketing, Square Gift Cards), staff managementtool products (including Square Team Management and Square Payroll), website hosting and domain name registration services, and other products.

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 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.

Revenue from our BNPL platformproducts includesinclude merchant fees generated from consumer receivables, late fees, gift cards, and certain affiliate and advertising fees. Through the use of our BNPL platform,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 six-three-, six-, twelve-, or twelve-monthtwenty-four-month period using a monthly payment option, which includes no late fees and no compounding interest with a cap on total interest owed. ForWe some of the loans, it is our intention tomay sell the rights, title, and interest to a third-party investor for an upfront fee.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.

HardwareRevenue revenuefrom 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.

Bitcoin Ecosystem Revenue

OurBitcoin ecosystem revenue is primarily comprised of revenue the Company generates from customer purchases of bitcoin within Cash AppApp, customersProto, haveand thebitcoin abilitywithdrawal to purchase bitcoin, a cryptocurrency.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.

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

SubscriptionFinancial and services-basedsolutions costs consist primarily of processing and partnership fees related to Cash App including InstantATM Depositwithdrawals and CashInstant App Card, and our BNPL platform, as well as costs associated with TIDAL.Deposit.

Bitcoin Ecosystem Costs

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

Operating expenses consist of product development; sales and marketing; general and administrative expenses; transaction, loan, and consumer receivable losses; bitcoin impairment 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 the 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 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.

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 forApp 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 andLoans, Cash App BorrowBorrow, 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.

Total cost of revenue for the year ended December 31, 20242025 increaseddecreased by $821.3$1.4 million,billion, or 6%,9%, compared to the year ended December 31, 2023.2024. Bitcoin ecosystem costs of revenue, which increaseddecreased by $617.3$1.9 million,billion, was the primary driver of the increasedecrease in total cost of revenue, with the remaining increase related to an increase in GPV.revenue. Excluding bitcoin ecosystem costs of revenue, total cost of revenue increased by approximately $204.0$457.3 million, or 4%,9%, in the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024, largely related to an increase in Square GPV.

BitcoinCommerce enablement costs for the year ended December 31, 20242025 increased by $617.3$440.1 million, or 7%,9%, compared to the year ended December 31, 2023.2024. BitcoinCommerce enablement costs are comprised offor the totalyear amountended weDecember pay31, to2025 purchasewere bitcoin,primarily driven by growth in Square processing costs, which fluctuateswere in line with bitcointhe revenue.growth of Square GPV of 10%, as well as an increase in Square hardware costs.

Product development expenses for the year ended December 31, 2024,2025, increaseddecreased by $193.6$6.5 million, or 7%,million compared to the year ended December 31, 2023,2024. primarilyThe due to an increase of $154.1 milliondecrease in softwareexpenses andwas clouddriven computingby infrastructure fees for the year ended December 31, 2024, as a result of increased capacity needs and expansion of our cloud-based services. Impairmentimpairment charges of certain assets related to our TIDAL reporting unit of $60.3 million were also recognized in the fourth quarter of 2024.2024 Thethat increasedid innot productrecur developmentduring expensesthe wasyear partiallyended offsetDecember by31, 2025, as well as a decrease of $87.9$21.7 million in personnel costs primarilyexpenses 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.

•our recently announced workforce reduction and related reorganization, including changes to our operating model and the potential for increased reliance on proactive intelligence and artificial intelligence tools;

•risks related to our loan products such as repaymentscredit losses and general macroeconomic conditions; and

•increasedchanging scrutinyperspectives from investors, regulators, and other stakeholders relating to environmental, social, and governance issues.

Our recently announced workforce reduction and related reorganization, including changes to our operating model and the potential for increased reliance on proactive intelligence and AI tools, may not achieve their intended benefits and could adversely affect our business, financial condition and results of operations.

In February 2026 we announced a workforce reduction restructuring plan designed to better align our organizational structure with our operating model and strategic priorities. This plan has resulted in, and we expect to continue to result in, an increased reliance on automation, proactive intelligence capabilities and AI tools that we believe will enhance productivity and maintain operational efficiency. These actions have resulted in severance and other restructuring charges, and will require additional investments in technology and systems. We may not realize the expected cost savings, operating efficiencies or other anticipated benefits of these initiatives within the anticipated timeframe, or at all.

The workforce reduction and reorganization has resulted in, and may continue to result in, disruptions to our operations and adversely affect employee morale and productivity. The departure of employees, including experienced personnel, may result in the loss of institutional knowledge and expertise, and remaining employees have increased workloads and broader scopes of responsibility, which could lead to increased error rates, reduced innovation and attrition of key talent. Our ability to successfully operate with a reduced workforce and modified organizational structure is expected to depend in part on the effectiveness, reliability and adoption of proactive intelligence and AI tools. These technologies do not always perform as expected, may require moresignificant time orand expense to implement effectively,effectively mayand as they continue to evolve, can introduce operational or cybersecurity risksrisks, and have not in all cases enhanced productivity or may fail to enhance productivity and maintainmaintained operational efficiency as expected.expected and may not do so in the future. These actions could increase the risk of operational disruptions, service interruptions, control failures or other significant events, particularly during transition periods, as responsibilities are reassigned and processes are adjusted. We expect to continue to invest in employees we wish to retain and attract, including through increased compensation. In addition, evolving regulatory requirements and public scrutiny relating to AI technologies could increase compliance costs or limit our ability to deploy such tools as intended.

Harm to our brands can arise from many sources, including failure by us or our partners and service providers to satisfy expectations of service and quality; inadequate protection or misuse of sensitive information; fraud committed by third parties using our products or applications; compliance failures and claims; litigation, regulatory claims, investigations, enforcement actions, settlements or consent orders; errors caused by us or our partners; and misconduct by our partners, service providers, or other counterparties. Even allegations regarding the foregoing may harm our reputation and brands and have an adverse impact on the market price on our Class A common stock. Our recent significant workforce reduction may create uncertainty regarding our financial condition, growth prospects, or operational stability. Sellers, customers, and business partners may delay or reconsider relationships, and investors may react negatively, which could adversely affect our reputation, relationships, and stock price. We have also been from time to time in the past, and may in the future be, the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our reputation and brands and deter customers from adopting our services or our products. In addition, negative statements about us can cause and have caused a decline in the market price of our Class A common stock, divert our management’s attention and resources, and could cause other adverse impacts to our business. Partners and influencers, employees, former employees or other third parties with whom we maintain relationships or have maintained relationships with could engage in behavior or use their platforms to communicate directly with our sellers and customers in a manner that reflects poorly on our brands and such behavior or communications may adversely affect us. Further, negative publicity or commentary regarding the partners and influencers or other third parties who are, or are perceived to be, or have been affiliated with us may also damage our reputation, even if the negative publicity or commentary is not directly related to us. Any negative publicity about the industries we operate in or our company, the quality, reliability, or the way in which we market, disclose, or represent our products and services, our risk management processes, changes to our products and services, our ability to effectively manage and resolve customer complaints, our privacy, data protection, and information security practices, litigation, regulatory activity, policy positions, and the experience of our sellers, customers, employees and former employees with us, our products or services could adversely affect our reputation and the confidence in and use of our products and services. If we do not successfully maintain, protect or enhance our brands, our business could be materially and adversely affected.

Rapid and significant technological changes continue to confrontcharacterize 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.

Our success depends in part on our ability to develop new technologies, to adapt to technology changes and evolving industry standards, to incorporate new technologies into our products and services, and to provide products and services that are tailored to specific needs and requirements of 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. We are unable to predict all of the risks related to the use of AI because laws, rules, directives, and regulations governing the use of AIAI, as well as the technology itself, are evolving rapidly and our ability to develop or use AI may not be as we expect or may be adversely affected. Refer to the risk factor titled “Our recently announced workforce reduction and related reorganization, including changes to our operating model and the potential for increased reliance on proactive intelligence and artificial intelligence tools, may not achieve their intended benefits and could adversely affect our business, financial condition and results of operations.” for additional risks related to our expected and planned use of AI. If we are unable to provide enhancements and new features for our products and services or to develop new products and services that achieve market acceptance or that keep pace with rapid technological developments and evolving industry standards, our business would be materially and adversely affected.

We compete in markets characterized by vigorous competition, changing technology, evolving industry standards, changing customer needs, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. For example, companies not traditionally associated with the payments industry have introduced products or services that are or may become competitive with our business. We compete against many companies to attract customers across our products and services, and some of these companies have greater financial resources and substantially larger bases of customers than we do, which may provide them with significant competitive advantages. These companies may devote greater resources to the development, promotion, and sale of products and services, may achieve economies of scale due to the size of their customer bases, and may more effectively introduce their own innovative products and services that adversely impact our growth. For example, we offer Cash App customers and Square sellers access to banking services and products through our bank partners, as well as through Square Financial Services. We compete with established banks, neobanks, and other financial technology companies that provide access to similar offerings, some of which have larger established customer bases or provide customers with a different range of offerings than we do. We also compete in the BNPL market and a number of our competitors have introduced or offer BNPL products. Competitors in the BNPL space have engaged in, and may continue to engage in, aggressive consumer acquisition campaigns, may develop superior technology offerings, or consolidate with other entities and achieve benefits of scale. Such competitive pressures may materially erode our existing market share in the BNPL space and may hinder our expansion into new markets. In addition, mergers and acquisitions by, and collaborations between, the companies we compete against may lead to even larger competitors with more resources.

Our investments in bitcoin, our bitcoin ecosystem, and our Cash App and Square features that facilitate transactions in bitcoin and stablecoins by our customers and sellers each subject us to additional risks related to developments in the cryptocurrency markets and the resulting impact on customer and investor behavior. Actions taken by regulators, legislatures, and other government actors, including the current U.S. administration, in the cryptocurrency industry, may impact market demand for bitcoin and the supply and pricing for bitcoin. If the cryptocurrency environment deteriorates or improves based on these or other factors, 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 demand increases sharply, either to buy or to sell bitcoin, we may not be able to fulfill that demand in a timely manner or at all, which could result in customer frustration or movement to other platforms. If our customers experience losses due to market fluctuations in the prices of bitcoin, they may reduce or cease their use of our product features that facilitate transactions in bitcoin, or other bitcoin-related products, which could adversely impact our results of operations. Further, our customers could attempt to seek compensation from us for their financial investment losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

We have incorporated and expect to continue to incorporate AI technologies, including generative AI and AI agents, into our products, internal operations and technologies. As AI technologies continue to evolve rapidly, new capabilities and associated risks may emerge that may be difficult to anticipate or address. Our use of AI depends in part on third-party large language models that we do not control, and these models may generate inaccurate, biased, hallucinated or unexpected outputs that conflict with our business objectives or brand standards.

Consumer and societal attitudes toward AI are evolving and there is a risk that customers, regulators or the public may perceive AI technologies negatively. Concerns about automation, privacy, security, bias, transparency, flawed datasets, or other ethical considerations could reduce trust in our products and services or deter customer adoption of AI-enabled features in our products or services. Our customers and sellers may become increasingly reliant on AI outputs in our products and services when making financial or operational decisions. AI-enabled features in our products may generate outputs that could be interpreted as regulated advice, even if unintended or automated. If such AI outputs are, or are perceived to be, inaccurate, biased, unexplainable, flawed, or otherwise determined as providing regulated advice without appropriate authorization, we could face reputational harm, regulatory scrutiny, enforcement actions or liability claims, any of which could materially and adversely affect our business, financial condition, and results of operations.

Our AI initiatives have not in all cases, and may notnot, improve efficiency, performance, or profitability as expected, and may underperform or fail entirely due to technological limitations, the evolving nature of AI technologies, regulatory requirements, or other factors. If our AI initiatives and investments do not produce expected benefits, our operating results and long-term growth could be materially and adversely affected.

Our loan products expose us to increased credit losses and are subject to risks related to general macroeconomic conditions and increase our exposure to customer defaults.conditions.

Revenue generated by our loan productsproducts, such asincluding Square Loans, as well as Cash App Borrow, and our BNPL productsproducts, depends on our ability to recoup the loan amount and to effectively manage risk. Square Loans is our commercial lending program. Cash App Borrow is a consumer credit product, allowing our Cash App customers access to short-term loans for a fee. Our BNPL products facilitate 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. Our loan products are generally unsecured obligations of our borrowers. To the extentIf a seller breaches a contractual obligation, such asincluding the requirement to makerequired minimum payments or other breach,payments, the seller would be liable for an accelerated business loan repayment, and our recourse is generally to the business and not to any individual or other asset. Although weWe rely on technologyproprietary models, data, and automated underwriting processes to assess borrowers' repayment capability for our loan products, there can be no guarantee thatand such assessment processes willmay not accurately predict future repayments. If our underwriting processes fail to adequately capture risks or otherwise miscalculate repayment ability, we may experience higher levels of delinquencies, default and credit losses. As we expand into new products, customer segments, and geographies, including offering existing products to borrowers on different repayment terms or expanding product eligibility, orour ashistorical performance data can be less predictive of future borrower behavior. In addition, inflation, economic downturns, or market volatility increasesor other adverse macroeconomic conditions may increase repayment failures,failures. As a result, our ability to appropriately evaluate and manage credit risk may be further challenged, and we may experience higher levels of delinquencies or defaults than we have historically experienced, which could negatively impact our business, results of operations, and financial condition.

We, our sellers, and our partners, including third-party vendors and data centers that we use, obtain and process large amounts of data, including data related to our customers, our sellers’ customers, and their transactions. We face risks, including to our reputation as a trusted brand, in the handling and protection of this data. These risks will increase as our business continues to expand to include new products and technologies, such as AI, and as we and our third-party vendors rely on an increasingly distributed workforce. Our operations involve the storage and transmission of data of individuals and businesses using our services, including their names, addresses, social security/tax ID numbers (or foreign equivalents), government IDs, payment card numbers and expiration dates, bank account information, loans they have applied for or obtained, and data regarding the performance of our sellers’ businesses. Additionally, certain of our products and services are subject to the Health Insurance Portability and Accountability Act of 1996 (and the rules and regulations thereunder, as amended, including with respect to the HITECH Act), and therefore we are required to take measures to safeguard protected health information of our health care entity-sellers' customers when using those products and services. Our services also provide third-party developers the opportunity to provide applications to sellers in the Square and Weebly app marketplaces. Sellers who choose to use such applications can grant permission allowing the applications to access content created or held by sellers in their Square or Weebly account. 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. The growing use of AI in our products and services presents additional risks.risks, including risks relating to the processing, handling, disclosure, and protection of sensitive data. AI algorithms or automated processing of data may be flawed, and datasets may be insufficient or may use third-party AI with unclear intellectual property rights or interests. Inappropriate or controversial data practices by us or others could subject us to lawsuits, regulatory investigations, legal and financial liability, or reputational harm. Additionally, our use of AI may create additional, or increase the risk of, cybersecurity breaches and incidents.

Additionally, electronic payment, hardware, and software products and services, including ours, have been, and could continue to be in the future, specifically targeted and penetrated or disrupted by hackers and other malicious actors. Because the techniques used to obtain unauthorized access to data, products, and services and to disable, degrade, or sabotage themthem, including through the use of AI and other emerging technologies, change frequently and may be difficult to detect or remediate for long periods of time, we and our customers may be unable to anticipate these techniques or implement adequate preventative measures to stop them. If we or our sellers or other customers are unable to anticipate or prevent these attacks, our sellers' or other customers may be harmed, our reputation could be damaged, and we could incur significant liability.

To maintain and grow our business, we will need to identify, attract, hire, develop, motivate, and retain highly skilled employees. This requires significant time, expense, and attention. In addition, we have made and may in the future make changes in our management team or management structure that may be disruptive to our business. 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. We may need to invest significant amounts of cash and equity to attract and retain new employees, and we may never realize returns on these investments. Further, our recent changes in our organizational structure, and restructurings of our employee base we have undertaken and may undertake in the future may adversely impact employee morale, and adversely affect our ability to retain or attract highly skilled employees. Refer to the risk factor titled “Our recently announced workforce reduction and related reorganization, including changes to our operating model and the potential for increased reliance on proactive intelligence and AI tools, may not achieve their intended benefits and could adversely affect our business, financial condition and results of operations.” for additional risks related to our recently announced workforce reduction.

These challenges have magnified as we continue to be a distributed workforce. In addition, our recently announced workforce reduction and any resulting changes in personnel and responsibilities may require changes to our internal controls, financial reporting processes, cybersecurity oversight, or other risk management functions, which could result in disruptions or temporary deficiencies. If we are not successful in developing and implementing the right processes and tools to manage our enterprise, our ability to compete successfully and achieve our business objectives could be impaired, we could face regulatory or other enforcement actions, and our business, results of operations, and financial condition may be adversely impacted.

We are currently subletting some of our office space. AnMacroeconomic economicconditions, downturnour work-from-home practices, and our work-from-homeworkforce practicesreduction have caused and may in the future cause us to need less office space than we are contractually committed to leasing. We have, and may continue to, incur losses or recognize impairment charges in connection with any unused office space if we are unable to successfully sublease any unused office space, or if we are unable to successfully terminate any of our leasing commitments.

We fund our operations primarily through debt and equity financings, bank credit agreements, warehouse funding facilities, and cash from operations. 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. In the future, we may require or seek additional capital to respond to business opportunities, refinancing needs, finance our products, business and financial challenges, regulatory surety bond requirements, acquisitions, or unforeseen circumstances and may decide to engage in equity, equity-linked, or debt financingsfinancings, enter into additional warehouse funding facilities, or enter into additional credit agreements for other reasons. We may not be able to secure any such additional financing or refinancing on favorable terms, in a timely manner, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

Our credit agreement contains affirmative and negative covenants, including covenants that restrict our domestic restricted subsidiaries from incurring debt for borrowed money, us and our domestic restricted subsidiaries from granting liens to secure debt for borrowed money and entering into sale and leaseback transactions, and customary limitations on dividends and stock repurchases. Our credit agreement also requires us to comply with a maximum total net leverage ratio, measured quarterly. The indentures pursuant to which our 2026 Senior Notes, 2030 Senior Notes, 2031 Senior Notes, 2032 Senior Notes, and 2033 Senior Notes (collectively, the “Senior Notes”) were issued contain covenants that restrict or could restrict, among other things, our business and operations. Any debt financing obtained by us in the future could also involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to operate our business, obtain additional capital, and pursue business opportunities, including potential acquisitions. 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. If not waived, these defaults could cause indebtedness outstanding under our credit agreement, our Senior Notes, our other outstanding indebtedness, including our 2026 Convertible Notes and 2027 Convertible Notes (collectively, the “Convertible Notes,” and together with the Senior Notes, the “Notes”), and any future financing agreements that we may enter into to become immediately due and payable or may prevent us from borrowing under our credit agreement.

As of MarchJune 31,30, 2026, we had $575.0 million outstanding aggregate principal amount of 2026 Convertible Notes, $575.0 million outstanding aggregate principal amount of 2027 Convertible Notes, $1.0 billion outstanding aggregate principal amount of 2026 Senior Notes, $1.2 billion outstanding aggregate principal amount of 2030 Senior Notes, $1.0 billion outstanding aggregate principal amount of 2031 Senior Notes, $2.0 billion outstanding aggregate principal amount of 2032 Senior Notes, and $1.0 billion outstanding aggregate principal amount of 2033 Senior Notes.

Prior to February 1, 2026, in the case of the 2026 Convertible Notes, and August 1, 2027, in the case of the 2027 Convertible Notes, the applicable Convertible Notes are convertible at the option of the holders only under certain conditions or upon the occurrence of certain events. After such dates,date, the holders may convert all or a portion of suchthe Convertible Notes at their option. If holders of the Convertible Notes of a series elect to convert such Convertible Notes when eligible, we will be required to settle the Convertible Notes in cash, shares of Class A common stock or any combination thereof.

In connection with the issuance of each series of our Convertible Notes, we entered into convertible note hedge transactions with certain financial institutions, which we refer to as the "option counterparties." The option counterparties are financial institutions or affiliates of financial institutions, and we will be subject to the risk that one or more of such option counterparties may default under the convertible note hedge transactions. Our exposure to the credit risk of the option counterparties will not be secured by any collateral. If any option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the convertible note hedge transaction. Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated to the increase in our Class A common stock market price and in the volatility of the market price of our Class A common stock. 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.

As of MarchJune 31,30, 2026, ourwe have released a portion of the valuation allowance for deferred tax assets in California. Our deferred tax assets relate predominantly to the U.S. 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. In making such an assessment, significant weight is given to evidence that can be objectively verified. Refer to Note 13, Income Taxes within Notes to the Consolidated Financial Statements for further details.

We continue to monitor the likelihood that we will be able to recover our deferred tax assets in the future and adjustments in our valuation allowance may be required. The recording of any future increases in or release of all or any portion of our valuation allowance has had and 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.

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, FinCEN, FCC, the Consumer Financial Protection Bureau ("CFPB"), the Department of Justice ("DOJ"), the Federal Trade Commission, the IRS and Office of Foreign Assets Control, self-regulatory organizations, and numerous state and local agencies, such as state money transmission license regulators and virtual currency regulators. Outside of the United States, we are subject to additional regulators, authorities, and governing bodies. As we expand into new jurisdictions, expand our product offerings in existing jurisdictions, or as laws, regulations, and standards evolve, the number of foreign regulations and regulators, authorities, and governing bodies governing our business will expand as well. For example, in connection with our acquisition of Afterpay we established a secondary listing on the ASX, subjecting us to additional listing requirements. As our business and products continue to develop and expand, we may become subject to additional rules, regulations, and industry standards. We may not always be able to accurately predict the scope or applicability of certain regulations to our business, particularly as we expand into new areas of operations, which could have a significant negative effect on our existing business and our ability to pursue future plans. In addition, certain regulators have imposed and in the future may impose additional requirements on our business as a condition for obtaining or maintaining permits, licenses or rights to conduct our business, including conditions under any settlements and consent orders with regulators, that restrict our business or our ability to take certain actions. If we fail to comply with the terms of such permits, licenses or other requirements, we could face regulatory or other enforcement actions, penalties or we may not be able to continue operating our business in the same manner.

The number and significance of our legal or regulatory matters have increased as we have grown larger, as our business has expanded in scope and geographic reach, and as our products and services have increased in complexity, and we expect that we will continue to face additional legal or regulatory matters as we continue to grow and expand. We also receive significant media attention, which could result in increased legal or regulatory matters. Moreover, legal or regulatory matters have in the past and could in the future cause follow-on litigation or regulatory scrutiny by additional parties. These matters may require significant time and expense even if we are successful in resolving the matter, and the outcomes can be uncertain and unpredictable and may involve material penalties, fines, or restrictions on our business. In addition, our recently announced workforce reduction and any reassignment of responsibilities, together with potential increased reliance on automation and AI tools to support certain legal, regulatory compliance and risk management functions, may limit our capacity and introduce additional oversight risks. If such tools do not perform as anticipated or are not effectively implemented and monitored, our ability to maintain effective governance, compliance, and risk processes during and after the transition could be impaired, which could increase the risk of regulatory inquiries, investigations, litigation, enforcement actions, control deficiencies and penalties.

Third parties have asserted, and may in the future assert, that we have infringed, misappropriated, or otherwise violated their copyrights, patents, and other intellectual property rights. Although we expend significant resources to seek to comply with the statutory, regulatory, and judicial frameworks and the terms and conditions of statutory licenses, we cannot assure you that we are not infringing or violating any third-party intellectual property rights, or that we will not do so in the future, particularly as new technologies such as generative AI impact the industries in which we operate. We also do not have control over whether standardized technologies and protocols infringe purported third-party intellectual property rights. It is difficult to predict whether assertions of third-party intellectual property rights or any infringement or misappropriation claims arising from such assertions will substantially harm our business, operating results, and financial condition. If we are forced to defend against any infringement or misappropriation claims, whether they are with or without merit, are settled out of court, or are determined in our favor, we may be required to expend significant time and financial resources on the defense of such claims. Legal and regulatory changes in this area may also present uncertainty and risk. For instance, the Unifiedsignificant decline in Patent CourtTrial inand theAppeal EuropeanBoard Unionproceedings createsmay anlimit opportunityour ability to efficientlychallenge resolvecertain suchpatents claimsvia inadministrative a specialized forum, while also introducing limited operational uncertainty as the court’s procedures and processes scale.proceedings. Regardless of the forum, an adverse outcome of a dispute may require us to pay significant damages, which may be even greater if we are found to have willfully infringed upon a party’s intellectual property; cease exploiting copyrighted content that we have previously had the ability to exploit; cease using solutions that are alleged to infringe or misappropriate the intellectual property of others; expend additional development resources to redesign our solutions; enter into potentially unfavorable royalty or license agreements in order to obtain the right to use necessary technologies, content, or materials; indemnify our partners and other third parties; and/or take other actions that may have material and adverse effects on our business, operating results, and financial condition.

IncreasedChanging scrutinyperspectives from investors, regulators, and other stakeholders relating to sustainability issues could result in additional costs for us and may adversely impact our reputation.

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 53% of the voting power of our combined outstanding capital stock as of MarchJune 31,30, 2026. 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. When the shares of our Class B common stock represent less than 5% of the combined voting power of our Class A common stock and Class B common stock, the then-outstanding shares of Class B common stock will automatically convert into shares of Class A common stock.

In connection with the issuance of each series of our Convertible Notes, we entered into convertible note hedge transactions with the option counterparties. We also entered into warrant transactions with the option counterparties pursuant to which we sold warrants for the purchase of our Class A common stock. 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. The warrant transactions would separately have a dilutive effect to the extent that the market price per share of our Class A common stock exceeds the strike price of any warrants unless, subject to the terms of the warrant transactions, we elect to cash settle the warrants.

In the firstsecond quarter of 2026, we generated gross profit of $2.9$3.2 billion, up 27%25% year over year. Cash App generated gross profit of $1.9$2.0 billion in the firstsecond quarter of 2026, up 38%31% year over year, driven by growth in Cash App Borrow.Borrow and Cash App Card. Square generated gross profit of $981.5$1.2 millionbillion in the firstsecond quarter of 2026, up 9%13% year over year, driven primarily by financialSquare solutions,processing, mostSquare notablysoftware, and Square Loans.

In the firstsecond quarter of 2026, operating lossincome was $172.0$446.9 million and Adjusted Operating Income was $727.7$863.8 million, compared to operating income of $329.3$484.3 million and Adjusted Operating Income of $466.3$549.6 million in the firstsecond quarter of 2025. Net lossincome attributable to common stockholders was $308.7$88.5 million for the firstsecond quarter of 2026, compared to net income attributable to common stockholders of $189.9$538.5 million for the same period in 2025, and Adjusted EBITDA was $1.0$1.2 billion for the firstsecond quarter of 2026, compared to $812.8$891.4 million for the same period in 2025. Net lossincome for the firstsecond quarter of 2026 and net income for the first quarter of 2025 included lossesa loss of $172.8$88.5 million and $93.4gain of $212.2 million, respectively, from the remeasurement of our bitcoin investment.

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 reduced our workforce by more than 40%. Restructuring charges in connection towith the Workforce Plan duringfor the threesix months ended MarchJune 31,30, 2026 were $495.3$495.0 million, which primarily consisted of cash expenditures for notice period and severance payments, employee benefits and related costs, as well as share-based compensation expense. WeRestructuring charges for the three months ended June 30, 2026 were immaterial. The Workforce Plan concluded during the second quarter of fiscal 2026, and we do not expect to incur any additional immaterial relatedmaterial charges related to the Workforce Plan and expect that these remaining charges will be substantially complete by the end of the second quarter of fiscal 2026.Plan. We expecthave tobegun realizerealizing 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.

The following table presents a summary of severance and other personnel costs related to the Workforce Plan for the six months ended June 30, 2026 (in thousands):

While timing and savings are subject to change, weWe expect annualized net cost savings associated with the Workforce Plan of approximately $800 million to $900 million, related to employee compensation, a portion of which we expect to strategically reinvest in the Company. We expect that we will beginbegan to realize these cost savings uponduring the completionsecond quarter of fiscal 2026 following the conclusion of the Workforce Plan. Refer to Note 20,19, Restructuring, within Notes to the Condensed Consolidated Financial Statements for further details regarding charges related to the Workforce Plan.

We ended the firstsecond quarter of 2026 with $9.1$8.8 billion in available liquidity, with $8.2$7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $900.0 million available under our revolving credit facility. This represents a decrease of $120.5 million from our available liquidity as of December 31, 2025, primarily due to $636.0 million of share repurchases inDuring the firstsecond quarter of fiscal 2026, we settled $1.6 billion of debt upon the maturity of our 2026 Senior Notes and net2026 purchasesConvertible Notes and originationscontinued ofto loansinvest originallyin classifiedour aslending heldproducts, while maintaining a strong liquidity position. Refer to Liquidity and Capital Resources section below for investmentfurther of $414.0 million, partially offset by net proceeds from principal repayments of consumer receivables of $652.6 million and an increase of $125.0 million to our revolving credit facility.details.

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 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. As of MarchJune 31,30, 2026, we have repurchased a total of $4.3$4.4 billion of our Class A common stock under the program, of which $636.0$700.9 million was purchased in the first quarter offiscal 2026.

Total net revenue for the three and six months ended MarchJune 31,30, 2026 increased by $285.1$563.2 million, or 5%,9%, and $848.3 million, or 7%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. Bitcoin ecosystem revenue decreased by $533.4$277.9 million forand the$811.3 threemillion, months ended March 31, 2026, compared to the three months ended March 31, 2025.respectively. Excluding bitcoin ecosystem revenue, total net revenue increased by $818.5$841.1 million, or 24%,22%, inand the$1.7 threebillion, monthsor ended23%, March 31, 2026, compared to the three months ended March 31, 2025.respectively.

Commerce enablement revenue for the three and six months ended MarchJune 31,30, 2026 increased by $371.5$443.3 million, or 14%,15%, and $814.8 million, or 15%, compared to the three and six months ended MarchJune 31,30, 2025.2025, Thisrespectively. The increase in revenue was driven by growth in Square processing,processing whichof increased by $161.6$218.1 million forand the$379.7 three months ended March 31, 2026, compared to the three months ended March 31, 2025, as well asmillion, growth in Cash App Card of $76.2 million and $147.3 million, and growth in Afterpay Post-Purchase revenue of $72.3$62.1 million and $71.1$134.4 million, in each case for the three and six months ended June 30, 2026, respectively. The growth in Square processing was in line with Square gross payment volume ("GPV") growth of 13%,13% for both the three and six months ended June 30, 2026, 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 three and six months ended MarchJune 31,30, 2026 increased by $447.0$397.8 million, or 51%,40%, and $844.8 million, or 45%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was primarily due to growth in Cash App's financial solutions-related products, specifically Cash App Borrow origination volumes. For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, Cash App Borrowwhere revenue increased by $369.4$281.1 million and $650.5 million, respectively, as we continued to expand access to the product.product, resulting in higher origination volumes. Additionally, revenue from Square's financial solutions-related products increased by $45.7$54.4 million comparedand to$110.8 million for the three and six months ended MarchJune 31,30, 2025,2026, respectively, primarily related to Square Lending.Loans.

Bitcoin ecosystem revenue for the three and six months ended MarchJune 31,30, 2026 decreased by $533.4$277.9 million, or 23%,13%, and $811.3 million, or 18%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. As bitcoin ecosystem revenue is primarily the total sale amount of bitcoin to customers, the amount of bitcoin ecosystem revenue recognized will fluctuate depending on customer demand as well asand changes in the market price of bitcoin. The decreasedecreases in the three months ended March 31, 2026 waswere driven by alower decrease inbitcoin trading volume asand wella as thelower average market price of bitcoin,bitcoin compared to the threeprior monthsyear ended March 31, 2025.periods. While the bitcoin ecosystem contributed 30% and 40%29% of total revenue for the three and six months ended MarchJune 31,30, 20262026, and March36% 31,and 38% for the three and six months ended June 30, 2025, respectively, gross profit generated from the bitcoin ecosystem was only 2% and 4% of the total gross profit for both the three and six months ended MarchJune 31,30, 20262026, and March4% 31,for both the three and six months ended June 30, 2025.

Total cost of revenue for the three and six months ended MarchJune 31,30, 2026 decreased by $334.6$66.3 million, or 10%,2%, and $400.9 million, or 6%, compared to the three and six months ended MarchJune 31,30, 2025.2025, Bitcoinrespectively. ecosystemThe costsdecrease ofwas revenue,primarily which decreaseddriven by $509.4 million, was the primary driver of thea decrease in totalbitcoin ecosystem cost of revenue.revenue of $245.2 million and $754.6 million, respectively. Excluding bitcoin ecosystem costscost of revenue, total cost of revenue increased by approximately $174.9$178.8 million, or 14%,12%, inand the$353.7 threemillion, monthsor ended13%, March 31, 2026, compared to the three months ended March 31, 2025,respectively, largely related to an increase in Square GPV.

Commerce enablement costs for the three and six months ended MarchJune 31,30, 2026 increased by $165.3$169.3 million, or 14%,12%, and $334.5 million, or 13%, compared to the three monthsand ended March 31, 2025. Commerce enablement costs for the threesix months ended MarchJune 31,30, 20262025, wererespectively. The increase was primarily driven by growth inhigher Square processing costs, which were in line with the growth of Square GPV of 13%, as well as an increase inhigher Square hardware costs.costs from the continued distribution of Square products launched in the second half of fiscal 2025.

Financial solutions costs for the three and six months ended MarchJune 31,30, 2026 increased by $11.5$11.2 million, or 14%, and $22.6 million, or 14%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was primarily driven by growth in Cash App's financial solutions-related products on Cash App Card, including ATM, Paper Money Deposits, and related processing costs. WhileOver the same periods, financial solutions revenue increased by 51%40% forand the45%, threeoutpacing monthsgrowth ended March 31, 2026, compared to the three months ended March 31, 2025, thein costs of revenuesrevenue increasedand byresulting 15% for the same comparative period. Thisin gross margin expansion isexpansion, primarily due to more favorable economics inof Cash App's financial solutions-related products.

Bitcoin ecosystem costs for the three and six months ended MarchJune 31,30, 2026 decreased by $509.4$245.2 million, or 23%,12%, and $754.6 million, or 18%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. Bitcoin ecosystem costs are primarily comprisedconsist of the total amountsamount we pay to purchase bitcoin, which fluctuates in line with bitcoin ecosystem revenue.

Sales and marketing expenses increased by $146.0$115.2 million, or 29%,21%, and $261.3 million, or 25%, for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025. The increase for the three and six months ended June 30, 2026 was primarily driven by Cash App peer-to-peer processing costs and related transaction losses of $82.6$48.3 million and $131.0 million, as well asrespectively, higher marketing and advertising costs of $20.1$29.2 million and $49.3 million, respectively, as we prioritizedprioritize marketing investments to support the growth of Cash App and Square.Square, Additionally,and higher partnership fees of $29.1 million and $39.5 million, respectively. Further, for the six months ended June 30, 2026, personnel costs increased by $26.4$28.5 million, which were driven by the Workforce Plan and other restructuring costs, including severance and related expenses,expenses partially offset by cost efficiencies from headcount reductionsrecognized in the first quarter of 2025.2026.

General and administrative expenses increased by $365.8$376.6 million, or 74%,84%, and $742.4 million, or 79%, for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase for the three and six months ended June 30, 2026 was primarily duedriven toby an increase in accrued expenses for estimated and settled amounts in connection with certain litigation and regulatory matters of $253.8$294.9 million.million Theand $548.7 million, respectively, and an increase in allocated IT, human resources, and facilities expenses wasof also$63.8 duemillion and $106.4 million, respectively, mainly attributable to higherpersonnel costs and cloud computing infrastructure fees. Further, for the three months ended June 30, 2026, these increases included $52.5 million of impairment charges related to certain lease assets and property and equipment, which were partially offset by a decrease in personnel costs of $48.5$47.6 million driven by cost efficiencies realized following the Workforce Plan and other restructuring costs, including severance and related expenses, partially offset by cost efficiencies from headcount reductionsactions in the first quarter of 2025, as well as an increase in facilities and other expenses of $42.6 million.2026.

Transaction, loan, and consumer receivable losses increased by $330.4$291.4 million, or 195%,99%, and $621.8 million, or 134%, for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, respectively, as detailed below (in thousands, except for percentages):

•Loan losses increased by $301.4$277.1 million, or 450%,177%, and $578.5 million, or 258%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase in loan losses was driven by significant growth in loan origination volumes of Cash App Borrow,Borrow which grew 175% inand the same period,continued scaling of Afterpay Post-Purchase, as well as growth in Square Loans. Underlying loan loss rates and portfolio credit performance remained stable. Additionally, beginning in the second quarter of 2025, Cash App Borrow,Borrow along withand certain other loan products,products were retained on our balance sheet and classified as held for investment, resultingfor inwhich upfrontwe recognition ofrecognize expected credit losses uponupfront at origination. As a result, loan losses in a given period reflect the volume, mix, and timing of originations and underlying credit performance.

•Consumer receivable losses increased by $24.6$4.7 million, or 50%,6%, and $29.3 million, or 22%, compared to the three and six months ended MarchJune 31,30, 2025, respectively, while loss rates remained stable. The increase was primarily due to growth of our Pay in 4 BNPL productsproduct and higher origination volumes from preceding periods that reached charge-off during the current quarter.

Interest expense, net, increased by $36.0$32.0 millionmillion, or 135%, and $68.0 million, or 166%, for the three and six months ended MarchJune 31,30, 2026, compared to the three and six months ended MarchJune 31,30, 2025, respectively, primarily due to the issuance of our 2030 and 2033 Senior Notes in the third quarter of 2025, which more than offset interest income received on invested funds. Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details.

Remeasurement loss on bitcoin investment of $172.8$88.5 million and $261.3 million for the three and six months ended MarchJune 31,30, 2026, compared to lossgain on bitcoin investment of $93.4$212.2 million and $118.8 million for the three and six months ended MarchJune 31,30, 2025, respectively, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date. Refer to Note 11, Bitcoin within Notes to the Condensed Consolidated Financial Statements for further details regarding the remeasurement of our bitcoin investment.

The following table provides a summary of the revenue and gross profit for our Square segment for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 (in thousands, except for percentages):

Revenue for the Square segment for the three and six months ended MarchJune 31,30, 2026 increased by $260.2$337.3 million, or 14%,16%, and $597.5 million, or 15%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was primarily due to the Square items referenced within our overall revenue discussion.

Cost of revenue for the Square segment for the three and six months ended MarchJune 31,30, 2026 increased by $176.5$203.9 million, or 18%, and $380.4 million, or 18%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The increase was primarily due to the Square items referenced within our overall cost of revenue discussion.

The following table provides a summary of the revenue and gross profit for our Cash App segment for the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 (in thousands, except for percentages):

Revenue for the Cash App segment for the three and six months ended MarchJune 31,30, 2026 decreasedincreased by $8.3$175.8 million, or 5%, and $167.4 million, or 2%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The decreaseincrease was driven by the Cash App items referenced within our overall revenue discussion. While bitcoin ecosystem revenue contributed 45% of Cash App revenue for three and six months ended MarchJune 31,30, 2026, respectively, gross profit generated from bitcoin ecosystem was only 3% of Cash App gross profit for the three and six months ended MarchJune 31,30, 2026.

Excluding bitcoin ecosystem revenue, Cash App net revenue increased by $576.9$533.9 million, or 37%,32%, and $1.1 billion, or 34%, compared to the three and six months ended MarchJune 31,30, 2025.

Cost of revenue for the Cash App segment for the three and six months ended MarchJune 31,30, 2026 decreased by $536.5$296.7 million, or 21%,13%, and $833.2 million, or 17%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively. The decrease was due to the items referenced within our overall revenue and cost of revenue discussion. Excluding bitcoin ecosystem cost of revenue, Cash App cost of revenue increased by $20.1$6.6 million, or 8%,2%, and $27.3 million, or 5%, compared to the three and six months ended MarchJune 31,30, 2025.2025, respectively.

As of MarchJune 31,30, 2026, we had approximately $9.1$8.8 billion in available liquidity, with $8.2$7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $900.0 million available under our revolving credit facility. Additionally, we had $960.9$342.5 million available to be withdrawn under our warehouse funding facilities. Refer to Note 12, Indebtedness within Notes to the Condensed 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,program and debt repayment obligations, and future cash payments related to the Workforce Plan.obligations. As of MarchJune 31,30, 2026, 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.

(i) As of MarchJune 31,30, 2026, we have invested $99.5$278.6 million of restricted cash into a money market fund. See Note 5, Fair Value Measurements.

As of MarchJune 31,30, 2026, we held approximately 9,0329,117 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $617.3$533.9 million based on observable market prices. 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 condensed consolidated statements of operations. We purchased approximately 14985 and 99234 bitcoins with a cost basis of $12.6$5.1 million and $9.5$17.6 million during the three and six months ended MarchJune 31,30, 20262026, respectively, for investment purposes. We purchased approximately 108 and March207 31,bitcoins with a cost basis of $11.0 million and $20.6 million for the three and six months ended June 30, 2025, respectively, for investment purposes. We did not sell any of our bitcoin investment during the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025. We recognized losses of $172.8$88.5 million and $93.4$261.3 million from the remeasurement of our bitcoin investment during the three and six months ended MarchJune 31,30, 20262026, respectively. We recognized gains of $212.2 million and March$118.8 31,million from the remeasurement of our bitcoin investment during the three and six months ended June 30, 2025, respectively.

As of MarchJune 31,30, 2026, we held $7.4$5.8 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"), $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,Notes and 2031 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”). Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details.

We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.5 billion on a revolving basis, of which $542.5$1.2 millionbillion was drawn as of MarchJune 31,30, 2026. 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 condensed 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.

Short-term restricted cash of $621.3$821.7 million as of MarchJune 31,30, 2026 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 condensed 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 $73.7$71.9 million as of MarchJune 31,30, 2026 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 condensed 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.

For the threesix months ended MarchJune 31,30, 2026, cash provided by operating activities was $1.0$2.0 billion, comprised of net loss of $308.6$221.5 million, adjusted for non-cash expenses of $1.1$2.3 billion, consisting primarily of transaction, loan, and consumer receivable losses; share-based compensation; bitcoin remeasurement loss; and depreciation and amortization,amortization; non-cash lease expense and other non-cash adjustments; and changes in deferred income taxes, all of which contributed positively to operating activities. These were partially offset by the amortization of discounts and otherpremiums, non-cashprimarily adjustmentsrelated onto consumer receivablesreceivables, of $279.9 million and changes in deferred income taxes of $79.0$603.1 million. Changes in other assets and liabilities, including customers payable and settlements receivable, of $557.5$617.1 million contributed positively and was primarily due to the timing of period end.

For the threesix months ended MarchJune 31,30, 2025, cash provided by operating activities was $133.3$507.7 million, comprised of net income of $188.7$727.1 million, adjusted for non-cash expenses of $689.3$1.2 million,billion, consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; bitcoin remeasurement; and depreciation and amortization, all of which contributed positively to operating activities. These were partially offset by the amortization of discounts and otherpremiums, non-cashprimarily adjustmentsrelated onto consumer receivablesreceivables, of $265.2$548.1 million; net outflows from loan products of $311.0$470.8 million; bitcoin remeasurement loss of $118.8 million; and net outflows related to changes in other assets and liabilities, including customers payable and settlements receivable, of $168.5$419.8 million due to the timing of period end.

For the threesix months ended MarchJune 31,30, 2026, cash providedused byin investing activities was $300.0$6.3 million, primarily due to net inflows related to consumer receivables of $652.6 million and net proceeds from investments of marketable securities of $90.3 million. These were partially offset by net outflows of $414.0$1.1 millionbillion primarily related to Cash App Borrow and Afterpay Post-Purchase loans originated through Square Financial Services and the purchases of property and equipment of $30.6$83.8 million. These were partially offset by net inflows related to consumer receivables of $685.7 million; net proceeds from other investments primarily due to the sale of a non-marketable equity security of $329.8 million; and net proceeds from investments of marketable securities of $171.7 million.

For the threesix months ended MarchJune 31,30, 2025, cash provided by investing activities was $914.7$428.9 million, primarily due to a net inflow related to consumer receivables of $703.6$855.7 million and net proceeds from investments of marketable securities of $250.5$370.2 million. These were partially offset by net outflows of $706.9 million primarily related to Cash App Borrow loans originated through Square Financial Services and the purchases of property and equipment of $31.9$63.2 million.

For the threesix months ended MarchJune 31,30, 2026, cash used in financing activities was $251.9$1.6 millionbillion primarily due to $640.0a $1.0 billion cash payment to settle the outstanding principal balance of the 2026 Senior Notes, plus accrued and unpaid interest, that matured in June 2026 as well as a $575.0 million cash payment for the settlement of the outstanding 2026 Convertible Notes that matured in May 2026; $700.9 million of share repurchases in the first quarterand second quarters of 2026; and net repayments under Warehouse Facilities borrowings of $841.2$216.0 million. These were partially offset by an increase in customer funds of $1.2$758.5 billionmillion and interest-bearing deposits of $55.3$90.0 million.

For the threesix months ended MarchJune 31,30, 2025, cash used in financing activities was $1.2$2.1 billion, driven by $1.1 billion of share repurchases in the first and second quarters of 2025; a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025; and net repayments under Warehouse Facilities borrowings of $868.3$806.8 million; and $445.3 million of share repurchases in the first quarter of 2025.million. These were partially offset by increases in customer funds of $1.1$754.9 billion,million and interest-bearing deposits of $34.5$54.8 million.

There were no significant changes in our critical accounting estimates during the quarter ended MarchJune 31,30, 2026 compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025.

SeeRefer to “Recent Accounting Pronouncements” described in Note 1, Description of Business and Summary of Significant Accounting Policies within Notes to the Condensed Consolidated Financial Statements.