Q4 2022 Shareholder Letter

investors.block.xyz

BLOCK q4 2022 2

$801M

22%

$657M

54%

$661M

41%

$755M

29%

$783M

29%

Square Gross Profit

$801 Million

22% YOY

2021

Q2Q1

2022

Q4Q3

Q4'22 Highlights

In the fourth quarter of 2022, total net revenue was $4.65 billion, up 14% year over year, and, excluding bitcoin revenue, revenue was $2.82 billion, up 33% year over

year. Excluding bitcoin revenue and revenue from our buy-now-pay-later (BNPL) platform, revenue was $2.55 billion, up 21% year over year. We acquired our BNPL

platform through the acquisition of Afterpay on January 31, 2022.

Reconciliations of non-GAAP financial measures used in this letter to their nearest GAAP equivalents are provided at the end of this letter. Please see these

reconciliations for a description of certain items that impacted net income (loss) and operating income (loss) in 2022.

In the fourth quarter of 2022, we

generated gross profit of $1.66 billion, up

40% year over year. Square generated

gross profit of $801 million, up 22% year

over year, and Cash App generated gross

profit of $848 million, up 64% year over year.

In 2022, Cash App continued

to efficiently grow its network:

We ended the year with 51 million

monthly transacting actives in

December, with two out of three

transacting each week on average.

The breadth and cohesion of our

Square ecosystem continued to be

our biggest differentiator: In 2022,

44% of Square’s gross profit came from

sellers that used four or more monetized

products, an improvement of more than

15 points compared to three years ago.

Gross Profit

$1.66 Billion

40% YOY

Fourth Quarter Financial Metrics

$1.18B

47%

$1.29B

34%

$1.47B

29%

$1.66B

40%

$1.57B

38%

2021

2022

Q4Q3

Net Income (Loss)*

($114 Million)

2021

Q2Q1

2022

Q4Q3

*Attributable to

common

stockholders

($208M)

($204M)

($15M)

($114M)

($77M)

$281M

53%

$327M

40%

$184M

(1%)

$187M

(48%)

$195M

(17%)

2021

Q2Q1

2022

Q4Q3

Adjusted EBITDA

$281 Million

2021

Q2Q1

2022

Q4Q3

$518M

37%

$624M

26%

$848M

64%

$705M

29%

$774M

51%

Cash App Gross Profit

$848 Million

64% YOY

YoY Growth

BLO C K q4 2022 3

$1.07B

For the full year of 2022, we generated gross profit of $5.99 billion, up 36% year

over year. Square generated gross profit of $3.00 billion, up 30% year over year,

and Cash App generated gross profit of $2.95 billion, up 43% year over year.

2022 Highlights

2022 Financial Metrics

$3.00B

30%

$1.39B

30%

$1.51B

$2.32B

54%

Square Gross Profit

$3.00 Billion

30% YOY

2018 20202019 20222021

Gross Profit

$5.99 Billion

36% YOY

55%

45%

YoY Growth

$2.73B

45%

$5.99B

36%

$4.42B

62%

2018 2019 20222021

Net Income (Loss)*

($541 Million)

2018 20202019 20222021

*Attributable to

common stockholders

$166M

$375M

$213M

$1.30B

131%

$195M

$458M

$1.89B

($541M)

($38M)

$991M

(2%)

$1.01B

114%

$257M

85%

$474M

14%

$417M

63%

2018 20202019 20222021

Adjusted EBITDA

$991 Million

2018 20202019 20222021

$2.95B

43%

$1.23B

168%

$2.07B

69%

Cash App Gross Profit

$2.95 Billion

43% YOY

2020

For the full year of 2022, total net revenue was $17.53 billion, down 1% year over year, and, excluding bitcoin revenue, revenue was $10.42 billion, up 36% year over

year. Excluding bitcoin revenue and revenue from our buy-now-pay-later (BNPL) platform, revenue was $9.61 billion, up 26% year over year. We acquired our BNPL

platform through the acquisition of Afterpay on January 31, 2022.

Reconciliations of non-GAAP financial measures used in this letter to their nearest GAAP equivalents are provided at the end of this letter. Please see these

reconciliations for a description of certain items that impacted net income (loss) and operating income (loss) in 2022.

BLO C K q4 2022 4

Over the last year, our ecosystem model helped

drive resilience as we continued to serve a diverse

base of global customers across a wide range of

verticals, complementary products, and use cases.

Looking ahead to 2023 and beyond, we are focused

on balancing growth and efficiency and will prioritize

speed, agility, and accountability. This framework

will ensure we remain customer-led while building a

disciplined and durable business for the long term.

We delivered strong growth and profitability at

scale during the fourth quarter of 2022. Gross

profit grew 40% year over year to $1.66 billion.

Excluding our BNPL platform, gross profit was

$1.46 billion, up 24% year over year. Our Square

ecosystem delivered gross profit of $801 million,

an increase of 22% year over year and, excluding

our BNPL platform, 7% year over year. Excluding

gross profit from Paycheck Protection Program

(PPP) loan forgiveness and our BNPL platform,

Square gross profit increased 17% year over year.

Our Cash App ecosystem delivered gross profit of

$848 million, an increase of 64% year over year and,

excluding our BNPL platform, an increase of 45%

year over year. Adjusted EBITDA was $281 million.

To Our Shareholders

February 23, 2023

ON THE COVER

Boedecker Cellars is an urban

winery in Portland, Oregon,

that uses Square’s

ecosystem — including

Square Online, Square Point

of Sale, Square Marketing,

Square Team Management

and Payroll, and multiple

Square hardware devices —

to power operations across

multiple revenue streams,

such as its wine club and

tasting room experiences.

In the fourth quarter, gross

profit was affected by $18

million of amortization of

acquired technology assets,

the majority of which was

from the acquisition of our

BNPL platform.

The compound annual growth rate (CAGR)

is the mean annual growth rate over a

specified time period. Given the impacts

of the COVID-19 pandemic have lasted for

nearly three years, ranging from March 2020

through today, we believe using three-year

CAGRs from 2019 to 2022 helps reflect

underlying growth trends through the fourth

quarter of 2022.

We facilitated access to

Paycheck Protection

Program (PPP) loans for our

sellers during the COVID-19

pandemic. We recognize

revenue and gross profit over

the life of the loan. If a loan is

forgiven, we recognize the

remaining revenue and gross

profit in the period the loan

is forgiven.

2022 g ross prof i t

As reported

Gross

Profit

YoY

Growth

3-year

CAGR

Block $5,992M 36% 47%

Square $3,001M 30% 29%

Cash App $2,951M 43% 86%

Excluding BNPL

Platform

Gross

Profit

YoY

Growth

3-year

CAGR

Block $5,404M 22% 42%

Square $2,707M 17% 25%

Cash App $2,657M 28% 80%

q4 2022 gros s prof it

As reported

Gross

Profit

YoY

Growth

3-year

CAGR

Block $1,660M 40% 47%

Square $801M 22% 28%

Cash App $848M 64% 81%

Excluding BNPL

Platform

Gross

Profit

YoY

Growth

3-year

CAGR

Block $1,464M 24% 41%

Square $703M 7% 23%

Cash App $750M 45% 73%

BLO C K q4 2022 5

Square Ecosystem

We continue to focus on our three strategic

priorities to drive Square’s business: omnichannel,

growing upmarket, and expanding globally.

Enhancing Our Ecosystem of Products

We remain focused on investing in omnichannel

commerce to help sellers never miss a sale and

operate more efficiently — especially during an

uncertain macroeconomic environment. We believe

our key differentiators are the depth and breadth of

our products and software, along with the range of

verticals we serve. In 2022, 44% of Square gross

profit came from sellers that used four or more

monetized products, an improvement of more than

15 points from three years ago. We have seen

greater retention from larger sellers and those that

adopt more products: In 2022, mid-market sellers

who adopted four or more products had 15x greater

retention than those who only adopted one.

Growing Upmarket

During the fourth quarter, mid-market sellers

continued to be our fastest-growing segment, with

gross profit up 16% year over year in the fourth

quarter, outpacing total Square gross profit growth,

excluding our BNPL platform. While we want to

serve all types of sellers — including both sole

proprietors who need us seasonally and enterprises

who need us around the clock — we see the

greatest opportunity with sellers with annualized

GPV ranging from $500,000 to $10 million, which

represents an addressable market of approximately

$4.0 trillion in U.S. gross receipts and makes up

more than half of our estimated $125 billion total

addressable market on a gross profit basis.

We believe sellers who adopt more of our products

can drive meaningful growth for Square and allow us

to deepen our relationship with them. For example,

The Market at Grelen, a Virginia-based garden shop

and cafe with more than $2.5 million in annualized

GPV, joined Square 10 years ago when their business

was just getting started. Over the years, The Market

at Grelen has grown to encompass a 1,000-acre

multi-purpose property, a second location, and

an online store. As they expanded, The Market at

Grelen adopted more Square products to address

their changing needs, including Square for Retail

to manage inventory from more than 100 vendors

and Square Online to support their eCommerce

operations. These integrated solutions help The

Market at Grelen more seamlessly operate their

complex business both in person and online, which

we believe is a key reason why they have been able

to grow with Square for more than a decade.

re ten tion improves w ith la rge r

sellers and greater product adoption

SMB MID-MARKET

15x

1 product 2 products 3 products 4 products

Chart depicts 2022 year-over-year seller count churn by seller

size. Churn is defined as sellers who used at least one product in

2021 but did not use a product in 2022.

We determine seller size based on annualized GPV during the

applicable quarter. A mid-market seller generates more than

$500,000 in annualized GPV. GPV does not include transactions

from our BNPL platform because GPV is related only to

transaction-based revenue and not to subscription and services-

based revenue.

square gpv m ix by se lle r size

2020

2021

2022

$15.9B

$14.0B

$18.9B

$12.4B

$14.5B

$15.7B

$8.8B

$8.9B

$11.7B

<$125K

Annualized GPV

$125K–$500K

Annualized GPV

>$500K

Annualized GPV

$48.6B

$42.6B

$29.4B

Percent Mid-market

Sellers

30% 37% 39%

BLO C K q4 2022 6

Expanding Globally

We are applying a product-centric approach to

global expansion of our Square ecosystem. Our

goal is to reach product parity across each of

our markets, which will enable sellers to take full

advantage of the breadth of our ecosystem. In

Australia, we introduced Square for Retail and

Square Appointments on Square Terminal, and

in Ireland, we launched Square Appointments

to provide a solution that integrates booking

software with an all-in-one point of sale built

for the Beauty and Personal Care sector.

We have heard from sellers that cash flow

management is a top priority, which is why we

provide integrated tools that connect directly

with sellers’ payments. Since launching more of

our banking products internationally, we have

experienced steady demand with Square Loans:

Through year-end 2022, we originated nearly

$400 million in Square Loans throughout our

global markets and achieved loss rates on these

loans in line with Square Loans in the U.S.

$23M

gross profit in markets outside the u.s.

2018

2021

$62M

2020

2019

2022

$139M

17%

% of Square

Gross Profit

Square gross profit in markets outside the U.S. includes

contributions from our BNPL platform during the fourth quarter

of 2022. Excluding our BNPL platform, Square gross profit in

markets outside the U.S. was $83 million, representing 12% of

Square gross profit.

$16M

$39M

BLO C K q4 2022 7

A transacting active is a

Cash App account that

has at least one financial

transaction using any product

or service within Cash App

during a specified period.

A transacting active for a

specific Cash App product

has at least one financial

transaction using that product

during the specified period

and is referred to as an active.

Certain of these accounts

may share an alias identifier

with one or more other

transacting active accounts.

This could represent, among

other things, one customer

with multiple accounts or

multiple customers sharing

one alias identifier (for

example, families).

Cash App Ecosystem

We use our inflows framework to assess the

performance of Cash App’s gross profit as a

result of three primary variables: (1) Actives, (2)

Inflows per Active, and (3) Monetization Rate

on Inflows. We are investing in the following

development pillars: Community, Commerce,

Crypto, Financial Services, Global, Operating

System, and Trust. In the fourth quarter we

made notable progress on Community, Financial

Services, and Commerce, which meaningfully

contributed to gross profit growth.

Community

We believe our ability to efficiently scale our

network is one of our biggest differentiators:

During December 2022, Cash App had 51

million monthly transacting actives, an increase

of 16% year over year. Our acquisition cost

remained stable in 2022 at $10 or less on

average to acquire a new transacting active

with strong returns on acquisition spend.

Creating unique experiences within peer-to-

peer transactions allows us to engage our

community in new and interesting ways. In

the fourth quarter, we launched peer-to-peer

gift cards, allowing customers to send a gift

card from a wide range of merchants to their

friends and family, who can then receive and

spend it through their Cash App Card.

Financial services

Cash App Card delivered strong growth over the

past year, generating more than $750 million

in gross profit during 2022, up 56% year over

year from transactions on the card alone. This

growth was driven by continued momentum

from Cash App Card monthly actives and spend

per active. Cash App Card is a key driver of

increased inflows as Cash App Card actives

brought 2x the amount of inflows into Cash App

compared to peer-to-peer actives in the fourth

quarter. Increased product adoption has positively

impacted inflows per transacting active, which

were $1,048 in the fourth quarter, up slightly year

over year despite the benefit from government

disbursements in the prior-year period.

cash app card gross profit increasing

as % of mix

2018 2019 2020 2021 2022

24%21%17%9%

26%

Cash App Card

Gross Profit as

% of Total

Cash App Card

Gross Profit

Cash App

Gross Profit

BLO C K q4 2022 8

We are focused on continuing to build customer

trust through the breadth of our banking offerings.

Based on direct feedback from our customers,

in January we rolled out Savings, which allows

customers to hold a separate savings balance

and easily set and track towards financial goals.

Customers can add money to savings using their

Cash App balance, a linked debit card, or through

Round Ups on purchases with Cash App Card. This

provides our customers with a meaningful tool to

manage their money, and also furthers Cash App’s

ability to be our customers’ primary bank of choice.

Commerce

As we continue our investment in Commerce,

we are seeing new and meaningful opportunities

in our BNPL platform that can further connect

our Square and Cash App ecosystems. In the

past year, we have channeled an opportunity

to connect consumers with merchants by

creating an ad and affiliate offering. With the

offering available to both in- and out-of-network

merchants, we are paid a commission when a

consumer begins their shopping journey in the

Afterpay app and makes a purchase. We also

earn revenue through our BNPL platform from

consumer clicks to a merchant site from the app

as well as flat fees for premium ad placements.

Since launch, we have seen meaningful growth in

the ad and affiliate offering of our BNPL platform.

In 2022, the ads and affiliate program generated

nearly $100 million in revenue across nearly 2,000

advertisers. As we build out Cash App's commerce

platform, we intend to integrate this demand

generation engine from the Afterpay app, and pair

ad and affiliate offerings with Cash App's powerful

Boost rewards and incentives capabilities.

In January 2023, we launched Savings, which allows our

customers to budget better by saving in a separate balance

within Cash App.

BLO C K q4 2022 9

revenue and gross profit

Total net revenue was $4.65 billion in the

fourth quarter of 2022, up 14% year over year.

Excluding bitcoin revenue, revenue in the fourth

quarter was $2.82 billion, up 33% year over

year. For the full year of 2022, total net revenue

was $17.53 billion, down 1% year over year.

Excluding bitcoin revenue, revenue for the full

year was $10.42 billion, up 36% year over year.

Gross profit was $1.66 billion in the fourth quarter

of 2022, up 40% year over year. For the full year

of 2022, gross profit was $5.99 billion, up 36%

year over year. In the fourth quarter and for the

full year, gross profit included $18 million and $70

million, respectively, of amortization of acquired

technology assets, the majority of which was

from the acquisition of our BNPL platform.

In the fourth quarter of 2022, our BNPL

platform contributed $264 million of revenue

and $196 million of gross profit. Excluding

bitcoin revenue and our BNPL platform,

revenue was $2.55 billion, up 21% year over

year. Excluding our BNPL platform, gross profit

was $1.46 billion, up 24% year over year.

For the full year of 2022, our BNPL platform

contributed $811 million of revenue and

$588 million of gross profit. Excluding bitcoin

revenue and our BNPL platform, revenue

was $9.61 billion, up 26% year over year.

Excluding our BNPL platform, gross profit

was $5.40 billion, up 22% year over year.

Transaction-based revenue was $1.47 billion in

the fourth quarter of 2022, up 13% year over year,

and transaction-based gross profit was $605

million, up 10% year over year. We processed

$53.16 billion in GPV in the fourth quarter, up

15% year over year. Transaction-based gross

profit as a percentage of GPV was 1.14% in the

fourth quarter, up 1 basis point quarter over

quarter and down 4 basis points year over year.

Financial

Discussion

Reconciliations of non-

GAAP metrics used in this

letter to their nearest GAAP

equivalents are provided at

the end of this letter.

We acquired our BNPL

platform through the

acquisition of Afterpay. We

recognize revenue from our

BNPL platform as

subscription and services-

based revenue, and have

allocated 50% of revenue and

gross profit from our BNPL

platform to each of Square and

Cash App. Revenue from our

BNPL platform includes fees

generated from consumer

receivables, late fees, and

certain affiliate and advertising

fees from the platform.

GPV includes Square GPV

and Cash App Business GPV.

Square GPV is defined as

the total dollar amount of all

card payments processed by

sellers using Square, net of

refunds, and ACH transfers.

Cash App Business GPV

comprises Cash App activity

related to peer-to-peer

transactions received by

business accounts, Cash

App Pay transactions, and

peer-to-peer payments sent

from a credit card. GPV does

not include transactions from

our BNPL platform because

GPV is related only to

transaction-based revenue

and not to subscription and

services-based revenue.

gros s pro fit

$1.66B

40%

2022

2021

$1.29B

34%

$1.18B

47%

YoY G row th

$1.57B

38%

$1.47B

29%

Bitcoin gross profit was $35 million in the fourth quarter of

2022. The total sale amount of bitcoin sold to customers, which

we recognize as bitcoin revenue, was $1.83 billion. Bitcoin gross

profit was 2% of bitcoin revenue.

BLO C K q4 2022 10

For the full year of 2022, transaction-based

revenue was $5.70 billion, up 19% year over year,

and transaction-based gross profit was $2.34

billion, up 13% year over year. We processed

$203.54 billion in GPV for the full year of 2022,

up 21% year over year. Transaction-based gross

profit as a percentage of GPV was 1.15% for the

full year of 2022, down 9 basis points year over

year and up 7 basis points compared to 2019.

Subscription and services-based revenue was

$1.31 billion in the fourth quarter of 2022,

up 69% year over year, and subscription and

services-based gross profit was $1.07 billion,

up 70% year over year. Excluding our BNPL

platform, subscription and services-based

revenue was $1.04 billion and subscription and

services-based gross profit was $871 million,

up 35% and 39% year over year, respectively.

For the full year of 2022, subscription and

services-based revenue was $4.55 billion,

up 68% year over year, and subscription and

services-based gross profit was $3.69 billion,

up 66% year over year. Excluding our BNPL

platform, subscription and services-based

revenue was $3.74 billion and subscription and

services-based gross profit was $3.10 billion,

up 38% and 39% year over year, respectively.

BLO C K q4 2022 11

square ecosystem revenue

and gross profit

In the fourth quarter of 2022, Square generated

$1.76 billion of revenue and $801 million of gross

profit, up 19% and 22% year over year, respectively.

For the full year of 2022, Square generated $6.70

billion of revenue and $3.00 billion of gross profit,

up 29% and 30% year over year, respectively.

Our BNPL platform contributed $132 million of

revenue and $98 million of gross profit to Square

in the fourth quarter of 2022. Excluding our

BNPL platform, Square generated $1.62 billion of

revenue and $703 million of gross profit, up 10%

and 7% on a year-over-year basis, respectively.

For the full year of 2022, our BNPL platform

contributed $406 million of revenue and $294

million of gross profit to Square. Excluding our

BNPL platform, Square generated $6.29 billion of

revenue and $2.71 billion of gross profit, up 21%

and 17% on a year-over-year basis, respectively.

Excluding gross profit from PPP loan forgiveness

and our BNPL platform, Square gross profit was up

17% and 19% year over year in the fourth quarter

and for the full year of 2022, respectively.

We target positive gross profit retention to

measure our ability to support our sellers and

help them grow over time. In 2022, each of

our existing annual Square cohorts achieved

positive gross profit retention when compared

to 2021. Square cohorts onboarded prior to

2021 have achieved or are pacing towards

an estimated return on investment of 3x or

greater over four years. Our 2021 and 2022

cohorts have achieved or are pacing towards

an estimated payback of six quarters or less.

Square gross profit retention rate is calculated as the year-over-

year gross profit growth of all existing quarterly seller cohorts,

averaged over the last four quarters (excluding gross profit from

our BNPL platform, hardware, Caviar, PPP loans, and Weebly

prior to the acquisition). A Square cohort represents new sellers

onboarded to Square during a given period.

gross profit by annual square cohort

2022 Cohort

2019 Cohort

2020 Cohort

2021 Cohort

Pre-2019 Cohort

2019 2020 2021 2022

square gross paym en t vo lum e

$48.6B

14%

2022

2021

$39.5B

33%

$42.6B

45%

YoY G row th

$50.0B

20%

$48.3B

25%

Square GPV is defined as the total dollar amount of all

card payments processed by sellers using Square, net of

refunds, and ACH transfers. Square GPV does not include

transactions from our BNPL platform because GPV is related

only to transaction-based revenue and not to subscription and

services-based revenue.

BLO C K q4 2022 12

In the fourth quarter of 2022, Square generated

$1.35 billion of transaction-based revenue, up

12% year over year, with growth from both in-

person and online channels. During the quarter,

Square saw a lower percentage of debit card

transactions on a year-over-year basis, as the

proportion of debit transactions was comparable

to pre-pandemic levels. For the full year of

2022, Square transaction-based revenue

was $5.24 billion, up 19% year over year.

In the fourth quarter of 2022, Square GPV was

$48.61 billion, up 14% year over year and 16% year

over year on a constant currency basis. For the full

year of 2022, Square GPV was $186.47 billion, up

22% year over year and 24% on a constant currency

basis. We observed the following trends in Square

GPV during the fourth quarter of 2022:

• Products: Card-present GPV was up

17% year over year and card-not-present

GPV was up 9% year over year.

• Geographies: Square GPV in our U.S.

market grew 13% year over year, and

growth in our international markets was

23% year over year. On a constant currency

basis, Square GPV in our international

markets was up 39% year over year.

• Verticals: Square GPV was up 16% year

over year in October, compared to 13% in

November and 14% in December. Growth in

Square GPV was slower in November and the

first half of December compared to during

the December holiday season. The slowdown

was most pronounced in discretionary

verticals, including food and drink and retail.

Return on investment, or payback, measures the effectiveness

of sales and marketing spend. Return on investment (ROI) is

calculated by dividing the cumulative cohort gross profit of each

cohort of sellers by GAAP sales and marketing expenses for the

applicable time period, excluding the following: Cash App sales

and marketing expenses, BNPL platform sales and marketing

expenses, Corporate and Other sales and marketing expenses,

Caviar sales and marketing expenses, and the portion of sales

and marketing expenses from the legacy Weebly business. Each

line represents a quarterly cohort from the first quarter of 2013

to the third quarter of 2022.

square re tu rn o n inves tme nt

2 106 144 12

Quarters after joining

8 16

ROI

BLO C K q4 2022 13

Square generated $368 million of subscription

and services-based revenue during the fourth

quarter of 2022, up 60% year over year. Excluding

our BNPL platform, subscription and services-

based revenue was $236 million, up 3% year

over year. For the full year of 2022, Square

subscription and services-based revenue was

$1.30 billion, up 96% year over year. Excluding our

BNPL platform, subscription and services-based

revenue was $894 million, up 35% year over year.

• Banking: Excluding revenue from PPP loan

forgiveness, revenue and gross profit from

seller banking products achieved strong year-

over-year growth in the fourth quarter of 2022.

This includes Instant Transfer, Square Card,

and Square Loans, which represent most of

our financial services products for sellers.

• Square Loans: Excluding revenue from

PPP loan forgiveness, Square Loans

achieved strong revenue and gross

profit growth during the fourth quarter of

2022, facilitating approximately 124,000

loans totaling $1.16 billion in originations,

up 37% year over year. Square Loans

benefited from $2 million of PPP loan

forgiveness revenue and gross profit

during the fourth quarter of 2022,

compared to $59 million in the fourth

quarter of 2021. For the full year of 2022,

Square Loans facilitated approximately

461,000 loans totaling $4.07 billion in

originations, up 29% year over year.

• Software: Revenue and gross profit from

software subscriptions delivered strong

year-over-year growth during the quarter,

and gross profit growth continued to outpace

overall Square gross profit growth.

Hardware revenue in the fourth quarter of 2022

was $36 million, down 1% year over year, and

generated a gross loss of $28 million as we

use hardware as an acquisition tool. For the

full year of 2022, hardware revenue was $164

million, up 13% year over year, and generated

a gross loss of $123 million. Revenue growth

for the full year of 2022 was driven by strong

unit sales of Square Terminal, Square Register,

and Square Reader for contactless and chip.

q4 square s u b scrip ti o n and serv i ces-bas e d

reve n u e ex-p p p and e x-bn p l platfor m

Q419 Q420 Q421 Q422

Square subscription and

services-based revenue

$105M $105M $230M $368M

PPP loan forgiveness

revenue

$0M $2M $59M $2M

Square subscription

and services-based

revenue excluding PPP

forgiveness

$105M $103M $171M $366M

BNPL platform

subscription and

services-based revenue

allocated to Square

$0M $0M $0M $132M

Square subscription

and services-based

revenue excluding

PPP forgiveness and

excluding contributions

from BNPL platform

$105M $103M $171M $234M

fy s qua r e subscrip tion a nd se rvice s -based

reve n u e ex-p p p and e x-bn p l platfor m

2019 2020 2021 2022

Square subscription and

services-based revenue

$369M $376M $664M $1,300M

PPP loan forgiveness

revenue

$0M $2M $96M $68M

Square subscription

and services-based

revenue excluding PPP

forgiveness

$369M $374M $568M $1,232M

BNPL platform

subscription and

services-based revenue

allocated to Square

$0M $0M $0M $406M

Square subscription

and services-based

revenue excluding

PPP forgiveness and

excluding contributions

from BNPL platform

$369M $374M $568M $827M

BLO C K q4 2022 14

cash app ecosystem revenue

and gross profit

In the fourth quarter of 2022, Cash App generated

$2.86 billion of revenue and $848 million of gross

profit, up 12% and 64% year over year, respectively.

For the full year of 2022, Cash App generated

$10.63 billion of revenue and $2.95 billion of gross

profit, down 14% and up 43% year over year,

respectively. The year-over-year decline in revenue

was driven by a decrease in the total dollar amount

of bitcoin sold to customers, which we recognize as

bitcoin revenue, and bitcoin gross profit was 2% of

bitcoin revenue in the quarter.

Our BNPL platform contributed $132 million of

revenue and $98 million of gross profit to Cash App

in the fourth quarter of 2022. Excluding bitcoin

revenue and our BNPL platform, Cash App revenue

was $892 million in the fourth quarter of 2022, up

51% year over year. Excluding our BNPL platform,

Cash App gross profit was $750 million, up 45%

year over year.

For the full year of 2022, our BNPL platform

contributed $406 million of revenue and $294 million

of gross profit to Cash App. Excluding bitcoin revenue

and our BNPL platform, Cash App revenue was $3.11

billion for the full year of 2022, up 35% year over year.

Excluding our BNPL platform, Cash App gross

profit was $2.66 billion, up 28% year over year.

We drove growth in net new transacting actives and

strong engagement across products in our Cash

App ecosystem. Inflows per transacting active were

$1,048 in the fourth quarter of 2022, up slightly

year over year despite the benefit from government

disbursements in the prior-year period. Overall

inflows for the full year of 2022 were $203 billion,

up from $179 billion in 2021.

Our Cash App ecosystem has achieved positive

annual gross profit retention for our historical cohorts,

demonstrating that existing customers have remained

on the platform and increased their engagement with

Cash App over time. We have seen strength in

retention during recent years, with positive annual

gross profit retention for all historical cohorts.

We continued to efficiently grow our customer

base and generate strong returns on customer

acquisition for Cash App. Our historical Cash

App cohorts through 2020 have achieved a

6x ROI or greater over three years, and our

2021 and 2022 Cash App cohorts are at or

pacing towards an estimated payback of less

than one year. In 2022, we onboarded our

largest annual cohort on a gross profit basis.

cas h ap p inf lows

$54B

20%

2022

2021

$48B

$45B

35%

YoY G row th

$52B

19%

$50B

2022 Cohort

2019 Cohort

2020 Cohort

2021 Cohort

Pre-2019 Cohort

2019 2020 2021 2022

gross profit by annual cash app

cohort

Cash App annual gross profit retention is calculated as the

year-over-year gross profit growth of all existing quarterly Cash

App cohorts, averaged over the last four quarters, and excluding

BNPL platform gross profit, contra revenue, and interest income.

A transacting active’s cohort is determined based on the date

they first became a transacting active on the platform. For

example, retention for our Q1 2019 cohort is the average annual

gross profit growth from transacting actives who completed a

first transaction in Q1 2019. Each of our annual Cash App cohorts

since 2015 and the pre-2015 cohort have exhibited positive

overall gross profit retention on aggregate from the date of their

first transaction through December 31, 2022.

BLO C K q4 2022 15

In the fourth quarter of 2022, Cash App Business

GPV was $4.55 billion, up 20% year over year.

Cash App Business GPV comprises Cash App

activity related to peer-to-peer transactions

received by business accounts, Cash App Pay

transactions, and peer-to-peer payments sent

from a credit card. Cash App generated $122

million of transaction-based revenue during

the fourth quarter of 2022, up 18% year over

year. Growth was driven by an increase in the

number of business accounts and in the number

of transactions. For the full year of 2022, Cash

App Business GPV was $17.07 billion, up 14%

year over year, and Cash App transaction-based

revenue was $466 million, up 14% year over year.

Cash App generated $901 million of subscription

and services-based revenue during the fourth

quarter of 2022, up 85% year over year. Growth

in the quarter was driven by contributions from

our BNPL platform, as well as transaction fees

from both Cash App Card and Instant Deposit.

Excluding our BNPL platform, subscription and

services-based revenue was $769 million, up 58%

year over year. For the full year of 2022, Cash

App subscription and services-based revenue was

$3.05 billion, up 61% year over year. Excluding our

BNPL platform, subscription and services-based

revenue was $2.64 billion, up 40% year over year.

Cash App generated $35 million of bitcoin gross

profit in the fourth quarter of 2022, down 25%

year over year. The total sale amount of bitcoin

sold to customers, which we recognize as bitcoin

revenue, was $1.83 billion, down 7% year over year.

Bitcoin revenue and gross profit were relatively

consistent compared to the third quarter of 2022.

The year-over-year decrease in bitcoin revenue

and gross profit was driven by a decline in the

price of bitcoin. For the full year of 2022, Cash

App generated $7.11 billion of bitcoin revenue

and $156 million of bitcoin gross profit, down

29% and 28% year over year, respectively.

corporate and other revenue

and gross profit

Corporate and Other generated $38 million in

revenue and $11 million in gross profit in the

fourth quarter of 2022. For the full year of

2022, Corporate and Other generated $206

million in revenue and $40 million in gross profit.

Corporate and Other comprised areas outside

Square and Cash App, which were primarily

TIDAL and intersegment eliminations in 2022.

Bitcoin revenue is the total

sale amount of bitcoin sold

to customers. Bitcoin costs

are the total amount we pay

to purchase bitcoin in order

to facilitate customers’

access to bitcoin. In future

quarters, bitcoin revenue and

gross profit may fluctuate

as a result of changes in

customer demand or the

market price of bitcoin.

cas h app return on i nve st men t

10x

15x

20x

18 24

Months after joining

ROI

12 30

20182017 2019 2020 2021 2022

Return on investment, or payback, is calculated by taking a

given Cash App monthly cohort’s cumulative variable profit and

dividing by acquisition marketing spend for the initial month

when onboarded. Each line represents the average monthly

cohort for years 2017 to 2022.

Cohort variable profit is calculated as gross profit across Cash

App transaction-based profit, Cash App Card gross profit,

Instant Deposit gross profit for Cash App, bitcoin gross profit,

less certain variable sales and marketing expenses, including

peer-to-peer processing and risk loss. Cohort variable profit is

based on our estimates for certain risk loss measures.

BLO C K q4 2022 16

operating expenses

Operating expenses were $1.80 billion in the fourth

quarter of 2022, up 45% year over year, and

non-GAAP operating expenses were $1.40 billion,

up 39% year over year. For the full year of 2022,

operating expenses were $6.62 billion, up 55%

year over year, and non-GAAP operating expenses

were $5.07 billion, up 48% year over year. In the

fourth quarter and for the full year, operating

expenses included $35 million and $139 million,

respectively, of amortization of customer and other

acquired intangible assets, the majority of which

was from the acquisition of our BNPL platform.

Product development expenses were $605 million

on a GAAP basis and $382 million on a non-GAAP

basis in the fourth quarter of 2022, up 54% and

60% year over year, respectively. The increase

was driven primarily by headcount and personnel

costs related to our engineering, data science, and

design teams, as well as product development

expenses related to our BNPL platform.

Sales and marketing expenses were $540

million on a GAAP basis and $508 million on a

non-GAAP basis in the fourth quarter of 2022,

up 11% and 9% year over year, respectively.

• Cash App marketing expenses were down 9%

year over year, driven by a decrease in

advertising and non-traditional marketing

expenses. Cash App peer-to-peer processing

costs, related peer-to-peer transaction losses,

and card issuance costs were up 15% year

over year.

• Other sales and marketing expenses were up

48% year over year. The increase was driven

primarily by sales and marketing expenses

related to our BNPL platform. Other sales and

marketing expenses also include expenses

related to TIDAL.

General and administrative expenses were

$452 million on a GAAP basis and $343 million

on a non-GAAP basis in the fourth quarter

of 2022, up 51% and 43% year over year,

respectively. The increase was due primarily

to additions to customer support, human

resources, finance, and legal personnel, as well

as expenses related to our BNPL platform.

We discuss Cash App

marketing expenses because

a large portion is generated

by our peer-to-peer service,

which we offer free to our

Cash App customers, and we

consider it to be a marketing

tool to encourage the use of

Cash App.

BLO C K q4 2022 17

Transaction, loan, and consumer receivables

losses were $155 million in the fourth quarter

of 2022, up 172% year over year. The increase

was driven primarily from consumer receivables

losses related to our BNPL platform, as well as

growth in Square Loans volumes and Square

GPV. In the fourth quarter, loss rates for Square

GPV, Square Loans, and BNPL consumer

receivables remained consistent with historical

ranges, and we will continue to monitor trends

closely given the dynamic macro environment.

In the fourth quarter of 2020 and first quarter

of 2021, we invested $50 million and $170

million, respectively, in bitcoin. As an indefinite-

lived intangible asset, bitcoin is subject to

impairment losses if the fair value of bitcoin

decreases below the carrying value during the

assessed period. In the fourth quarter of 2022,

we recognized a bitcoin impairment loss of

$9 million on our bitcoin investment, and for

the full year of 2022, we recognized a bitcoin

impairment loss of $47 million on our investment.

As of December 31, 2022, the fair value of our

investment in bitcoin was $133 million based

on observable market prices, which was $30

million greater than the carrying value of the

investment after cumulative impairment charges.

The accounting rules for

bitcoin currently require us to

recognize any decreases in

market price below carrying

value as an impairment charge,

with no upward revisions

recognized when the market

price increases until the sale

of that bitcoin. Bitcoin

impairment loss is a GAAP

expense. Non-GAAP

operating expenses exclude

bitcoin impairment losses. To

determine fair value, Block

revalues its bitcoin holdings on

a daily basis using the closing

price at midnight Coordinated

Universal Time (UTC).

BLO C K q4 2022 18

earnings

In the fourth quarter of 2022, operating

loss was $135 million. For the full year of

2022, operating loss was $625 million.

In the fourth quarter of 2022, net loss attributable

to common stockholders was $114 million. Net loss

per share attributable to common stockholders

was $0.19 on a basic and diluted basis in the

fourth quarter of 2022, based on 599 million

weighted-average basic and diluted shares

outstanding during the fourth quarter of 2022.

For the full year of 2022, net loss attributable

to common stockholders was $541 million.

Net loss per share was $0.93 on a basic

and diluted basis, based on 579 million

weighted-average basic and diluted shares

outstanding during the full year of 2022.

Adjusted Operating Loss was $32 million in

the fourth quarter of 2022. For the full year

of 2022, Adjusted Operating Loss was $145

million. Adjusted Operating Income (Loss) is

a non-GAAP financial measure that excludes

certain expenses that we believe are not

reflective of our core operating performance,

including amortization of intangible assets,

bitcoin impairment losses, acquisition-related

accelerated share-based compensation

expenses, and acquisition-related, integration,

and other costs. We present Adjusted Operating

Income (Loss) because we use it to evaluate

our operating performance, generate future

operating plans, and make strategic decisions.

Adjusted EBITDA was $281 million in the fourth

quarter of 2022, compared to $184 million in the

fourth quarter of 2021. The increase in Adjusted

EBITDA compared to the prior-year period was

driven by gross profit growth across our Cash

App and Square ecosystems. For the full year

of 2022, Adjusted EBITDA was $991 million.

In the fourth quarter of 2022, Adjusted Net

Income Per Share (Adjusted EPS) was $0.22 on

a diluted basis based on 623 million weighted-

average diluted shares, representing a $0.06

decrease year over year. For the full year of

2022, Adjusted EPS was $1.00 based on

615 million weighted-average diluted shares,

compared to $1.28 for the full year of 2021.

Please see the reconciliations at the end of this letter for a

description of certain items that impacted net income (loss) and

operating income (loss) in 2022.

($77M)

($114M)

2021

Q2 Q4Q3Q1

2022

net income (loss) attributable to

common stockholders

$281M

53%

2021

Q2 Q4Q3Q1

2022

adj usted e bitda

$187M

(48%)

$327M

40%

$195M

(17%)

($15M)

($208M)

($204M)

Beginning in the first quarter

of 2022, we have included

the tax impact of the

non-GAAP adjustments in

determining the Adjusted

EPS. We determined the

adjusted provision (benefit)

for income taxes by

calculating the estimated

annual effective tax rate

based on adjusted pre-tax

income and applying it to

Adjusted Net Income before

income taxes.

$327M

$184M

(1%)

YoY G row th

BLO C K q4 2022 19

balance sheet/cash flow

We ended the fourth quarter of 2022 with $7.5

billion in available liquidity, with $6.9 billion in

cash, cash equivalents, restricted cash, and

investments in marketable debt securities, as

well as $600 million available to be withdrawn

from our revolving credit facility. Additionally,

we had $389 million available to be withdrawn

under our warehouse funding facilities, to

support funding of growth in our consumer

receivables related to our BNPL platform.

In the fourth quarter of 2022, Adjusted EBITDA

contributed positively to our overall liquidity.

BLO C K q4 2022 20

Given we acquired our BNPL platform on January 31, 2022 through the acquisition of Afterpay, we believe

Block combined company gross profit is more representative of underlying growth trends in the first quarter.

*Block combined company gross profit is calculated assuming a $51 million gross profit contribution from our

BNPL platform in January 2022, as if our BNPL platform had been acquired on January 1, 2022. On a

combined company basis, our BNPL platform contributed $143 million of gross profit in the first quarter of

2022 and $185 million in the fourth quarter of 2021.

Q4 2022

YoY Growth %

Jan + Feb 2023

YoY Growth %

Block Gross Profit 40% 33%

Block Combined Company Gross Profit* 21% 25%

2023

Adjusted EBITDA $1,300M

Adjusted Operating Income (Loss) ($150M)

Q1 2023

QoQ

increase ($)

Block Non-GAAP Operating Expenses $1,430M $30M

Trends and Forward-

Looking Commentary

1. We have not provided the forward-looking GAAP equivalents for certain forward-looking non-GAAP metrics, including Block Non-

GAAP Operating Expenses, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Operating Income, Adjusted Operating Income

margin, or GAAP reconciliations of any of the aforementioned, as a result of the uncertainty regarding, and the potential variability of,

reconciling items such as share-based compensation expense. Accordingly, reconciliations of these non-GAAP guidance metrics to

their corresponding GAAP equivalents are not available without unreasonable effort. However, it is important to note that material

changes to reconciling items could have a significant effect on future GAAP results. We have provided reconciliations of other historical

GAAP to non-GAAP metrics in tables at the end of this letter.

Adjusted EBITDA margin and Adjusted Operating Income margin are both defined by dividing the respective metric taken over a period

by gross profit over the same period.

Note: The table above presents preliminary gross profit growth estimates for the months of January and February 2023. These

represent our current estimates as we have not yet finalized our financial statements for the months of January and February, and

our monthly and combined company results are not subject to interim review by our auditors. As a result, actual January and February

results may differ from these preliminary estimates.

bus i nes s t ren ds

ope r at ing ex pen s es

2023 ou tloo k

On a GAAP basis, we currently expect to recognize approximately $53 million in quarterly expenses related

to amortization of intangible assets over the next few years, based on the intangible assets as of December

31, 2022. This quarterly expense includes approximately $18 million recognized in cost of sales and

approximately $35 million in operating expenses. These amounts may be affected by fluctuations in foreign

exchange rates in future periods.

In the first quarter of 2023, we expect our share-based compensation expense to be relatively consistent

quarter over quarter on a dollar basis. Share-based compensation expenses are not included in non-GAAP

operating expenses.

Based on trends in our business year to date as of earnings, we expect Adjusted EBITDA margin to expand

by at least one percentage point year over year and Adjusted Operating Income margin to also expand on a

year-over-year basis in 2023 compared to 2022.

BLO C K q4 2022 21

investment framework

Our investment framework can be articulated in a single sentence: Block and each ecosystem must

show a believable path to gross profit retention of more than 100% and Rule of 40, measured as gross

profit growth plus Adjusted Operating Income, over the long-term. Unlike Adjusted EBITDA, Adjusted

Operating Income is a profitability measure which takes into account certain non-cash expenses, including

share based compensation as well as depreciation and certain amortization expenses. As we transition

to Adjusted Operating Income, we will continue to share Adjusted EBITDA as a measure of profitability.

We believe this framework will enhance our ecosystem model by allowing each ecosystem to make business

decisions in parallel, and balance tradeoffs as we invest for growth with discipline. It also ensures we remain

customer focused, and provides flexibility for products and businesses at varying stages of maturity.

BLO C K q4 2022 22

Block (NYSE:SQ) will host a conference call and

earnings webcast at 2:00 p.m. Pacific time/5:00

p.m. Eastern time, February 23, to discuss these

financial results. To register to participate in

the conference call, or to listen to the live audio

webcast, please visit the Events & Presentations

section of Block's Investor Relations website

at investors.block.xyz. A replay will be available

on the same website following the call.

We will release financial results for the first

quarter of 2023 on May 4, 2023, after the

market closes, and will also host a conference

call and earnings webcast at 2:00 p.m. Pacific

time/5:00 p.m. Eastern time on the same

day to discuss those financial results.

MEDIA CONTACT

press@block.xyz

INVESTOR RELATIONS

CONTACT

ir@block.xyz

Jack Dorsey

ceo

Amrita Ahuja

cfo

Earnings

Webcast

BLO C K q4 2022 23

My goal is to transform Boedecker

into a destination where customers

can enjoy a glass of wine and a

bite to eat — and Square equips us

with the tools we need to make this

dream a reality.

- Athena Poppas, Founder of Boedecker Cellars

“Making wine is easy, but selling is hard — and that’s where Square helps us provide a personalized,

elevated customer experience. I can easily manage wine club memberships and securely keep cards on

file with Square Subscriptions, while building brand loyalty and oering discounts to new and returning

customers using Square Marketing.

”

BLO C K q4 2022 24

With a debit card, acct #, routing

#, direct deposit, and bitcoin, I see

no need to use a traditional bank.

#cashapp #Bitcoin

#cashappgiftcards

smart thinking

cashapp !

Yo cashapp got

everything now

haha. You can have

a savings account,

crypto, stocks,

wallet, and even

tax filing.

My jaw dropped

yesterday morning

when I saw the

“savings” widget (tab)

definitely excited to

start using this! I am

actually saving for my

first ever plane ticket

(not sure where I’ll be

going but I gotta get on

a plane to get there!)

so excited!

I use the Cash app

Bitcoin roundup daily.

Easy way to stack with

no fees.

@JSmilanic

Via Twitter

@479_isaiah

Via Instagram

@SILNTMUSIC

Via Twitter

@BradyRamsey777

Via Twitter

@keithkman

Via Reddit

BLO C K q4 2022 25

safe harbor statement

This letter contains “forward-looking statements” within the

meaning of the Safe Harbor provisions of the U.S. Private

Securities Litigation Reform Act of 1995. All statements

other than statements of historical fact could be deemed

forward-looking, including, but not limited to, statements

regarding the future performance of Block, Inc. and its

consolidated subsidiaries (the Company); the Company’s

strategies, including expected impact of such strategies on

our customers, actives, and sellers as well as our business and

financial performance, expected financial results, guidance,

and general business outlook for current and future periods;

the Company’s integration of Afterpay into its Square and

Cash App businesses, and its impacts on the Company’s

business and financial results; future profitability and growth

in the Company’s businesses and products and the Company’s

ability to drive such profitability and growth; the Company’s

expectations regarding scale, economics, and the demand for

or benefits from its products, product features, and services;

the Company’s product development plans; the ability of

the Company’s products to attract and retain customers,

particularly in new or different markets or demographics;

trends in the Company’s markets and the continuation of such

trends; the Company’s expectations and intentions regarding

future expenses, including future transaction and loan losses

and the Company’s estimated reserves for such losses; the

Company’s bitcoin investments and strategy as well as the

potential financial impact and volatility; and management’s

statements related to business strategy, plans, investments,

opportunities, and objectives for future operations. In some

cases, forward-looking statements can be identified by

terms such as “may,” “will,” “appears,” “should,” “expects,”

“plans,” “anticipates,” “could,” “intends,” “target,” “projects,”

“contemplates,” “believes,” “estimates,” “predicts,” “potential,”

or “continue,” or the negative of these words or other similar

terms or expressions that concern our expectations, strategy,

plans, or intentions.

Such statements are subject to a number of known and

unknown risks, uncertainties, assumptions, and other factors

that may cause the Company’s actual results, performance,

or achievements to differ materially from results expressed or

implied in this letter. Investors are cautioned not to place undue

reliance on these statements, and reported results should not be

considered as an indication of future performance.

Risks tht contribute to the uncertin nture of the forwrd-

looking sttements include, mong others,  continued or

prolonged economic downturn in the United Sttes nd in other

countries round the world; the Compny’s investments in its

business nd bility to mintin profitbility; the Compny’s

efforts to expnd its product portfolio nd mrket rech;

the Compny’s bility to develop products nd services to

ddress the rpidly evolving mrket for pyments nd finncil

services; the Compny’s bility to del with the substntil nd

incresingly intense competition in its industry; cquisitions,

strtegic investments, entries into new businesses, joint

ventures, divestitures, nd other trnsctions tht the

Compny my undertke; the integrtion of Afterpy;

uncertinty round the impcts of the COVID-19 pndemic

nd the relted effects of government nd other mesures;

the Compny’s bility to ensure the integrtion of its services

with  vriety of operting systems nd the interoperbility of

its technology with tht of third prties; the Compny’s bility

to retin existing customers, ttrct new customers, nd

increse sles to ll customers; the Compny’s dependence on

pyment crd networks nd cquiring processors; the effect

of extensive regultion nd oversight relted to the Compny’s

business in  vriety of res; the effect of mngement

chnges nd business inititives; the libilities nd loss

potentil ssocited with new products, product fetures,

nd services; litigtion, including intellectul property clims,

government investigtions or inquiries, nd regultory mtters

or disputes; doption of the Compny’s products nd services

in interntionl mrkets; chnges in politicl, business, nd

economic conditions; s well s other risks listed or described

from time to time in the Compny’s filings with the Securities

nd Exchnge Commission (the SEC), including the Compny’s

Annul Report on Form 10-K for the fiscl yer ended

December 31, 2021, nd subsequent Qurterly Reports on

Form 10-Q, which re on file with the SEC nd vilble on the

Investor Reltions pge of the Compny’s website. Additionl

informtion will lso be set forth in the Compny’s Annul

Report on Form 10-K for the fiscl yer ended December 31,

2022. All forwrd-looking sttements represent mngement's

current expecttions nd predictions regrding trends ffecting

the Compny’s business nd industry nd re bsed on

informtion nd estimtes vilble to the Compny t the time

of this letter nd re not gurntees of future performnce.

Except s required by lw, the Compny ssumes no obligtion

to updte ny of the sttements in this letter.

BLO C K q4 2022 26

key operating metrics and

non-gaap financial measures

To supplement our financial information presented in accordance

with generally accepted accounting principles in the United States

(GAAP), from period to period, we consider and present certain

operating and financial measures that we consider key metrics or

are not prepared in accordance with GAAP, including Gross

Payment Volume (GPV), Adjusted EBITDA, Adjusted EBITDA

margin, Adjusted Net Income (Loss), Diluted Adjusted Net Income

(Loss) Per Share (Adjusted EPS), Adjusted Operating Income

(Loss), constant currency, and non-GAAP operating expenses as

well as other measures defined in this letter such as measures

excluding bitcoin revenue or gross profit, bitcoin impairment losses,

measures excluding gains or losses on equity investments,

measures excluding amortization of intangibles, measures

excluding our BNPL platform, measures excluding both our BNPL

platform and bitcoin revenue or gross profit, and measures

excluding both of our BNPL platform and PPP loan forgiveness

gross profit. We believe these metrics and measures are useful to

facilitate period-to-period comparisons of our business and to

facilitate comparisons of our performance to that of other

payments solution providers.

We define GPV as the total dollar amount of all card payments

processed by sellers using Square, net of refunds, and ACH

transfers. Additionally, GPV includes Cash App Business GPV,

which comprises Cash App activity related to peer-to-peer

transactions received by business accounts, Cash App Pay

transactions, and peer-to-peer payments sent from a credit card.

GPV does not include BNPL transactions.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income

(Loss), Diluted Adjusted Net Income (Loss) Per Share (Adjusted

EPS), and Adjusted Operating Income (Loss) are non-GAAP

financial measures that represent our net income (loss) and net

income (loss) per share (or, in the case of Adjusted Operating

Income (Loss), represents our operating income (loss)), adjusted

to eliminate the effect of share-based compensation expenses;

amortization of intangible assets; gain or loss on revaluation of

equity investments; bitcoin impairment losses; amortization of

debt discount and issuance costs; and the gain or loss on the

disposal of property and equipment, as applicable. We also

exclude certain acquisition-related and integration costs

associated with business combinations, and various other costs

that are not reflective of our core operating performance.

Acquisition-related costs include amounts paid to redeem

acquirees’ unvested stock-based compensation awards, and legal,

accounting, and due diligence costs. Integration costs include

advisory and other professional services or consulting fees

necessary to integrate acquired businesses. Other costs that are

non-recurring operating expenses may include contingent losses,

certain litigation, and regulatory charges. We also add back the

impact of the acquired deferred revenue and deferred cost

adjustment, which was written down to fair value in purchase

accounting. Additionally, for purposes of calculating diluted

Adjusted EPS, we add back cash interest expense on convertible

senior notes, as if converted at the beginning of the period, if the

impact is dilutive. In addition to the items above, Adjusted EBITDA

is a non-GAAP financial measure that also excludes depreciation

and amortization, interest income and expense, other income and

expense, and provision or benefit from income taxes, as

applicable. Adjusted EBITDA margin is calculated as Adjusted

EBITDA divided by gross profit. To calculate the diluted Adjusted

EPS, we adjust the weighted-average number of shares of

common stock outstanding for the dilutive effect of all potential

shares of common stock. In periods when we recorded an

Adjusted Net Loss, the diluted Adjusted EPS is the same as basic

Adjusted EPS because the effects of potentially dilutive items

were anti-dilutive given the Adjusted Net Loss position.

Constant currency growth is calculated by assuming international

results in a given period and the comparative prior period are

translated from local currencies to the U.S. dollar at rates consistent

with the monthly average rates in the comparative prior period. We

discuss growth on a constant currency basis because a portion of our

business operates in markets outside the U.S. and is subject to

changes in foreign exchange rates.

Non-GAAP operating expenses is a non-GAAP financial measure

that represents operating expenses adjusted to remove the impact

of share-based compensation, depreciation and amortization,

bitcoin impairment losses, loss on disposal of property and

equipment, and acquisition-related integration and other costs.

We have included Adjusted EBITDA, Adjusted Net Income,

Adjusted EPS, and non-GAAP operating expenses because they

are key measures used by our management to evaluate our

operating performance, generate future operating plans, and make

strategic decisions, including those relating to operating expenses

and the allocation of internal resources. Accordingly, we believe that

Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, and

non-GAAP operating expenses provide useful information to

investors and others in understanding and evaluating our operating

results in the same manner as our management and board of

directors. In addition, they provide useful measures for period-to-

period comparisons of our business, as they remove the effect of

certain non-cash items and certain variable charges that do not vary

with our operations. We have included measures excluding our

BNPL platform because we believe these measures are useful in

understanding the ongoing results of our operations. We have

included measures excluding bitcoin revenue because our role is to

facilitate customers’ access to bitcoin. When customers buy bitcoin

through Cash App, we only apply a small margin to the market cost

of bitcoin, which tends to be volatile and outside our control.

Therefore, we believe deducting bitcoin revenue or gross profit

better reflects the economic benefits as well as our performance

from these transactions. We also include measures that exclude

both our BNPL platform and bitcoin revenue or gross profit in order

to further facilitate comparison of our business without bitcoin

revenue or gross profit to periods prior to the acquisition of BNPL.

We have included measures excluding both our BNPL platform and

PPP loan forgiveness gross profit because we believe these

measures are useful in order to facilitate comparisons of our

business without PPP loan forgiveness to periods prior to the

acquisition of BNPL. We exclude amortization of intangible assets

arising from business combinations because the amount of such

expenses in any specific period may not directly correlate to the

underlying performance of our ongoing business operations.

Adjusted EBITDA, Adjusted Net Income, Adjusted Operating

Income (Loss), Adjusted EPS, and non-GAAP operating expenses,

as well as other measures defined in the shareholder letter, such

as measures excluding our BNPL platform, bitcoin revenue or

gross profit, PPP loan forgiveness gross profit, bitcoin impairment

losses, and measures excluding gains or losses on equity

investments, have limitations as financial measures, should be

considered as supplemental in nature, and are not meant as

substitutes for the related financial information prepared in

accordance with GAAP.

BLO C K q4 2022 27

key operating metrics and

non-gaap financial measures

We believe that the aforementioned metrics and measures

provide useful information about our operating results, enhance

the overall understanding of our past performance and future

prospects, and provide useful measures for period-to-period

comparisons of our business, as they remove the effect of certain

variable amounts, or they remove amounts that were not repeated

across periods and therefore make comparisons more difficult.

Our management uses these measures to evaluate our operating

performance, generate future operating plans, and make strategic

decisions, including those relating to operating expenses and the

allocation of internal resources.

These non-GAAP financial measures should not be considered in

isolation from, or as a substitute for, financial information prepared

in accordance with GAAP. These non-GAAP financial measures

are not based on any standardized methodology prescribed by

GAAP. Other companies, including companies in our industry, may

calculate the non-GAAP financial measures differently or not at all,

which reduces their usefulness as comparative measures.

BLO C K q4 2022 28

Condensed Consolidated

Statements of Operations

audited

In thousands, except per share data

ye a r e n d ed

Dec 31, 2022 Dec 31, 2021 Dec 31, 2020

Revenue:

Transaction-based revenue $ 5,701,540 $ 4,793,146 $ 3,294,978

Subscription and services-based revenue 4,552,773 2,709,731 1,539,403

Hardware revenue 164,418 145,679 91,654

Bitcoin revenue 7,112,856 10,012,647 4,571,543

Total net revenue 17,531,587 17,661,203 9 ,4 9 7, 5 7 8

Cost of revenue:

Transaction-based costs 3,364,028 2,719,502 1,911,848

Subscription and services-based costs 861,745 483,056 222,712

Hardware costs 286,995 221,185 143,901

Bitcoin costs 6,956,733 9,794,992 4,474,534

Amortization of acquired technology assets 70,194 22,645 11,174

Total cost of revenue 11,539,695 13,241,380 6,764,169

Gross profit 5,991,892 4,419,823 2,733,409

Operating expenses:

Product development 2,135,612 1,383,841 881,826

Sales and marketing 2,057,951 1,617,189 1,109,670

General and administrative 1,686,849 982,817 579,203

Transaction, loan, and consumer receivable losses 550,683 187,991 177,670

Bitcoin impairment losses 46,571 71,126 —

Amortization of customer and other acquired intangible assets 138,758 1 5,747 3,855

Total operating expenses 6,616,424 4,258,711 2,752,224

Operating income (loss) (624,532) 161,112 (18,815)

Interest expense, net 36,228 33,124 56,943

Other income, net (95,443) (29,474) (291,725)

Income (loss) before income tax (565,317) 157,462 215,967

Provision (benefit) for income taxes (12,312) (1,364) 2,862

Net income (loss) (553,005) 158,826 213,105

Less: Net income (loss) attributable to noncontrolling interests (12,258) (7,458) —

Net income (loss) attributable to

common stockholders

$ (540,747) $ 166,284 $ 213,105

Net income (loss) per share attributable to

common stockholders:

Basic $ (0.93) $ 0.36 $ 0.48

Diluted $ (0.93) $ 0.33 $ 0.44

Weighted-average shares used to compute net income

(loss) per share attributable to common stockholders:

Basic 578,949 458,432 443,126

Diluted 578,949 501,779 482,167

BLO C K q4 2022 29

Condensed Consolidated

Balance Sheets

audited

In thousands, except share and per share data

Dec 31, 2022 Dec 31, 2021

Assets

Current assets:

Cash and cash equivalents $ 4,544,202 $ 4,443,669

Investments in short-term debt securities 1,081,851 869,283

Settlements receivable 2,416,324 1,171,612

Customer funds 3,180,324 2,830,995

Consumer receivables, net 1,871,160 —

Loans held for sale 474,036 517,940

Safeguarding asset related to bitcoin held for other parties 428,243 1,100,596

Other current assets 1,627,265 687,429

Total current assets 15,623,405 11,621,524

Property and equipment, net 329,302 282,140

Goodwill 11,966,761 519,276

Acquired intangible assets, net 2,014,034 257,049

Investments in long-term debt securities 573,429 1,526,430

Operating lease right-of-use assets 373,172 449,406

Other non-current assets 484,237 370,535

Total assets $ 31,364,340 $ 15,026,360

Liabilities and Stockholders’ Equity

Current liabilities:

Customers payable $ 5,548,656 $ 3,979,624

Settlements payable 462,505 254,611

Accrued expenses and other current liabilities 1,056,676 702,881

Current portion of long-term debt 460,356 455

Warehouse funding facilities, current 461,240 —

Safeguarding obligation liability related to bitcoin held for other parties 428,243 1,100,596

PPP Liquidity Facility advances 16,840 497,533

Total current liabilities 8,434,516 6,535,700

Deferred tax liabilities 132,498 15,236

Warehouse funding facilities, non-current 877,066 —

Long-term debt (Note 15) 4,109,829 4,559,208

Operating lease liabilities, non-current 357,419 395,017

Other non-current liabilities 201,657 207,610

Total liabilities 14,112,985 11,712,771

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at December 31, 2022

and December 31, 2021. None issued and outstanding at December 31, 2022 and December 31,

2021.

— —

Class A common stock, $0.0000001 par value: 1,000,000,000 shares authorized at

December 31, 2022 and December 31, 2021; 539,408,009 and 403,237,209 issued and

outstanding at December 31, 2022 and December 31, 2021, respectively.

— —

Class B common stock, $0.0000001 par value: 500,000,000 shares authorized at

December 31, 2022 and December 31, 2021; 60,651,533 and 61,706,578 issued and

outstanding at December 31, 2022 and December 31, 2021, respectively.

— —

Additional paid-in capital 18,314,681 3,317,255

Accumulated other comprehensive loss (523,090) (16,435)

Accumulated deficit (568,712) (27,965)

Total stockholders' equity attributable to common stockholders 17,222,879 3,272,855

Noncontrolling interests 28,476 40,734

Total stockholders' equity 17,251,355 3,313,589

Total liabilities and stockholders’ equity $ 31,364,340 $ 15,026,360

BLO C K q4 2022 30

Condensed Consolidated

Statements of Cash Flows

audited

In thousands

ye a r e n d ed

Dec 31, 2022 Dec 31, 2021 Dec 31, 2020

Cash Flows from Operating Activities

Net income (loss) $ (553,005) $ 158,826 $ 213,105

Adjustments to reconcile net income (loss) to net cash provided by

operating activities:

Depreciation and amortization 340,523 134,757 84,212

Amortization of discounts and premiums and other non-cash adjustments (592,489) 31,104 76,129

Loss on extinguishment of long-term debt — — 6,651

Non-cash lease expense 129,811 83,137 70,253

Share-based compensation 1,071,278 608,040 397,800

Gains on revaluation of equity investments (73,457) (35,492) (295,297)

Transaction, loan, and consumer receivable losses 550,683 187,991 177,670

Bitcoin impairment losses 46,571 71,126 —

Change in deferred income taxes (69,593) (10,435) (8,016)

Changes in operating assets and liabilities:

Settlements receivable (1,499,057) (346,217) (547,484)

Purchases and originations of loans (6,665,387) (3,227,172) (1,837,137)

Proceeds from payments and forgiveness of loans 6,590,909 3,067,344 1,505,406

Customers payable 1,060,861 171,555 371,598

Settlements payable 207,894 15,249 143,528

Other assets and liabilities (369,639) (61,983) (185,308)

Net cash provided by operating activities 175,903 847,830 173,110

Cash Flows from Investing Activities

Purchases of marketable debt securities (755,697) (2,714,560) (1,322,362)

Proceeds from maturities of marketable debt securities 999,569 831,019 607,134

Proceeds from sale of marketable debt securities 449,723 617,097 585,427

Purchases of marketable debt securities from customer funds — (488,851) (642,252)

Proceeds from maturities of marketable debt securities from

customer funds

73,000 505,501 382,887

Proceeds from sale of marketable debt securities from customer funds 316,576 35,071 51,430

Payments for originations of consumer receivables (18,361,871) — —

Proceeds from principal repayments and sales of consumer receivables 18,192,470 — —

Purchases of property and equipment (170,815) (134,320) (138,402)

Purchases of bitcoin investments — (170,000) (50,000)

Purchases of other investments (56,712) (48,510) (1,277)

Proceeds from sale of equity investments — 420,644 —

Business combinations, net of cash acquired 539,453 (163,970) (79,221)

Net cash provided by (used in) investing activities 1,225,696 (1,310,879) (606,636)

BLO C K q4 2022 31

Condensed Consolidated

Statements of Cash Flows

audited

In thousands

ye a r e n d ed

Dec 31, 2022 Dec 31, 2021 Dec 31, 2020

Cash Flows from Financing Activities

Proceeds from issuance of convertible notes, net — — 2,116,544

Purchases of senior note hedges — — (338,145)

Proceeds from issuance of warrants — — 232,095

Proceeds from issuance of senior notes, net — 1,971,828 —

Payments to redeem convertible notes (1,071,788) — —

Proceeds from PPP Liquidity Facility advances — 681,539 464,094

Repayments of PPP Liquidity Facility advances (480,694) (648,100) —

Proceeds from warehouse facilities borrowings 1,620,805 — —

Repayments of warehouse facilities borrowings (391,463) — —

Proceeds from the exercise of stock options and purchases under the

employee stock purchase plan

81,768 126,719 161,985

Payments for tax withholding related to vesting of restricted stock units (4,735) (323,011) (314,019)

Net increase in interest-bearing deposits 82,049 59,844 —

Other financing activities (87,692) (9,948) (7,359)

Change in customer funds, restricted from use in the Company's operations 349,330 793,163 1,361,540

Net cash provided by financing activities 97,580 2,652,034 3,676,735

Effect of foreign exchange rate on cash and cash equivalents (38,363) (7,066) 12,995

Net increase in cash, cash equivalents, restricted cash, and

customer funds

1,460,816 2,181,919 3,256,204

Cash, cash equivalents, restricted cash, and customer funds, beginning of the year 6,975,090 4,793,171 1,536,967

Cash, cash equivalents, restricted cash, and customer funds, end of the year $ 8,435,906 $ 6,975,090 $ 4,793,171

BLO C K q4 2022 32

Reportable Segment Disclosures

Information on the reportable segments revenue and segment operating profit are

as follows (in thousands):

(i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment, and

intersegment eliminations.

(ii) The revenue for both Cash App and Square for the year ended December 31, 2022 included $405.7 million each,

from Afterpay post-acquisition results following the closing of the acquisition.

(iii) The gross profit for both Cash App and Square for the year ended December 31, 2022 included $294.1 million

each, from Afterpay post-acquisition results following the closing of the acquisition.

(iv) Segment gross profit for Cash App for the years ended December 31, 2022, 2021,

and 2020 included $32.1 million, $10.5 million, and $5.4 million of amortization of acquired technology assets expense, respectively.

Segment gross profit for Square for the years ended December 31, 2022, 2021, and 2020 included $32.2 million, $8.3 million, and

$5.8 million of amortization of acquired technology assets expense, respectively. Amortization of acquired technology assets

expense included in Corporate and Other was immaterial for the years ended December 31, 2022, 2021, and 2020.

th r e e m ont h s e n ded

de c 31 , 2022

(u nau dit e d)

ye a r e n d ed

de c 31 , 2022

(audi t ed)

Cash App Square

Corporate

and Other

(i)

Total Cash App Square

Corporate

and Other

(i)

Total

Revenue

Transaction-based revenue $ 122,403 $1,352,571 $ — $ 1,474,974 $ 466,171 $5,235,369 $ — $5,701,540

Subscription and

services-based revenue

900,921 367,855 38,073 1,306,849 3,047,084 1,300,043 205,646 4,552,773

Hardware revenue — 35,653 — 35,653 — 164,418 — 164,418

Bitcoin revenue 1,833,426 — — 1,833,426 7,112,856 — — 7,112,856

Segment revenue (ii) 2,856,750 1,756,079 38,073 4,650,902 10,626,111 6,699,830 205,646 17,531,587

Segment gross profit

(iii, iv)

$ 847,944 $ 801,349 $ 10,901 $1,660,195 $2,950,967 $3,000,978 $ 39,947 $ 5,991,892

th r e e m ont h s e n ded

de c 31 , 2021

(u nau dit e d)

ye a r e n d ed

de c 31 , 2021

(audi t ed)

Cash App Square

Corporate

and Other

(i)

Total Cash App Square

Corporate

and Other

(i)

Total

Revenue

Transaction-based revenue $ 103,743 $1,205,158 $ — $1,308,901 $ 409,844 $4,383,302 $ — $4,793,146

Subscription and

services-based revenue

486,695 229,694 55,713 772,102 1,893,008 664,367 152,356 2,709,731

Hardware revenue — 35,910 — 35,910 — 145,679 — 145,679

Bitcoin revenue 1,961,621 — — 1,961,621 10,012,647 — — 10,012,647

Segment revenue 2,552,059 1,470,762 55,713 4,078,534 12,315,499 5,193,348 152,356 17,661,203

Segment gross profit (iv) $ 517,592 $ 657,293 $ 7,158 $ 1,182,043 $2,070,847 $ 2,316,671 $ 32,305 $4,419,823

th r e e m ont h s e n ded

de c 31 , 2020

(u nau dit e d)

ye a r e n d ed

de c 31 , 2020

(audi t ed)

Cash App Square

Corporate

and Other

(i)

Total Cash App Square

Corporate

and Other

(i)

Total

Revenue

Transaction-based revenue $ 71,550 $ 857,461 $ — $ 929,011 $ 233,747 $ 3,061,231 $ — $ 3,294,978

Subscription and

services-based revenue

344,105 105,266 — 449,371 1,163,096 376,307 — 1,539,403

Hardware revenue — 24,363 — 24,363 — 91,654 — 91,654

Bitcoin revenue 1,756,225 — — 1,756,225 4,571,543 — — 4,571,543

Segment revenue 2,171,880 987,090 — 3,158,970 5,968,386 3,529,192 — 9 ,4 97, 5 7 8

Segment gross profit (iv) $ 376,659 $ 427,031 $ — $ 803,690 $ 1,225,578 $ 1,507,831 $ — $ 2,733,409

BLO C K q4 2022 33

th r e e m ont h s e n ded

(u nau dit e d)

ye a r e n d ed

(audi t ed)

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Total segment gross profit $1,660,195 $ 1,182,043 $ 803,690 $ 5,991,892 $ 4,419,823 $ 2,733,409

Less: Product development 604,524 391,343 250,670 2,135,612 1,383,841 881,826

Less: Sales and marketing 539,724 484,778 328,576 2,057,951 1,617,189 1,109,670

Less: General and administrative 451,543 298,848 159,420 1,686,849 982,817 579,203

Less: Transaction, loan, and consumer

receivable losses

155,250 57,117 15,986 550,683 187,991 177,670

Less: Bitcoin impairment losses 8,991 — — 46,571 71,126 —

Less: Amortization of customer and other

intangible assets

35,344 4,571 3,855 138,758 1 5,747 3,855

Less: Interest expense, net 1,472 12,998 17,988 36,228 33,124 56,943

Less: Other income (expense), net (24,407) 6,7 75 (271,212) (95,443) (29,474) (291,725)

Income (loss) before income taxes $ (112,246)

$ (74,387) $ 298,407

$ (565,317)

$ 157,462 $ 215,967

Operating Segment Disclosures

A reconciliation of total segment gross profit to the Company’s income (loss)

before applicable income taxes is as follows (in thousands):

Key Operating Metrics and

Non-GAAP Financial Measures

unaudited

In thousands, except GPV and per share data

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Gross Payment Volume (GPV)

(in millions)

$ 53,160 $ 46,238 $ 32,022 $ 28,639 $ 203,536 $ 167,720 $ 112,295 $ 106,239

Adjusted EBITDA (in thousands) $ 280,901 $ 184,181 $ 185,489 $ 118,529 $ 990,964 $ 1,013,657 $ 474,071 $ 416,853

Adjusted Net Income Per Share:

Basic $ 0.22 $ 0.30 $ 0.37 $ 0.25 $ 1.05 $ 1.46 $ 0.72 $ 0.70

Diluted $ 0.22 $ 0.27 $ 0.32 $ 0.23 $ 1.00 $ 1.28 $ 0.64 $ 0.62

BLO C K q4 2022 34

Adjusted EBITDA

(



)

unaudited

In thousands

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Net income (loss) attributable to common stockholders $ (113,823) $ (76,830) $ 293,959 $ (540,747) $ 166,284 $ 213,105

Net loss attributable to noncontrolling interests (3,798) (4,155) — (12,258) (7,458) —

Net income (loss) (117,621) (80,985) 293,959 (553,005) 158,826 213,105

Share-based compensation expense 274,495 178,043 113,628 1,069,289 608,042 397,500

Depreciation and amortization 90,907 39,051 22,471 340,523 134,756 84,212

Acquisition-related, integration, and other costs 40,662 20,848 3,543 157,264 35,474 7,482

Interest expense, net 1,472 12,998 17,988 36,228 33,124 56,943

Other expense (income), net (24,407) 6,7 75 (271,212) (95,443) (29,474) (291,725)

Bitcoin impairment losses 8,991 — — 46,571 71,126 —

Provision (benefit) for income taxes 5,375 6,597 4,448 (12,312) (1,364) 2,862

Loss on disposal of property and equipment 984 767 475 1,619 2,633 2,570

Acquired deferred revenue adjustment 73 138 257 382 744 1,497

Acquired deferred cost adjustment (30) (51) (68) (152) (230) (375)

Adjusted EBITDA $ 280,901 $ 184,181 $ 185,489 $ 990,964 $ 1,013,657 $ 474,071

Adjustments for Adjusted Operating Income (Loss)

Share-based compensation expense $ 274,495 $ 178,043 $ 113,628 $ 1,069,289 $ 608,042 $ 397,500

Acquisition related share based acceleration costs — — — (66,337) — —

Depreciation and amortization 90,907 39,051 22,471 340,523 134,756 84,212

Amortization of acquired intangibles (53,664) (11,215) (4,582) (208,952) (38,392) (15,029)

Acquired deferred revenue adjustment 73 138 257 382 744 1,497

Acquired deferred costs adjustment (30) (51) (68) (152) (230) (375)

Loss (gain) on disposal of property and equipment 984 767 475 1,619 2,633 2,570

Adjusted Operating Income (Loss) $ (31,864) $ (22,552) $ 184,181 $ (145,408) $ 306,104 $ 3,696

(1) For a reconciliation of Adjusted EBITDA to net income (loss) for the years ended December 31, 2019 and 2018, please refer to the section

entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Operating Metrics and Non-GAAP

Financial Measures” within our Annual Report on Form 10-K for the year ended December 31, 2022, filed on February 23, 2023.

BLO C K q4 2022 35

Adjusted Net Income

and Adjusted EPS

unaudited

In thousands, except per share data

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Net income (loss) attributable to common

stockholders

$ (113,823) $ (76,830) $ 293,959 $ (540,747) $ 166,284 $ 213,105

Net loss attributable to noncontrolling interests (3,798) (4,155) — (12,258) (7,458) —

Net income (loss) (117,621) (80,985) 293,959 (553,005) 158,826 213,105

Share-based compensation expense 274,495 178,043 113,628 1,069,289 608,042 397,500

Acquisition related, integration, and other costs 40,662 20,848 1,260 157,264 35,474 7,482

Amortization of intangible assets 53,637 13,264 5,717 208,952 40,522 19,239

Amortization of debt discount and issuance costs 3,855 2,817 20,355 15,162 9,822 67,979

Loss (gain) on revaluation of equity investments (29,543) 5,515 (274,299) (73,457) (35,493) (295,297)

Loss on extinguishment of long-term debt — — 4,258 — — 6,651

Bitcoin impairment losses 8,991 — — 46,571 71,126 —

Loss on disposal of property and equipment 984 767 475 1,619 2,633 2,570

Acquired deferred revenue adjustment 73 138 928 382 744 1,497

Acquired deferred cost adjustment (30) (51) (189) (152) (230) (375)

Tax effect of non-GAAP net income adjustments $ (102,523) (34,754) $ (41,585) $ (264,523) $ (222,104) $ (102,383)

Adjusted Net Income - basic $ 132,980 $ 140,356 $ 166,092 $ 608,102 $ 669,362 $ 317,968

Cash interest expense on convertible notes $ 1,263 $ 1,266 $ 1,596 $ 5,014 $ 6,099 $ 6,078

Adjusted Net Income - diluted $ 134,243 $ 141,622 $ 167,688 $ 613,116 $ 675,461 $ 324,046

Weighted-average shares used to compute

Adjusted Net Income Per Share:

Basic 598,875 462,562 452,869 578,949 458,432 443,126

Diluted 622,520 523,169 523,586 615,034 525,725 507,229

Adjusted Net Income Per Share:

Basic $ 0.22 $ 0.30 $ 0.37 $ 1.05 $ 1.46 $ 0.72

Diluted $ 0.22 $ 0.27 $ 0.32 $ 1.00 $ 1.28 $ 0.64

BLO C K q4 2022 36

Select Financial Results Excluding

Bitcoin and Buy Now Pay Later

("BNPL") Platform

unaudited

In thousands

th r e e m ont h s e n ded ye a r e n ded

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Total net revenue (GAAP) $4 ,650,902 $4,078,534 $ 3,158,970 $ 1,313,429 $ 17,531,587 $ 17,661,203 $ 9 ,4 9 7, 5 7 8 $ 4,713,500

Less: Bitcoin contribution to total

net revenue

1,833,426 1,961,621 1,756,225 177,567 7,112,856 10,012,647 4,571,543 516,465

Less: BNPL Platform contribution

to total net revenue

263,563 — — — 811,385 — — —

Total net revenue, excluding

Bitcoin and BNPL Platform

$2,553,913 $ 2,116,913 $ 1,402,745 $ 1,135,862 $ 9,607,346 $ 7,648,556 $4,926,035 $ 4,197,035

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Cash App revenue (GAAP) $ 2,856,750 $2,552,059 $ 2,171,880 $ 360,665 $ 10,626,111 $ 12,315,499 $ 5,968,386 $ 1,105,599

Less: Bitcoin contribution to Cash

App revenue

1,833,426 1,961,621 1,756,225 177,567 7,112,856 10,012,647 4,571,543 516,465

Less: BNPL Platform contribution

to Cash App revenue

131,782 — — — 405,693 — — —

Total Cash App revenue,

excluding Bitcoin and

BNPL Platform

$ 891,542 $ 590,438 $ 415,655 $ 183,098 $ 3,107,562 $ 2,302,852 $ 1,396,843 $ 589,134

th r e e m ont h s e n ded y e ar ende d

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Square gross profit (GAAP) $ 801,349 $ 657,293 $ 427,031 $ 3,000,978 $ 12,316,671 $ 1,507,831

Less: Square gross profit – U.S. 662,297 595,182 388,348 2,541,398 2,114,142 1,398,752

Total Square gross profit – International 139,052 62,111 38,683 459,580 202,529 109,079

Less: BNPL Platform contribution to Square gross

profit – International

55,866 — — 176,639 — —

Total Square gross profit – International, excluding

BNPL Platform

$ 83,186 $ 62,111 $ 38,683 $ 282,941 $ 202,529 $ 109,079

th r e e m ont h s e n ded y e ar ende d

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Gross profit (GAAP) $1,660,195 $ 1,182,042 $ 803,690 $ 527,049 $ 5,991,892 $ 4,419,823 $2,733,409 $1,889,685

Less: BNPL Platform contribution

to gross profit

196,492 — — — 588,151 — — —

Total gross profit, excluding

BNPL Platform

$1,463,703 $ 1,182,042 $ 803,690 $ 527,049 $ 5,403,741 $ 4,419,823 $ 2,733,409 $1,889,685

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2019

Bitcoin revenue $1,833,426 $ 1,961,621 $ 1,756,225 $ 177,567 $ 7,112,856 $10,012,647 $ 4,571,543 $ 516,465

Bitcoin costs 1,798,798 1,915,176 1,715,452 174,438 6,956,733 9,794,992 4,474,534 508,239

Bitcoin gross profit $ 34,628 $ 46,445 $ 40,773 $ 3,129 $ 156,123 $ 217,655 $ 97,009 $ 8,226

BLO C K q4 2022 37

Select Financial Results Excluding

Bitcoin and Buy Now Pay Later

("BNPL") Platform, Continued

unaudited

In thousands

th r e e m ont h s e n ded ye a r e n d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Subscription and services-based revenue (GAAP) $1,306,849 $ 772,102 $ 449,371 $ 4,552,773 $ 2,709,731 $1,539,403

Less: BNPL Platform contribution to subscription and

services-based revenue

263,563 — — 811,385 — —

Total subscription and services-based revenue,

excluding BNPL Platform

$1,043,286 $ 772,102 $ 449,371 $ 3,741,388 $ 2,709,731 $ 1,539,403

Subscription and services-based costs (GAAP) $ 239,714 $ 145,497 $ 65,046 $ 861,745 $ 483,056 $ 222,712

Less: BNPL Platform contribution to subscription and

services-based costs

6 7, 0 7 1 — — 223,234 — —

Total subscription and services-based costs,

excluding BNPL Platform

$ 172,643 $ 145,497 $ 65,046 $ 638,511 $ 483,056 $ 222,712

Subscription and services-based gross profit (GAAP) $ 1,067,135 $ 626,605 $ 384,325 $ 3,691,028 $2,226,675 $ 1,316,691

Less: BNPL Platform contribution to subscription and

services-based gross profit

196,492 — — 588,151 — —

Total subscription and services-based gross profit,

excluding BNPL Platform

$ 870,643 $ 626,605 $ 384,325 $3,102,877 $2,226,675 $ 1,316,691

th r e e m ont h s e n ded

de c 31 , 2022

th r e e m ont h s e n ded

de c 31 , 2021

th r e e m ont h s e n ded

de c 31 , 2020

th r e e m ont h s e n ded

de c 31 , 2019

Cash App Square Cash App Square Cash App Square Cash App Square

Segment revenue

(GAAP)

$ 2,856,750 $ 1,756,079 $2,552,059 $1,470,762 $2,171,880 $ 987,090 $ 360,665 $ 937,718

Less: BNPL Platform

contribution to

segment revenue

131,782 131,782 — — — — — —

Total segment

revenue,

excluding BNPL

Platform

2,724,968 1,624,297 2,552,059 1,470,762 2,171,880 987,090 360,665 937,718

Segment cost of

revenue (GAAP)

2,008,806 954,730 2,034,467 813,469 1,795,221 560,059 216,638 558,887

Less: BNPL Platform

contribution to

segment cost

of revenue

33,536 33,536 — — — — — —

Total segment

cost of revenue,

excluding BNPL

Platform

1,975,270 921,194 2,034,467 813,469 1,795,221 560,059 216,638 558,887

Segment gross profit

(GAAP)

847,944 801,349 517,592 657,293 376,659 427,031 144,027 378,831

Less: BNPL Platform

contribution to

segment gross profit

98,246 98,246 — — — — — —

Total segment

gross profit,

excluding

BNPL Platform

$ 749,698 $ 703,103 $ 517,592 $ 657,293 $ 376,659 $ 427,031 $ 144,027 $ 378,831

BLO C K q4 2022 38

Select Financial Results Excluding

Bitcoin and Buy Now Pay Later

("BNPL") Platform, Continued

unaudited

In thousands

ye a r e n d ed

de c 31 , 2022

ye a r e n d ed

de c 31 , 2021

ye a r e n d ed

de c 31 , 2020

ye a r e n d ed

de c 31 , 2019

Cash App Square Cash App Square Cash App Square Cash App Square

Segment revenue

(GAAP)

$ 10,626,111 $ 6,699,830 $ 12,315,499 $5,193,348 $ 5,968,386 $ 3,529,192 $ 1,105,599 $ 3,461,988

Less: BNPL Platform

contribution to

segment revenue

405,693 405,693 — — — — — —

Total segment

revenue,

excluding BNPL

Platform

10,220,418 6,294,137 12,315,499 5,193,348 5,968,386 3,529,192 1,105,599 3,461,988

Segment cost of

revenue (GAAP)

7,675,144 3,698,852 10,244,652 2,876,677 4,742,808 2,021,361 647,931 2,071,561

Less: BNPL Platform

contribution to

segment cost

of revenue

111,617 111,617 — — — — — —

Total segment

cost of revenue,

excluding BNPL

Platform

7,563,527 3,587,235 10,244,652 2,876,677 4,742,808 2,021,361 647,931 2,071,561

Segment gross profit

(GAAP)

2,950,967 3,000,978 2,070,847 2,316,671 1,225,578 1,507,831 457,668 1,390,427

Less: BNPL Platform

contribution to

segment gross profit

294,076 294,076 — — — — — —

Total segment

gross profit,

excluding

BNPL Platform

$ 2,656,891 $ 2,706,902 $2,070,847 $ 2,316,671 $ 1,225,578 $ 1,507,831 $ 457,668 $ 1,390,427

BLO C K q4 2022 39

Select Financial Results Excluding

Bitcoin and Buy Now Pay Later

("BNPL") Platform, Continued

unaudited

In thousands

th r e e m ont h s e n ded

de c 31 , 2022

th r e e m ont h s e n ded

de c 31 , 2021

th r e e m ont h s e n ded

de c 31 , 2020

th r e e m ont h s e n ded

de c 31 , 2019

Cash App Square Cash App Square Cash App Square Cash App Square

Segment revenue,

subscription and

services-based (GAAP)

$ 900,921 $ 367,855 $ 486,695 $ 229,694 $ 344,105 $ 105,266 $ 161,695 $ 104,674

Less: BNPL Platform

contribution to

segment revenue,

subscription and

services-based (GAAP)

131,782 131,782 — — — — — —

Total segment

revenue,

subscription and

services-based

excluding

BNPL Platform

$ 769,139 $ 236,073 $ 486,695 $ 229,694 $ 344,105 $ 105,266 $ 161,695 $ 104,674

ye a r e n d ed

de c 31 , 2022

ye a r e n d ed

de c 31 , 2021

ye a r e n d ed

de c 31 , 2020

ye a r e n d ed

de c 31 , 2019

Cash App Square Cash App Square Cash App Square Cash App Square

Segment revenue,

subscription and

services-based (GAAP)

$ 3,047,084 $ 1,300,043 $ 1,893,008 $ 664,367 $ 1,163,096 $ 376,307 $ 516,269 $ 369,274

Less: BNPL Platform

contribution to

segment revenue,

subscription and

services-based (GAAP)

405,693 405,693 — — — — — —

Total segment

revenue,

subscription and

services-based

excluding

BNPL Platform

$ 2,641,391 $ 894,350 $ 1,893,008 $ 664,367 $ 1,163,096 $ 376,307 $ 516,269 $ 369,274

th r e e m ont h s e n ded ye a r e n ded

Dec 31,

2022

Dec 31,

2021

Dec 31,

2022

Dec 31,

2021

Square gross profit (GAAP) $ 801,349 $ 657,293 $ 3,000,978 $ 2,316,671

Less: BNPL Platform contribution to Square gross profit 98,246 — 294,076 —

Less: PPP loan forgiveness 2,094 58,622 6 7, 5 9 3 96,187

Total Square gross profit – excluding BNPL Platform and PPP loan forgiveness $ 701,009 $ 598,671 $ 2,639,309 $2,220,484

BLO C K q4 2022 40

Non-GAAP Operating Expenses

unaudited

In thousands

th r e e m ont h s e n ded yea r en d ed

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Operating expenses $ (1,795,376) $ (1,236,657) $ (758,507) $ (6,616,424) $ (4,258,711) $ (2,752,224)

Share-based compensation 274,353 177,943 113,531 1,068,795 607,632 397,132

Depreciation and amortization 71,874 32,461 18,966 268,676 112,111 72,896

Acquisition related, integration, and other costs 40,662 20,848 3,543 157,264 35,474 7,482

Bitcoin impairment losses 8,991 — — 46,571 71,126 —

Loss on disposal of property and equipment 984 767 475 1,619 2,633 2,570

Non-GAAP operating expenses $ (1,398,512) $ (1,004,638) $ (621,992) $ (5,073,499) $ (3,429,735) $ (2,272,144)

Product development $ (604,524) $ (391,343) $ (253,448) $ (2,135,612) $ (1,383,841) $ (881,826)

Share-based compensation 192,934 132,331 83,906 701,715 446,596 289,553

Depreciation and amortization 29,943 20,299 13,724 122,266 77,544 53,080

Loss on disposal of property and equipment — 385 198 461 1,570 884

Non-GAAP product development $ (381,647) $ (238,328) $ (155,620) $ (1,311,170) $ (858,131) $ (538,309)

Sales and marketing $ (539,724) $ (484,778) $ (328,576) $ (2,057,951) $ (1,617,189) $ (1,109,670)

Share-based compensation 30,098 16,390 9,273 105,231 57, 0 7 0 36,627

Depreciation and amortization 1,677 1,426 1,095 6,197 5,142 4,152

Loss (gain) on disposal of property and equipment 192 — (3) 244 — (2)

Non-GAAP sales and marketing $ (507,757) $ (466,962) $ (318,211) $ (1,946,279) $ (1,554,977) $ (1,068,893)

General and administrative $ (451,543) $ (298,794) $ (159,420) $ (1,686,849) $ (982,817) $ (579,203)

Share-based compensation 51,321 29,222 20,352 261,849 103,966 70,952

Acquisition related, integration and other costs 40,662 20,848 3,543 157,264 35,474 7,482

Depreciation and amortization 15,578 8,287 4,147 47,095 26,976 15,664

Loss on disposal of property and equipment 792 382 280 914 1,063 1,688

Non-GAAP general and administrative $ (343,190) $ (240,055) $ (131,098) $ (1,219,727) $ (815,338) $ (483,417)

Adjusted Operating Income (Loss)

unaudited

In thousands

th r e e m ont h s e n ded year end e d

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Dec 31,

2022

Dec 31,

2021

Dec 31,

2020

Operating income (loss) $ (135,181) $ (54,615) $ (45,183) $ (624,532) $ 161,112 $ (18,815)

Amortization of acquired technology assets 18,320 6,590 3,505 70,194 22,645 11,174

Acquisition related, integration, and other costs 40,662 20,848 3,543 157,264 35,474 7,482

Bitcoin impairment losses 8,991 — — 46,571 71,126 —

Amortization of customer and other acquired

intangible assets

35,344 4,625 1,077 138,758 15,747 3,855

Acquisition related share-based acceleration costs

— — — 66,337 — —

Adjusted Operating Income (Loss)

$ (31,864) $ (22,552) $ 53,308 $ (145,408) $ 306,104 $ 3,696