BLOCK(US:SQ)2025-08-07 20:26PART I—Financial Information Financial Statements Block, Inc. reported Q2 2025 total net revenue of $6.05 billion, gross profit of $2.54 billion, and net income of $538.5 million, with assets at $36.9 billion and equity at $22.1 billion Condensed Consolidated Balance Sheets As of June 30, 2025, total assets reached $36.9 billion, liabilities decreased to $14.7 billion, and stockholders' equity grew to $22.1 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $36,858,391 | $36,777,595 | | Cash and cash equivalents | $6,384,224 | $8,075,247 | | Loans held for investment, net | $1,039,544 | $365,062 | | Goodwill | $11,816,794 | $11,417,422 | | Total Liabilities | $14,735,499 | $15,542,633 | | Long-term debt (including current) | $5,110,866 | $6,105,436 | | Total Stockholders' Equity | $22,122,892 | $21,234,962 | Condensed Consolidated Statements of Operations Q2 2025 total net revenue decreased 2% to $6.05 billion, while gross profit increased 14% to $2.54 billion, and net income surged 176% to $538.5 million Q2 and H1 2025 vs 2024 Performance (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | Y/Y Change | H1 2025 | H1 2024 | Y/Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Net Revenue | $6,054,457 | $6,155,563 | (2%) | $11,826,253 | $12,112,691 | (2%) | | Transaction-based Revenue | $1,817,398 | $1,712,967 | 6% | $3,368,129 | $3,224,176 | 4% | | Subscription & Services Revenue | $2,052,604 | $1,787,893 | 15% | $3,943,577 | $3,470,187 | 14% | | Bitcoin Revenue | $2,144,032 | $2,611,743 | (18%) | $4,445,434 | $5,342,867 | (17%) | | Gross Profit | $2,536,530 | $2,233,480 | 14% | $4,826,133 | $4,327,953 | 11% | | Operating Income | $484,293 | $306,562 | 58% | $813,595 | $556,305 | 46% | | Net Income (to common) | $538,458 | $195,268 | 176% | $728,330 | $667,273 | 9% | | Diluted EPS | $0.87 | $0.31 | 181% | $1.17 | $1.05 | 11% | Condensed Consolidated Statements of Comprehensive Income Total comprehensive income for Q2 2025 significantly increased to $1.03 billion, driven by higher net income and a substantial foreign currency translation gain Comprehensive Income (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $538,334 | $189,872 | $727,056 | $660,692 | | Net foreign currency translation adjustments | $489,973 | $125,951 | $619,793 | $(158,223) | | Total Comprehensive Income | $1,027,236 | $317,706 | $1,346,208 | $506,630 | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $22.1 billion as of June 30, 2025, driven by net income, partially offset by $1.14 billion in share repurchases - The company repurchased a total of $1.14 billion of its common stock in the first six months of 2025 ($445.3 million in Q1 and $692.2 million in Q2)20 - Retained earnings increased by $728.3 million in the first half of 2025, reflecting the company's net income for the period20 Condensed Consolidated Statements of Cash Flows H1 2025 operating cash flow was $507.7 million, with a $2.12 billion outflow from financing activities due to share repurchases and debt redemption, leading to a $1.09 billion net cash decrease Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $507,658 | $1,008,787 | | Net cash provided by investing activities | $428,928 | $867,414 | | Net cash provided by (used in) financing activities | $(2,119,460) | $1,173,347 | | Net (decrease) increase in cash | $(1,087,942) | $3,009,777 | - Significant cash outflows from financing activities in H1 2025 included $1.14 billion for common stock repurchases and $1.0 billion for the redemption of convertible notes25 Notes to the Condensed Consolidated Financial Statements The notes provide detailed accounting policies, revenue disaggregation, loan portfolio insights, information on the $931.7 million Bitcoin investment, debt, share repurchases, and segment performance, including 16% Cash App gross profit growth Management's Discussion and Analysis of Financial Condition and Results of Operations Q2 2025 gross profit grew 14% to $2.5 billion, driven by Cash App and Square, with improved profitability despite lower Bitcoin revenue, and $8.5 billion in available liquidity - Gross profit for Q2 2025 was $2.5 billion, up 14% YoY. Cash App gross profit grew 16% YoY to $1.5 billion, while Square gross profit grew 11% YoY to $1.0 billion131 - The company achieved its goal of capping its employee base at 12,000 in 2024 and plans to operate below this cap through performance management and centralization134 - Available liquidity was $8.5 billion at the end of Q2 2025, down from year-end 2024 primarily due to a $1.0 billion convertible note settlement and $1.1 billion in share repurchases in H1 2025135 Q2 2025 Non-GAAP Financial Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Adjusted Operating Income | $549.6 | $399.1 | | Adjusted EBITDA | $891.4 | $759.5 | Results of Operations Q2 2025 total net revenue decreased 2% to $6.05 billion (up 10% excluding Bitcoin), driven by 15% growth in subscription and services revenue, while operating expenses rose 7% due to higher loan losses Q2 2025 Revenue Breakdown (in millions) | Revenue Stream | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Transaction-based | $1,817.4 | $1,713.0 | 6% | | Subscription and services-based | $2,052.6 | $1,787.9 | 15% | | Bitcoin | $2,144.0 | $2,611.7 | (18%) | | Total Net Revenue | $6,054.5 | $6,155.6 | (2%) | - Excluding bitcoin, total net revenue increased by 10% in Q2 2025 compared to Q2 2024138 - Transaction, loan, and consumer receivable losses increased by 53% YoY in Q2 2025, primarily driven by growth in loan volumes from Cash App Borrow154 Segment Results In Q2 2025, Square revenue grew 9% to $2.17 billion and gross profit 11% to $1.03 billion, while Cash App gross profit surged 16% to $1.50 billion despite a 7% revenue decline Q2 2025 Segment Performance (in millions) | Segment | Net Revenue | Revenue Y/Y Change | Gross Profit | Gross Profit Y/Y Change | | :--- | :--- | :--- | :--- | :--- | | Square | $2,166.3 | 9% | $1,026.8 | 11% | | Cash App | $3,844.9 | (7%) | $1,500.5 | 16% | - Excluding Bitcoin revenue, Cash App revenue increased by 12% in Q2 2025 compared to the prior year's quarter164 Key Operating Metrics and Non-GAAP Financial Measures Q2 2025 Gross Payment Volume (GPV) grew 8% to $66.6 billion, Adjusted EBITDA increased to $891.4 million, and Adjusted Operating Income rose to $549.6 million, with a revised Adjusted EPS definition Key Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Payment Volume (GPV) (in millions) | $66,615 | $61,941 | | Adjusted Operating Income (in thousands) | $549,569 | $399,118 | | Adjusted EBITDA (in thousands) | $891,422 | $759,476 | | Diluted Adjusted Net Income Per Share | $0.62 | $0.47 | - Beginning in fiscal 2025, the definition of Adjusted EPS was revised to include stock-based compensation to provide a more comprehensive view of operating performance168 Liquidity and Capital Resources As of June 30, 2025, Block maintained $8.5 billion in available liquidity, reduced by $1.0 billion debt settlement and $1.1 billion share repurchases, holding a $931.7 million Bitcoin investment Available Liquidity (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,384,224 | $8,075,247 | | Restricted cash (short & long term) | $820,532 | $972,393 | | Investments in debt securities | $510,000 | $875,403 | | Revolving credit facility | $775,000 | $775,000 | | Total Liquidity | $8,489,756 | $10,698,043 | - The company holds a bitcoin investment with a fair value of $931.7 million as of June 30, 2025184 - In H1 2025, the company used $1.0 billion in cash to settle its 2025 Convertible Notes and $1.1 billion for share repurchases135201 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is the price volatility of its $931.7 million Bitcoin investment, which could materially impact financial results - The company's bitcoin investment, valued at $931.7 million as of June 30, 2025, is subject to significant market price risk206 - A decline in the market price of bitcoin could result in a material adverse effect on financial results. In Q2 2025, the company recognized a gain of $212.2 million from the remeasurement of this investment206 Controls and Procedures As of June 30, 2025, management concluded the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level208 - No material changes to the company's internal control over financial reporting were identified during the second quarter of 2025209 PART II—Other Information Legal Proceedings The company faces significant legal and regulatory matters, including a $40 million NYDFS settlement, ongoing state AG discussions, SEC/DOJ inquiries, and a $114 million potential San Francisco tax dispute on Bitcoin sales - In April 2025, the company paid a $40 million civil monetary penalty to the NYDFS to settle matters related to its Bank Secrecy Act/anti-money laundering and bitcoin programs110 - The company is cooperating with inquiries from the SEC and Department of Justice (DOJ) that began after a short seller report in March 2023, primarily related to compliance and risk practices112 - Block is disputing a San Francisco gross receipts tax assessment on bitcoin sales, has paid $71.4 million under protest, and estimates a potential aggregate loss of up to $114 million for fiscal years 2020-2024113 Risk Factors The company faces significant business, operational, financial, and regulatory risks, including intense competition, data security, Bitcoin price volatility, macroeconomic conditions, and complex global legal compliance - Business risks include intense competition, reliance on customer retention, and the ability to successfully expand the product portfolio and manage acquisitions216222235 - Operational risks are high, including potential for data breaches, system failures, ineffective risk management, and the challenge of safeguarding bitcoin holdings217257265 - Financial risks stem from macroeconomic conditions, ability to service significant debt, counterparty risk, and the high volatility of its bitcoin investments218292301 - The company is subject to extensive and evolving legal and regulatory oversight globally, including in areas of money transmission, privacy (GDPR/CCPA), broker-dealer activities, and banking (Square Financial Services)219319325 Unregistered Sales of Equity Securities and Use of Proceeds In Q2 2025, the company repurchased 12.46 million shares for $692.2 million under its $4 billion share repurchase program, with $1.5 billion remaining Share Repurchase Activity (Q2 2025) | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 2,869 | $54.19 | | May 2025 | 8,373 | $54.74 | | June 2025 | 1,221 | $64.19 | | Total Q2 | 12,463 | N/A | - The company's board of directors has authorized a total of $4 billion for its share repurchase program. As of June 30, 2025, approximately $1.5 billion remained available for repurchases365366 Other Information During Q2 2025, two executive officers, Ajmere Dale and Brian Grassadonia, adopted Rule 10b5-1 trading plans for potential stock sales - Two officers, Ajmere Dale and Brian Grassadonia, adopted Rule 10b5-1 trading plans during Q2 2025370