AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 1/4 · Integration, seller-relative purchasing benefits and extensive risk automation provide utility. Explicitly limited switching costs and absent comparative performance leave structural protection weak. Management's two-sided network claim is not demonstrated competitive exclusion.
durability · 1/4 · Product integration and favorable purchasing terms recur across annual disclosures, but there is little contractual protection. Proprietary repayment data is a current capability; its durable superiority over alternatives is unestablished.
customer dependency · 2/4 · Integrated workflows, growing GPV and Primary Banking Actives indicate meaningful use, assessed indirectly. Conditional AI return engagement provides narrower repeat-use evidence, but neither it nor aggregate growth establishes broad lock-in.
erosion resilience · 2/4 · Payment and engagement growth show resilience in demand. Actual tariff margin pressure, historical service failures and low switching barriers temper it. Higher loan-loss dollars accompanied lending growth and do not alone prove deteriorating credit quality or competitive share loss.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Observed monetization is mixed: Square commerce enablement excluding hardware declined from 1.27% to 1.23% year over year, while financial solutions increased from 0.38% to 0.41%. These economic outcomes permit an indirect assessment, but mix and adoption prevent attributing them to specific price changes or durable pricing power.
retention · 2/4 · Growing payment activity and Primary Banking Actives support continued demand indirectly. Conditional AI product return comparisons add bounded repeat-use evidence. Cohort retention is unavailable, acquisition contributes to growth, and switching friction is limited.
margin resilience · 2/4 · First-half gross profit increased to $6.08 billion from $4.83 billion, but operating income fell to $275 million from $814 million and transaction, loan and receivable losses rose. Tariffs actually reduced affected product margins. Mix, lending expansion and excluded contingencies or restructuring prevent isolating pricing effects.
contractual freedom · 2/4 · Transaction-based charging and generally absent long-term customer contracts support some flexibility in offering current terms. Customers can also leave readily. Explicit unilateral repricing provisions and contractual restrictions are not supplied.
Predictability84
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 10.34
- Positive FCF years (%)
- 80.00
- FCF margin volatility (pp)
- 3.89
- observedAnnualPeriods
- 5.00
Financial strength79
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 71.34
- netDebtEbitGrade
- 91.51
- interestCoverageGrade
- 51.48
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 3.01
- Net debt / operating income (x)
- 0.42
- Interest coverage (x)
- 6.66
- Current ratio (x)
- 2.20
Capital allocation63
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 3.78
- 3-year average dilution (%)
- 1.91
- 3-year average SBC / revenue (%)
- 5.37
- cashConversionGrade
- 93.24
Management50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Actual 2025 operating cash generation of $2.6 billion, $700.9 million of completed first-half 2026 repurchases and substantial liquidity demonstrate funding and capital-return capacity. Binding purchase commitments of about $2.30 billion, stock-based compensation within cash-flow adjustments and weaker first-half GAAP results temper discipline. Repurchase value creation is unproven.
incentive alignment · 2/4 · Actual 2025 options and RSUs vest over four years subject to service, providing stock-price exposure and retention incentives; hedging and pledging are prohibited. Discretionary grant criteria weaken explicit operating-performance linkage, ownership percentages are missing, and the expected 2026 bonus program is not treated as adopted.
execution · 2/4 · Assessed indirectly from growing GPV, gross profit, Primary Banking Actives and reported AI repeat engagement. Falling first-half GAAP operating income, historical system errors and a paid customer-dispute penalty show meaningful weaknesses. Adjusted operating growth excludes important costs; increased loan-loss dollars also reflect lending expansion.
governance · 2/4 · A lead independent director and independent audit and compensation committees provide actual oversight safeguards. A non-independent chair, staggered board and ten votes per Class B share versus one per Class A share constrain accountability. Paid regulatory penalties demonstrate a substantive compliance weakness; individual voting control remains unknown.
Evidence
Our products are integrated to create a seamless experience and enable a holistic view of sales, customers, employees, and finances.
2025 Form 10-K, Square product integration · Filed 26/02/2026
We generally do not have long-term contracts with our sellers and customers, and the difficulty and costs associated with switching to a competitor may not be significant for many of the services we offer.
2025 Form 10-K, customer contracts and switching costs · Filed 26/02/2026
Our products are integrated to create a seamless experience and enable a holistic view of sales, customers, employees, and finances.
2024 Form 10-K, Square product integration · Filed 24/02/2025
Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gross Payment Volume (GPV) (in millions) $ 74,734 $ 66,615 $ 137,843 $ 123,412 Adjusted Operating Income (in thousands) $ 863,845 $ 549,569 $ 1,591,517 $ 1,015,838 Adjusted EBITDA (in thousands) $ 1,168,597 $ 891,422 $ 2,178,818 $ 1,704,216 Adjusted Net Income Per Share: Basic $ 1.04 $ 0.63 $ 1.89 $ 1.20 Diluted $ 1.02 $ 0.62 $ 1.87 $ 1.18 Gross Payment Volume (GPV) GPV includes Square GPV and Cash App GPV.
2026 second-quarter Form 10-Q, GPV and adjusted operating metrics · Filed 05/08/2026
Competitors that overlap with certain functions and features that we provide include: •Business software providers such as those that provide point of sale, website building, inventory management, employee management, customer relationship management invoicing, and appointment booking solutions; •Payment terminal vendors; •Merchant acquirers; •Banks that provide payment processing, checking, savings, loans, and payroll; •Pen and paper, manual processes, and paper currency; •Payroll processors; and •Established or new alternative lenders.
2025 Form 10-K, Square competitor categories · Filed 26/02/2026
These contracts include negotiated terms, such as more favorable pricing, that are generally not available to sellers if they were to contract directly with these sub-service providers.
2024 Form 10-K, negotiated sub-service provider terms · Filed 24/02/2025
These contracts include negotiated terms, such as more favorable pricing, that are generally not available to sellers if they were to contract directly with these sub-service providers.
2023 Form 10-K, negotiated sub-service provider terms · Filed 22/02/2024
In our Square ecosystem, this technology platform enables us to capture and analyze billions of transactions per year and automate risk assessment for more than 99.95% of all transactions.
2025 Form 10-K, transaction scale and automated risk assessment · Filed 26/02/2026
We compete against many companies to attract customers across our products and services, and some of these companies have greater financial resources and substantially larger bases of customers than we do, which may provide them with significant competitive advantages.
2025 Form 10-K, competitors' resources and customer bases · Filed 26/02/2026
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Commerce enablement revenue $ 3,341,571 $ 2,898,302 $ 6,280,041 $ 5,465,277 Financial solutions revenue 1,382,368 984,553 2,704,353 1,859,564 Bitcoin ecosystem revenue 1,893,748 2,171,602 3,690,140 4,501,412 Total net revenue 6,617,687 6,054,457 12,674,534 11,826,253 Cost of revenue: Commerce enablement costs 1,523,639 1,354,370 2,841,098 2,506,570 Financial solutions costs 93,819 82,649 183,194 160,571 Bitcoin ecosystem costs 1,821,343 2,066,504 3,549,300 4,303,901 Amortization of acquired technology assets 12,805 14,404 25,622 29,078 Total cost of revenue 3,451,606 3,517,927 6,599,214 7,000,120 Gross profit 3,166,081 2,536,530 6,075,320 4,826,133 Operating expenses: Product development 608,660 725,288 1,647,533 1,485,987 Sales and marketing 664,955 549,731 1,315,463 1,054,191 General and administrative 825,869 449,237 1,683,433 941,034 Transaction, loan, and consumer receivable losses 585,450 294,090 1,085,575 463,779 Amortization of customer and other acquired intangible assets 34,277 33,891 68,436 67,547 Total operating expenses 2,719,211 2,052,237 5,800,440 4,012,538 Operating income 446,870 484,293 274,880 813,595 Interest expense, net 55,721 23,687 108,916 40,930 Remeasurement loss (gain) on bitcoin investment 88,474 (212,165) 261,292 (118,814) Other expense (income), net 1,199 13,389 (4,227) 5,047 Income (loss) before income tax 301,476 659,382 (91,101) 886,432 Provision for income taxes 214,407 121,048 130,425 159,376 Net income (loss) 87,069 538,334 (221,526) 727,056 Less: Net loss attributable to noncontrolling interests (1,448) (124) (1,362) (1,274) Net income (loss) attributable to common stockholders $ 88,517 $ 538,458 $ (220,164) $ 728,330 Net income (loss) per share attributable to common stockholders: Basic $ 0.15 $ 0.88 $ (0.37) $ 1.18 Diluted $ 0.15 $ 0.87 $ (0.37) $ 1.17 Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: Basic 597,829 612,882 597,702 616,108 Diluted 608,847 618,928 597,702 627,103 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2026 second-quarter Form 10-Q, consolidated statements of operations · Filed 05/08/2026
The durable differentiation is the combination of a two-sided network generating proprietary data and the AI capabilities to use
it well.
2026 second-quarter shareholder letter, management's differentiation claim · Filed 05/08/2026
Our pace of scaling Neighborhoods, our loyalty, discovery and rewards experience that connects Square sellers
2026 first-quarter shareholder letter, Neighborhoods product description · Filed 07/05/2026
$320 million in annualized gross payment volume (GPV), up 190% from December.
2026 first-quarter shareholder letter, Neighborhoods seller GPV adoption · Filed 07/05/2026
Sellers are 33% more likely to return to Managerbot if they experience an insight-led session and Cash App customers are 5x more likely to return to Moneybot after taking a recommended action, making insight-led engagement a strong predictor of
2026 first-quarter shareholder letter, conditional AI product return engagement · Filed 07/05/2026
The Company recorded $279.8 million and $576.4 million for the three and six months ended June 30, 2026, respectively, compared to $211.6 million and $415.1 million for the three and six months ended June 30, 2025, respectively, for such expenses.
2026 second-quarter Form 10-Q, customer acquisition and usage-related expenses · Filed 05/08/2026
Primary
Banking Actives (PBAs) grew 17% year over year as we continued our focus on building for modern earners.8 These customers are twice as likely to name Cash App as their primary banking platform,
2026 second-quarter shareholder letter, Primary Banking Actives growth · Filed 05/08/2026
GPV
YoY Growth
7.0%
8.9%
7.0%
8.2%
9.8%
% of Total Square GPV
81%
79%
78%
78%
78%
Square International GPV
YoY Growth
25%
26%
24%
35%
28%
CC GPV YoY Growth
24%
25%
25%
26%
25%
% of Total Square GPV
19%
21%
22%
22%
22%
Commerce Enablement (excluding Hardware) Monetization Rate18
1.27%
1.20%
1.18%
1.22%
1.23%
Financial Solutions Monetization Rate19
0.38%
0.38%
0.41%
0.45%
0.41%
Square GPV grew 13% year over year in the
2026 second-quarter shareholder letter, Square monetization rates · Filed 05/08/2026
These tariffs negatively affect our gross margin on the impacted products, and increases in our pricing as a result of tariffs may adversely affect demand for our products or reduce the competitiveness of our products if our competitors do not make similar pricing adjustments.
2026 second-quarter Form 10-Q, actual tariff margin effects and possible pricing response · Filed 05/08/2026
We charge the customer a per transaction fee when they instantly deposit funds to their bank account or withdraw funds from an ATM.
2025 Form 10-K, instant deposit and ATM transaction fees · Filed 26/02/2026
For the year ended December 31, 2025, cash provided by operating activities was $2.6 billion, primarily due to net income of $1.3 billion, adjusted for non-cash expenses of $3.4 billion consisting primarily of transaction, loan, and consumer receivable losses; share-based compensation; depreciation and amortization; changes in deferred income taxes; non-cash lease expense; and losses on bitcoin remeasurement, each of which contributed positively to cash provided by operating activities.
2025 Form 10-K, operating cash generation and noncash adjustments · Filed 26/02/2026
During the six months ended June 30, 2026, the Company repurchased 11.6 million shares of its Class A common stock for an aggregate amount of $700.9 million, excluding excise tax, which was immaterial.
2026 second-quarter Form 10-Q, completed share repurchases · Filed 05/08/2026
As of June 30, 2026, the future minimum payments under the purchase commitments were as follows (in thousands):
Payments Due By Period
Remainder of 2026
$
280,143
2027
457,317
2028
386,171
2029
370,000
2030
410,000
Thereafter
392,000
Total
$
2,295,631
34
Other Contingencies
The Company is under examination, or may be subject to examination, by several tax authorities.
2026 second-quarter Form 10-Q, binding purchase commitments · Filed 05/08/2026
As of June 30, 2026, we had approximately $8.8 billion in available liquidity, with $7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $900.0 million available under our revolving credit facility.
2026 second-quarter Form 10-Q, available liquidity · Filed 05/08/2026
Typically, these awards vest over four years, contingent on continued service, and the awards to our named executive officers in 2025 followed this practice.
2026 proxy, actual 2025 executive award vesting terms · Filed 24/04/2026
In determining the mix of stock options and RSUs for 2025, our compensation committee, with input from our Block Head, our People Lead, and Pay Governance, considered competitive market practices as well as the retention and performance incentives of outstanding equity holdings and determined that a mix of approximately 50% stock options and 50% RSUs, based on the target grant date value of the awards, provided appropriate incentives for the named executive officers in 2025.
2026 proxy, actual 2025 stock option and RSU mix · Filed 24/04/2026
We do not have an established set of criteria for granting equity awards.
2026 proxy, discretion in equity award criteria · Filed 24/04/2026
Other Compensation Information
Hedging and Pledging Prohibitions
We have an Insider Trading Policy, which, among other matters, prohibits our employees, including officers, or directors from making short sales, engaging in transactions in publicly traded options (such as puts and calls) and other derivative securities relating to our common stock, pledging any of our securities as collateral for a loan, and holding any of our securities in a margin account, whether such securities are granted as compensation or are held, directly or indirectly, by the employee or director.
2026 proxy, hedging and pledging prohibitions · Filed 24/04/2026
Because Mr. Dorsey is our Chairperson and is not an “independent” director as defined in NYSE listing standards, our board of directors has appointed Roelof Botha as our Lead Independent Director.
2026 proxy, non-independent chair and lead independent director · Filed 24/04/2026
In addition, each member of our audit and risk committee and our compensation committee meets the enhanced independence standards required for such committee members under the applicable rules and regulations of the SEC and the NYSE listing standards.
2026 proxy, audit and compensation committee independence · Filed 24/04/2026
Our board of directors is divided into three staggered classes of directors.
2026 proxy, staggered board structure · Filed 24/04/2026
Holders of the Company’s Class A common stock, par value $0.0000001 per share (the “Class A Common Stock”), were entitled to one vote on each proposal for each share held as of the close of business on April 20, 2026 (the “Record Date”), and holders of the Company’s Class B common stock, par value $0.0000001 per share (the “Class B Common Stock”), were entitled to ten votes on each proposal for each share held as of the close of business on the Record Date.
June 18, 2026 Form 8-K, actual Class A and Class B voting rights · Filed 18/06/2026
Pursuant to the consent order, the Company paid a $55 million civil monetary penalty in January 2025 and agreed to pay between $75 million and $120 million in restitution to certain Cash App customers.
2024 Form 10-K, January 2025 paid CFPB penalty and restitution commitment · Filed 24/02/2025
Software and system errors, or human errors, could delay or inhibit settlement of payments, result in oversettlement, cause reporting errors, cause pricing irregularities or prevent us from collecting transaction-based fees, or negatively impact our ability to serve our customers, all of which have occurred in the past.
2026 second-quarter Form 10-Q, historical software and system errors · Filed 05/08/2026
In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, acquisition-related and integration costs, various contingencies, restructuring and other costs, and goodwill and intangible asset impairment charges.
2026 second-quarter Form 10-Q, adjusted operating income exclusions · Filed 05/08/2026
Transaction, loan, and consumer receivable losses increased 99% year over year on a GAAP basis, driven primarily by growth in loan volumes.
2026 second-quarter shareholder letter, loan-volume explanation for increased losses · Filed 05/08/2026
infrastructure. It integrates millions of historical repayment outcomes with near real-time data across inflows, spending patterns, and engagement across our ecosystem.
2025 fourth-quarter shareholder letter, underwriting data infrastructure · Filed 26/02/2026
2026 Executive Compensation Changes Beginning in 2026, we expect to introduce an annual cash incentive bonus program for our leadership team, including our named executive officers, with payouts based on the achievement of company-wide gross profit and operating income targets.
2026 proxy, expected annual cash incentive program · Filed 24/04/2026
