Block Inc. CFO Discusses Consumer Spending, Lending, and Bitcoin Strategy

Consumer Spending Resilience

• 💡 Block Inc. leverages real-time data from its Square and Cash App ecosystems to monitor consumer spending and health patterns.
• 📈 Overall, the company observes resilience in consumer behavior, with strong retention and new customer acquisition on the Square platform.
• 💰 Cash App shows continued growth in spending and earned wages, indicating strong platform engagement and consumer resilience.

Lending Products and Underwriting

• 🛠️ Block offers three primary lending products: Square Loans for small businesses, Buy Now, Pay Later at point-of-checkout, and Cash App Borrow for lines of credit.
• ✅ All lending products have demonstrated strong and healthy repayment behavior despite macro uncertainty.
• 🧠 The company utilizes machine learning-based underwriting models that can be updated in real-time to adapt to changing repayment rates.

Key Performance Metrics

• 📊 Cash App's inflows per active metric grew 8% in Q2, reflecting strong user engagement.
• 🛒 Commerce volumes within Cash App increased by 16% year-over-year, driven by features like Buy Now, Pay Later and Cash App Pay.
• 📈 Discretionary verticals like food and beverage (Quick Service Restaurants) and retail on the Square platform saw healthy year-over-year growth rates of 15% and 10% respectively.

Bitcoin Strategy and Treasury

• 🚀 Block Inc. believes Bitcoin is the most likely contender for the internet's currency due to its longevity, resilience, and open developer ecosystem.
• 🏦 The company holds approximately 8600 Bitcoins on its balance sheet and has no plans to add other cryptocurrencies.
• 📈 Block has a program to dollar-cost average Bitcoin purchases, investing 10% of the gross profit generated from its Bitcoin products back into Bitcoin.

Accounting and Investor Clarity

• ⚖️ Updated accounting standards now treat Bitcoin like any other asset, allowing for write-ups and write-downs at the end of the quarter.
• 💡 This change aims to create clarity for investors and encourage more companies to consider holding Bitcoin on their balance sheets.