square earnings call

Thanks for the question, George. I know you have a number of very vertical-specific solutions out there that are designed to resonate with somewhat larger merchants. But as we think about that sales and marketing growth, what’s giving us the desire and confidence to lean in here are the cohort economics, which are really compelling as you think about the combination of both efficient acquisition and engagement on the existing products that we have let alone engagement on the products that we could be building in the future, we are building for the future. So I was curious if there were any noteworthy call-out there. And that 40% sort of engagement of our mid-market sales coming via the sales team has grown over time as we've enabled greater efficiency for our sales team through AI and ML technologies. This is our whole strategy. Good day, ladies and gentlemen, and welcome to the Square First Quarter 2020 Earnings Conference Call. Appreciate it. Nice to speak to you all. During Q&A, we will take questions from our customers in addition to questions from the conference call. Thank you for taking my question. Why are we doing this? Boost have been an interesting lever for us, it’s been a powerful tool to drive engagement and adoption, not only with Cash Card, but also to graduate our customers to a broader ecosystem of products so that we can diversify their experience, provide greater daily utility and ultimately build multiple revenue streams within our app. There are three topics I’d like to cover today. In the fourth quarter, as Bitcoin demand was growing, we launched a Bitcoin Boost, where Cash Card customers could get rewards in Bitcoin. Second is the sales team. So obviously, we saw a lot of this momentum with COVID as people open their eyes toward the rest of our platform, and we quickly reprioritized a lot of our efforts to make sure that we could support that growth and that we could enable more of it. • The consensus is for the company to report earnings … I would now like to turn the call over to your host, Jason Lee, Head of Investor Relations. Yeah, thank you for being a customer. And we onboarded our largest cohort of Square sellers during 2020, with each quarter growth on a year-over-year basis for our cohorts that we've added. So Jack, in the past, we talked about kind of the holy grail being connecting the two ecosystems, and you came up with the Cash by Cash App apparel line recently. Analysts: Tien-Tsin Huang — JPMorgan Chase & Co. … Categories Earnings Call Transcripts, Technology, Square, Inc. (NYSE: SQ) Q4 2020 earnings call dated Feb. 23, 2021, Jason Lee — Vice President, Head of Investor Relations, Jack Dorsey — Co-Founder, Chairman and Chief Executive Officer and Chief Executive Officer, Co-Founder of Twitter, Tien-Tsin Huang — JPMorgan Chase & Co. — Analyst, Darrin Peller — Wolfe Research LLC — Analyst, Ignacio Diaz-Garza — Cash App Customer — Analyst, Lisa Ellis — MoffettNathanson LLC — Analyst, Harshita Rawat — Sanford C. Bernstein & Co. LLC. But we still think, we are in the early days. Yeah. Analysts: Tien-Tsin Huang — … I think it was only up around 7% or 8% quarter-over-quarter even though, obviously the price of Bitcoin skyrocketed and there obviously been lot of retail trading. George Mihalos -- Cowen & Company -- Analyst. So the overall investment step-up that we envisioned for 2021 is 800 and 900. The company reported adjusted EPS of $0.18 and $1.92 billion in net revenue. To Our Shareholders November 6, 2019. square q3 2019 4 seller ecosystem Our Seller ecosystem has achieved strong The home improvement company reported Q1 revenue of $24.4 billion, up 24% year-over-year, Target Corporation (NYSE: TGT) reported first quarter 2021 earnings results today. The company reported adjusted EPS of $0.18 and $1.92 billion in net revenue. Let’s now turn to the fourth quarter, where gross profit was $804 million, up 52% year-over-year or 54% growth excluding Caviar. For the seller business, we will continue focus on growing our omnichannel capabilities, expand globally and increase our financial service offerings to sellers of all sizes. Square (NYSE:SQ) Earnings Information Square last posted its quarterly earnings data on May 6th, 2021. They’re all in one service. But there's another area where it shows the strength of having these two ecosystems, both on the Seller side and also on the individual side. We intend on continuing to invest where we see attractive returns even in the face of variability in macro trends. The Internet has broken through so many barriers all around the world for every industry, and we do think money and currency are a big part of that future. For Cash App, we're going to focus on increasing the transaction limits across the ecosystem, expand our deposit capabilities and increase the quality of our customer service, all in order to strengthen our foundation and reach new customers. Square stock rose 0.4% on Tuesday to $80.49 a share. Reported results should not be considered as an indication of future performance. No credit profile or fee required and those rewards can be personalized to the customer in real-time. I can definitely make the argument for you guys to spend more. When you think about our TAM expansion over the years from our last Investor Day in 2017 to our more recently disclosed TAM opportunity of $160 billion, we've grown TAM by $100 billion, $40 billion on the Seller business, these new product launches, new geographic expansions; and $60 billion on the Cash App ecosystem. And we have people who are hiring us to serve multiple jobs instead of being dependent and overly dependent upon just one, which would be a single point of failure for us. Square will release financial results for the first quarter of 2021 on May 6, 2021, after market close. Our sales team has played an important role in our growth of market. Prior to the pandemic, Seller had achieved positive gross profit retention and returns on investment of three times over three years as sellers stayed with Square and grew their businesses with us. We would also like to remind everyone that we will be making forward-looking statements on this call. While we strive to produce the best transcripts, it may contain misspellings and other inaccuracies. Great, thanks a lot. And our last question is from Jason Kupferberg with Bank of America. With that in mind, investors should sell SQ stock ahead of its Q1 earnings call. Hey, thanks, guys, and congrats on a good year. That's helped us unlock help sellers adapt, restaurants adapt and help us unlock going upmarket with restaurants. So increasing awareness that building through time and I think you’ll see that reflected in the results as well with Bitcoin gross profit, which is how we sort of anchor to the economic impact to our business, Bitcoin gross profit growing meaningfully on a year-over-year basis and also on a quarter-over-quarter basis. See Square, Inc. (SQ) stock analyst estimates, including earnings and revenue, EPS, upgrades and downgrades. Looking at some of the drivers for the quarter, first, we’re seeing growing engagement and monetization with Cash App. Second, an update on our business through mid-February and what this could mean for growth going forward. Sure. Gross profit in the fourth quarter was $427 million, up 13% year over year, with Seller GPV up 6% year over year. It’s looking for opportunities in every single way that a business might attract customers that’s through marketplaces, that’s through the API. Please go ahead. And I just feel like given all this opportunity that is facing the company, it might have been bigger and then I think, if I’m not mistaken, you also took up the high-end of that range, maybe $50 million. With Cash App, we've seen a 6x ROI over three years on the back of efficient acquisition at less than $5 per customer, again calling upon our network effects -- very strong network effects that -- where we've seen strong volumes in peer-to-peer, and that continues to be a strong front door for us, but then also very strong gross profit retention at over 130% for each of the last three years as our -- we've maintained the vast majority of our customers, and they've grown on our platform. But right now, focus on making sure all the capabilities and the attributes are there, and it's just getting stronger and stronger every day. Why It Should Keep Rising. And we see an opportunity for further TAM expansion, investments in new products and in new markets. We plan to reinvest any gains back into the fund and are exploring opening up for participation by like-minded companies. An audio replay of this call will be available on our website shortly. Gross profit from our mid-market sellers grew 27% year over year, which is approximately two times the gross profit growth of our overall Seller business. And I believe they're quite powerful. Amazing results. And Bitcoin is at about one in 10. So we sort of see Boost as punching above its weight, frankly, in terms of its ability to impact the broader ecosystem given the relatively only one in 20 transactions are actually boosted. Despite 2020 being a year of extreme uncertainty, our results in the fourth quarter and full year speak to our ability to both help new customers adapt during a dynamic environment and reach new customers. Square was meant to report earnings after markets closed on August 5, 2020, but its earnings leaked and were reported by Bloomberg after markets closed on August 4. Great. I would like to turn the call over to your host, Jason Lee, Head of … I would now like to turn the call over to your host, Jason Lee, Head of Investor Relations. Hey, thanks guys, and congrats on a good year, obviously a tough environment for everybody. What wall street expects from the madison square garden's earnings. Hey, Darrin, thanks for the question. Maybe I’ll explain a little bit about what we’re seeing in terms of cohort economics that lead us to continue to want to invest in both areas. Square was meant to report earnings after markets closed on August 5, 2020, but its earnings leaked and were reported by Bloomberg after markets closed on August 4. People might come in because they receive money from a friend using the peer-to-peer aspect and then may discover the ability to buy stocks or buy Bitcoin, then discover that they can get the card and they can get their paycheck deposited to it, and now they can fill their taxes with it. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website. But obviously, a lot has happened in the last year, and I know you called out the high adoption rates of some of the other products over the course of last year. And then also a little bit more on the potential to turn some of these users into direct deposit starting with your tax refund and then obviously hopefully, payroll down the road. When you think about mid-market as well, to your point, that's -- our larger sellers now are 60% of Seller GPV in the fourth quarter, up from 52% two years ago. Why It Should Keep Rising. And it doesn't take a lot to imagine, that certainly that will exist and that it will be Bitcoin. Actual results could differ materially from those contemplated by our forward-looking statements and reported results should not be considered as an indication of future performance. That’s really helpful. So let me sort of step back and talk about the strong unit economics and the growth of the business model over-time. As a reminder, we will start lapping particularly challenging growth comparisons in the second and third quarter of this year. ET. But what we started experimenting within the fourth quarter is how Boost is a differentiated tool to graduate customers to the broader ecosystem of products. 16 mins High-Tech Factories Helped Siemens Beat Earnings. With that, I'd like to turn it over to Jack. Darrin Peller -- Wolfe Research -- Analyst. This transcript is produced by AlphaStreet, Inc. We saw strength here in the fourth quarter, despite the impact of the pandemic. Looking ahead to a recovery, we plan to continue investing behind these strong returns to reach new sellers and drive growth. We achieved strong acquisition of customers and drove increased product adoption with our highest monthly total of new transacting active customers for Bitcoin, stock brokerage and Cash Card. In 2020 and the fourth quarter, we increased adoption across all of our products beyond peer-to-peer for Cash App. Particularly during COVID, we -- if you think about the pairing of strength in our omnichannel efforts, as well as strength moving up market, we've been able to progress in our ability to serve restaurants. But it was a forcing function that people allowed themselves to open their eyes to more. And once they come in for that that it’s very simple for them to discover everything else that we offer. And now for some updates on our business. I wanted to follow-up a little bit more on Boost. Stock Advisor list price is $199 per year. So in terms of acquisition, we don't have to be focused on just one thing. We’ll share more details on our environmental and social initiatives next month in our 2020 Corporate Social Responsibility Report. 7. Looking at some of the drivers for the first -- for the quarter. In 2020 and the fourth quarter, we increased adoption across all of our products beyond peer-to-peer for Cash App. 1. I would now like to turn the call over to … 16 mins High-Tech Factories Helped Siemens Beat Earnings. We have Jack and Amrita with us today. Harshita Rawat -- Sanford C. Bernstein -- Analyst. We'll share more details on our environmental and social initiatives next month in our 2020 corporate social responsibility report. Thanks, Amri. And that’s our goal is to help people understand what their point is, what it can be used for and make it a whole lot more useful and accessible for anything that they want to do on the Internet. People might come in because they receive money from a friend using the peer-to-peer aspect. By expanding the breadth of our product ecosystem, refining features and continuing to build on our foundation, we’ve driven greater engagement across our ecosystem. Cash App has proved out and scaled a strong business model. Additionally, these are some of the areas that we will be increasingly investing in to drive further opportunity here. The question I have is maybe for Amrita, can you just talk a little bit about the cadence of this investment that you guys have outlined? Prior to the pandemic, Seller had achieved positive gross profit retention and returns on investment of 3 times over three years as sellers stayed with Square and grew their businesses with us. Moving to Seller where our omnichannel offerings are driving growth. I’m really excited about the location aspect, being able to understand where someone is and specifically like what local sellers around them and offer them a reward that they’re actually going to value and actually going to use and do so instantly is a really, really powerful idea. And when you pair with things like what we can do with Boost as well, we have a pretty powerful way to drive a lot of traffic and connect all the dots. We believe the Internet will have a native currency. And I’d like to turn the call back over to the company for closing remarks. And we think given the variety, the breadth of products that we provide across hardware, software, payments and financial services that there's an even greater opportunity to offer those additional products to larger sellers over time to be able to meet their more complex needs. So we're excited about the opportunity that we see here. We have also been encouraged by Seller's cohort economics. 2020 was also a year that we invested in our business and in our customers with compelling returns. This compares to loss of $0.02 per share a year ago. I spoke a little bit earlier already to efficient acquisition driven through network effects for growing our customer base while also growing the per customer engagement and monetization through strong retention within Cash App, retention at over 130% and ARPU, gross profit per customer, growing 70% year over year to $41 in the fourth quarter. We will also begin to lap the initial impact of the pandemic in the Seller business in late March. I use Cash App to invest in stocks in Bitcoin, send money to friends as well as spending using the Cash Card. In the fourth quarter, Cash App generated $377 million in gross profit, an increase of 162% year over year, Cash App benefits from the compounding effect of growing our customer base while also increasing engagement and monetization per customer. Yeah. And then third, product. Jack Dorsey — Co-Founder, Chairman and Chief Executive Officer and Chief Executive Officer, Co-Founder of Twitter. Thanks for taking the question. Well, thanks again. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. And when we think about all of that, where do you see that going in terms of sustainability and investments you can make in that to keep that level of really sustainable, 50%-plus potentially? I think the most attractive thing is really its flexibility. Good day, ladies and gentlemen, and welcome to the Square fourth-quarter 2020 earnings conference call. The company will not hold an earnings conference call. Your next question is from the line of Lisa Ellis with MoffettNathanson. So we’re going to continue watching and learning, but we think, this is a pretty stable path for us. © 2021 Eighty-Five Technologies Inc. Not affiliated with SEC EDGAR. Good day, ladies and gentlemen. And, frankly, on a week-by-week basis, about less than 5% of Cash Card transactions were boosted in the fourth quarter. Thank you. Your next question is from the line of Dan Dolev with Mizuho. Maybe you could give some added context around the e-tax filing opportunity for Cash App whether it’d be retention, reactivation, new users and also how this could be something that we really should look for in Q1 for years to come. Our more recently acquired Seller cohorts have seen a stronger rebound in gross profit than older cohorts, which is partly driven by stronger acquisition of larger sellers in recent years. I think it was a 27% there. I believe a year ago, the gross profit mix within Cash App was roughly 60% Instant Deposit, if I’m remembering right, 30% Cash Card and about 10% in Bitcoin and other miscellaneous fees. I had a big picture or maybe a simple question on priorities. This is our whole strategy. Thank you and thanks for taking my question. We expect to lap these mix changes for transaction margins and for transaction margins to normalize toward the end of the first quarter. Both our Cash App and Seller ecosystems have delivered strong cohort economics including acquisition, retention, paybacks and returns on investments. Good steps here on Cash App. About less than 5% of Cash Card transactions were boosted in the fourth quarter, so we sort of see Boost is punching above its weight frankly in terms of its ability to impact the broader ecosystem, given the relatively only one in 20 transactions are actually boosted. When we think about addressable market for our larger sellers were less than 1% penetrated in that opportunity. And as mid-market sellers has taken on more products on our ecosystem, we see as I mentioned earlier, mid-market sellers taking on 2.5 products on average in our ecosystem. Square, Inc. () Q4 2020 earnings call dated Feb. 23, 2021Corporate Participants: Jason Lee — Vice President, Head of Investor Relations. And they found a lot more efficiency, and they found a lot more sales because of it. It is something that anyone can see and no particular third-party can actually control and that really speaks to the principles of the Internet. In the fourth quarter, Cash App generated $377 million in gross profit, an increase of 162% year-over-year. But as we think about that sales and marketing growth, what's giving us the desire and confidence to lean in here are the cohort economics, which are really compelling as you think about the combination of both efficient acquisition and engagement on the existing products that we have, let alone, engaging on the products that we could be building in the future, we are building for the future. So let me sort of step back and talk about the strong unit economics and the growth of the business model over time. And there's three areas of investment to help us unlock that. Our online channels delivered more than 50% GPV growth year over year and became a growing portion of our mix. Based on trends during the first three weeks of February, we estimate Cash App gross profit growth to be approximately 130% year over year. So we have typically restaurant-type businesses who are doing more retail things and vice versa and services who are doing more retail. So we expect a lot more of those internal efficiencies and eventual future sharing as time goes on. We’re also going to double down on our commitment to Bitcoin and continue to look for new ways to connect our product lines within the Cash App. Cash is definitely a rich culture and we want to make sure that we’re emphasizing that as much as we can. And in 2020, approximately half of our mid-market GPV came from sellers with integrations into our developer platform, which enables a data-driven way to process payments using custom software, build unique commerce experiences and connect with existing business systems. We saw a pretty obvious opportunity in acquiring Credit Karma. Square reported fourth-quarter adjusted earnings of 32 cents per share on total net revenue of $3.16 billion, a 141% year-over-year increase that topped the Street … A tough -- obviously, tough environment for everybody. Photo by Christiann Koepke on Unsplash. Just wanted to ask the strength that you're seeing with the mid-market sellers, how vertical-specific is that? So I’m just wondering, what was the incremental opportunity that you saw that you wanted to seize upon? And we can expand that even more by opening up down the line. To that end, Square posted earnings results that showed how the great digital shift — to transactions done online and peer-to-peer (P2P) payments — has spurred consumers to … These represent our gross profit, gross results for January and current estimates for February performance. Jack Dorsey -- Founder and Chief Executive Officer. Now a question from a Cash App customer, Ignacio, I’m sorry if I mispronounce it. Great. But what we've started experimenting with in the fourth quarter is how Boost is a differentiated tool to graduate customers to the broader ecosystem of products. Investors will be looking through the hype of the recent acquisition to see if Square can continue delivering strong financial results when it reports earnings on May 6, 2021 for Q1 FY 2021. So we’re really focused on both and have showed an track record here driving both acquisition engagement along with broader TAM expansion. As Jack mentioned, our developer platform is really key for serving more complex Seller needs, our vertical software additionally. Square (NYSE:SQ) Q1 2021 Earnings Call May 06, 2021, 5:00 p.m. In January, Cash App delivered gross profit growth of 164% year-over-year, a two-point improvement from the fourth quarter. Yeah. So we see an opportunity in both areas and we’ve shown again a track record of focus on both expansion of opportunity as well as going deeper in our existing markets. It was a year of strong growth, where we improved our gross profit growth rate over 2019 and also diversified our ecosystem. Our online channels delivered more than 50% GPC [Phonetic] growth year-over-year and became a growing portion of our mix. Your next question is from the line of Dan Perlin with RBC. These represent our gross profit gross results for January and current estimates for February performance. Your next question is from the line of Dan Perlin with RBC. Square (SQ) just released their Q2 earnings and they are unbelievable!The stock is trading up 12% after hours. So I think both Cash App and the Seller business have an opportunity to strengthen each other. Thanks a lot for taking my questions. And as more people participate, not only in investments, but also through products and through development, it gets even more trusted and more solid and more secure and something that more people can utilize. Can you give some updates on what the current GP mix looks like for Cash App and how you see that evolving? We're also going to double down on our commitment to Bitcoin and continue to look for new ways to connect our product lines within the Cash App. Next, we wanted to share early trends in our Cash App and Seller businesses during the first quarter and what this could mean for growth going forward. So we see this is really just a refinement of the earlier numbers we shared with you and a reflection of the opportunity ahead. So I'm curious, have you had or progressed much on the advertiser discussions in terms of maybe wanting to help fund some of those rewards? So each one of these things, we believe, positively reinforces the other. And we can expand that even more by opening up down the line, but this is another area where it shows the strength of having these two ecosystems, both on the service side and also on the individual side. Why are we doing this? So we'll continue to be working with them. Good evening. Because the move from what you previously being much more card-present centric to where you are now, 50% omni, has been pretty dramatic. I think it was up 27% there. Great. Square reported numbers a day earlier than expected after a media outlet leaked them. So we want to dig around. Sure. We've historically shown an ability to do both. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Square stock rose 0.4% on Tuesday to $80.49 a share. You can create your customized portfolio podcast by signing up, get earnings webcast and EPS alerts. Jason Kupferberg -- Bank of America Merrill Lynch -- Analyst. Looking at profitability. Square, Inc. () Q4 2020 earnings call dated Feb. 23, 2021Corporate Participants: Jason Lee — Vice President, Head of Investor Relations. Finally, in 2021, we are investing for long-term profitable growth. Growth in February decelerated compared to January or the impact from government funded disbursements normalized partly offset by continued strength in acquisition and peer to peer network volumes. We believe the Internet will have a native currency. Good evening. Good afternoon, everyone. Thanks. Thank you. And Bitcoin is at about one in 10. In the fourth quarter, Bitcoin volumes per customer increased more than two and a half times compared to the same period last year, mostly driven by buying activity of both existing and new customers. When we think about addressable market for larger sellers, we're at less than 1% penetrated in that opportunity. Despite 2020 being a year of extreme uncertainty, our results in the fourth quarter and full year speaks to our ability to both help new customers adapt during a dynamic environment and reach new customers. I have a big picture, maybe a simple question on priorities. ... “We announced two strategic investments,” Dorsey said during the earnings call. For the Seller business, we will continue to focus on growing our omnichannel capabilities, expand globally and increase our financial service offerings to sellers of all sizes. So that’s a little bit of the progression that you see as well from quarter to quarter. So obviously we saw a lot of this momentum with COVID, as people open their eyes towards the rest of our platform and we quickly reprioritize a lot of our efforts to make sure that we could support that growth. Appreciate the thoughts and metrics. ET Prepared Remarks • Questions and … Here is what Wall Street expects from Square, along with some recent history. [Operator Instructions] Our next question is from the line of Harshita Rawat with Bernstein. And similarly, for Cash App, we've seen in the first month that our Cash App customers onboard into our ecosystem an increasing proclivity to adopt new products like stocks, like Bitcoin, like Cash Cards.

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