Block Inc.

Ladies and gentlemen, and welcome to the Square fourth quarter 2020 earnings conference call. I would now like to turn the call over to your host, Jason Lee, head of investor relations. Please go ahead.

Hi, everyone. Thanks for joining our fourth quarter 2020 earnings call. We have Jack and Amrita with us today. We will begin this call with some short remarks before opening the call directly to your questions. During Q&A, we will take questions from our customers in addition to questions from conference call participants. We would also like to remind everyone that we will be making forward-looking statements on this call. Actual results could differ materially from those contemplated by our forward-looking statements. Report results should not be considered as an indication of future performance. Please take a look at our findings with the SEC for discussion of the factors that could cause the results to differ. Also, note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements except as required by law. During this call, we will provide preliminary gross profit growth results for the month of January and February. These represent our gross profit growth results for January and current estimates for February performance. These numbers are not final, as we have not yet closed our accounting financials for the month of February, and our monthly results are not subject to interim review by our auditors. As a result, actual January and February results may differ from these estimates. Also, we will discuss certain non-GAAP financial measures during this call. reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our investor relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being audio webcast on our investor relations website. An audio replay of this call will be available on our website shortly. With that, I'd like to turn it over to Jack.

Thank you, Jason, and thank you, everyone, for joining us today. 2020 was a tough year for many. Our focus was to help our customers through it all, which required us to adapt and evolve quickly. I believe this is an important attribute for any organization, and I'm proud we continue to demonstrate it. We also took the opportunity to act more broadly by announcing our plans for our operations to be carbon net zero by 2030 and launched our Bitcoin Clean Energy Investment Initiative, a $10 million commitment to support companies that will help drive adoption and efficiency of renewables within the Bitcoin ecosystem. We plan to reinvest any gains back into the fund and are exploring opening up for participation by like-minded companies. We'll share more details on our environmental and social initiatives next month in our 2020 Corporate Social Responsibility Report. In addition, today we announced $170 million purchase of Bitcoin, on top of the 50 million we bought in the fourth quarter. Why are we doing this? We believe the internet needs a native currency, and we believe Bitcoin is it. We believe it has the highest probability of empowering more people in the economy in a fair way. We're doing a lot to ensure this from a product, open source development, and open patent perspective. And by us owning Bitcoin, our incentives are aligned with skin in the game. And now for some updates on our business. Cash App continued to see strong adoption, both from new and existing customers. In December, Cash App had more than 36 million monthly active customers, up 50% compared to last year. We saw customers increase their usage of products beyond peer-to-peer transactions, including use of our Visa Cash Card, Cash Boost, and Bitcoin. Boost is our instant rewards program within our Cash Card that enables customers to receive unique discounts based on their location and other attributes. In the fourth quarter, Active Boost customers spent double that of other Visa Cash Card customers. We also recently launched a special boost, which a customer unlocks after receiving their first paycheck in the Cash App, and a Bitcoin boost, giving people a way to earn Bitcoin on all Cash Card purchases. As more of the world has discovered the value of Bitcoin, Cash App continued its focus to make Bitcoin more accessible and more useful. One example of this is enabling people to change the default denomination unit from BTC to Satoshi's, which is 100th millionth of a Bitcoin, also known as Sats, to help people realize you don't have to own a full Bitcoin and can stack Sats instead. In the fourth quarter, Bitcoin volumes per customer increased more than 2.5 times compared to the same period last year, mostly driven by buying activity of both existing and new customers. In 2020, more than 3 million customers bought or sold Bitcoin and cash up. And in January 2021 alone, more than 1 million customers bought Bitcoin for the first time. Our seller ecosystem continued to grow of market and attract larger sellers as we saw mid-market sellers use 2.5 of our products on average in 2020. Nearly all mid-market sellers use our team management product to schedule staff and view real-time performance and sales analytics for their workforces. 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. Our sales team has played an important role in our growth of market. In the fourth quarter, 40% of mid-market seller GPV came from sellers who had been engaged by our sales team. The team also focuses on educating existing sellers about our broader ecosystem. We use machine learning to identify sellers most likely to adopt more products and which of our solutions are likely to be most relevant. This helped drive a 15% increase in product adoption among existing mid-market sellers in 2020. We plan to continue this work and intend to double our sales team in 2021. So what's our focus for the year ahead? 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. 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. 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. And with that, over to Amrita.