Block Inc.

Good day, ladies and gentlemen, and welcome to the Block Second Quarter 2023 Earnings Conference Call. I would now like to turn the call over to your host, Nikhil Dixit, Head of Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our Second Quarter 2023 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. All statements other than statements of historical fact could be deemed to be forward-looking. These forward-looking statements include discussions of our outlook and guidance as well as our long-term targets and goals, and we may decide to shift our priorities or move away from these targets and goals at any time. These statements are subject to risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please take a look at our filings with the SEC for a discussion of the factors that could cause our 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 estimates of gross profit growth, GPV, and GMV performance for the month of July. These represent our current estimates for July performance, as we have not yet finalized our financial statements for the month of July, and our monthly results are not subject to interim review by our auditors. As a result, actual July results may differ from these estimates and may not be reflective of performance for the full third quarter. Moreover, this financial information has been prepared solely on the basis of currently available information by and is the responsibility of management. This preliminary financial information has not been reviewed or audited by our independent public accounting firm. This preliminary financial information is not a comprehensive statement of our financial results for July or the third quarter. Within these remarks, we will also discuss metrics related to our investment framework, including Rule of 40. With Rule of 40, we are evaluating the sum of our gross profit growth and adjusted operating income margins. Also, we will discuss certain non-GAAP financial measures during this call. Reconciliations for the most directly comparable GAAP financial measures are provided in the shareholder letter, historical financial information spreadsheet, and investor data materials 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 and the transcript for Jack and Amrita's opening remarks will be available on our website shortly. With that, I would like to turn it over to Jack.

Thank you for joining us today. I'll spend my time today highlighting the progress we've made on two themes. First, our investment framework, and second, or ecosystem of ecosystems model. You'll find everything else from the quarter in the shareholder letter we posted an hour ago. As we shared earlier this year, we define our investment framework as block and each ecosystem must show a believable path to gross profit retention of over 100% and rule of 40 on adjusted operating income. Today, I want to share our progress towards this target and demonstrate how our investment framework forces us to make trade-offs and guides our decision-making across the company. Leaders across our company are now looking at the true full cost of their businesses, inclusive of share-based compensation. This has led us to pull back on our pace of hiring, to be more targeted in hiring for critical roles, and to focus more on performance management. For sales and marketing, we have focused on efficiency to drive acquisition while decreasing spend. We've pulled back on brand spend and more experimental channels across our ecosystems in favor of channels with more proven returns. This past quarter, we also decided to wind down operations in certain markets, including Cash App's Versbrand in the EU, and our Buy Now, Pay Later platform, Clearpay, in Spain, France, and Italy. These required significant investment, and the markets have not seen the growth and profitability we had expected over the past several years. We see an opportunity to shift these resources towards strategic areas that have a higher potential return on investment. And we continue to drive towards our goal we may identify other areas where we aren't seeing the expected and necessary returns. We also continue to improve our cost structure for each of the ecosystems by identifying opportunities to expand our structural margins. These include the investments we make in technologies like automation and machine learning to manage risk and finding ways to optimize our partnerships. As a result of our investment discipline, we're increasing our profitability expectations for this year, which Amrita will speak about. We'll continue to share updates with you as we make progress towards our target. As a company, our strength and resilience comes from our diversified ecosystems, each serving different audiences and the connections we create between them. There's some notable examples of this work in the second quarter. In June, we turned on Cash App Pay as a payment method for Square invoices, giving customers the ability to pay outstanding invoices directly from their Cash App balance. In the second quarter, We launched Cash App Pay with several well-known after-pay sellers, expanding the connection between Cash App and our Buy Now, Pay Later platform, and also recently launched strategic partnerships with payment providers Stripe, Ideon, and Pay Near Me, an important step in reaching a wider range of merchants. We started enabling Square Payroll employees to file taxes for free by using automated W-2 import directly in the Cash App taxes. After receiving a notification from Square Payroll, Employees simply log in to Cash App Taxes, securely import their W-2, and complete and submit their tax forms. Earlier this year, we shared plans for the public beta testing of our Bitcoin wallet, BitKey. And in June, we announced our first two global partners, Coinbase and Cash App, to allow customers to buy and immediately transfer Bitcoin from those custodial platforms into BitKey's self-custody wallet. I'll now pass it to Amrita, who will provide more details on our financials.