BLOCK Investment & Profitability Ecosystem Overview
BLOCK
INVESTMENTS & PROFITABILITY
Square has benefited from high
structural margins, which have
remained relatively stable over time
Structural Margin
1 - (variable costs as
a % of gross profit)
80%
Structural margins in the
60% to 70% range from
2018 through 2021
60%
40%
20%
0%
2018
2019
2020
2021
69%
2021
For these purposes, corporate overhead is allocated by cost center to each ecosystem based on a driver selected to closely approximate each ecosystem's usage of centralized services which
include ratios like headcount, gross profit, consumption rates. Our corporate overhead used the same methodology and structure as our ecosystems did to assign variable and fixed costs.
From this point, we used the ratio of variable vs fixed to allocate our total corporate overhead variable costs to each of the ecosystems based on their total allocation usage. Excludes
share-based compensation expenses, and expenses related to TIDAL and TBD. Please see Appendix for a reconciliation and information on expense categories.
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