BLOCK Investment & Profitability Ecosystem Overview
BLOCK
Appendix
Slide 21
Square "Return on investment (ROI)" measures the
effectiveness of sales and marketing spend. ROI is calculated
by dividing cumulative cohort gross profit of each cohort of
sellers by GAAP sales and marketing expenses for the
applicable period, excluding the following: Cash App sales
and marketing expenses, Caviar sales and marketing
expenses, and the portion of sales and marketing expenses
from the legacy Weebly business. Cumulative cohort gross
profit excludes gross profit from hardware, Square Gift Cards,
and Weebly prior to the acquisition. We begin measuring
returns for the first full quarter's worth of data for each
cohort.
Slide 22
Square "gross profit retention" is calculated as the
year-over-year gross profit growth of a quarterly seller cohort,
averaged over the last four quarters (excluding gross profit
from hardware, Square Gift Cards, Caviar, and Weebly prior to
the acquisition). We do not include hardware or gift cards
because they are typically non-recurring in nature, gift cards
do not have a material impact to the trend, and we view
hardware as an acquisition tool and not a profit center for our
business.
Slide 31
"Transacting active" or "active" is a Cash App account that
has at least one financial transaction using any product or
service within Cash App during the specified period. A
transacting active for a specific Cash App product has at least
one financial transaction using that product during the
specified period and is referred to as an active. Certain of
these accounts may share an alias identifier with one or more
other transacting active accounts. This could represent,
among other things, one customer with multiple accounts or
multiple customers sharing one alias identifier (for example,
families).
Slide 36
Cash App "acquisition spend" includes paid marketing,
referrals and incentives, brand awareness and social
marketing expenses for a given period, and excludes
peer-to-peer processing and risk loss.
Slide 37
Cash App "cohort" represents the new actives onboarded to
Cash App during a given period.
Cash App "Return on investment (ROI)" or "payback
period" measures the effectiveness of acquisition marketing
spend, and is calculated by taking a given Cash App monthly
cohort's cumulative gross profit net of peer-to-peer expenses,
and dividing by acquisition marketing spend for the month
when the given cohort was onboarded. Cash App gross profit
net of P2P expenses is calculated as gross profit across Cash
App transaction-based profit, Cash App Card gross profit
including interchange and ATM withdrawals, Instant Deposit
gross profit for Cash App, bitcoin gross profit and less certain
variable sales and marketing expenses, including "P2P
expenses" or processing costs and risk loss on peer-to-peer
transactions.
Slide 38
Cash App "gross profit retention" is calculated as the
year-over-year gross profit growth of an annual Cash App
customer cohort, excluding contra revenue and interest
income. A customer's annual cohort is determined based on
the date they first became a transacting active on the
platform. For example, retention for our 2019 cohort is the
average annual gross profit growth from actives who had
their first transaction in 2019.
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