You should read the following discussion and analysis in conjunction with the information set forth within the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as our Annual Report on Form 10-K. The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, our plans, estimates, beliefs and expectations that involve risks and uncertainties, and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Our actual results may differ materially from those contained in or implied by any forward-looking statements. Overview We launched the Square ecosystem in February 2009 to enable businesses ("sellers") to accept card payments, a critical capability that had previously been inaccessible to many businesses. We have since expanded to provide sellers additional products and services and to give them access to a cohesive ecosystem of tools to help them start, run, and grow their businesses. Similarly, with Cash App, we have built an ecosystem of financial products and services to help consumers manage their money. Cash App now provides an ecosystem of commerce solutions, financial solutions, and bitcoin capabilities focused on helping consumers make their money go further by enabling customers to store, send, receive, spend, invest, BNPL, borrow, or save their money. In addition, our nascent ecosystems include TIDAL as well as Bitcoin, which includes businesses such as Proto and Bitkey. In the second quarter of 2026, we generated gross profit of $3.2 billion, up 25% year over year. Cash App generated gross profit of $2.0 billion in the second quarter of 2026, up 31% year over year, driven by growth in Cash App Borrow and Cash App Card. Square generated gross profit of $1.2 billion in the second quarter of 2026, up 13% year over year, driven primarily by Square processing, Square software, and Square Loans. In the second quarter of 2026, operating income was $446.9 million and Adjusted Operating Income was $863.8 million, compared to operating income of $484.3 million and Adjusted Operating Income of $549.6 million in the second quarter of 2025. Net income attributable to common stockholders was $88.5 million for the second quarter of 2026, compared to net income attributable to common stockholders of $538.5 million for the same period in 2025, and Adjusted EBITDA was $1.2 billion for the second quarter of 2026, compared to $891.4 million for the same period in 2025. Net income for the second quarter of 2026 and 2025 included a loss of $88.5 million and gain of $212.2 million, respectively, from the remeasurement of our bitcoin investment. Refer to the Key Operating Metrics and Non-GAAP Financial Measures section below for reconciliations of non-GAAP financial measures to their nearest generally accepted accounting principles ("GAAP") equivalents. In February 2026, we announced a workforce reduction restructuring plan (the “Workforce Plan”) designed to better align our organizational structure with our operating model and strategic priorities. As part of the Workforce Plan, we reduced our workforce by more than 40%. Restructuring charges in connection with the Workforce Plan for the six months ended June 30, 2026 were $495.0 million, which primarily consisted of cash expenditures for notice period and severance payments, employee benefits and related costs, as well as share-based compensation expense. Restructuring charges for the three months ended June 30, 2026 were immaterial. The Workforce Plan concluded during the second quarter of fiscal 2026, and we do not expect to incur any additional material charges related to the Workforce Plan. We have begun realizing benefits related to our focus on disciplined growth and cost efficiencies, and we expect to continue to benefit from these actions in future periods. We plan to continue to operate at this smaller size and are continuing to look at ways to improve our efficiency through a combination of AI automation, prioritization of our scope, performance management, and centralization of teams and functions to reduce duplication. 39 The following table presents a summary of severance and other personnel costs related to the Workforce Plan for the six months ended June 30, 2026 (in thousands): Six Months Ended June 30, 2026 Product development $ 345,603 Sales and marketing 47,836 General and administrative 101,573 Total $ 495,012 We expect annualized net cost savings associated with the Workforce Plan of approximately $800 million to $900 million, related to employee compensation, a portion of which we expect to strategically reinvest in the Company. We began to realize these cost savings during the second quarter of fiscal 2026 following the conclusion of the Workforce Plan. Refer to Note 19, Restructuring, within Notes to the Condensed Consolidated Financial Statements for further details regarding charges related to the Workforce Plan. We ended the second quarter of 2026 with $8.8 billion in available liquidity, with $7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $900.0 million available under our revolving credit facility. During the second quarter of fiscal 2026, we settled $1.6 billion of debt upon the maturity of our 2026 Senior Notes and 2026 Convertible Notes and continued to invest in our lending products, while maintaining a strong liquidity position. Refer to Liquidity and Capital Resources section below for further details. In November 2025, the board of directors of the Company authorized an increase to the Company's share repurchase program to repurchase up to an additional $5 billion of the Company's Class A common stock, for a total authorization of $9 billion. The goal of the program is to return capital to shareholders. The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors. As of June 30, 2026, we have repurchased a total of $4.4 billion of our Class A common stock under the program, of which $700.9 million was purchased in fiscal 2026. Results of Operations Revenue (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Commerce enablement revenue $ 3,341,571 $ 2,898,302 $ 443,269 15 % $ 6,280,041 $ 5,465,277 $ 814,764 15 % Financial solutions revenue 1,382,368 984,553 397,815 40 % 2,704,353 1,859,564 844,789 45 % Bitcoin ecosystem revenue 1,893,748 2,171,602 (277,854) (13) % 3,690,140 4,501,412 (811,272) (18) % Total net revenue $ 6,617,687 $ 6,054,457 $ 563,230 9 % $ 12,674,534 $ 11,826,253 $ 848,281 7 % Total net revenue for the three and six months ended June 30, 2026 increased by $563.2 million, or 9%, and $848.3 million, or 7%, compared to the three and six months ended June 30, 2025, respectively. Bitcoin ecosystem revenue decreased by $277.9 million and $811.3 million, respectively. Excluding bitcoin ecosystem revenue, total net revenue increased by $841.1 million, or 22%, and $1.7 billion, or 23%, respectively. 40 Commerce enablement revenue for the three and six months ended June 30, 2026 increased by $443.3 million, or 15%, and $814.8 million, or 15%, compared to the three and six months ended June 30, 2025, respectively. The increase in revenue was driven by growth in Square processing of $218.1 million and $379.7 million, growth in Cash App Card of $76.2 million and $147.3 million, and growth in Afterpay Post-Purchase revenue of $62.1 million and $134.4 million, in each case for the three and six months ended June 30, 2026, respectively. The growth in Square processing was in line with Square gross payment volume ("GPV") growth of 13% for both the three and six months ended June 30, 2026, driven primarily by strength in Food and Beverage sellers. See below in Key Operating Metrics and Non-GAAP Financial Measures for further discussion of GPV. Financial solutions revenue for the three and six months ended June 30, 2026 increased by $397.8 million, or 40%, and $844.8 million, or 45%, compared to the three and six months ended June 30, 2025, respectively. The increase was primarily due to growth in Cash App's financial solutions-related products, specifically Cash App Borrow where revenue increased by $281.1 million and $650.5 million, respectively, as we continued to expand access to the product, resulting in higher origination volumes. Additionally, revenue from Square's financial solutions-related products increased by $54.4 million and $110.8 million for the three and six months ended June 30, 2026, respectively, primarily related to Square Loans. Bitcoin ecosystem revenue for the three and six months ended June 30, 2026 decreased by $277.9 million, or 13%, and $811.3 million, or 18%, compared to the three and six months ended June 30, 2025, respectively. As bitcoin ecosystem revenue is primarily the total sale amount of bitcoin to customers, the amount of bitcoin ecosystem revenue recognized will fluctuate depending on customer demand and changes in the market price of bitcoin. The decreases were driven by lower bitcoin trading volume and a lower average market price of bitcoin compared to the prior year periods. While the bitcoin ecosystem contributed 29% of total revenue for the three and six months ended June 30, 2026, and 36% and 38% for the three and six months ended June 30, 2025, respectively, gross profit generated from the bitcoin ecosystem was only 2% of total gross profit for both the three and six months ended June 30, 2026, and 4% for both the three and six months ended June 30, 2025. Cost of Revenue (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Commerce enablement costs $ 1,523,639 $ 1,354,370 $ 169,269 12 % $ 2,841,098 $ 2,506,570 $ 334,528 13 % Financial solutions costs 93,819 82,649 11,170 14 % 183,194 160,571 22,623 14 % Bitcoin ecosystem costs 1,821,343 2,066,504 (245,161) (12) % 3,549,300 4,303,901 (754,601) (18) % Amortization of acquired technology assets 12,805 14,404 (1,599) NM 25,622 29,078 (3,456) NM Total cost of revenue $ 3,451,606 $ 3,517,927 $ (66,321) (2) % $ 6,599,214 $ 7,000,120 $ (400,906) (6) % (i) Not meaningful ("NM") Total cost of revenue for the three and six months ended June 30, 2026 decreased by $66.3 million, or 2%, and $400.9 million, or 6%, compared to the three and six months ended June 30, 2025, respectively. The decrease was primarily driven by a decrease in bitcoin ecosystem cost of revenue of $245.2 million and $754.6 million, respectively. Excluding bitcoin ecosystem cost of revenue, total cost of revenue increased by $178.8 million, or 12%, and $353.7 million, or 13%, respectively, largely related to an increase in Square GPV. Commerce enablement costs for the three and six months ended June 30, 2026 increased by $169.3 million, or 12%, and $334.5 million, or 13%, compared to the three and six months ended June 30, 2025, respectively. The increase was primarily driven by higher Square processing costs, in line with the growth of Square GPV of 13%, as well as higher Square hardware costs from the continued distribution of Square products launched in the second half of fiscal 2025. 41 Financial solutions costs for the three and six months ended June 30, 2026 increased by $11.2 million, or 14%, and $22.6 million, or 14%, compared to the three and six months ended June 30, 2025, respectively. The increase was primarily driven by growth in Cash App's financial solutions-related products on Cash App Card, including ATM, Paper Money Deposits, and related processing costs. Over the same periods, financial solutions revenue increased by 40% and 45%, outpacing growth in costs of revenue and resulting in gross margin expansion, primarily due to more favorable economics of Cash App's financial solutions-related products. Bitcoin ecosystem costs for the three and six months ended June 30, 2026 decreased by $245.2 million, or 12%, and $754.6 million, or 18%, compared to the three and six months ended June 30, 2025, respectively. Bitcoin ecosystem costs primarily consist of the total amount we pay to purchase bitcoin, which fluctuates in line with bitcoin ecosystem revenue. Operating Expenses (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Product development $ 608,660 $ 725,288 $ (116,628) (16) % $ 1,647,533 $ 1,485,987 $ 161,546 11 % % of total net revenue 9 % 12 % 13 % 13 % % of total gross profit 19 % 29 % 27 % 31 % Sales and marketing $ 664,955 $ 549,731 $ 115,224 21 % $ 1,315,463 $ 1,054,191 $ 261,272 25 % % of total net revenue 10 % 9 % 10 % 9 % % of total gross profit 21 % 22 % 22 % 22 % General and administrative $ 825,869 $ 449,237 $ 376,632 84 % $ 1,683,433 $ 941,034 $ 742,399 79 % % of total net revenue 12 % 7 % 13 % 8 % % of total gross profit 26 % 18 % 28 % 19 % Transaction, loan, and consumer receivable losses $ 585,450 $ 294,090 $ 291,360 99 % $ 1,085,575 $ 463,779 $ 621,796 134 % % of total net revenue 9 % 5 % 9 % 4 % % of total gross profit 18 % 12 % 18 % 10 % Amortization of customer and other acquired intangible assets $ 34,277 $ 33,891 $ 386 NM $ 68,436 $ 67,547 $ 889 NM % of total net revenue 1 % 1 % 1 % 1 % % of total gross profit 1 % 1 % 1 % 1 % Total operating expenses $ 2,719,211 $ 2,052,237 $ 666,974 32 % $ 5,800,440 $ 4,012,538 $ 1,787,902 45 % Product development expenses decreased by $116.6 million, or 16%, and increased by $161.5 million, or 11%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively. Personnel costs decreased by $146.4 million for the three months ended June 30, 2026, primarily from cost efficiencies realized following the implementation of the Workforce Plan actions in the first quarter of 2026, but increased by $106.3 million for the six months ended June 30, 2026, as the severance and related restructuring charges related to the Workforce Plan recognized in the first quarter of 2026 more than offset those savings. Cloud computing infrastructure fees increased by $86.8 million and $137.7 million for the three and six months ended June 30, 2026, respectively, while allocated IT, human resources, and facilities expenses, mainly attributable to personnel costs and cloud computing infrastructure fees, decreased by $66.4 million and $111.4 million, respectively. 42 Sales and marketing expenses increased by $115.2 million, or 21%, and $261.3 million, or 25%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. The increase for the three and six months ended June 30, 2026 was primarily driven by Cash App peer-to-peer processing costs and related transaction losses of $48.3 million and $131.0 million, respectively, higher marketing and advertising costs of $29.2 million and $49.3 million, respectively, as we prioritize marketing investments to support the growth of Cash App and Square, and higher partnership fees of $29.1 million and $39.5 million, respectively. Further, for the six months ended June 30, 2026, personnel costs increased by $28.5 million, which were driven by the Workforce Plan and other restructuring costs, including severance and related expenses recognized in the first quarter of 2026. General and administrative expenses increased by $376.6 million, or 84%, and $742.4 million, or 79%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively. The increase for the three and six months ended June 30, 2026 was primarily driven by an increase in accrued expenses for estimated and settled amounts in connection with certain litigation and regulatory matters of $294.9 million and $548.7 million, respectively, and an increase in allocated IT, human resources, and facilities expenses of $63.8 million and $106.4 million, respectively, mainly attributable to personnel costs and cloud computing infrastructure fees. Further, for the three months ended June 30, 2026, these increases included $52.5 million of impairment charges related to certain lease assets and property and equipment, which were partially offset by a decrease in personnel costs of $47.6 million driven by cost efficiencies realized following the Workforce Plan actions in the first quarter of 2026. Transaction, loan, and consumer receivable losses increased by $291.4 million, or 99%, and $621.8 million, or 134%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively, as detailed below (in thousands, except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Loan losses $ 433,988 $ 156,931 $ 277,057 177 % $ 802,359 $ 223,884 $ 578,475 258 % Consumer receivable losses (i) 87,768 83,019 4,749 6 % 161,847 132,537 29,310 22 % Transaction losses 63,694 54,140 9,554 NM 121,369 107,358 14,011 NM Total transaction, loan, and consumer receivable losses $ 585,450 $ 294,090 $ 291,360 99 % $ 1,085,575 $ 463,779 $ 621,796 134 % (i) Amounts do not include reserves for certain receivables, such as late fees. Consumer receivables losses also includes provision for charge-back losses that are realized and written-off within the same period, rather than through the allowance for consumer receivable losses. •Loan losses increased by $277.1 million, or 177%, and $578.5 million, or 258%, compared to the three and six months ended June 30, 2025, respectively. The increase in loan losses was driven by significant growth in loan origination volumes of Cash App Borrow and the continued scaling of Afterpay Post-Purchase, as well as growth in Square Loans. Underlying loan loss rates and portfolio credit performance remained stable. Additionally, beginning in the second quarter of 2025, Cash App Borrow and certain other loan products were retained on our balance sheet and classified as held for investment, for which we recognize expected credit losses upfront at origination. As a result, loan losses in a given period reflect the volume, mix, and timing of originations and underlying credit performance. •Consumer receivable losses increased by $4.7 million, or 6%, and $29.3 million, or 22%, compared to the three and six months ended June 30, 2025, respectively, while loss rates remained stable. The increase was primarily due to growth of our Pay in 4 BNPL product and higher origination volumes from preceding periods that reached charge-off during the current quarter. 43 Interest Expense (Income), Net (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Interest expense, net $ 55,721 $ 23,687 $ 32,034 135 % $ 108,916 $ 40,930 $ 67,986 166 % Interest expense, net, increased by $32.0 million, or 135%, and $68.0 million, or 166%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively, primarily due to the issuance of our 2030 and 2033 Senior Notes in the third quarter of 2025, which more than offset interest income received on invested funds. Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details. Remeasurement Loss (Gain) on Bitcoin Investment (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Remeasurement loss (gain) on bitcoin investment $ 88,474 $ (212,165) $ 300,639 142 % $ 261,292 $ (118,814) $ 380,106 320 % Remeasurement loss on bitcoin investment of $88.5 million and $261.3 million for the three and six months ended June 30, 2026, compared to gain on bitcoin investment of $212.2 million and $118.8 million for the three and six months ended June 30, 2025, respectively, was due to the remeasurement of our bitcoin investment to its fair value at each reporting date. Refer to Note 11, Bitcoin within Notes to the Condensed Consolidated Financial Statements for further details regarding the remeasurement of our bitcoin investment. Other Expense (Income), Net (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Other expense (income), net $ 1,199 $ 13,389 $ (12,190) (91) % $ (4,227) $ 5,047 $ (9,274) (184) % Other expense, net, of $1.2 million and other income, net, of $4.2 million for the three and six months ended June 30, 2026, respectively, were primarily due to realized and unrealized gains and losses on certain investments as well as foreign exchange rate impacts. Other expense, net, of $13.4 million and $5.0 million for the three and six months ended June 30, 2025, respectively, was primarily due to losses from the currency revaluation of intercompany loans, partially offset by accretion on investments. Provision for (Benefit from) Income Taxes (in thousands, except for percentages) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Provision for income taxes $ 214,407 $ 121,048 $ 93,359 77 % $ 130,425 $ 159,376 $ (28,951) (18) % Provision for income taxes increased by $93.4 million, or 77%, and decreased by $29.0 million, or 18%, for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, respectively. The increase for the three month period was primarily driven by the tax impact of non-deductible accruals related to certain litigation and regulatory matters. This impact was partially offset by a larger one-time benefit from the partial release of a valuation allowance on certain California deferred tax assets compared with the prior year period. The decrease for the six month period was primarily driven by one-time tax benefits related to Workforce Plan restructuring charges and the partial release of the California valuation allowance. These benefits were partially offset by the tax impact of non-deductible litigation and regulatory accruals and lower pre-tax income in taxable jurisdictions. 44 Segment Results Square The following table provides a summary of the revenue and gross profit for our Square segment for the three and six months ended June 30, 2026 and June 30, 2025 (in thousands, except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Segment net revenue $ 2,503,563 $ 2,166,275 $ 337,288 16 % $ 4,615,885 $ 4,018,435 $ 597,450 15 % Segment cost of revenue 1,343,327 1,139,464 203,863 18 % 2,474,099 2,093,726 380,373 18 % Segment gross profit $ 1,160,236 $ 1,026,811 $ 133,425 13 % $ 2,141,786 $ 1,924,709 $ 217,077 11 % Revenue Revenue for the Square segment for the three and six months ended June 30, 2026 increased by $337.3 million, or 16%, and $597.5 million, or 15%, compared to the three and six months ended June 30, 2025, respectively. The increase was primarily due to the Square items referenced within our overall revenue discussion. Cost of Revenue Cost of revenue for the Square segment for the three and six months ended June 30, 2026 increased by $203.9 million, or 18%, and $380.4 million, or 18%, compared to the three and six months ended June 30, 2025, respectively. The increase was primarily due to the Square items referenced within our overall cost of revenue discussion. Cash App The following table provides a summary of the revenue and gross profit for our Cash App segment for the three and six months ended June 30, 2026 and June 30, 2025 (in thousands, except for percentages): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 $ Change % Change 2026 2025 $ Change % Change Segment net revenue $ 4,020,683 $ 3,844,928 $ 175,755 5 % $ 7,891,389 $ 7,723,942 $ 167,447 2 % Segment cost of revenue 2,047,680 2,344,428 (296,748) (13) % 4,010,252 4,843,491 (833,239) (17) % Segment gross profit $ 1,973,003 $ 1,500,500 $ 472,503 31 % $ 3,881,137 $ 2,880,451 $ 1,000,686 35 % Revenue Revenue for the Cash App segment for the three and six months ended June 30, 2026 increased by $175.8 million, or 5%, and $167.4 million, or 2%, compared to the three and six months ended June 30, 2025, respectively. The increase was driven by the Cash App items referenced within our overall revenue discussion. While bitcoin ecosystem revenue contributed 45% of Cash App revenue for three and six months ended June 30, 2026, respectively, gross profit generated from bitcoin ecosystem was only 3% of Cash App gross profit for the three and six months ended June 30, 2026. Excluding bitcoin ecosystem revenue, Cash App net revenue increased by $533.9 million, or 32%, and $1.1 billion, or 34%, compared to the three and six months ended June 30, 2025. 45 Cost of Revenue Cost of revenue for the Cash App segment for the three and six months ended June 30, 2026 decreased by $296.7 million, or 13%, and $833.2 million, or 17%, compared to the three and six months ended June 30, 2025, respectively. The decrease was due to the items referenced within our overall cost of revenue discussion. Excluding bitcoin ecosystem cost of revenue, Cash App cost of revenue increased by $6.6 million, or 2%, and $27.3 million, or 5%, compared to the three and six months ended June 30, 2025, respectively. Key Operating Metrics and Non-GAAP Financial Measures We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources, and assess our performance. In addition to total net revenue, operating income (loss), net income (loss), and other results reported under GAAP, the following table sets forth key operating metrics and non-GAAP financial measures we use to evaluate our business. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business, and to facilitate comparisons of our performance to that of other payment solution providers. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gross Payment Volume (GPV) (in millions) $ 74,734 $ 66,615 $ 137,843 $ 123,412 Adjusted Operating Income (in thousands) $ 863,845 $ 549,569 $ 1,591,517 $ 1,015,838 Adjusted EBITDA (in thousands) $ 1,168,597 $ 891,422 $ 2,178,818 $ 1,704,216 Adjusted Net Income Per Share: Basic $ 1.04 $ 0.63 $ 1.89 $ 1.20 Diluted $ 1.02 $ 0.62 $ 1.87 $ 1.18 Gross Payment Volume (GPV) GPV includes Square GPV and Cash App GPV. Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds. Cash App GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card. GPV does not include transactions related to our BNPL products. Adjusted EBITDA, Adjusted EPS and Adjusted Operating Income Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures that represent our net income (loss) and net income (loss) per share, adjusted to eliminate the effect of items as described below. Adjusted Operating Income is a non-GAAP financial measure that represents our operating income (loss), adjusted to eliminate the effect of items as described below. We have included these non-GAAP financial measures in this Quarterly Report on Form 10-Q because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe these measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain variable charges that do not vary with our operations. •We believe it is useful to exclude certain non-cash charges, such as amortization of intangible assets, from our non-GAAP financial measures because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. 46 •We believe that excluding the expense related to amortization of debt discount and issuance costs from our non-GAAP measures is useful to investors because such incremental non-cash interest expense does not represent a current or future cash outflow for the Company and is therefore not indicative of our continuing operations or meaningful when comparing current results to past results. Additionally, for purposes of calculating diluted Adjusted EPS, we add back cash interest expense on convertible notes, as if converted at the beginning of the period, if the impact of the note conversion is dilutive. •We exclude the following from non-GAAP financial measures because we do not believe that these items are reflective of our ongoing business operations: gain or loss on the disposal of property and equipment; gain or loss on revaluation of equity investments; gain or loss from the remeasurement of our bitcoin investment; and discrete benefits from the release of valuation allowances on our deferred tax assets, as applicable. •To aid in comparability of our results across periods, we also exclude certain acquisition-related and integration costs associated with business combinations, various contingencies, restructuring and other costs, and goodwill and intangible asset impairment charges, each of which are not normal operating expenses. Acquisition related costs include amounts paid to redeem acquirees’ unvested share-based compensation awards, charges associated with holdback liabilities, and legal, accounting, valuation, and due diligence costs. Integration costs include advisory and other professional services or consulting fees necessary to integrate acquired businesses. Contingencies, restructuring and other costs that are not reflective of our core business operating expenses may include severance costs, contingent losses, impairment charges, and certain litigation and regulatory charges. We also add back the impact of the acquired deferred revenue and deferred cost adjustment, which was written down to fair value in purchase accounting. In addition to the items above, Adjusted EBITDA as a non-GAAP financial measure also excludes depreciation and amortization, other cash interest income and expense, and other income and expense. Non-GAAP financial measures have limitations, should be considered as supplemental in nature, and are not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following: •the intangible assets being amortized may have to be replaced in the future, and the non-GAAP financial measures do not reflect cash capital expenditure requirements for such replacements or for new capital expenditures or other capital commitments; and •non-GAAP measures do not reflect changes in, or cash requirements for, our working capital needs. In addition to the limitations above, Adjusted EBITDA does not reflect the effect of share-based compensation expense, which has been, and will continue to be for the foreseeable future, a significant recurring expense in our business and an important part of our compensation strategy, depreciation and amortization expense and related cash capital requirements, income taxes that may represent a reduction in cash available to us, and the effect of foreign currency exchange gains or losses, which is included in other income and expense. In view of the limitations associated with Adjusted EBITDA, we also present Adjusted Operating Income (Loss), which is a non-GAAP financial measure that excludes certain expenses that we believe are not reflective of our core operating performance, including amortization of intangible assets, acquisition-related and integration costs, various contingencies, restructuring and other costs, and goodwill and intangible asset impairment charges. Adjusted Operating Income (Loss) and Adjusted EPS include the effect of share-based compensation expense, as well as depreciation expense. Other companies, including companies in our industry, may calculate the non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures. Because of these limitations, you should consider the non-GAAP financial measures alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. 47 The following table presents a reconciliation of operating income (loss) to Adjusted Operating Income (Loss) for each of the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Operating income $ 446,870 $ 484,293 $ 274,880 $ 813,595 Amortization of acquired technology assets 12,805 14,404 25,622 29,078 Acquisition-related and integration costs 367 1,042 729 1,362 Contingencies, restructuring and other charges 365,118 15,844 1,107,930 93,655 Restructuring share-based compensation expense 4,408 95 113,920 10,601 Amortization of customer and other acquired intangible assets 34,277 33,891 68,436 67,547 Adjusted Operating Income $ 863,845 $ 549,569 $ 1,591,517 $ 1,015,838 The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for each of the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) attributable to common stockholders $ 88,517 $ 538,458 $ (220,164) $ 728,330 Less: Net loss attributable to noncontrolling interests (1,448) (124) (1,362) (1,274) Net income (loss) 87,069 538,334 (221,526) 727,056 Share-based compensation expense 255,343 297,246 484,531 601,976 Restructuring share-based compensation expense 4,408 95 113,920 10,601 Depreciation and amortization 95,051 92,397 191,028 181,345 Acquisition-related and integration costs 367 1,042 729 1,362 Contingencies, restructuring and other charges 365,118 15,844 1,107,930 93,655 Interest expense, net 55,721 23,687 108,916 40,930 Remeasurement loss (gain) on bitcoin investment 88,474 (212,165) 261,292 (118,814) Other expense (income), net 1,199 13,389 (4,227) 5,047 Provision for income taxes 214,407 121,048 130,425 159,376 Loss on disposal of property and equipment 1,434 495 5,788 1,659 Acquired deferred revenue and cost adjustment 6 10 12 23 Adjusted EBITDA $ 1,168,597 $ 891,422 $ 2,178,818 $ 1,704,216 48 The following table presents a reconciliation of net income (loss) to Adjusted Net Income (Loss) Per Share for each of the periods indicated (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) attributable to common stockholders $ 88,517 $ 538,458 $ (220,164) $ 728,330 Less: Net loss attributable to noncontrolling interests (1,448) (124) (1,362) (1,274) Net income (loss) 87,069 538,334 (221,526) 727,056 Acquisition-related and integration costs 367 1,042 729 1,362 Contingencies, restructuring and other charges 365,118 15,844 1,107,930 93,655 Restructuring share-based compensation expense 4,408 95 113,920 10,601 Amortization of intangible assets 47,082 48,295 94,058 96,625 Amortization of debt discount and issuance costs 3,287 2,835 7,173 6,134 Loss (gain) on revaluation of equity investments 4,140 (1,582) 9,805 (1,456) Remeasurement loss (gain) on bitcoin investment 88,474 (212,165) 261,292 (118,814) Loss on disposal of property and equipment 1,434 495 5,788 1,659 Acquired deferred revenue and cost adjustment 6 10 12 23 Income tax benefits from deferred tax assets (113,385) (52,600) (113,385) (52,600) Tax effect of non-GAAP net income adjustments 131,553 44,538 (133,365) (24,833) Adjusted Net Income - basic $ 619,553 $ 385,141 $ 1,132,431 $ 739,412 Cash interest expense on convertible notes 275 267 539 700 Adjusted Net Income - diluted $ 619,828 $ 385,408 $ 1,132,970 $ 740,112 Weighted-average shares used to compute Adjusted Net Income Per Share: Basic 597,829 612,882 597,702 616,108 Diluted 608,847 618,928 606,505 627,103 Adjusted Net Income Per Share: Basic $ 1.04 $ 0.63 $ 1.89 $ 1.20 Diluted $ 1.02 $ 0.62 $ 1.87 $ 1.18 Diluted Adjusted Net Income Per Share is computed by dividing Adjusted Net Income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock. In periods when we reported an Adjusted Net Loss, diluted Adjusted Net Income Per Share is the same as basic Adjusted Net Income Per Share because the effects of potentially dilutive items were anti-dilutive. The following table presents a reconciliation of the tax effect of non-GAAP net income adjustments to our provision for (benefit from) income taxes (in thousands, except effective tax rate): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Provision for income taxes, as reported $ 214,407 $ 121,048 $ 130,425 $ 159,376 Income tax benefits from deferred tax assets 113,385 52,600 113,385 52,600 Tax effect of non-GAAP net income adjustments (131,553) (44,538) 133,365 24,833 Adjusted provision for income taxes, non-GAAP $ 196,239 $ 129,110 $ 377,175 $ 236,809 Non-GAAP effective tax rate 24 % 25 % 25 % 24 % 49 We determined the adjusted provision for income taxes by calculating the estimated annual effective tax rate based on our adjusted provision for income taxes, non-GAAP and applying it to Adjusted Net Income before income taxes. Liquidity and Capital Resources Liquidity Sources As of June 30, 2026, we had approximately $8.8 billion in available liquidity, with $7.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as an undrawn amount of $900.0 million available under our revolving credit facility. Additionally, we had $342.5 million available to be withdrawn under our warehouse funding facilities. Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for more details. We intend to continue focusing on our long-term business initiatives and believe that our available funds are sufficient to meet our liquidity needs for the foreseeable future, including our share repurchase program and debt repayment obligations. As of June 30, 2026, we were in compliance with all financial covenants associated with our revolving credit facility and senior notes. None of our warehouse funding facilities contain financial covenants. The following table summarizes our available liquidity (in thousands): June 30, 2026 December 31, 2025 Cash and cash equivalents $ 6,427,331 $ 6,564,092 Short-term restricted cash (i) 821,679 1,071,574 Long-term restricted cash 71,911 73,786 Investments in short-term debt securities 310,845 517,777 Investments in long-term debt securities 225,441 188,887 Revolving credit facility 900,000 775,000 Total liquidity $ 8,757,207 $ 9,191,116 (i) As of June 30, 2026, we have invested $278.6 million of restricted cash into a money market fund. See Note 5, Fair Value Measurements. Our principal sources of liquidity are our cash and cash equivalents, and investments in marketable debt securities. Customer funds cash and cash equivalents are excluded from our liquidity as these are funds we hold on behalf of customers that are separate from our corporate funds and are not available for corporate purposes. Investments in marketable debt securities were held primarily in certificates of deposits, money market funds, reverse repurchase agreements, U.S. government and agency securities, commercial paper, and corporate bonds. We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Our investments in marketable debt securities are classified as available-for-sale. As of June 30, 2026, we held approximately 9,117 bitcoins for long-term investment purposes ("bitcoin investment") with a fair value of $533.9 million based on observable market prices. We believe cryptocurrency is an instrument of economic empowerment that aligns with our corporate purpose. We expect to hold these investments for the long-term but will continue to reassess our bitcoin investment relative to our balance sheet. Bitcoin is considered an indefinite-lived intangible asset, and upon adoption of Accounting Standards Update No. 2023-08, Accounting for and Disclosure of Crypto Assets, effective January 1, 2023, our bitcoin investment is remeasured at fair value at each reporting date with changes recognized in net income through "Remeasurement loss (gain) on bitcoin investment" within the condensed consolidated statements of operations. We purchased approximately 85 and 234 bitcoins with a cost basis of $5.1 million and $17.6 million during the three and six months ended June 30, 2026, respectively, for investment purposes. We purchased approximately 108 and 207 bitcoins with a cost basis of $11.0 million and $20.6 million for the three and six months ended June 30, 2025, respectively, for investment purposes. We did not sell any of our bitcoin investment during the three and six months ended June 30, 2026 and June 30, 2025. We recognized losses of $88.5 million and $261.3 million from the remeasurement of our bitcoin investment during the three and six months ended June 30, 2026, respectively. We recognized gains of $212.2 million and $118.8 million from the remeasurement of our bitcoin investment during the three and six months ended June 30, 2025, respectively. 50 Our principal commitments consist of convertible notes, senior notes, revolving credit facility, warehouse funding facilities, operating leases, and purchase commitments. Refer to Note 12, Indebtedness and Note 16, Commitments and Contingencies within Notes to the Condensed Consolidated Financial Statements for more details on these commitments. Senior Notes and Convertible Notes As of June 30, 2026, we held $5.8 billion in aggregate principal amount of debt, comprised of $575.0 million in aggregate amount of convertible senior notes that mature on November 1, 2027 (the “Convertible Notes”), as well as an outstanding $1.2 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2030 ("2030 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on June 1, 2031 ("2031 Senior Notes"), $2.0 billion in aggregate principal amount of senior unsecured notes that mature on May 15, 2032 ("2032 Senior Notes"), $1.0 billion in aggregate principal amount of senior unsecured notes that mature on August 15, 2033 ("2033 Senior Notes" and, together with the 2030 Senior Notes and 2031 Senior Notes, the “Senior Notes” and, together with the Convertible Notes, the “Notes”). Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details. Revolving Credit Facility We have entered into a revolving credit agreement with certain lenders, as subsequently amended and restated, which provides a $900.0 million senior unsecured revolving credit facility maturing in January 2031. Refer to Note 12, Indebtedness within Notes to the Condensed Consolidated Financial Statements for further details. Warehouse Funding Facilities We have warehouse funding facilities ("Warehouse Facilities") with an aggregate amount of $1.5 billion on a revolving basis, of which $1.2 billion was drawn as of June 30, 2026. The Warehouse Facilities have been arranged utilizing wholly-owned and consolidated entities (collectively, the Warehouse Special Purpose Entities ("Warehouse SPEs")) formed for the sole purpose of financing the origination of consumer receivables to partly fund certain BNPL products. Borrowings under the Warehouse Facilities are secured against the respective consumer receivables. While the Warehouse SPEs are included in our condensed consolidated financial statements, they are separate legal entities that maintain legal ownership of the receivables they hold. The assets of the Warehouse SPEs are not available to satisfy our claims or those of our creditors. Cash, Restricted Cash, and Working Capital We believe that our existing cash and cash equivalents, investment in marketable debt securities, and availability under our line of credit and warehouse funding facilities will be sufficient to meet our working capital needs, including any expenditures related to strategic transactions and investment commitments that we may from time to time enter into, short-term debt repayments, shares repurchased through our share repurchase program, and planned capital expenditures for at least the next 12 months. From time to time, we have raised capital by issuing equity, equity-linked, or debt securities such as our Convertible Notes and Senior Notes; and we may do so in the future. However, such funding may not be available on terms acceptable to us or at all. During 2025, we received an investment grade rating by Fitch Ratings, Inc. (BBB-) and a non-investment grade rating from Moody's Corporation (Ba1), and our non-investment grade rating from S&P Global Ratings (BB+) was affirmed. We expect that these credit rating agencies will continue to monitor our performance, including our capital structure and results of operations. Our liquidity, access to capital, and borrowing costs could be adversely impacted by declines in our credit rating. 51 Short-term restricted cash of $821.7 million as of June 30, 2026 primarily includes cash held by the Warehouse SPEs used in the Warehouse Facilities funding arrangements that will be used to pay the borrowings under the Warehouse Facilities or will be distributed to us. It also includes pledged cash deposits in accounts at the financial institutions that process our sellers' payment transactions and collateral pursuant to various agreements with banks relating to our products. We use restricted cash to secure letters of credit with the related financial institutions to provide collateral for cash flow timing differences in the processing of payments. We have recorded these amounts as current assets on our condensed consolidated balance sheet given the short-term nature of these cash flow timing differences and that there is no minimum time frame during which the cash must remain restricted. Long-term restricted cash of $71.9 million as of June 30, 2026 is primarily related to cash held as collateral as required by the Federal Deposit Insurance Corporation ("FDIC") for Square Financial Services. We have recorded these amounts as non-current assets on our condensed consolidated balance sheet as the requirement by the FDIC specifies a time frame of 12 months or longer during which the cash must remain restricted. We experience significant day-to-day fluctuations in our cash and cash equivalents due to fluctuations in settlements receivable and customers payable, and hence working capital. These fluctuations are primarily due to: •Timing of period end. For periods that end on a weekend or a bank holiday, our cash and cash equivalents, settlements receivable, and customers payable balances typically will be higher than for periods ending on a weekday, as we settle to our sellers for payment processing activity on business days; and •Fluctuations in daily GPV. When daily GPV increases, our cash and cash equivalents, settlements receivable, and customers payable amounts increase. Typically our settlements receivable and customers payable balances at period end represent one to four days of receivables and disbursements to be made in the subsequent period. Customers payable, excluding amounts attributable to Cash App stored funds, and settlements receivable balances typically move in tandem, as pay-out and pay-in largely occur on the same business day. However, customers payable balances will be greater in amount than settlements receivable balances due to the fact that a subset of funds are held due to unlinked bank accounts, risk holds, and chargebacks. Customer funds obligations, which may be impacted by the timing of period end, number of processors used and processing times, are included in customers payable and may also cause customers payable to trend differently than settlements receivable. Holidays and day-of-week may also cause significant volatility in daily GPV amounts. Cash Flow Activities The following table summarizes our cash flow activities (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 1,985,416 $ 507,658 Net cash provided by (used in) investing activities (6,324) 428,928 Net cash used in financing activities (1,608,643) (2,119,460) Effect of foreign exchange rate on cash and cash equivalents (526) 94,932 Net increase (decrease) in cash, cash equivalents, restricted cash, and customer funds $ 369,923 $ (1,087,942) Cash Flows from Operating Activities For the six months ended June 30, 2026, cash provided by operating activities was $2.0 billion, comprised of net loss of $221.5 million, adjusted for non-cash expenses of $2.3 billion, consisting primarily of transaction, loan, and consumer receivable losses; share-based compensation; bitcoin remeasurement loss; depreciation and amortization; non-cash lease expense and other non-cash adjustments; and changes in deferred income taxes, all of which contributed positively to operating activities. These were partially offset by the amortization of discounts and premiums, primarily related to consumer receivables, of $603.1 million. Changes in other assets and liabilities, including customers payable and settlements receivable, of $617.1 million contributed positively and was primarily due to the timing of period end. 52 For the six months ended June 30, 2025, cash provided by operating activities was $507.7 million, comprised of net income of $727.1 million, adjusted for non-cash expenses of $1.2 billion, consisting primarily of share-based compensation; transaction, loan, and consumer receivable losses; and depreciation and amortization, all of which contributed positively to operating activities. These were partially offset by the amortization of discounts and premiums, primarily related to consumer receivables, of $548.1 million; net outflows from loan products of $470.8 million; bitcoin remeasurement loss of $118.8 million; and net outflows related to changes in other assets and liabilities, including customers payable and settlements receivable, of $419.8 million due to the timing of period end. Cash Flows from Investing Activities For the six months ended June 30, 2026, cash used in investing activities was $6.3 million, primarily due to net outflows of $1.1 billion primarily related to Cash App Borrow and Afterpay Post-Purchase loans originated through Square Financial Services and the purchases of property and equipment of $83.8 million. These were partially offset by net inflows related to consumer receivables of $685.7 million; net proceeds from other investments primarily due to the sale of a non-marketable equity security of $329.8 million; and net proceeds from investments of marketable securities of $171.7 million. For the six months ended June 30, 2025, cash provided by investing activities was $428.9 million, primarily due to a net inflow related to consumer receivables of $855.7 million and net proceeds from investments of marketable securities of $370.2 million. These were partially offset by net outflows of $706.9 million primarily related to Cash App Borrow loans originated through Square Financial Services and the purchases of property and equipment of $63.2 million. Cash Flows from Financing Activities For the six months ended June 30, 2026, cash used in financing activities was $1.6 billion primarily due to a $1.0 billion cash payment to settle the outstanding principal balance of the 2026 Senior Notes, plus accrued and unpaid interest, that matured in June 2026 as well as a $575.0 million cash payment for the settlement of the outstanding 2026 Convertible Notes that matured in May 2026; $700.9 million of share repurchases in the first and second quarters of 2026; and net repayments under Warehouse Facilities borrowings of $216.0 million. These were partially offset by an increase in customer funds of $758.5 million and interest-bearing deposits of $90.0 million. For the six months ended June 30, 2025, cash used in financing activities was $2.1 billion, driven by $1.1 billion of share repurchases in the first and second quarters of 2025; a $1.0 billion cash payment for the settlement of the outstanding 2025 Convertible Notes that matured in March 2025; and net repayments under Warehouse Facilities borrowings of $806.8 million. These were partially offset by increases in customer funds of $754.9 million and interest-bearing deposits of $54.8 million. Critical Accounting Estimates Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with GAAP. GAAP requires us to make certain estimates and judgments that affect the amounts reported in our financial statements. We base our estimates on historical experience, anticipated future trends, and other assumptions we believe to be reasonable under the circumstances. Because these accounting estimates require significant judgment, our actual results may differ materially from our estimates. There were no significant changes in our critical accounting estimates during the quarter ended June 30, 2026 compared to those previously disclosed in “Critical Accounting Policies and Estimates” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025. Recent Accounting Pronouncements Refer to “Recent Accounting Pronouncements” described in Note 1, Description of Business and Summary of Significant Accounting Policies within Notes to the Condensed Consolidated Financial Statements. 53