Block, Inc. (XYZ) Earnings Call Transcript & Summary

Welcome. Thank you for joining us for Blocks Investor Day. We have a lot to share today, and we're excited to have you join us. Before we get started, we would like to remind you that we will be making forward-looking statements during the course of this Investor Day. 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 risks and other factors that could cause our results to differ. Also, note that the forward-looking statements during this Investor Day 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. Additional information regarding the matters discussed during this Investor Day is contained in the slide presentations available on our Investor Relations website, including additional information about the financial and nonfinancial measures discussed. We encourage you to review these slides as they contain important supplemental information to the matters discussed today. Also, we will discuss certain non-GAAP financial measures during this Investor Day. Reconciliations to the most directly comparable GAAP financial measures are provided in the presentations, which are available on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Now on to the agenda. Today, you'll hear from our team about our products, strategy and financials. We'll start by covering our vision and market opportunity, followed by deep dives in the Square, Cash App, the Afterpay acquisition and our title and Bitcoin ecosystems. We'll round it out with Block's business model, and then we'll end with the Q&A Session. With that, let's get started.

Thank you all for joining us. This is our second Investor Day as a company and our first as Block, Inc. We haven't talked about our company this cohesively since our last Investor Day 5 years ago. A lot has changed since that time. We know these days can feel long. So we decided to make it even longer by having brief live sections between the recorded sections. It might be awesome, it might be annoying, we just wanted to make it a little more human. And we're going to kick things off with me describing what we're building, and I'll see you back here live after our CFO, Amrita section. Thank you all for joining us today. We haven't had the chance to tell the Block story in over 5 years. So we appreciate the time you've given us. A lot has changed since our last Investor Day. I wanted to start by answering the question, what is Block? Fitting a company like ours into a single category is difficult. Based on everything we're doing, we span a bunch of them. So instead, I'll talk about what we're building. We're building an ecosystem of ecosystems. Let me use my time with you to define what that is and why we think it's so valuable. We started Square at the beginning of 2009 with one goal, make a credit card reader anyone could use with the tool they already had, their mobile phone. A few months after that, we realized we actually weren't making a credit card reader. We're making a service to help a seller make a sale. That insight expanded the scope of the problem significantly, especially as we ask a follow-up question, how do we help a seller make more sales? The answer to that question led us to a suite of tools and services from a full register to point-of-sale software for retailers, restaurants and services, an online store, invoices, customer relationship, employee and location management, a debit card and banking tools, loans and a full-fledged developer platform to extend beyond what we've built. We call what we've built for sellers an ecosystem. That is a set of hardware and software tools and services that work together, often positively reinforcing one another, creating a resilient customer relationship. In the past, sellers would have to hook up all of these tools themselves to run their businesses. We decided to take all that complexity away, handle it ourselves and give sellers time back to focus on what matters, their customers and growing their business. If they grow their business, we grow our business. It's a perfect virtuous cycle with very little tax on our customers. And it managed to expand our value beyond payments and towards software services. It also gave us resiliency. Sellers may hire us to do 3 or 4 jobs for them. If they aren't satisfied with one, they can fire us for that one, but they aren't firing our entire company. They may not use us for a loan, but will continue to use us for software, payments, register and CRM. It gives us time to address the issues for the service they fired. And perhaps in the future, they were rehires for that one, too. In 2013, we launched another product called Cash App. It started like Square focused on one specific problem, moving money between people in the simplest way possible. Initially, it was an e-mail product, and you can send an e-mail to anyone, cc [ [email protected] ] and put the amount you wanted to send in the subject line or body. And it worked instantly because we pushed that money to the debit card, the recipient entered. Eventually, we converted it into an app and worked on growing the network and finding a monetization model. That exploration led us to building a way to store a balance with us, pay for instant deposit, issue a Visa card that also worked at ATMs, direct deposit, a bitcoin exchange, fractional stock purchases, taxes, an instant rewards program and lending. Once again, we got to an ecosystem of services that all work together, this time for a different audience, consumers. Once again, we could scale to whatever job someone needed us to do. Taking all the complexity away from getting these services from multiple vendors by putting it all into a single app. So in 2019, we found ourselves with 2 massively scaled ecosystems, one for sellers, and one for consumers. And we ask 2 further questions, do these ecosystems connect? And should we create ecosystems for new audiences? These 2 questions get at the heart of how unique we are and how massive our potential value can grow over time. Let me expand on each now. Why would we want to connect 2 completely different ecosystems? There are customer-focused reasons and reasons for our business. Sellers and their employees, for instance, have consumer financial needs that aren't served by the seller ecosystem, but are served by Cash App. Consider our payroll product, employees can opt in to getting their pay via Cash App, which means it's faster and enables everything Cash App has to offer, including our rewards program and stocks purchasing. We also see Cash App consumers and micro sellers who intend to start or grow business, get a Cash App business account and may eventually need the sophistication Square offers them. These ecosystems naturally have many connection points, including the fact that we see a lot of cash card usage at Square sellers and see opportunity to drive traffic to Square businesses in someone's neighborhood. This was our strategy behind our acquisition of Afterpay, a buy now, pay later service that has relationships with both buyers and sellers. It provides a new way for sellers to grow their sales and new discovery methods for people on Cash App. The more connections between our ecosystems we create, the more resilience our overall company enjoys in addition to competitive advantages. Very few companies have both sides of the network we have at Block, just by making natural connections between our ecosystems. After seeing these connections, we knew we had a model that would allow us to create new ecosystems, serving new audiences. We chose 3 to start. [ Musicians ] in the bitcoin ecosystem of developers and consumers. We acquired TIDAL because we saw the artists take a pass similar to small businesses and that there's a significant gap in the market around artist tools. This is especially important as the creator economy continues to grow, while AI removes more and more of the need for mechanical work. This will be a massive economy in the future and we see an opportunity to be a big part of it, all using the tools and platform we've already built. We also see bitcoin as an extraordinary trend towards an open standard for global money transmission. That becoming a reality allows our entire business to move faster globally for sellers, consumers and for artists. Given our expertise and experience with developer platforms and hardware, we decided to fill further gaps in the market, which we believe will become massive parts of our business in the future and a smart way to add resilience to our company. TBD, our hardware wallet and our bitcoin miner will all enable a self [indiscernible] Economy that addresses many faults in the current financial system, especially identity and trust. We are no longer just a payments company. Everything I've described will create an ecosystem of tools and services for tailored audiences. Square for sellers, Cash App for consumers, TIDAL for artists, TBD for bitcoin developers and Bitcoin hardware for those wanting to participate in the new economic reality. Each of them shares only one purpose, build simple tools to empower people into the economy. Each connects together to make their offerings more valuable and distinctive for their customers. There are very few examples of organizations pulling this off. And we believe we will be a leader in demonstrating how tremendously beneficial this model can be for the world. We've already approved it with the Square and Cash App ecosystems, and we will do so again with our new ecosystems and with the new ones to come. Now we'll turn to how we think about our story from a financial perspective, and then we'll dive deeper into each of these ecosystems. Thank you again for the time, and I'm looking forward to our discussion later on.

You heard a lot from Jack about how we think about our ecosystem of ecosystems and our shared purpose of economic empowerment. Now I want to ground you in how that has driven our growth, expanded our addressable market and where we are in capturing the opportunity. I want to start by reflecting on how our company has grown since our first card reader and a pivotal moment since to show you the evolution that Jack mentioned. When we started the company more than 10 years ago, we began with a simple idea of allowing small businesses to accept credit card payments using their mobile phone. As we heard from our sellers and listen to their struggles, we learned more about other tools and services they needed. By the time we went public 5 years later, we had started to build an ecosystem of products to allow sellers to start, run and grow their business. We also started serving a new audience and consumers with an initial use case around moving money. By our first Investor Day in 2017, and we were expanding the Square ecosystem to offer more financial services and omnichannel capabilities. We also started expanding globally and building tools to serve the needs of larger sellers. Cash App or Square Cash at the time was still in its infancy. We had approximately 3 million monthly actives at the end of 2016, and we're just beginning to grow the product set. Looking back, only 5 of the nearly 200 slides mentioned Cash App in our 2017 Investor Day without a single slide dedicated solely to it. By the end of 2019, we had experienced significant growth in both of these ecosystems. Cash App was a core of our gross profit even as Square had nearly doubled its gross profit since 2017. In 2020, with the onset of the pandemic, our tools and services became even more important to help sellers and consumers adapt quickly to a changing world. Fast forward to today, we've had a relentless pace of innovation and service of our customers. We use a platform approach so that each of these products integrate with the others and work seamlessly together. It's more work for us to connect our products in a way that makes our customers' money and data move quickly, but it takes the work of our customers' plate creating simplicity and speed, which ultimately builds trust. The growth of our product platform has led to our ability to understand and address the needs of our customers, which in turn, has enabled us to build our business. Looking at our gross profit growth over the past 5 years is remarkable. We compounded growth by an average of more than 50% in each of the last 5 years. Our scale is more than 5x greater than in 2017 at our last Investor Day and 2x greater than in 2019. We've done this in part by continuing to grow and expand the Square business. Despite the pandemic, Square has grown at a 31% CAGR over the past 5 years. And we also did it by growing an entirely new scaled and durable ecosystem in Cash app, from little monetization in 2017 to now almost half of our total gross profit. We've not only grown our top line, we've also grown our profitability. This has been a result of discipline in measuring the returns on investments we make, guided by focusing our investable dollars on reaching and benefiting our customers. We've launched and scaled products with strong structural profitability, something I'll speak more about later today when we discuss our business model. When you put together our top line progression and profitability at scale, you see the incredible growth plus margin profile we've delivered over the past 5 years. We look at growth and margin together to help evaluate trade-offs in the investments we make and the different maturities of our ecosystems. We showed you how our product set has grown over the years. Now let's look at what that's done for our market opportunity. We started small in 2010 by addressing a particular use case for micro merchants. And as we grew our product set and the customers we serve, we unlocked a new market and added more use cases we could solve across 2 ecosystems. By following the needs of our customers, we scaled 2 broad product platforms, reaching sizable markets. With what we have in our portfolio today, we're now addressing a market opportunity of nearly $200 billion across Square and Cash App. For 2022, we've estimated our market opportunity based on the primary products we offer today to our target customer audiences and in our current geographies. In that sense, we think this represents our serviceable, addressable market today. And in the coming years, we expect to continue expanding our surface area. We also now size the opportunity on a gross profit basis, to reflect how we evaluate growth and to normalize for business models compared to showing the revenue opportunity in prior years. So the increase from prior years to 2022 on a comparable basis is even greater than what you see here. I'm going to share with you now not only how we build up to these numbers, but also how we could be under calling it. These 2022 figures may significantly underestimate the size of the opportunity we'll be addressing in the next 5 years, given the secular tailwinds behind our Square and Cash App ecosystems. We believe in our ability to launch and scale new products and geographies, our emerging initiatives around creators and Bitcoin and the interconnections across ecosystems, all of which make the whole far greater than the sum of the parts. Let's start with Square. We begin by looking at U.S. commerce. We think about commerce as a combination of integrated payments and software, which are inherently linked in our business model. In the U.S., we've identified more than 20 million businesses across the relevant industry verticals that Square can serve today, ranging in size from the smallest of businesses up to $100 million in annual sales. Together, these businesses generate more than $7 trillion in gross sales. If we adjust to reflect card penetration rates on payments, our transaction margins and subscription fees on software, U.S. commerce makes up an $81 billion gross profit opportunity. As we look at our banking products for sellers, we add an additional $16 billion opportunity across Square loans, scorecard and instant transfer. We've sized this portion based on current adoption and what we believe are the relevant verticals and seller sizes for these products. Finally, as we look globally, we see an additional $25 billion gross profit opportunity across our 7 markets outside the United States. We've sized this by adjusting household consumption in these markets for the estimated share of spend at relevant businesses and included revenue streams across integrated payments, software and financial services as we've launched much of our Square ecosystem across these 7 markets. Together, this amounts to a $120 billion gross profit opportunity. When we step back and look at what goes into this, we have more than 30 Square products today. Each one could be its own company focused only on building tools that make up just one subset of the Square ecosystem, whether payroll, appointments, vertical points of sale or marketing, these are giant opportunities on a stand-alone basis and even more powerful as part of our ecosystem because we bring them together on one integrated platform for our sellers. We think we're in the early days of capturing share of this large and growing market that mostly sits on legacy platforms today. Square's 2021 gross profit was less than 2% of the mix. Now going a bit deeper into the U.S. market. We mapped census data on relevant verticals to Square's seller size segments here. We've assumed sellers are doing about half of their sales on cards, which might be conservative. We see significant future growth potential as we address larger sellers with a focus on SMB and mid-market sellers in particular. Sellers with $250,000 to $100 million in gross sales make up more than 40% of the total U.S. market. That's a massive opportunity for us to address. We know larger sellers have more complex needs and we believe we can serve these sellers not just with software and payments, but also with the breadth of our Square ecosystem. If we turn to penetration by seller size, our potential for growth among larger sellers becomes clear. As you can see, we've made progress where we first started with micro sellers, reaching about 13% of the estimated market, although we still have room to grow. And as we move further upmarket, we're less than 5% penetrated among SMBs and less than 1% penetrated with mid-market, demonstrating the tremendous runway we have ahead. What I just shared is a snapshot in time for the market data and products we sit with today. We believe we have massive potential ahead with several trends supporting the ongoing growth of our addressable market and our ability to take a larger share of it. We've seen cards continue to gain share in payments, and we're seeing new businesses being created at a healthy clip. Both of these trends are stronger now compared to before the pandemic. As we look ahead, we have a meaningful opportunity to continue expanding Square's addressable market beyond $120 billion as we focus on 4 key areas. First, we are seeing a widespread trend towards omnichannel commerce. Buyers are changing the way they make purchases and demanding more flexibility from sellers around new commerce experiences, new fulfillment channels, new ways to interact and communicate with sellers and more. This is playing out across the verticals we serve from retailers to restaurants, professional services, health and beauty and everything in between. Today, the penetration of software integrated with payments remains low. Many sellers don't have this flexibility. And those who do are often stitching together an assortment of distinct solutions that aren't integrated or cohesive for the merchant or their buyers. We want to help all sellers offer new commerce channels and grow their business in new ways. We intend on expanding into other forms of omnichannel commerce, which we haven't sized here like the flexible delivery options, social commerce and consumer demand generation where Afterpay can make us stronger. Second, we're focused on expanding upmarket with larger sellers. These sellers have more complex needs around managing the operations of large workforces and effectively reaching customers at scale. To address these, we're investing in expanding our software capabilities around both staff and customers. We also see potential to serve enterprise customers. We have a handful of sellers processing more than $100 million in GPV today, and are just beginning to build our muscle around our products and go-to-market efforts here, which we believe Afterpay enhances further. Third, we have just scratched the surface on financial services to sellers. We know that traditional financial services are complex to understand and difficult to access for many. We want to take our learnings from Square loans and expand our ability to offer sellers access to funds with new forms of responsible credit. Square Financial Services banking charter can help us move faster and unlock even more opportunities down the road in serving U.S. banking customers. We also see a need for broader cash flow management solutions for sellers. We can expand our current spending, saving and checking tools across a broad range of products for our sellers, from bill pay to B2B payments to bank-to-bank ACH transfers. So there is much more to come as we build upon this suite of financial services and tools. And finally, we see a global opportunity in each of these areas, which will remain a growing investment for our business. We see that software enablement is often lower outside the United States, and the landscape of business tools is often more fragmented, giving us the opportunity to bring millions of global sellers into our cohesive ecosystem of software and integrated payments. We'll continue to launch in new markets with a particular long-term focus on Europe and Latin America, where these secular trends are complemented by a thriving small business environment. And we'll also work to add new features in our existing markets globally. As we execute on these areas, we believe our addressable market for Square can expand significantly beyond where it is today. Turning now to Cash App. Before jumping into the market itself, cash is helping create and define a new market within financial services, which is rapidly growing and evolving, and we've done our best to estimate its size based only on our primary revenue streams today. Let's start with what we call community or the revenue streams related to our peer-to-peer network, which are business accounts and Instant Deposit. We size the overall peer-to-peer market in the United States today, based on our addressable population and the current engagement we see across the major platforms. We applied the monetization rates of business accounts and instant deposit to this peer-to-peer market and arrived at a $28 billion opportunity. Adding in financial services, we see a $40 billion gross profit opportunity where Cash Card is our defining product today. We've sized this based on debit and prepaid spend in the United States and believe the broader potential for Cash Card could be even greater across other ways that consumers spend. And lastly, we see a $3 billion gross profit opportunity for Bitcoin consumer trading in the United States. Today, we offer our customers the capability to buy and sell Bitcoin within Cash App, and we think this is just the tip of the iceberg. I'll come back to explain why in a few minutes. This amounts to a $70 billion gross profit opportunity. Again, the power of an ecosystem is in its breadth and how each product reinforces the others. There are other companies focused on building singular apps addressing specific use cases for customers, whether for teams, do-it-yourself taxes, Bitcoin and stock trading. Each of those represent a large market opportunity, but we believe our ecosystem approach expands utility and enables access for consumers. Ultimately, we think our approach is more durable, addresses a far larger market opportunity, giving us the potential to grow beyond less than 3% share today. When we look more closely at the U.S. audience for Cash App, there's a range of demographic factors to consider, region, age, income, use cases and so on. Here, we've segmented the U.S. population by age as one useful way to seize the opportunity. But I'll also touch on the other factors. When we look at the U.S., there are 260 million people between the ages of 13 and 76 years old. We're focused first on strengthening our network with digital natives. This includes millennials, Gen Z and [ teams ], which totaled 130 million people in the U.S. today. These represent the next-generation financial customer. They are more likely to use newer tech platforms like Cash App to manage their money, and they are the spenders of the future. Millennials and Gen Z are expected to make up nearly half of consumer spending in markets like the U.S., U.K. and Australia by 2030. We've seen our ecosystem resonate with these customers as they've used a range of products from peer-to-peer to financial services in Bitcoin. You can see this in their strong share of Cash App's ecosystem. Together, Millennials and Gen Z make up more than 2/3 of both inflows and actives on Cash App. [ Teams ] are a particularly compelling subset of Gen Z as they're just beginning their financial journey and typically lack broader access to financial services. We're still early on as we only recently opened up Cash App to teams last fall, but we have an opportunity to earn their trust and grow with them over time. Next, moving to Gen X and baby boomers. As you can see, these audiences make up a smaller part of inflows and actives compared to digital natives, but they are still meaningful to our mix. Within each of these segments, we see Cash App already serving specific subgroups cutting across geography, income and use cases. According to the Federal Reserve, 1 in 4 individuals in the U.S. are unbanked or underbanked, and that spans across generations. We've seen these customers turn to Cash App for specific use cases, particularly around products that strengthen our network, like peer-to-peer, business accounts and Bitcoin. And over time, we believe we can do more for these customers. As we zoom out, our 44 million monthly actives constitute less than 20% of the potential 260 million person audience we've sized in the United States today. We have an opportunity to grow with each of these groups. Now looking ahead, we believe we can vastly expand upon the $70 billion market we serve today. First, we've seen growing spend and engagement on mobile payment networks globally. The Cash App addressable market you see here with size using the volumes we see today in the U.S. on digital wallets and mobile peer-to-peer payments, which we believe represents only a fraction of the potential these services can deliver in the future. To gauge the potential for increased engagement for mobile payment networks, we can look to platforms in the Asian markets. Customers in markets like China use these platforms on a daily basis for an expanding range of services across sending, spending, investing, insurance, commerce and more. As consumers continue to shift towards modern financial services, we believe mobile payment networks can continue to grow meaningfully faster than overall spending in the U.S. and globally and believe Cash App is well-positioned to benefit from this trend. Second, as the utility of these payment networks expand, commerce is becoming further integrated into the platforms. Bringing commerce directly into Cash App can help increase daily utility for our customers. This begins to unlock an entirely new growth vector for us as we build a commerce platform that leverages the strong engagement we already see among our customers to drive value for merchants. Afterpay adds discovery and lead generation platform, which is critical to connecting consumers and merchants. Third, consumer preferences are shifting towards new forms of lending, giving rise to the rapid emergence of modern credit platforms around the world, including Afterpay's BNPL product. This shift is driven by digital native consumers, who we've seen turn to new and innovative alternatives instead of traditional financial services. Access to credit is an important way consumers can build wealth over time. With Cash App, we've seen the demand from consumers for fast, simple access to funds, and we intend to add new financial services products beyond what we offer today. Fourth, we think we've just scratched the surface for further adoption of Bitcoin in the United States and globally. We believe Bitcoin is going to have a profound impact on financial services, particularly as a tool for economic empowerment and as a global currency for the Internet. As adoption of Bitcoin grows, we intend on unlocking more ways to empower Cash App customers and expanding the reach of our consumer Bitcoin trading platform beyond the 10 million cumulative actives we've served since launch and in expanding to broader utility for customers. As 2 recent examples of this, Cash App has just started bringing Bitcoin to payments through the [ Lightning Network ] and facilitating the transfer of [ Fiat Paychex ] to Bitcoin. These sorts of initiatives combined with our emerging businesses, which I'll speak about in a moment, are how we are building for the future. Fifth, and finally, each of these trends and tailwinds extend beyond the U.S. with a much broader global opportunity we can address. Technology is helping democratize access to financial tools and services. Today, much of the world has access to the Internet and a smartphone. And we believe this will continue to grow. In markets around the world, we're seeing a burgeoning middle class with growing spending power. According to the [ Brooking Institution ], roughly 4 billion people fall into this global middle class. And it's the population group that is expected to grow the fastest over the next decade. We see this as an opportunity to bring Cash App to new audiences in markets around the world and believe what we've built so far has massive global relevance. As we execute in these areas, we believe our addressable opportunity for Cash App can expand multiples beyond where it is today. Now as Jack mentioned, we are an ecosystem of ecosystems. Just as we grew Cash App into half of the company's gross profit, we have the opportunity to create new ecosystems with entirely different customer audiences. We're now putting the building blocks in place for ecosystems around creators and Bitcoin. For creators, today, we're focusing on building tools for the 100,000 artists on TIDAL that include both professional and budding musicians. Many of these artists are already creating and establishing a fan base but often need access to more resources to succeed. And we plan to scale these tools to the broader ecosystem of millions of music creators on TIDAL to grow their brand find more opportunities to monetize their work and better manage their finances. We want to build more meaningful connections between music creators and the hundreds of millions of music streaming subscribers and fans that make up the global music economy. Eventually, we plan to support creators of all kinds, each with their own complementary and reinforcing ecosystems of fans and collaborators. Younger generations of musicians, artists and creators of all types are looking to make a living and display their craft in a direct relationship with their audiences. We see an opportunity to play a significant role in supporting these tens of millions of creators, empowering them to grow their own financial livelihood in the same way we have done with sellers and consumers. We believe this will be a massive economy in the future. Now moving to Bitcoin. The Bitcoin ecosystem is still in its earliest stages. Its value has grown rapidly but remains small compared to other financial assets and equities. Particularly when you consider its profound long-term potential. Of the high-profile asset classes and equities we looked at, Bitcoin reached $1 trillion in market cap in the shortest period of time at just 12 years. Now this isn't a perfect benchmark, but we've seen those other assets and equities continue to grow their market cap over time as awareness and utility grows, and we see the same potential for Bitcoin. We believe growing adoption, engagement and use cases at the speed of the Internet will be a powerful growth engine for Bitcoin. While largely an asset class today, Bitcoin has the potential to disrupt existing payment networks with the growing adoption of the Lightning Network. We're working to help solve gaps that exist in the ecosystem today around accessibility and tools. We're building integrated hardware and software to address self-custody with our wallet and decentralized mining with a new mining system. These initiatives are early in their development, and we intend to build out in the open. In the past year, the number of people who own Bitcoin more than tripled to over 175 million people, about 1 in 50 people in the world. The large majority of Bitcoin owners use a custodial service such as Cash App or others to hold their coins due to convenience. Only a small portion used self-custody wallets since the process for transferring and securing their coins appears daunting to many consumers today. But we see self-custody as being the future of decentralized finance, a world in which people control their own financial destiny. To serve this rapidly growing user base, our wallet will pair the benefits of custody, namely convenience, with the benefits of self-custody, which includes security, ownership and decision power. Due to price appreciation at various points in the past few years, the industry has seen impressive growth in mining revenue, up more than 3x to nearly $17 billion in 2021. Over time, with more adoption and use cases, Bitcoins price can continue to grow and with it, transaction fees. However, so far, the bulk of this revenue has accrued to a handful of larger industrial players. Since the current state of mining is not conducive for consumers or small companies to participate, we want to dramatically expand access to this rapidly growing market, which would add resilience and security to the Bitcoin ecosystem and generate value for a broader set of stakeholders. This is what our mining initiative intends to fulfill. TBD's core product, [ tbDEX ], will be a decentralized exchange built on a decentralized identity protocol. With TBD, we're seeking to change how consumers and financial institutions interact, which has the potential to affect everything from verifying identity to underwriting and moving money and have significant implications for the entire financial services sector. Building a new system for managing identity and trust in a decentralized manner is at the core of our product development efforts. This is vitally important for expanding access to financial services products while making a step change improvement to users' privacy and security. Our plan is to build consumer-facing proprietary products and also enable developers and other industry participants to build upon our standards. We see multiple ways in which the TBD business model could evolve over the long-term. On the consumer side, we're excited about tackling the remittance industry. Remittances market is large, growing and often addressed with costly hard-to-use systems that tend to disproportionately tax the most underserved populations. We have an opportunity to enable cheaper and faster transactions, better serving the 1 billion people sending and receiving global remittances. On the developer side, we're actively engaging potential partners throughout the financial services ecosystem and are encouraged about the interest they're showing. We think we can build value-added services on top of TBD that will, in turn, enable developers to build products better suited for decentralized financial services. What I've shared with you today is the market opportunity around each of our ecosystems as if they were individual companies. But as you heard from Jack, we are building an ecosystem of ecosystems. That means as our businesses scale and connect the opportunities we create are self-reinforcing and enable greater scale and more connections. We see a future where the whole is far greater than the sum of the parts. We started with Square serving sellers, building commerce capabilities and a broader ecosystem of integrated software and financial services. We added Cash App in service of consumers, which now has its own ecosystem of products and services, including shared connections with Square around staff and increasingly commerce, strengthened by Afterpay. We are now pursuing emerging opportunities around the creator economy and the Bitcoin ecosystem with the potential over time to drive even more connections across a number of products and services, leveraging learnings, talent, infrastructure and customer-facing tools to create resilience and value for our multiple stakeholders. This ecosystem of ecosystems model becomes more powerful as we scale, engage and build unexpected connections. You'll learn today about our vast aspirations, combined with financial discipline. But if I had to distill it down to 4 themes, they'd be the following. First, each of our ecosystems can grow in a multitude of ways. We're going after large, growing and fragmented markets with secular tailwinds behind us, and we're just getting started. We plan to continue to expand these ecosystems with products that unlock new markets and serve different customers. Second, we're scaling multiple ecosystems, which means we're uniquely able to forge connections between them. There's overlap across the audiences we're serving, sellers, consumers, creators, bitcoin consumers and developers. With each audience, we can take the learnings from one to serve the others, helping us move faster and launch products and integrations for our customers that many others can't. We call this our ecosystem of ecosystems approach and believe this will be our key differentiator in the years to come. Third, we believe our focus on our customers and our products drives a powerful business model. We are able to efficiently acquire customers, introduce them to more products and retain them over time. This ultimately drives growth for our business. We measure these unit economics rigorously and bring a disciplined and data-driven approach to our investments. This has allowed us to drive compelling long-term returns with our investments and profitable growth for our ecosystems. You've seen this with Square and Cash App, and we're bringing the same rigor to our new initiatives. And finally, we have an operating model that supports this continuous innovation. It all comes back to economic empowerment, which guides our focus on our customers and the ecosystems we build to serve them. We build each of our ecosystems with shared principles like trust, speed, cohesion and simplicity. And we listen to the voice of our customers, which helps us embrace and enable change early. Now we'll turn to the fun stuff, our ecosystems and the products and strategies behind them. I'll see you again at the end of the day to talk more about our business model.

All right. We're back live with Amrita, our CFO. Amrita, how are you doing?

I'm doing well. How are you, Jack?

I'm great. So you have the benefit of seeing everything going on at Block given your role and all the information you have, what interest you most about our work?

This is a great question. Look, the thing that excites me most is the growth potential and the combination of aspiration and discipline that we've shown as a company. If you think about what we just talked about, over the last 5 years, we tripled our addressable market size from $60 billion in 2017 to almost $200 billion where we sit today. And that's just for Square and Cash with the products that we have today and the markets that we're in today. The opportunity is really limitless as we think about continued growth and continued innovation in each of our scaled ecosystems, Square and Cash App, and when you think about being guided by our purpose of economic empowerment with the creator economy and with the Bitcoin ecosystem, which aren't even included in that figure. So I think -- as you think about the last 5 years and the track record the execution, the discipline that we've evidenced, the next 5 years look incredibly exciting with a combination of our continued product innovation and the secular shifts that we see moving in our favor.

And what do you think investors don't understand about our company generally in your conversations with them? Or just underappreciate?

Yes. I think the thing that really came to life for me in your part of the presentation that kicked off the day is the opportunities that we are just starting to explore around the connections in our ecosystem. And I think we'll get to it more later today with Afterpay in particular, and how we'll be connecting the seller ecosystem with a consumer ecosystem and Afterpay enables us to really do that in a credible way because they already have those connections. They already sit in every transaction that they complete with a relationship between a merchant and a consumer. And when you step back and look at the full set of emerging initiatives that we're building and across all the products that we have, there's even more opportunity to bring value to, both sides of the ecosystem as we work to build these connections. And I think that's something that's truly unique about our company and something that I think will be a growth driver for us and a meaningful value driver for our customers as we look ahead.

And just a final question. You and your team did a ton of work to put this Investor Day together finally. We've been planning this for some time in COVID. So what is -- what surprised you the most in seeing this live -- seeing this altogether?

I mean honestly, I think we've been excited to tell our story because we've changed so much as a company in the past 2 years, let alone the last 5 years, let alone since our IPO. In the last 2 years, we've doubled the size of our company. And I think we showed up in a way during the pandemic that was unexpected and surprised. Many of our customers surprised ourselves in how valuable our platform has been to our customers at a time where they needed it the most. Dynamic macro environments are actually a moment where we think our ecosystems can shine. And so though we had to delay our Investor Day for the last 2 years, I think we proved a lot about ourselves in that time. We proved a lot about the resilience of our ecosystems. We proved a lot about how we move quickly to address real-time customer feedback. And we proved a lot about the growth potential of the products that we're building. And we'll come back to it later. We also proved a lot about the unit economics and profitability of the ecosystems that we're building. So even though we had to shelve our Investor Day 2 years ago, I think the story that we're telling now is a far more holistic story that really paints the potential for the future.

100%. I completely agree, it's been amazing to see how much we're able to do since the last Investor Day, but certainly over the past 2 years. And with that, why don't we move on to exploring Square with Alyssa?

Today, I'm going to cover the problem that Square is addressing and the multiyear transformation we've undertaken. You'll hear 5 key themes. First, sellers need overwhelming number of tools in order to operate effectively and none of them work well together. This is the problem we're solving. Second, we have a significant market opportunity with multiple vectors for growth. Third, we're building an integrated commerce ecosystem, spanning software, hardware and financial services. Fourth, we're taking a differentiated platform-based approach. Finally, we have a scalable, multifaceted growth engine with compelling unit economics. We've got a lot to cover, so let's get started. We're here because of our sellers. This is [ Meg Ray ], a real Square seller that owns a multi-location confectionery and patisserie in the Bay Area. While the business may look simple on the surface, it's not. Running a business is hard. Businesses have a wide range of needs across commerce, customers, staff and banking. Buyer preferences have also changed with an expectation of omnichannel experiences, adding further complexity. This is the world that both small and large businesses have to operate in. It's crazy and completely overwhelming for sellers. The landscape is highly fragmented with a wide range of solutions and providers and little of it works together out of the box. This forces sellers to manually integrate these solutions, which is time-consuming and unreliable. As a result, business owners under consume technology. And in many cases, had to resort to pen and paper or no solution at all. Industry offerings have generally coalesced around 3 approaches. The first approach is commodity payments, which is nonintegrated, cumbersome and a race to the bottom on pricing for acquirers. Next is niche software solutions for specific verticals like restaurants or retail or a single capability like e-commerce, HR services or banking. These might work for one specific need, but often won't address the breadth of the seller's needs. This approach also doesn't amortize customer acquisition costs across multiple capabilities, which can lead to lower ROI for the provider. The other common approach is an M&A roll-up of niche solutions. Here, sales teams are often looked at paper over the lack of product integration. The friction from disjointed solution can inhibit efficient cross-sell and ultimately, retention of the seller. Square has taken a different approach. Square solution gives sellers a robust set of tools that are integrated out of the box. We're focused on 4 distinct capabilities that are critical and broadly applicable to all the businesses that we serve. Our commerce products help our sellers to never miss a sale, whether their buyers are in person or online. We have 14 different commerce products. Some are broadly applicable across industries like Square point-of-sale and e-commerce APIs, others like Square for Retail, Square for Restaurants, and Appointments are purpose-built for specific verticals. Our customers' products enable sellers to attract, retain, engage and grow the share of wallet from both new and existing buyers. Buyers can earn and view rewards give and get gift cards, send feedback on their experience and learn about new products offers or events. Our staff products enable sellers to schedule manage, communicate and pay their employees. There are more than 1 million employees using these products to communicate with their teammates, view their schedules, swap shifts or track the wages. Our banking products enable sellers to manage their cash flow with instant access to spend net sales, grow their business with funds from a loan or easily set aside funds for upcoming expenses like taxes and the safe or new goals, like a new location or even a well-deserved vacation. Finally, we extend our first-party capabilities with hundreds of third-party products built by developers and partners using our open platform. Altogether, the Square solution is a deeply integrated set of products that address the 4 key capabilities that businesses need to succeed. In building our solution, we've taken a platform approach using a micro services architecture. I'm showing just a few of our micro services here for simplicity. Think of each microservice as a LEGO block. Each LEGO block encapsulates specific business logic and associated data that can be reused to create new products. When we launch a new product like Square for Restaurants, -- we did not have to build everything from scratch. We used existing microservices such as employees, items and orders to move faster. Our platform-based approach creates more leverage from our R&D investment as microservices are reused across many products. This is key to our strategy. We will continue to invest in building software to expand the capabilities of our platform in order to support our ecosystem, global expansion and growth upmarket. Our platform-based approach also results in a more cohesive and integrated customer experience. Businesses data and settings are automatically available across products rather than having to be exported and imported by the seller for each new product. The reuse of microservices is the mechanism that drives the integration and cohesion of our ecosystem. For example, the customer's microservice is integrated across all of our point-of-sale products and Square online. When a buyer mix purchases online and in person, the seller has a unified view of that buyer, including what they purchased and when. This is possible because our products are using the same customer microservice. The customer's microservice is also integrated into Square marketing. Sellers can run targeted campaigns to their buyers based on prebuilt smart groups, such as including top spenders and frequent visitors or custom groups based on data like items purchased. Third-party developers can also leverage the customer's microservice, building bespoke marketing solutions or custom reporting. Our open platform is agile and sophisticated and a differentiator for our business. This has also led to wins with larger sellers, including SoFi Stadium. They were attracted by our omnichannel capabilities, beautiful hardware, fast checkout speed and ability to build rich customer profiles from transactions across stadium revenue centers, including retail and concessions. What ultimately sealed the deal for SoFi Stadium was how our open platform enabled them to achieve their vision. Our platform enabled SoFi Stadium to build flexible solutions that help them meet changes in consumer behavior. For example, ordering concessions online from your seat. It also enables integration into their business systems. Information on customers and inventory can connect directly with their CRM and ERP systems. All of this can translate to better operations and business performance. Imagine understanding which areas of the stadium are seeing slower or faster sales in real time and being able to adjust inventory and staffing accordingly. As a result, Square help Super Bowl 56 at SoFi Stadium achieved the highest per capita game day sales for full capacity Super Bowl in history. SoFi Stadium demonstrates how far Square has come from the little white reader at the farmers market. This has been a multiyear transformative journey from hardware and payments to software, hardware and integrated financial services. From a single product to a full ecosystem of products. From in-person only to omnichannel, from solopreneurs to multi-location businesses and even premier venues like SoFi Stadium and from U.S. only to multinational. And the pace of our transformation has accelerated. In 2015, the majority of Square's gross profit came from [ side car ] sellers. These are sellers who enter an amount on the keypad, hit charge just as they would with a traditional payment terminal. These sellers don't take full advantage of Square's capabilities. Roll forward to today, and we grow rapidly across software and integrated payments, banking and international. These 3 areas collectively represented about 80% of gross profit in 2021, that's up from less than 30% 6 years ago. We have grown these areas faster by reaching new segments with more robust and more specialized software. And by graduating side car sellers to software products. The growth across these areas has been driven by sellers adopting more of Square's ecosystem. In 2021, 40% of gross profit came from sellers that use 4 or more monetized products, that's up from just 4% 6 years ago. The faster growth from higher count categories demonstrates how our sellers are growing their ecosystem adoption. Now let's talk about what's behind our multiyear transformation. As Amrita showed, we continue to unlock significant new addressable markets. I'm showing the same numbers and progression as she showed, but I've changed the visual to squares, not circles because, well, we're Square. There are several key drivers worth calling out. First, there's a secular shift towards software with integrated financial services. This segment has grown rapidly, nearly doubling its share of U.S. payments volume in the last 3 years alone. And there's still plenty of runway as much of the payment industry offerings come from non-tech legacy players. Specifically, over 85% of U.S. payments volumes are from traditional merchant acquirers or banks. Second, buyer and seller demand for omnichannel solutions have only accelerated over the last few years. Omnichannel commerce significantly increases operational complexity for businesses. Operating cost channels requires integrating many traditionally siloed and manual processes. This is a tailwind for us because Square makes it easier for sellers to digitize and integrate their operations. Finally, our ecosystem is greater than the sum of its parts due to integration and cohesion. Many of the individual monetized products in our ecosystem could be a stand-alone company. As you can see from this chart, combined, they've made Square one of the largest and fastest-growing SMB-focused commerce businesses. Now let's look at how we're prioritizing investments to continue to fuel this rapid growth. We are focused on 3 strategic priorities. First, omnichannel software. We want to help sellers make the sale no matter where their buyers are. Second, global expansion. While commerce is different around the globe, all sellers face similar challenges. Third, growing upmarket. We already serve a growing number of larger sellers and expect that growth to continue. Omnichannel isn't just about e-commerce. It's about connecting all channels in person and online, analogue and digital. Buyers want more flexibility in how they interact with businesses. They expect businesses to meet them on their terms, not the other way around. We, as buyers, now all expect [ Amazon ] hours, not banker hours. And it's not just retail. Buyers expect this flexibility with restaurants and services businesses, too. Square help sellers meet their buyers wherever and whenever they are. We offer products that enable commerce in person, over the phone, on the web or via social and chat. Now let's hear the story of one of our omnichannel sellers, Graze on Main. Graze on Main is one of many new businesses started during COVID. The co-owners [ Gaza and Elise ] started making charcuterie boards at home for themselves and posting the pictures of what they've made on social media. Folks started asking them where they got the beautiful charcuterie because they wanted to order some too. That's when [ Gaza and Elise ] realized they are on to something and decided to start the business. [Presentation]

This is a great example of how Square is helping sellers eliminate manual processes, serve their customers across multiple channels and gain insights into their business. We've made significant progress growing omnichannel. Gross profit from omnichannel and online-only sellers has grown more than 6x over the last 6 years and now makes up nearly half of Square's gross profit. With the recent addition of Afterpay, we believe we can further accelerate omnichannel gross profit. Our next priority is to go global. We've been working hard to bring our full ecosystem of products to all of our international markets and expanding into new markets as well. We know that the breadth and integration of our ecosystem is our key differentiator internationally as much or even more so than it is in the U.S. Sellers outside the U.S. faced the same challenges with solutions that don't work well together, and there are fewer software and integrated payment solutions available. We had a rapid pace of launches in 2021, 91 product launches in 1 year alone. This was 2/3 of the launches in the prior 10 years combined. We'll continue to execute on global product parity and market expansion in the coming years. We've achieved strong growth in our global markets. Markets outside the U.S. represented 9% of gross profit in 2021 with a compound annual growth rate of more than 60% since 2015, 2x faster than that Square overall. With our increasing focus, go-to-market investment and the addition of Afterpay, we believe we can drive further growth in international gross profit. Internationally, we've taken an intentional product-centric approach towards expansion, leveraging our capabilities to unlock and enter into new markets. Now some history on our global expansion. Square started with its initial launch in the U.S. in 2010. We were blessed with a large home market and a simpler payments acceptance landscape, including the lack of EMV. We began our international expansion in 2012 with launches in Canada and Japan. We chose those markets because they were large magstripe markets. Our next international market was Australia in 2016. As an EMV market, it required new hardware and an innovative solution for secure pin entry on consumer mobile devices. We use this market to prove the viability of our solution to the card networks. After we proved our solution on Australia, the industry approved our entry into Europe. We launched in the U.K. in 2017 and then began focusing on closing product parity gaps in all of our international markets. In 2020, we launched in the Falkland Islands. The Falkland Islands, while a U.K. territory is distinct from the U.K., from a payments, banking and compliance perspective. This was not an obvious new market for many reasons. However, it aligned with our purpose of economic empowerment. Much of the island's revenue comes from tourists, who expect to pay with the card. However, banking and compliance issues made it difficult for local businesses to accept cards, which meant they missed out on sales. Further, the remote location made it almost impossible to install and maintain traditional point-of-sale and payment solutions. The Falkland Islands government wanted to find a way to solve these issues. They reached out to Mastercard for help. Mastercard has relationships with a wide range of businesses but recognize that Square was the best suited to help this underdeveloped market, given the scalability and reach of our solution set. We took on the challenge and demonstrated what Square can do in both remote and emerging card markets. This is one component of what is needed for geographic expansion. Expanding in Europe was more obvious. Over the last 12 months, we've launched in 3 new markets: France, Ireland and Spain. This is the most rapid pace of geographic expansion in our history, reflecting not only the increase in our global product market fit, but more importantly, our ability to invest in the go-to-market costs that come with market expansion. As we look ahead, we're excited about future expansion opportunities, both within as well as outside of Europe. Our third strategic priority is growing upmarket. We're focused on serving larger retail, restaurants and services-based businesses. This also enables us to address multiple vertical sellers, including breweries, stadiums, airports and festivals. Larger sellers are now over half of our gross profit. Mid-market plus sellers, those with more than 500,000 annualized GPV is our fastest-growing segment. It's grown 19x since 2015. Larger sellers use more software and adopt more of our ecosystem. These sellers have more complex businesses, often using multiple channels and products to reach customers. They also typically have employees and many have multiple locations. To serve them, we've built vertical-specific software and deeply integrated them with the rest of our ecosystem. I'll highlight how our commerce capabilities are combined with our staff, customers and banking capabilities to serve these sellers across the platform, though I'm showing our capabilities in the context of a specific vertical, each of these capabilities are broadly applicable across all verticals we serve. With retail, we're focused on finished good retailers. This includes clothing, jewelry, home and garden and specialty markets. We have a purpose-built point of sale with an integrated online store, an inventory, order and fulfillment management in real time across both in-person and online and across first and third-party channels. With Afterpay integrated into our solutions, we can also help sellers grow their businesses. Afterpay can help sellers attract new buyers, drive an increase in repeat purchases and increase average order values. We can also help sellers attract new buyers through integrations with third-party sites, such as TikTok. We help all sellers, including retailers, build a 360-degree view of their customers, including a full buying history across in-person and online channels as well as across concepts for multi-concept businesses. We connect contact information collected online or at the point of sale with purchase history to enable targeted e-mail and text messaging campaigns. We can then connect campaigns to subsequent purchases to demonstrate clear ROI for each campaign. Over the last 2 years, Square marketing help sellers generate approximately $15 in sales for every $1 spent on Square marketing. We focus on helping sellers increase their sales because their growth drives our growth. Square loans can also help retailers as well as other types of businesses grow. Sellers borrow money to buy inventory, equipment or open a new location. We underwrite and extend offers based on data from a seller's usage of Square and take repayment by holding back a percentage of their future processing receipts. This enables us to profitably lend to businesses that many banks won't lend to, further supporting our purpose of economic empowerment. We have also been able to grow our lending business with little to no additional customer acquisition costs through efficient cross-sell. With restaurants, we're focused on a broad range of food and beverage businesses, including food trucks, bars, quick service and full-service restaurants and [ gos ] kitchens. We've also built integrated software for selling and fulfilling orders across multiple channels. As with retail, we've integrated third-party channels to help drive new customer acquisition and streamline operations with integrated order management. Restaurants can avoid the third-party marketplace fees when orders are placed via their own Square online order page, while still leveraging integrated third-party services to deliver the order. With Cash App Pay integrated into our solutions, consumers can seamlessly pay with their Cash App account at [ score ] sellers. This provides customers more choice in payment and reduces checkout friction. This is one example of a growing number of connections between Square and Cash App. Our staffing solutions allow employers of all types, including restaurants to easily schedule, manage, communicate with and pay their staff. Now more than ever, sellers are looking for automated solutions to help optimize, recognize and support their staff. Sellers can use our tools to engage with team members, groups or their entire workforce through an in-app chat and notifications. This replaces the use of personal messaging services like SMS, group chats or WhatsApp. And unifies communication and key workflows like shift in task management. Our full-service payroll with automated tax filings and employee benefits is mobile-friendly, and easy to use for both sellers and their employees. Square Payroll also provides eligible team members with early access to a portion of their earned wages before the pay period is over, with no cost or cash flow impact to the seller. When a team member clocks out, they can view their hours work and wages earned either online or through the Square Team App. Team members can then access these funds by tapping a button and choosing how much of their wages they want to access. They can transfer up to 50% of their earned wages or up to $200 per pay period. They can have their money sent instantly for free to cash app or for a fee to a linked debit card or supported direct deposit bank account. The Kebab Shop is a quick service restaurant with locations across California and Texas. They're using a broad range of our ecosystem. They use 20 different products expanding software, hardware and integrated financial services. Let's hear from them about how they are leveraging Square's ecosystem to grow their business. [Presentation]

Such a great growth story and they're still growing. Since filming this, they've added 5 more locations for a total of 32. It really shows the operational value and data insights that come from using an integrated and cohesive ecosystem. For professional and field services sellers, we offer integrated software that works in store, on the go and online to support their end-to-end workflows. This includes estimates, contracts, invoices and reminders. Sellers using invoices get their money fast with about 25% of invoices paid on the same day they're sent. Sellers using our integrated contract software have a 50% higher win rate on chargeback transactions. Square Checking and Savings helps all sellers manage their cash flow. With Checking, sellers can instantly access and spend money from their Square sales. With savings, sellers can automatically set aside a portion of every sale to safer goals, taxes or [indiscernible] days. We see our larger sellers storing over 15% of their GPV in a square savings account on average. We're also building for health and beauty sellers who run their business through their calendar. Online booking tools help sellers never miss a sale, while reducing staff distractions and costs for scheduling. Automated reminders and no show protection helps sellers ensure their clients show up as schedule. Integrated messaging also helps buyers and sellers communicate and share photos of their expectations or work. Our loyalty software can also help sellers of all types, including health and beauty sellers, retain customers, drive traffic and increase share of wallet. In 2021, Square Loyalty drove 145 million unique visits and $3.6 billion of sales to Square sellers. When a buyer enrolls in a Square sellers loyalty program, They'll receive and welcome SMS message, including a link to download or open Cash App. From the Cash App activity tab, they can click on the business to view their progress towards reward as well as available rewards. Since the inception of linking Loyalty and Cash App, over 12 million Cash App actives or 40% of all Loyalty users have used Loyalty at a Square seller. [ My SALON Suite ] is one of our beauty sellers. They have over 200 owned and franchised locations. They offer beauty entrepreneurs across the country the ability to rent a private, customizable space for their business as an alternative to renting a seat in a salon. Let's hear why they chose Square. [Presentation]

Awesome. I love the alignment on purpose. And when our sellers grow, we grow. You should now have a better understanding of the breadth, depth and reach of our ecosystem. Next, I'll take you through how we're driving ecosystem adoption and growth. It all starts with remarkable products. We then supplement our product-led growth with marketing and sales. Finally, we amplify growth through cross-sell of additional products. This can increase monetization and retention, improving ROI of our acquisition spend. Collectively, these 3 levers intersect, forming multiple growth loops that can reinforce each other. Our remarkable products have driven acquisition growth through positive word of mouth and efficient self-serve onboarding. Customer satisfaction is reflected through strong product ratings on mobile app stores and Amazon as well as in our Net Promoter surveys. Our NPS scores are consistently in the 50% to 60% range. This compares to average scores in the 40s for software and financial services. When our customers have great experiences, they are more likely to become promoters who share their positive experiences with other businesses who then discover and adopt Square. This creates an efficient growth loop for acquisition. The app stores and Amazon also serve as efficient channels for discovery, social proof and distribution. We've been evolving our go-to-market investment to support our strategic priorities. We've increased our spend on awareness marketing in order to shift perceptions of Square's capabilities beyond in-person card payments. We've also increased our international spend as we go global. Finally, we're increasing our spend on sales as we grow up market. As an example, here's a video from the awareness campaign for our recent launch in Spain. It introduces Square to the market in a locally relevant way, highlighting upmarket sellers and capabilities across key verticals. [Presentation]

I really love watching our local ads. It's so cool to see both the similarities and the differences in each new market. Our investment in brand and awareness marketing is working. Over the last few years, we've seen lifts in our awareness and perception across all markets and across products. However, there is still significant room to continue to improve awareness of Square and our products. Higher awareness helps us widen the acquisition funnel, driving more website traffic and leads to sales. Sales is an increasingly growing portion of our acquisition spend. We've grown sales as a percentage of our acquisition spend to 14% in 2021, up from 10% in 2017. However, sales investment was still less than 4% of gross profit in 2021. We see a meaningful opportunity to drive further growth by investing in sales efforts to support our upmarket and vertical strategy. Historically, our sales force has been primarily generalists, working all verticals and selling all products. We're in the process of verticalizing our sales force, starting with inbound sales earlier this year. This will help the team increase industry knowledge and focus on how our ecosystem of products map to a specific industry. Once we bring a seller into the Square ecosystem, we drive cross-sell and retention, primarily via automated channels, such as in-app notifications, dashboard and e-mails. Our automated channels are powered by machine learning algorithms to enhance targeting and personalization. These cross-sell activities come at little to no incremental cost. Our existing cohorts have adopted more products over time, and newer cohorts are using more products relative to older cohorts. That said, we know that many larger sellers have been using Square for years, and they don't know about all the products we've added. Decision makers at larger sellers often don't see the messages in our automated channels. So we've continued to invest in outreach to larger sellers. We're using machine learning algorithms just as we do in our automated channels to target and personalize our phone-based outreach. As we cross-sell and increase product adoption across our ecosystem, we have also improved retention of our sellers. Specifically, retention improves 5 times for micro sellers using 4 or more products versus a single product. For mid-market sellers, we see a 15x improvement. Additionally, you can see retention improves with larger sellers. Retention of mid-market sellers is over 10x that of micro sellers. The output of this growth engine is a strong track record of attractive returns on our acquisition spend. Each cohort is like an annuity stream with ROI continued to grow over time. Our cohorts have generated over 3x return on investment over 4 years and cohorts continue to grow further into double-digit ROI over time. In summary, Square has an increasingly global ecosystem of remarkable products, which span multiple verticals and is coupled with an efficient growth engine. This differentiates us and provides a long runway for sustainable growth. We're building a business that is big, purposeful and enduring by helping sellers around the world do the same. Thank you.

And We're back live with Alyssa. Alyssa, how are you doing?

Not bad, although still trying to kick this COVID bug. I'm glad we didn't do this live because I wouldn't be there.

I'm glad we did it virtual as well the first off for all of us. So you've been living and breathing sellers and developers and their struggles for [ yours ]. What has been your most unexpected learning over the years?

It's a good question. I think a couple of things. One, we had a hypothesis that there were these common threads across industries and across verticals, but it kind of was a hypothesis. And it's been great to see that play out and see how the struggles -- there are these common struggles that play out across sellers of all types, across different businesses and with developers that are then trying to support them. So it's been encouraging to see. Again, we thought this was how it was going to play out, but I guess it's good validation and exciting to see it starting to really come together.

And what do you think -- I asked Amrita this question earlier, but what do you think investors don't understand about Square and your business? And -- or maybe just underappreciate?

Yes. I mean I think sort of with what we see with sellers is a lot of people don't really -- don't appreciate the journey that we've been on, how far we've come and the scope and the reach of our ecosystem and that while payments obviously is a core part of our monetization. Like, we're fundamentally a software company at this point. And what our sellers are adopting is software with integrated hardware and payments. And I think not everyone really appreciates the breadth of the software capabilities that we have. And still, in many cases, people still see us as the little white reader company or the payments only company.

Yes, 100%. So what -- like thinking broadly outside of your business unit in Square and Block, what trends, technology trends are you paying attention to or secular trends that you're paying attention to that you think affect our business or our investors should also look deeper at?

Well, certainly, there's -- I mean there's a lot going on in the macro from affecting all sorts of things. But I think one of the things that we've seen and I think will continue to play out and something that I've seen in kind of prior lives is that disruptive times, our opportunity for disruptive technologies, where you go from people being just fine with the status quo on everything to when things kind of get tossed up. The status quo doesn't work anymore, and so they're looking for new solutions and new ways, right? Going from, hey, if it ain't broke, don't fix it to, hey, it's broke, I got to fix it. And we as a company were born out of the 2008, 2009 financial crisis, we saw the pandemic, which really threw things up in the air for small businesses, individuals and consumers. We saw that those times actually were catalysts for us. And I think we've got an opportunity going forward on that. I think that plays out across all of our ecosystems whether it's for sellers or for its individuals or it's for creators, I think that is true across the board for us.

And just a final question. What -- you've seen the company transition for years from building one ecosystem and trying Cash App to now where we are. What are you most proud of? And what do you wish we -- what were some of the missteps along the way you think?

Well, I'm proud of just like the strength of the collective business and our ability to continue to invest and grow new things, right? Oftentimes, a company will be like, okay, well, I've got my one product and getting to the kind of the next ones and having successful follow-on is pretty rare. And we've done it not just, not just within Square, where we've got multiple follow-on products and expansion for growth to adding Cash App and now we're adding the other one. So I mean, I think that's pretty exciting, pretty rare. For me, I mean, honestly, like my biggest miss, my biggest regret having spent my entire career working on things without UIs is an under appreciation for design systems and kind of some of the UX investments. So we're remediating that. But like personally, that was the biggest miss and my biggest learning having never work on anything like the [ UI ] before.

Yes. But I mean you've come a long way and the team [indiscernible]. So we will -- thank you so much. We're going to move on to Brian Grassadonia and Cash App now.

It's been 5 years since we first introduced Cash App to the investor community at our last Investor Day. A lot has changed since then. And today, you're going to hear from me on 4 key themes that now underpin our business. One, Cash App has built a social money network with viral characteristics through peer-to-peer payments. This network forms the basis of our low-cost, massively scaled consumer distribution model. Two, we build an ecosystem and a compelling monetization engine by cross-selling many value-added services to our customers. Three, we instrument and operate Cash App's business through a simple equation to derive gross profit that we call the inflows framework. And four, we're focused on driving Cash App's business forward by investing in 7 key development pillars. We're going to dive deep into each of these 4 themes over the course of this presentation. First, I want to reacquaint you with Cash App's origin story as it sets the context for how Cash App contributes and ties back into Block's ecosystem of ecosystems. Let's get started. I joined Block nearly 12 years ago as our company's first product manager. And I was part of the early team launched and scaled Square's first flagship product, the Square Card reader. When it first launched, the card reader was a magical device that's solved the painful problem for sellers. It helps sellers make a sale anywhere they were using a simple tool that they can carry around in their pocket. As Square expanded, we focused on additional ways that we could help sellers grow, and we realize that helping them connect with our customers was a great way to do it. At that time, we didn't have much of our relationship with our sellers' customers. We tried establishing relationships with these customers by communicating with them through digital receipts. And we even built one of the first digital mobile wallets that enabled customers to pay faster by opening a tab at Square registers. These ideas were cutting edge, but ultimately ahead of their time. Then in 2013, a few of us started hacking on Cash App. Back then, we called it Square Cash. It was a rogue project, and we had a simple idea. We wanted to let anyone send money to anyone else using the tools that they already had in their pocket, their debit card and their mobile phone. The simplicity of it reminded us a lot of the card reader, but it was built for consumers instead of sellers. And it worked for everyone, not just our sellers' customers. Our vision was to build a consumer ecosystem that was unconstrained from Square's ecosystem because we believe it could be bigger this way. We gave the project its own brand in a separate operating model with a vision to connect it back to Square and our sellers later. We can only help sellers connect with consumers if we had enough scaled consumer relationships to make a meaningful impact. This was the beginning of our ecosystem of ecosystems model. For Cash App, we were laser-focused on creating something with epic consumer scale. It was ingrained in our culture. Everything we built was towards achieving a low-cost customer acquisition model that could scale our network virally and eventually become massive. If we could scale while keeping our customer acquisition cost low, then we can invest money and focus on making all the other elements like customer experience, brand and the technology truly world class. To achieve scale, we took inspiration from social networks. When people share photos and messages on social networks, these networks are able to grow fast and get big and for very low cost. A social network is more useful if your friends are using it. So early adopters encourage their friends to join those friends, invite their friends and the network can scale virally. We saw the same potential in peer-to-peer payments, and that's why we started there. We believe we could build a social money network that could become massive for very low cost. But our network needed an initial hook. We needed early adopters. So we started out by solving a problem that was so valuable that it didn't matter if people's friends weren't on the platform yet. When I was in college, I would periodically ask my parents to spot me $100 for food or gas until my next student loan deposit would hit. I found myself with a negative balance from overdraft charges. And the only way to get the money the same day as if my mom or dad agreed to physically walk into the local branch in my bank back home, wait in line, hand the teller paper money to pay off the overdraft fee and then add a little extra so I can get dinner. If you had the teller paper money, then the funds would post to the account instantly. The process took hours and it was frustrating, it ruined my day and it ruined my parents day, every time. So along with our partners, we pioneered a new way of moving money instantly between banks through Cash App. And people only needed a debit card to make it work. We call it instant deposit. In 2013, there were no other scaled services that allowed you to move money instantly this way. The experience was magic, and we knew it was something that people desperately needed. Now with Cash App. You can download an app, link your debit card, type in a dollar amount and enter someone's phone number and tap send, the money would appear in the recipients account at a completely different bank within seconds. It worked as fast as paper cash, but with way less hassle. Our early breakthrough with Instant Deposit helped us realize this was just 1 of the countless examples of how money and the broader financial system is broken for everyday people. Financial products are intimidating and unrelatable. They can be inaccessible and money moves between them way too slow. With Cash App, we had an opportunity to fix these problems and contribute meaningfully to Block's overarching purpose of economic empowerment. If the economy is a machine, then money is the oil that makes it operate efficiently. We realize that the most direct path to driving economic empowerment broadly is by making money work better for people. We set out to redefine the world's relationship with money by making it more relatable, instantly available and universally accessible. And this has been Cash App's mission ever since. Many of Cash App's early adopters were underserved people in the south who are digitally native and value fast access to funds with Instant Deposit. They skewed lower income, and we believe cash flow management was essential for them. These early adopters started inviting their family and friends just like a social network and Cash App's network started growing virally throughout the south and up the eastern seaboard. People would either hear about Cash App from a friend or join because their friends sent them money. Then something unexpected started happening. Cash App started becoming part of the cultural lexicon. It was spreading through culture. Our customers are talking about Cash App a lot in social media. They started an organic movement called Cash App Friday, where members of the community would make payments to other members of the community in need. We began participating in this program after our customers started it. They even nicknamed our product for us. I mentioned earlier that we organically named our product Square Cash, referencing our company's name at the time, along with the reference to digital money that moved its fastest paper cash. Our customers thought Cash App, better described what the service was. It was an app for digital cash, Cash App. So we decided to adopt the same officially. After this, mainstream music creators even started mentioning Cash App in their songs, and it was all organic. When music creators started referencing Cash App, we were surprised. But when you think about it deeply, it makes sense. We've been conditioned to think about money and especially bank brands as being corporate to [ untrustworthy ]. But on a fundamental level, there are a few things that are more core to our lifestyle than money. Money is emotional and raw. Most experiences and relationships in life are governed, at least to some extent, by money. We started to see this being reflected in the ways in which our brand was being referenced in culture, and we saw an opportunity to amplify it. So we developed a brand strategy to strengthen and promote what was already happening. Creators were building art around Cash App. So we support and partner with them. Some of these include [ Megastallion ], [ 100 thieves ] and [indiscernible], just to name a few. We invest deeply in social media by building programs like giveaways that feel native to each platform and innovate our products. We built massive followings as a result with more than 2 million followers on Instagram and 1.7 million followers on Twitter. We even have our own street wear line, [ Cash by Cash App ]. Sometimes people question why a financial app we're invest time designing clothing line. It's because money is inherent to lifestyle. The next generation feels this and they expect us to understand this about them. We invest in our brand because it softens the edges of Cash App's network as it expands organically by making each new customer that comes across the service more familiar and more likely to join. We support this network expansion further with more traditional forms of performance marketing like direct response paid advertising through Google and Snapchat and referrals. Every new customer that joins Cash App has the potential to spark new micro networks by inviting their friends or creating deeper engagement for the network at large. The multiplying effects of each new customer allows us to develop sophisticated performance marketing tactics that help us accelerate the growth of our network in strategic regions and demographics. And our customer acquisition formula is working. As of the end of March, there were 80 million annual actives who participated in our financial transaction on Cash App's network. And these customers are everywhere across the country. Cash App has achieved mass market, mainstream scale and penetrated in vast regions of the United States with micro networks now forming in nearly every county nationwide. Cash App is no longer serving only underserved customers in the South. The network has had a chain reaction, jumping demographic boundaries across geographies, age groups, ethnicities and income levels, just like a social network. We ranked #1 for finance apps across the App Store and Google Play since 2017, consistently beating our competition in every fintech category, such as mobile payment networks, neobanks, traditional banking, crypto trading and brokerage. But Cash App is not just a mainstream mass market financial outlook. It was the #8 most downloaded app in the United States overall in 2021, alongside the largest and most frequently used consumer services in the world, like TikTok, Facebook and YouTube. Because of our network-driven customer acquisition formula, we acquired each new transacting active in 2021 for $10 on average. This is a fraction of what other financial applications across our industry typically pay and a miniscule fraction of what traditional financial institutions have historically paid to acquire a new customer. And this investment has earned an incredibly strong way of return. On average, Cash App earned $60 worth of gross profit, net of peer-to-peer expenses over 3 years from every new monthly active that begins transacting on the network. This equates to a greater than 6x ROI over the 3-year span. We believe our ability to monetize at such a strong rate is credited to our ecosystem and our ability to cross-sell many value-added services to our customers. We took inspiration from Square's ecosystem in developing Cash App's ecosystem strategy. With Square, we started out with a simple card reader. And then built out adjacent services, such as the point-of-sale system, inventory, loans, invoicing and online store to name a few. Together, a full omnichannel commerce and financial services solution for sellers. We built a similar ecosystem around Cash App, serving consumers with a broad suite of financial and commerce services. We started monetizing Cash App in 2016 by charging for Instant Deposit and business accounts. These 2 revenue streams are highly correlated to the usage of our core peer-to-peer network. And over the past 5 years, the gross profit that we generate per active account has rapidly increased as we've methodically expanded Cash App's ecosystem beyond peer-to-peer payments by building and cross-selling adjacent financial services to our customer base. With each new product category that we introduced, we have additional opportunities for monetization. More recently earning spreads on Bitcoin trading and interchange fees on debit card spending. Greater product adoption from our customers has led to more money flowing into the ecosystem, increased engagement and ultimately, more gross profit per active account, reaching $47 on an annualized basis in Q4 of 2021. Next, I'll demonstrate the mechanics of how this ecosystem works. How it has led to a diversified and resilient business model and how it is reinforced by other ecosystems within Block. The most defining characteristic of Cash App's ecosystem that each of the services work together cohesively and the boundaries between them fade way. This allows us to move money between products instantly and invent entirely new product categories at the intersections. Here are some examples that will help you feel the power of the ecosystem. Peer-to-peer is the foundation as it forms a tight network amongst our customers. When somebody sends money across the [ P2P ] network, it shows up in the recipient's balance instantly and can be spent on her Cash App Card, the moment the sender tap send. She can even add a boost to the card purchase, our instant discounts program, partially funded by merchants. The savings is available in her balance immediately. This is a use case that I desperately needed in college and demonstrates how our network is starting to cross demographic boundaries between Gen Z and Gen X. Fractional stock trading, our Bitcoin exchange are only one tap away from our banking solutions. When a customer's direct deposit arrives, they can choose to have a percentage automatically convert into Bitcoin, just like they might allocate a percentage into a savings account at a traditional bank. It's effortless and worry-free because funds move instantly between balances and Cash App. So a customer has an unanticipated expense for the month and needs to tap into their savings, they can just sell a little Bitcoin and the dollars are available to spend at the grocery store on Cash App Card in seconds. There's no more waiting 3 days for funds to settle and transfer to the place where you can actually make use of them. It's your niece's birthday and you forgot to get her a gift, send $100 worth of fractional stock through the peer-to-peer network to kick start her portfolio. She can keep the stock trade it for a different one or exchange it for dollars and have the money available to spend in 3 seconds on something else with the Cash App Card. This is what we mean when we describe Cash App as an ecosystem. The services work together cohesively and each service is highly differentiated, which is why we believe it has an advantage over the competition. As an ecosystem, money can flow into Cash App through many different channels. And we found that the performance of our business is directly correlated to the amount of money that flows in. When a customer send a peer-to-peer payment, they bring money into Cash App from their external bank account and then send it across the network to a recipient. These funds can cycle throughout the ecosystem as customers use the same funds to send to other people in the network. When somebody receives money, the funds land and their stored balance and we've developed many services that can adopt and utilize these funds. They can cash it out to their bank, withdraw paper money from an ATM, buy Bitcoin, buy stocks, make a purchase on the Cash App Card or even withdraw Bitcoin to another wallet across the blockchain. But money doesn't only flow into the system through peer-to-peer. Customers can provide their ACH and routing number to their employer and receive a direct deposit for their paycheck, deposit paper checks, visit a retail location like Walgreens to deposit paper money, take out a loan through Cash App borrow, receive their tax refund and deposit bitcoin by receiving it from an external wallet across the blockchain. These inflows and outflows can also create connections across Block and reinforce the product within the ecosystem of ecosystems. Employees of Square sellers can receive their paycheck early by linking it directly to Cash App through Square Payroll, Cash App Pay allows customers to check out at Square sellers faster through a QR code payment. And when customers withdraw a bitcoin across the [ Lightning network ], they're using the connections that we built through spirals Lightning development kit. Soon, customers will be able to check out with Afterpay's buy now, pay later through Cash App and all of their repayments can be managed directly to their Cash App. The more products that our customers adopt, the more money they can bring in and the more engagement we see, which can lead to network growth and greater gross profit. As money flows through the ecosystem, we selectively charge fees that are intended to be commensurate with the overall value we provide our customers. Our revenue streams are diversified across 7 main channels, with the largest 4 monetization channels being Instant Deposit, interchange from Cash App Card, spreads on Bitcoin trading and business transactions coming through the P2P network. Each of our 4 largest monetization channels made up more than $200 million in gross profit each during 2021. As I mentioned, the amount of money pulled into Cash App is directly correlated to the performance of our business. And therefore, we instrument and operate the business through a simple equation that we call the inflows framework. We believe this framework is the most useful method for understanding the key levers of Cash App's business and how to model it. Gross profit is equal to the number of active accounts, times the volume of dollar inflows per active times the gross profit monetization rate applied to the inflows. And we can break down these top-level drivers further into sub-drivers. Actives is a function of new actives joining Cash App, retained actives and actives we win back after they've gone inactive. The volume of inflows brought into the ecosystem by each active is driven by the number of products they adopt, our share of wallet relative to other products in the category and the overall spending power of the active which can be affected by things like government stimulus or tax refunds. Finally, gross profit monetization rate is a function of the fees that we charge and the mix of product usage across the ecosystem. To make this formula more tangible, here's how these top-level drivers contributed to our Q1 results. In March, there are 46 million monthly active accounts that transacted on the Cash App platform. On average, each account brought $1,052 worth of inflows into the ecosystem. And in the first quarter, our gross profit monetization rate was 1.19% on these inflows. This led to $578 million with our gross profit in Q1, excluding contributions from Afterpay. Now let's shift gears to how we increase the key business levers in the inflows framework to grow the business. We're focused on driving Cash App forward by investing in the following development pillars: community, financial services, crypto, operating system, trust, commerce and global. When we innovate and develop improvements to Cash App service across each of these pillars, they can drive one or more of the key levers in the inflows framework. Actives, inflows per active and the monetization rate. Next, I'll walk you through how these strategic pillars drive the equation. Let's start with community. Peer-to-peer payments forms the basis of our community development pillar because customers engage in financial transactions with other members of the Cash App community. When customers use peer-to-peer, they're not just transacting by themselves. They're inviting their friends, their family and their coworkers to download Cash App so that they can send each other money. Peer-to-peer is more useful for our customers, the larger the community is. So our customers are naturally incentivized to bring more people into their network. We see opportunities to switch many product categories beyond simply peer-to-peer payments into the fabric of our community, which will ultimately strengthen our network, create viral effects and can lead to stronger growth of multi actives. We found that customer retention is directly correlated to the size of an active's network or a number of other accounts they transact with. When looking at the fourth quarter of 2021 and first quarter of this year, we saw a 31 percentage point increase in retention per actives with a network size of 4 or more accounts compared to an active who only transacted with one other account. We can influence the number of connections that a given customer has by developing more opportunities in the product for our customers to connect with one another. Examples of products that we've developed to drive more connections between our customers, beyond basic period for payments include Bitcoin peer-to-peer, stock gifting, family accounts and even nonfinancial products, like emoji payment reactions and payment notes. We're going to continue looking for more opportunities to build experiences that drive connections like these between our customers. Financial services is our second development pillar by broadening and deepening our financial relationships with our customers across a wide set of categories. We provide more reasons for our customers to bring money into Cash App's ecosystem which can drive stronger inflows per active account and more opportunities for monetization. Today, we're investing into financial services across 4 areas: Cash App Card, deposits and transfers, credit and investing. Let's start with Cash App Card, where we have achieved significant scale. In March, there were more than 15 million monthly actives that transacted using Cash App Card. And further, we saw 2/3 of these monthly actives transacting each week. Customers are using their card to purchase a wide variety of products and services across categories such as retail, restaurants, grocery, travel and recurring expenses like utilities. Cash App Card is typically the first product within our financial services suite that our customers adopt. And their engagement increases over time as they discover our additional offerings like direct deposit. Our vision is to make cash at the banking platform of preference for all of our customers. And to do that, we're building our capabilities across deposits and transfers with a particular focus on Direct Deposit. We're in the early days of direct deposit adoption and momentum is building. In March, we had 1.5 million monthly actives, utilizing Direct Deposit, and we have seen recurring paycheck deposits from employers make up an increasing share of volume of more than 2.5x year-over-year in March. We believe there's a large opportunity ahead to improve discovery and ease of use with features like seamless direct deposit switching through payroll integrations. We also have launched additional methods of deposit and transfers and features that customers would expect from a bank like [ FDI insurance ], ATM withdrawals, ACH bill pay, paper money deposits and check deposits, which have all been introduced more recently. We're also exploring how we can expand the utility we provide to customers through savings and money management. Moving to credit. Where our focus is on providing simple, fair and accessible credit products for our customers that promote financial health and avoid trapping them into a cycle of debt. Credit is a relatively new category for us. And Borrow is the first product that we've introduced. Borrow is a short-term lending product, offering customers small loans up to $200 that customers can pay back in 4 regularly scheduled installments or as a percentage of what they receive into Cash App. Since launch, we've issued loans to more than 1 million accounts, and we've been disciplined about testing pricing and limits to understand repayment rates and how customers are using these funds. We're on our way to establishing a rock solid track record of effectively managing loss rates and driving positive unit economics. Later, you'll hear about how we plan on integrating Afterpay into the Cash App ecosystem and how we view Afterpay's buy now, pay later installments product as a natural extension of the work that's already underway, offering inclusive and fair credit products to catch up customers. Lastly, on Financial Services, our stock brokerage product makes investing in the stock market relatable and accessible for regular people. When searching for stocks on Cash App, we lead with company names, which are familiar instead of tickers and are less intimidating for first-time stock investors. Since launching the product in late 2019, we've built out a rich suite of features such as auto buys, custom limit orders, news, price alerts and key stats that have helped us expand from serving novice investors to moderately sophisticated retail investors. In March, there were 4 million accounts who either traded or were holding stock in Cash App. Cross-selling our suite of financial services is one of our most direct methods of increasing inflows per active account. When customers adopt our financial services products, we have seen a multiplier effect in the volume of inflows that they bring into the ecosystem above and beyond customers who use Cash App for peer-to-peer payments. For Direct Deposit and Borrow, we see the highest multiplier effect at 6.5x and 4.5x, respectively. Direct Deposit actives are likely receiving a recurring paycheck in their cash at balance which they then send to friends, spend to their Cash App Card or invest. For those utilizing Cash App Card, we see them bringing in twice the amount of dollar inflows compared to a peer-to-peer only active as more of their spending is flowing through the app to fund card purchases. And with stocks, even though we don't monetize this product directly, we have still seen a noticeable difference in the volume of inflows brought in from these actives compared to the baseline peer-to-peer active-only profile. We have also seen a multiplier effect in our gross profit monetization rate above our baseline rate for peer-to-peer customers as we cross-sell additional financial services products. We have seen on average a 1.7x multiplier effect on the monetization rate from customers who adopt stocks, Cash App Card and Borrow. Let's move into crypto. You'll hear more from other leaders across block on our broader set of bitcoin initiatives for the company later today. In this section, I'll share how we're thinking about crypto within Cash App, and why investing in this pillar is critical for our customers, our business and the industry at large. We spoke earlier about Cash App's mission to redefine the world's relationship with money by making it more relatable, instantly available and universally accessible. We believe that there's no other technology more likely to redefine money than cryptocurrency and Bitcoin more specifically. These technologies continue to be intimidating, unrelatable and inaccessible to the average person and Bitcoin currently moves too slowly across the blockchain to be practical for regular everyday transactions. This is where we think Cash App is uniquely positioned to add value. Bitcoin is also great for our business as it's another reason for our customers to bring money into the ecosystem with multiple opportunities for monetization. So far, we focused on developing 2 core product applications for Bitcoin and Cash App. We started in early 2018 with a simple Bitcoin exchange and custody solution that provides an on-ramp and off-ramp for Cash App customers to buy and sell Bitcoin with U.S. dollars and a custodial account for them to store it securely without needing to keep track of their private keys. Our offering is differentiated based on speed and ease of use. Existing Cash App customers can dip their toe into Bitcoin within seconds and exchange dollars for Bitcoin in just a few taps. Since launching our Bitcoin Exchange, which allows for buying and selling Bitcoin. We've added a rich set of investing features, including auto buys and custom limited orders and compelling new trading and custodial experiences made possible by the tight integration with other products across Cash App's ecosystem. We allow customers to auto convert their paycheck into Bitcoin from direct deposits and instant Bitcoin rewards on Cash App Card purchases. Our second area of focus is Bitcoin payments. Given our network scale, we believe Cash App can help Bitcoin evolve beyond an asset class to [indiscernible] in real transactional utility, which is why we launched our offering in 2018 with the ability to deposit and withdraw bitcoin across the blockchain. More recently, we've added the ability for customers to send bitcoin across the Cash App network to any phone number or cash tag, creating an off chain network for Bitcoin payments that settles instantly between 80 million annual active Cash App accounts. We also just announced that U.S. customers can now send and receive Bitcoin on chain to anyone with a compatible wallet via the Lightning network. Typical transactions conducted directly on the Bitcoin blockchain. It can take upwards of 10 minutes and now it's nearly instant with Cash App over the Lightning network. This integration was made possible through the Lightning development kit, which was built by Spiral, another great example of how our ecosystem of ecosystem creates leverage and reinforces itself. It's remarkable to the extent to which these bitcoin experiences have resonated with our customers. Since launching Bitcoin and Cash App in 2018, we've had more than 10 million monthly actives by Bitcoin within our app. And similar to what we see with our financial services product, Bitcoin monthly actives have brought in significantly more inflows to the ecosystem, nearly 4x the amount in the first quarter than those who were using only peer-to-peer to send and receive money. This isn't because they're just buying Bitcoin. These customers are more engaged across the Cash App ecosystem overall. If you're buying and selling Bitcoin with Cash App, you have even more of a reason to be using our other products like Cash App Card or Direct Deposit because of the novel experiences that exist at the intersections. And we've seen a compounding factor here on the monetization rate. We charge a spread when customers buy and sell Bitcoin, and it's one of our highest monetization rate products. It's also a monetization lever where money isn't actually leaving the ecosystem. So we have the opportunity to monetize those inflows multiple times. Our fourth development pillar is trust. We aspire to earn the opportunity to serve customers with a broad suite of financial services by deepening our financial relationship with them, by increasing our share of wallet for each service and expanding our customer base to serve older and higher income customer demographics. To earn this opportunity, we have to obsess over building and maintaining deep trust with our customers. If we're successful with our efforts here, we believe more customers will adopt our products, grow with us and bring more money into the ecosystem to use the wider set of our offerings. We're currently focused on 3 target areas to earn and maintain our customers' trust. Access, customer service and limits. Offering our customers with reliable, easy and secure access to their accounts is essential when dealing with people's money. We have all had the experience where we've been locked out of an account and unable to access a critical service that we rely on. We're committed to ensuring that our customers never have to deal with this type of frustration, while ensuring that they have peace of mind knowing that their money is secure and protected. Next, we're committed to providing our customers with world-class customer service. Our support system must be reliable and we're making investments to ensure that customers get in touch with us when it's most convenient for them and through the channels that make it effortless, whether that be social media, chat or voice. We expect our support advocates to understand and navigate the nuances of the situations that our customers are dealing with. And we're investing in tools to surprise and delight customers so that we can resolve their problems in real time. Finally, we're focused on making sure that Cash App's limit system can scale to meet the needs of higher income customers. If a new customer wants to bring in hundreds of thousands of dollars into the ecosystem to trade on our bitcoin exchange, we want there to be a path, making this field effortless at scale or require a best-in-class identity verification system and anti-money laundering program. And it's clear that the limits we put on our customers today can be a blocker from bringing more inflows into the app. When you look at our actives that have reached the highest limit tier, they brought in 6x the amount of inflows compared to our lowest limit to our active in the first quarter. We think there's tremendous upside to expanding this type of access for a wider set of customers. Now turning to our operating system pillar. With Cash App's operating system, we're building the foundation for Cash App to become an infinitely scalable super app. We're building up the shared frameworks, applications and systems that can allow us to scale to new services, trigger broader engagement across our offering and drive brand cohesion across our product experience. I'll walk you through why this is important and what we're optimizing for in the future to allow greater engagement within Cash App. Prior to 2019, Cash App had a very simple interface. Our iconic peer-to-peer payment pad dominated the Cash App experience with features like Bitcoin, and Cash App Card varied due to constraints in technical and design architecture. This overly simplistic navigation severely limited our ability to drive incremental product adoption beyond peer-to-peer payments. In late 2019, we expanded Cash App's navigational architecture to be a more extensible interface with 5 tabs. We were able to display the full product suite that Cash App had to offer in a more intuitive and organic navigational flow. When we made this change, we saw a dramatic difference in attach rate for some of our products. Here, we looked at 2 cohorts before and after the tabs rollout from June and October 2019 and the adoption uplift based on a cohort's attach rate in the first 2 months of onboarding. Cash App Card and Bitcoin saw a 17% and 25% uplift as they were previously only one layer removed, but Direct Deposit saw a 57% lift as this was 2 layers removed from the home screen. Well, the tab's navigation enabled us to broaden our offering to a wider suite of services beyond peer-to-peer, we're again reaching the limits of what our current architecture can support, which puts emphasis on just 5 products. Deposits, Cash App Card, peer-to-peer payments, stocks and Bitcoin. This architecture won't scale going forward and inherently places an upper bound on the number of products, offers and recommendations that we can meaningfully surface to our customers. You can see here as an example, that Borrow is competing with a long list of other products, not well surfaced in the core navigational flow within the app today. It's nested in a list view, which limits discovery and engagement. We view today's limitation as a significant opportunity. As part of operating system, we're developing a new, technical and design architecture for Cash App, placing an emphasis on connecting our products together in ways that's intuitive and seamless for our customers and scalable for our business. Our goal is to meaningfully increase cross-sell of additional financial services and create more connections between customers within the Cash App community, including businesses. A major element of this future vision is search and discovery. We'll make searching for people and businesses across the network, part of the primary navigational flow of the app. We believe that search can unlock more organic opportunities for discovery and suggestions and help strengthen the Cash App network through more serendipitous engagement. We'll also be investing more heavily into history. Evolving it from serving as primarily a transactional ledger today to a rich activity feed showcasing relevant content that's occurring across the ecosystem with additional opportunities for suggestions and discovery of adjacent products and connections. Finally, we're building a home that organizes all of our customers' money, assets and financial services into one place that allows for a more streamlined and intuitive use of the services they engage with and a place to showcase and learn about the new services that we offer that they've not yet adopted. As this operating system takes shape, we're beginning to think about each of our services that will live within the ecosystem, more like apps in and of themselves or [indiscernible]. Products such as Bitcoin, banking, stocks, credit and even experiences like stock gifting could theoretically be stand-alone companies if they've lived outside of the Cash App ecosystem with early- to late-stage VC funding. These products are at various phases of maturity and scale, some being more nascent, while others are serving millions of customers and generating hundreds of millions of dollars of gross profit. We believe that this app with architecture and operating system that houses it gives each of our existing services and the new ones that we create, the space and opportunity to blossom into their full potential and compete as first-class players in their category. Hopefully, this new architecture and [ athlete ] model helps paint a more vivid picture for how we think about integrating, Afterpay into Cash App's ecosystem. Afterpay does have its own app today. And Cash App's operating system will aim to make it natural and seamless to integrate all of the functionality that currently exists in Afterpay app into Cash App. We're going to dive deeper into Afterpay in the next section and explain how the integration can help supercharge Cash App's entry into commerce and bring us back full circle to the original intent behind why we started building Cash App in the first place. To help sellers make a sale by more deeply connecting with customers. This is why commerce is our sixth development pillar. We're focused on 4 primary product areas within commerce. First, business accounts or what we've historically called cash for business. Second, Cash App Pay; third, offers and advertising, which you all may be familiar with to an extent with Boost. And fourth, Afterpay. We're going to focus our discussion here on the first 3 categories, as we'll have a fulsome deep dive on Afterpay in the next section, where I'll be joined by Nick and Ant, the co-founders of Afterpay and Squares lead Alyssa. When we started Cash App, it was born out of the desire to build an ecosystem for consumers so that we could ultimately help sellers make a sale. This is what our commerce focus is all about. Our vision is to give businesses a home on Cash App and even more a platform that they're incentivized to invest in. By creating a business profile, these businesses can surface relevant information to customers on Cash App, whether that's sharing a popular option at their cafe or simple actions like order now that can link customers to partner websites and seamlessly authenticate them. With Cash App Pay, we're continuing to scale our payment network capabilities with the goal of making Cash App the most loved way to pay. Currently, we're live with Square sellers using register and online, but we're building a sales team that can focus their efforts on achieving the greatest possible breadth of Cash App Pay acceptance at merchants. We're first starting with Afterpay merchants, and we're excited to share that DICK'S Sporting Goods, [ Shen ], [ Savage X Fenty ], Finish Line, ASOS, ThredUp and JD Sports have all signed up to integrate Cash App Pay into their platforms. We're also looking to welcome several other enterprise sellers in the weeks ahead who will be launching Cash App Pay as a new payment method. For offers and ads, we're building a fully-fledged merchant-funded offers platform, scaled up from Boost and integrated with Afterpay's, ads and affiliate engine. In the first quarter, we spent more than 350,000 leads to Afterpay merchants. Our investments into search and discovery will help supercharge this effort and we see immense opportunity in this space on the horizon. While Afterpay can be a major accelerant for us and furthering our commerce efforts in the United States, we believe it can also be an accelerator for Cache's final development pillar, which is global. You'll hear more from Nick and Ant about how Afterpay is scaling a global commerce network with meaningful traction so far in 8 countries. Afterpay's home market is Australia, with 3.4 million annual active consumers, 71,000 sellers and greater than 10% consumer market penetration for buy-now-pay-later. Afterpay has been able to leverage their scale and relationships with sellers in Australia to propel them into global markets and this cross-border effect started with the United States. Urban Outfitters was Afterpay's first U.S. seller, and they launched with them in the U.S. after seeing increased order sizes and higher repeat frequency from consumers in Australia. Many Australian sellers followed suit. And the global network was formed. As sellers activated in the U.S., Afterpay was able to leverage the integrations to scale to 13 million annual active consumers in the market, making the U.S. Afterpay's largest and fastest-growing country. This same cross-border effect has helped Afterpay achieve meaningful traction in New Zealand, the U.K. and Canada. Today, Cash App has relatively less traction outside of the United States, our home market. We operate Verse, a leading regional peer-to-peer service in Spain with approximately 450,000 monthly actives. And Cash App's core peer-to-peer service is used by 160,000 monthly actives in the United Kingdom. Cash App has not yet leveraged cross-border effects to the same extent as Afterpay although we see a lot of potential. Consumers can transact across U.S. and U.K. borders for free between Cash App accounts. And in March, more than half of the payment volume processed by consumers in the United Kingdom was between a U.K. and a U.S.-based account. This cross-border peer-to-peer effect has been a catalyst for Cash App's expansion in the U.K., and we think there are opportunities to expand into new markets around the world, leveraging cross-border payments from our U.S. consumer base and through deeper integration with Afterpay. Going forward, we're putting a priority and emphasis on expanding into global markets where we can leverage cross-border effects. Our U.S. consumer base is strong and thriving and there's demand for U.S. consumers to send payments across borders to more markets around the world. As we launch Cash App in new markets, one of the core benefits to these new global customers will be access to receive payments for free from our U.S. customer base and vice versa. We believe this cross-border network will be a meaningful strategic advantage. Finally, as we integrate Afterpay's commerce engine into Cash App, we'll be able to leverage Afterpay's distribution around the world to launch Cash App's peer-to-peer network in Afterpay's markets. Over time, our vision is to create one cohesive interoperable global network, where customers experience no borders and can transact through peer-to-peer using any number of global currencies or crypto, utilize Cash App's cohesive suite of financial services, search and discover sellers around the world and shop all through Cash App. We have an opportunity to redefine the world's relationship with money on a truly global scale. And this is the focus of our global development pillar. You heard a lot of detail from me today, and you certainly have a lot to digest. To summarize, there are 4 critical points to take away from this presentation that will help you understand the nuances of Cash App's business and operating model. First, Cash App has built a social money network with viral characteristics through peer-to-peer payments. This network forms the basis of our low-cost, massively scaled consumer distribution model. Second, gross profit per active has steadily increased over time. And our strong monetization engine is credited to our ecosystem and our ability to cross-sell many value-added services to our customers. Third, we instrument Cash App's business through a simple equation that we call the inflows framework. Gross profit is equal to the number of active accounts, times the volume dollar of inflows per account, times the gross profit monetization rate applied to the inflows. And finally, we're focused on driving Cash App's business forward by investing in community, financial services, crypto, trust, our operating system, commerce and global expansion. Each of these pillars correlate to driving one or more of the key variables in our gross profit equation. I appreciate you listening and sincerely hope you're walking away with a deeper understanding of the power of Cash App's business model. Thank you so much.

We're back live with Brian Grassadonia, Brian, how are you doing?

Great, jack.

There's a few people [indiscernible] in not talking about your outfit in the video. I see that you're wearing a similar comp to a different color. How can people get this fashion if they desire it?

Anybody can get this passion at [ shop.cash.app ], it's part of our second line cash-by-cash app, which is our latest Street were line from C. I saw somebody on the Internet references as address. It's actually a jumpsuit [indiscernible].

So Brian, you've been -- you were a first product manager at the company, and apart from me, you've been here the longest. I asked a list of this question, but you have even more context what -- what are you most proud of that we've done over the years as a full company, not just as Cash App, but as a full company and where are some of our biggest missteps that you wish we would have corrected?

Yes. I think -- I think what I'm most proud of is the culture that we've built. And if I think about how Cash App was created, if I think about what we're doing now with our new emerging initiatives like TBD and Spiral and TIDAL. These initiatives are possible because we've built a culture of institutionalizing entrepreneurship. So when I joined Block, Square at the time in 2010, I assumed I'd be here for 3 or 4 years. I assume that I'd be and I assume that I start my own company. And then in 2013, we were given a platform and a couple of us, me and [ Robert Anderson ] started hacking on Cash App. It was a rogue project, and we were able to develop a framework that kind of protected the innovation, protected the creativity within the organization. We created a firewall between us and the rest of the organization to make sure that we were able to take risks and invent in all the same ways that we were able to do when we were 5 people in your apartment. And so giving new businesses, the space to blossom to build brands, to build culture, to me, I think that that's how you -- that's why the ecosystem is possible. We've been able to create startups within our start-up and foster a culture of entrepreneurship, which I frankly haven't seen really anywhere else. Even if you look at other companies that have businesses that are as diversified with distinct brands like ours, there's some major conglomerates that have that. It almost always happens through acquisition. And so I think that the culture that we've built is really world-class. I think in terms of missteps, I don't have any -- I guess there's a couple. I think with Cash App, what we've got an opportunity to do was we were kind of kind of borne out of the same culture, but we got an opportunity to kind of retrospect on the things about early Square that we loved and adopt 70% of those and then look at the things about early Square that we thought we could have done better, whether that was how we approach things, how we recruited. And I just think that, that ability to create different cultures allows us to bring those learnings back into other parts of the organization and learn. It's a self-reinforcing organization that isn't dependent on any one person. It's a culture that can sustain for hundreds of years. So it's pretty incredible.

Yes. I agree. So at our last Investor Day 5 years ago, Cash App was barely mentioned. It wasn't even called Cash App at that point it's called Square Cash. I think we mentioned it 5 times in the presentation, and there was a little bit -- more than we mentioned it during our IPO. So looking back, if you were to -- if we gave more space to Cash App in that presentation, what would you -- what would you want to tell investors and shareholders more of? And in this particular Investor Day, what's the one thing you want them to walk away with about Cash App?

Yes, man. The thing that I think I didn't even fully appreciate back then was -- we talked in the presentation a lot about Cash App being a social money network, and it has an ability to scale virally every single person that comes in is incentivized to bring more people into the ecosystem because the service works better if there's a larger community. The thing -- the main thing that's different about our network, our social money network based on peer-to-peer payments versus a traditional social network, where you express yourself through text or photos or videos is it just takes longer to gestate these networks. People early on when they're using peer-to-peer as a baseline utility with friends and family, it starts off as twice a month, 3 times a month, 4 times a month, whereas a social network, you can kind of engage 20 times a day. But the network has a way of just stating over a longer period of time. So it took us a few years before we were really growing virally at scale where I think even we understood the power of what the network would ultimately become. And now you're at this scale. Now we have 46 million monthly actives, 80 million accounts over the last year. And the viral effect is still there. It's still there and we're just compounding off of a larger base. So I think as we -- I think the thing to think about going forward is around global expansion, global expansion is one of our key 7 development pillars a really key ingredient in our recipe, but just [indiscernible] and realizing that these networks do take a while to adjust it, but the underlying mechanics of how the network is scaling are there. And so that's what I would just kind of ask people to understand because Cash App is primarily -- we are really strong in the United States, but we started in 2013 and here we are in 2022, and we're kind of really just getting started there. So that probably my thing for people to take away.

So I think we're going to take a 5-minute break, and then we're going to bring you and Alyssa back to talk about Afterpay.

Amazing. [Break]

We believe the acquisition of Afterpay has the potential to be transformative for both the Cash App and Square ecosystems. By integrating Afterpay into both Square and Cash App, we can expand our ecosystems, grow our collective seller our consumer bases and strengthen the connections between them. For Square, Afterpay adds an omnichannel tool to our ecosystem, which our sellers typically haven't had access to. Together, we believe we can drive meaningful growth without market sellers. We've already launched Afterpay in person and online for many of our sellers.

For Cash App, Afterpay adds a new and accessible credit offering to our expanding suite of financial services through buy now, pay later. The integration brings a commerce engine into Cash App's ecosystem that will help sellers connect more deeply with the Cash App consumer base by embedding Afterpay discovery and shopping capabilities into the app. This can help us drive leads to existing and new Afterpay sellers and expand more deeply into advertising. Before we describe the integration in more detail, we want to introduce you to Nick and Ant, the Co-founders of Afterpay, who will share more about Afterpay's unique and differentiated business.

When Ant and I first met and began planning what would become Afterpay, we knew that we wanted to create a new economic paradigm. We wanted to build a business that created fairness and financial freedom for all. Having witnessed the aftermath of the global financial crisis and how it impacted lives, we knew people were looking for a new way to buy things they wanted without the threat of revolving in debt. At the same time, we knew that from my experience in running an online jewelry business with a significant shift towards e-commerce play ahead. But for any commerce venture to be successful, we knew we need a way to engage consumers beyond the point of sale and give them a reason to return. These were the principles and intent on which Afterpay was created. We knew that with product innovation, we could improve commerce for consumers and sellers. Afterpay enables consumers to buy and immediately enjoy their purchases by splitting the cost into 4 equal installments that they repay over time. Consumers tell us that they use Afterpay as a budgeting tool, making use of the visible spending limits and find it easy to understand the breakdown of their repayments. After a consumer's first purchase, they realize that our product is easy to use and free when they pay on time. Many develop a strong preference to shop where Afterpay is accepted. As a result, we have been continuously building out the Afterpay Shop Directory, a marketplace featuring our sellers that is available both online and from the app, seeing hundreds of millions of leads per year sent to our sellers. The Shop Directory showcases our sellers, enables consumers to search by brand and products and then make a payment. Once their preferences are known, we can show them new brands or similar products that they may yet to experience. By combining an easy way to pay with an intuitive and tailored shopping experience, the Shop Directory has become a highly effective consumer marketing channel for sellers who have benefited from more newer and repeat consumers, higher average transaction sizes, greater conversion and lower returns.

Because we started with commerce and in particular, leveraged our marketing capability with large retail brands to drive consumer awareness, we have scaled dramatically. As we've grown, we've lend into more verticals, building out from fashion and beauty into others such as health, automotive and travel. Today, you can Afterpay your haircut, your new shoes and even pay for a dentist appointment. And this is reflected in the numbers with 20 million-plus consumers using Afterpay, either in person or online at more than 140,000 sellers globally. The consumers that use Afterpay are mostly millennials and Gen Z. These generations are expected to account for almost half of all retail spend in Australia, the United Kingdom and the United States by 2030. And importantly, we think their peak earning years are still ahead.

As we added consumers and sellers over time, we've scaled a global business with operations across Australia, New Zealand, North America, the U.K. before recently launching into Europe. In 2021, we processed close to $20 billion in gross merchandise value and generated more than $600 million in gross profit. While we've scaled Afterpay rapidly, there remains a significant global opportunity ahead. Buy now pay later is 2% of a $10 trillion global online payments opportunity, and that is based on e-commerce spend alone. We think a good portion of this could be incremental to the addressable market that Amrita outlined earlier.

Before digging in on the integration with Block, we wanted to recap Afterpay's business model and how it's differentiated from traditional finance players and competitors across the buy now pay later landscape. We've been deliberate in offering a pay-in-full product that is free to the consumer, provided they make their repayments on time. Our revenue is primarily generated from sellers who pay our transaction fee in return for the prospect of high repeat usage, new consumer acquisition, higher transaction sizes and lower return rates. From this, we deduct the cost of sales, which includes processing fees and transaction costs to generate a healthy transaction margin. Transaction costs can be influenced by geographies with Australia having lower processing cost per transaction when compared to the United States. We're actively exploring potential ways to improve transaction margins, including via the introduction of ACH payments which we recently launched in the U.S. We also closely manage and report our risk loss, which has been reducing over time in all geographies. As a result, our profit less risk loss or what we've previously referred to as Afterpay's net margin has remained close to 2% of total gross merchandise value in recent years.

The indoor protections of our model mean that we are assessing a consumer's risk throughout their engagement with Afterpay. This starts with robust machine learning models to perform checks at the point of onboarding. Before the consumer can use Afterpay to make their first purchase, we implement a transaction limit that can only increase when they demonstrate healthy repayment behavior over time. We monitor real-time consumer behavior and risk before using sophisticated machine learning models, which helps us better control our exposure. During the pandemic, the model meant that we could quickly respond to changes in consumer repayment behavior to reduce risk loss in all geographies over time.

The combination of our product attributes, consumer assessment and strong loss management means Afterpay has historically demonstrated a receivables profile with low risk and a high return. In general, Afterpay consumers have historically had a lower consumer risk profile compared to the broader U.S. population based on a report by Alpha Beta. Individual balances outstanding are more a fraction of a typical credit card loan. Afterpay consumers are instantly suspended from making further purchases if there is a single mispayment. Our receivables book is very short duration and turns over more than 15x per annum. Unlike traditional lending, this means our consumer receivables risk exposure is low. And that gives us optionality around our funding. With such a short duration receivables book, it also means that we have generated attractive returns on our capital. From our original intent to scaling our business, we've generated compelling momentum which now forms the beginnings of our integration with Square and Cash App. The Afterpay model sees a consumer try Afterpay for the first time and love the experience. They often engage on the app more frequently, establish a preference for using Afterpay for more of their purchases and can use the app to discover more sellers. Over time, we build these preferences into our commerce engine to provide a personalized shopping experience for consumers. This helps drive increased frequency and engagement. As we compound with more sellers and more consumers, this can drive more sales and revenue to Afterpay. Our consumer product protections are designed to drive responsible spending and reduce risk loss. With higher engagement, we can drive highly targeted leads to sellers, both in our buy now pay later network as well as new sellers who don't offer buy now pay later at checkout, enabling us to build new revenue streams such as affiliate and advertising.

You can see this in action with our enterprise sellers, JD Sports and Finish Line. This is a strong omnichannel partnership. Afterpay is accepted online, in-app and in-person at hundreds of JD Sports and Finish Line stores. As the #1 referrer of online traffic to both brands, Afterpay has proven to be a credible marketing partner. Afterpay also improves website and app conversion. For example, Afterpay drove a 57% increase in conversion within the JD Sports app. We've also collaborated with targeted marketing campaigns such as the drop shop.

As highlighted earlier today, the acquisition of Afterpay forms an important connection point in our ecosystem of ecosystems. By integrating Afterpay, we reinforced the growth of Cash App and Square. At Square, we're focused on connecting millions of sellers across a range of commerce initiatives. These initiatives form our integration agenda and can be distilled into 4 key areas. First, we're going to help our Square sellers drive incremental sales by offering Afterpay as a new payment method. This is already underway with our launches of BNPL for online and in-person sellers in the U.S. and Australia.

Second, we're integrating Afterpay's discovery, shopping and lead generation engine into Cash App as the foundation of Cash App's commerce platform. Third, we're bringing Cash App Pay to Afterpay sellers which adds more flexibility for consumers and can drive incremental sales for sellers. Finally, we have ambitions to take these initiatives worldwide. We're now going to dive deeper into what the integration means for Square's ecosystem.

I spoke earlier about the 3 strategic priorities for Square, omnichannel software expanding globally and growing upmarket. Afterpay makes us stronger in all 3 of these areas. Let's take a look at upmarket first.

For Afterpay, we've built relationships with some of the biggest brands in the world from Dick's Sporting Goods, The Container Store and PetSmart to more recently Rite-Aid. Roughly half of Afterpay's 2021 volume came from enterprise sellers processing more than $50 million in annual gross merchandise value. And the other half is sellers doing less than $50 million in GMV per annum, which overlaps with Square's current addressable market.

We see an opportunity to cross-sell Afterpay's SMB and mid-market sellers today. Over time, as our product capabilities continue to expand, we can also begin to capture even larger enterprise sellers. Afterpay also adds a tremendous sales team with a strong understanding of larger sellers' needs. We see an opportunity to leverage their expertise as we continue to invest into Square's sales team. Square has a diverse base of SMB and mid-market sellers across a range of hurdles that we can cross-sell Afterpay to further diversifying Afterpay beyond retail. This includes a wide range of sellers from contractors and repairmen, to lawyers and doctors' offices, to salons and tattoo parlors. We've also already seen adoption by Square sellers and used by their buyers in the food and drink vertical.

These verticals will help to continue expanding Afterpay beyond our core strength in retail. Additional verticals can help drive engagement and frequency growing our utility with consumers. This vertical expansion played into our growth. More verticals can drive more consumer demand and acquisition, which in turn drives more seller acquisition and so on. We've seen the rapid growth of buy now pay later in recent years, especially in the U.S., where more than half of consumers have used a buy now pay later option at checkout according to CNI Research. And 3 out of 4 of these consumers are gen Z and millennial. Together with Square, Afterpay can more meaningfully give small and midsized sellers the tools to attract these young and engaged shoppers who prefer Afterpay and help sellers compete alongside businesses of all sizes.

This year, we're focused on bringing Afterpay to all of the relevant channels that our Square sellers use to reach their buyers. We started with online on the same day we closed the acquisition. We launched integrations with Afterpay and Square Online and Square's e-commerce API in both the U.S. and Australia. This was an incredible sprint by our teams to introduce this feature into our 2 largest markets, all while we were closing the transaction. The integration of Square and Afterpay online means that Square sellers can now serve and benefit from this growing consumer demand.

The integration is already delivering results for online sellers. By the end of the first quarter, approximately 13,000 Square online sellers had already processed an Afterpay transaction across a range of verticals and seller sizes, growing Afterpay seller base by nearly 10%. And as of today, more than 20,000 Square sellers have processed an Afterpay transaction, a strong early indication of continuing growth in the seller adoption. We're seeing encouraging conversion and greater basket sizes so far. Early indications have Afterpay's GMV at a healthy share of these Square sellers' overall processing volumes, generating 4% of share of checkout in the U.S. and almost 14% share of checkout in Australia. And across these markets, we've seen an average transaction size almost 3x those placed with other payment methods.

We're continuing this momentum into other channels. Yesterday, we announced the in-person integration of Afterpay for Square sellers live in the U.S. and Australia. Sellers can now offer Afterpay to their buyers across all of Square's in-person software. This includes Square Point of Sale, Square for Retail, Square Appointments and Square for Restaurants. These integrations strengthen our value proposition for both existing and new sellers as Afterpay could help sellers grow their sales, both online and in person.

Before we join forces with Block, Afterpay had successfully expanded from online to in-person by offering a digital card option. The card can be quickly and easily downloaded from the Afterpay app to a consumer's digital wallet. More than 8 million Afterpay in-person cards had been added to consumer wallets across Australia, New Zealand, the U.S. and the U.K. These omnichannel consumers transacted more frequently and spent more than 3x more than a single channel consumer in 2021. Together with Square, we can expand our omnichannel reach with a more seamless experience.

While we've made strong progress so far, this is just the beginning. We have more work ahead to bring Afterpay across the rest of the commerce products in our ecosystem and to all of our markets. Now I'll hand it over to Brian and Ant to talk through the consumer opportunity with Cash App.

We believe commerce and financial services are 2 of the development pillars that will drive Cash App's business in the years ahead and the Afterpay integration can supercharge both efforts. Around the world, consumer preferences are moving away from traditional lending solutions and towards new forms of credit that avoid trapping them in a cycle of debt. This is a generational shift we're seeing, driven by millennial and Gen Z consumers. And together, this demographic makes up more than 70% of annual actives for each of Cash App and Afterpay. With Cash App, we've already been focused on providing simple, fair and accessible credit products for our customers that promote financial health. Afterpay fits neatly into this by enabling consumers to buy and immediately enjoy their purchases by splitting the cost into 4 equal installments they repay over time without charging interest or revolving in debt. For Cash App customers, the addition of Afterpay will be a natural extension of the experiences within Cash App that they have come to know and love. As consumers develop a preference to pay where Afterpay is accepted, they can search to discover sellers through the Afterpay app either in person or online. This cycle can reinforce their preference and is what we describe as the Afterpay commerce engine. We'll be integrating this full experience into Cash App. Earlier, you heard me describe some of the core elements that Cash App has already built around commerce, including peer-to-peer business accounts, offers an advertising to the Boost program and Cash App Pay for commercial payments. By integrating Afterpay's commerce engine into Cash App, enabling sellers to generate leads from our scaled consumer base and introducing discovery and shopping into the app, we'll build upon these efforts and can drive stronger engagement and strengthen the Cash App network overall.

Afterpay's core product principles are designed for the next-generation consumer that Brian mentioned, those who have been shifting away from traditional forms of credit and towards new solutions that promote financial health. More than 90% of Afterpay's active consumers make their repayments with a debit card. In a similar fashion, the Cash App ecosystem has also revolved around debit cards to fund customers' accounts. It's free to use Afterpay if you pay on time, and that helps encourage responsible spending behavior. For the 12 months ended March 2022, consumer repayment behavior saw 95% of all installments paid on time, and 98% of purchases incurring no late fees.

After a consumer makes their first purchase with Afterpay, their use case often shifts from financing that initial purchase to shopping and browsing offers within the Afterpay app, which helps increase frequency. By integrating Afterpay's commerce engine in the Cash App, we believe we can benefit from similar engagement dynamics. We see a natural fit here as we know that shopping is one of the primary reasons that 15 million monthly actives spend on the Cash App Card each month. And we have seen how powerful Boost offers have been to drive spend at specific sellers.

In Australia and New Zealand, where Afterpay has been live for the longest, our oldest cohorts are using Afterpay almost 34x per annum on average. This habituation of use can be seen in other regions as well, with North America and the U.K. following a similar engagement trend. Afterpay has been able to achieve these engagement levels with 20 million active consumers. Of course, the magnitude of the opportunity is so much greater as we look to take that live to 80 million Cash App annual actives. With our combined basis, we see meaningful cross-sell opportunities. Early findings that around 1/3 of Afterpay consumers are Cash App actives. But only 6% of Cash App actives are Afterpay active consumers. Afterpay added almost 9 million new active consumers during 2021. As we integrate these consumers, we'll join Cash App's acquisition funnel as Afterpay will add a new entry point for consumers into Cash App's ecosystem.

We're not wasting any time. Our teams have already started integrating the Afterpay commerce engine in the Cash App. Our immediate focus is prequalifying Cash App customers to make purchases using Afterpay's buy now pay later product. Within Cash App, we're enabling existing consumers to seamlessly create an Afterpay account or link their existing one. This is a key first step for the rest of the integration. Next, we'll integrate account management into Cash App. By doing so, we expect to drive repeat usage by enabling the most frequently used tools and services in the app. Account management means a consumer will be able to review their orders, check their balance and transaction history and make repayments directly from Cash App. Then we're going to offer the Afterpay shop directly within Cash App to allow Cash App actives to shop and browse offers at Afterpay sellers. This will mean evolving Cash App's operating system to support search and discovery. The end result will be a unique commerce experience, designed to channel consumers to sellers from within the app, just as Afterpay has achieved across its own platform. We also know that a seamless integration into both Afterpay and Cash App is essential to sellers. Sellers want an end-to-end solution that is going to drive leads to them, convert consumers more frequently and keep them coming back more often. So we're going to offer a single global API to sellers to enable them to process both Afterpay and Cash App Pay transactions. Existing and new sellers will be able to integrate within a few simple steps and immediately gain access to the demand from Cash App consumers.

From the Afterpay Shop Directory, we've been able to drive more than 1 million leads per day from our 20 million active consumers. We have the potential to increase lead generation dramatically as we bring shopping to 80 million Cash App annual actives. And as the consumer arrives at checkout, we can offer them more ways to pay, whether that's pay now with Cash App pay, pay in full with Afterpay or with any future payment options we introduce. We believe this will drive incremental sales and higher conversion for sellers. We know this combined integration resonates strongly with some of the biggest retail brands globally. Existing Afterpay sellers that have already signed up to add Cash App Pay at checkout include Dick's Sporting Goods, SHEIN, Savage X Fenty, Finish Line, ASOS, Threadup and JD Sports. As Brian said, many Cash App actives already have a shopping and retail mindset. What's exciting is the prospect of bringing that together with the core expertise of Afterpay. Afterpay is an established shopping destination for consumers with around 1 in 3 or 30% of Afterpay consumers starting their shopping journey from within the Shop Directory. This has made Afterpay an effective consumer acquisition channel and has allowed us to introduce new revenue streams, such as affiliate marketing and advertising. In August last year, we went live with in-app advertising, curated by our own teams who have since onboarded more than 300 advertisers that are both existing Afterpay sellers as well as new sellers who previously didn't offer the Afterpay product. With Afterpay ads, sellers on average have seen a 150% lift in their referrals. And in the U.S., during the first quarter of 2022, we've monetized more than half of these referrals.

We introduced lead generation for Afterpay sellers into Cash App in late 2021 as an experiment. Even though this feature was not easily discoverable from within the app, it has since generated more than 350,000 leads for Afterpay sellers. The engagement from consumers has been powerful, showing strong product market fit for commerce. We plan to work together with the Afterpay team to scale this further. We think our biggest differentiator is the breadth of our ecosystem. We already have a highly engaged and diverse consumer base. We're able to combine multiple payment options at checkout for the consumer with both Cash App Pay and Afterpay buy now pay later. And we believe we'll be able to drive consumer demand in multiple ways with Boost offering personalized rewards and with Afterpay's lead generation and advertising engine. And as we've started sharing this vision with sellers, we're already seeing a strong pipeline of demand to sign on.

While we're still working through the integration phases, we have global ambitions for all of these initiatives. We'll start with the markets where we offer either Square, Cash App or Afterpay and expand from there. All of us across Square, Cash App and Afterpay are incredibly excited at the momentum that's being generated within our teams, who are passionately building the connections between these 2 ecosystems. We look forward to sharing more with everyone as we continue to scale this opportunity together.

You've heard a lot from us today on the momentum we're building with the integration. The 4 of us, our respective businesses, are incredibly excited about what is to come. We've outlined the progress made to date as well as short, medium and longer-term priorities that our teams are working hard to deliver. With Square, we've already launched online and in person and are going to expand the integration to all relevant products in the ecosystem. For Cash App, Afterpay can help transform Cash App into a super app, expanding utility for consumers and driving demand for sellers. Each and every initiative that we undertake has the potential of compound growth and I'm incredibly excited at the prospect of this work can reshape the global payments and commerce landscape and create new forms of economic empowerment.

And we're back live with Nick from Afterpay. Nick, how are you doing?

Good. Thanks for having me, Jack.

Thanks for being here. I mean, you just -- you and the team just joined us recently. So I just wanted to start with like first impressions.

Look, it's been the warmest of welcomes for myself, Anthony and the entire Afterpay team. It's been incredible to verify the conversations that we had for the many months before the transaction and to start to see the rubber hitting the road both with the integration with Square, both online and yesterday in-person. And then the conversations that have been following over the last couple of sessions with integrating Cash App into commerce. But culturally, it's been incredible to see the alignment, the team starting to blend and progress accelerating. So couldn't be happier to be here.

I wanted to ask you like what assumptions did you have coming in to this merger? And which of them were correct and which of them were incorrect? And did you think differently about either Afterpay or broader Block?

Look, we got to know both the Square side of the business and the Cash App side of the business before the transaction closed. And what has just been clear to me is the complementarity of both the cultures, but also the competitive advantages. And so naturally, Square started in a B2B perspective and built an incredible engine that can drive small micro and more recently enterprise growth. And then the evolution of Cash App has allowed it to build a deeply scaled consumer network that inherently comes with its own competitive advantage and culture and skill set to drive scale. I think that's actually an incredibly unique thing and history has allowed that to occur. The benefit that we bring to the table in having both a seller and consumer network, I think allowed us to see those cultures start to amplify and connect. And so I'm just fortunate to be able to sit in the middle, to speak with retailers about Cash App Pay, to work with the Square team in scaling the ecosystem. Quite frankly, I thought it would take us a little bit more time to mobilize around our initiatives, and that has pleasantly surprised me. There's definitely still kinks in the road integrating 1,700 people into the organization. There's no small feat at the best of times, but it's come with all the right mindset from both sides of the table, and I think that is ingredient to success.

Yes, I agree. And I've been impressed by how seamlessly the orgs have integrated together. Starting from a cultural perspective, it just felt like it's always meant to be. Having said that, what are you most excited about in terms of our future road map together, both -- maybe speak both to the Cash App side and also the Square seller side?

Yes. So from a Cash App perspective, we started conversations with the biggest retailers on our platform in February post transaction closing and started to introduce them to the thesis of the transaction. I think most sellers understood Square and Block to be Square's origin story, but the scale of Cash App, it's like the most unknown scale known business to a lot of people. It's amazing this kind of binary view. And when you start to take that view to the retail ecosystem and you communicate to them not just that you can drive an incredible payment product, but actually you can originate new business for them. And when you illustrate Cash App's active numbers, there are many, many multiples of Afterpay's numbers, when we can send 1 million leads per day, the mind stretches pretty far with how Cash App can contribute as a genuine customer acquisition channel to our retail partners. And that's led great brands like Dick's Sporting Goods, SHEIN, and many, many others that we spoke about earlier to commit to join the platform for launch. From a Square perspective, it's incredible to see the pace of the team and how that has mobilized. We started with integrating into the online platform. We then rolled out in-store, not just getting to market quickly, but actually seeing the engagement that this progressed following, the share of card that we've been able to achieve, the lift in average order value as well. But not just that, then similarly on the Square side, mobilizing collectively and speaking to retailers of all sizes together about this portfolio view. It's a deeply differentiated platform. Block brings so many dimensions to the table that can take retailers from here to many years to come. And I think that is what -- that's what gets retailers excited.

Awesome. Nick, thank you. It's amazing having you and the team at Block, and I'm really excited about what we're going to do in the future. We're going to move on to another one of our acquisitions, TIDAL. And to talk about TIDAL, Jesse Dorogusker.

[Presentation] Our vision is that TIDAL will become the first and best choice for music entrepreneurs, from supporting them at the start of their creative journeys like sharing their earliest beats or releasing their first demo, to helping them navigate the long road to success. There isn't just one path to success anymore or even 10. The creator economy has leveled the playing field for millions of creative newcomers armed with supercomputers in their pockets. Now anyone can bypass old guard radio stations and expensive recording studios to reach a global audience through social media. TIDAL with Block is well positioned to turn this influx of creative energy into empowerment and commercial success for rising artists like aspiring DJs, indie rockers, singer/songwriters and everything in between. The key question we're asking ourselves is what's missing? Like any small business owner, working artists spend hours on things that aren't about music at all, like paid marketing mechanics, taxes, cash flow, data, publishing rights, CRM tools and social media. They constantly navigate and endure the complexity, the bureaucracy and the entrenched business models of working in the music business. When you pile on a flurry of disconnected tools and overcrowded platforms, they're forced to work even harder to educate themselves about everything, find and engage fans and identify new ways to generate income, all while stealing some time to write lyrics or sit down at the piano. This is a familiar story for Block. Their transition from a mostly cash economy to credit and debit cards has been an empowering shift for consumers, largely enabled and sometimes exploited by banks and card networks. In this big shift, small businesses had been left behind, excluded entirely or burdened with outdated disconnected tools, resulting in less time and money to work on their craft. Enter Square, building tools that empower sellers and make it more inclusive, accessible, healthier and better. The addressable market was much bigger and more valuable than the major players imagined. But unlike small businesses that can tap into a range of integrated intuitive systems like Square, these opportunities just don't exist for artists. By stepping in to provide much needed resources and practical knowledge to this community, TIDAL can do the same for working artists. [Presentation]

We're focusing on the rising segment first because they're already creating and establishing a fan base. Research is telling us that they want nothing more than to spend most of their time working as an artist rather than other jobs they need to pay the bills. They are in the most clear and obvious need of better tools that make that possible. Our goal is to eventually scale these offerings to the broader artist ecosystem, so anyone can benefit no matter where they are in their career journey. Here's how we're thinking about it. First, we need to help artists grow their brand by reaching new listeners and by helping them better understand their current fan communities, especially those super fans. HIFI Plus, our premium tier where fans can track their activity and pay artists more is a good start to creating new valuable connections. And we can also establish smarter, easier marketing tools for artists to use what we know about fans inside and outside of TIDAL to build more connections. Next up, we want to connect artists to new revenue-generating opportunities and invite them to the rooms where the deals are made. The music industry is very relationship driven with lots of go-betweens. And most rising artists do not have the connections in place to negotiate things like movie or video game music placements, collaborations or tours or even brand partnerships or promotions. And lastly, we will lean into Square's and Cash App's commerce and financial infrastructure to drive artists' physical and digital sales while helping them better understand their cash flow and investment decisions. We also have a special advantage with TIDAL streaming data to smartly fund very specific activities rising artists need to grow. Doing so can help these artists become more successful earlier in their life cycle. TIDAL is uniquely suited to help artists break through and monetize their talent in new ways. Today, we're building more meaningful connections between artists and their fans on our music streaming platform. And we see near-term opportunities to enhance these connections with better commerce and better data. More effective fan-based management for everyone, old-fashioned merch done smarter and NFTs done right. Artists and their fans are a foundational ecosystem to make this happen. In the future, we can build more reinforcing and complementary systems. Artists with the industry, video streaming and gaming are driving unprecedented demand for licensing. Artists with their money, we hear over and over that managing finances and cash flow and taxes and borrowing are major struggles, and we know some things about those struggles already. Artists with collaborators, SMS is still the leading way to share beats and stems. And eventually, artists of all kinds, beyond music with their own ecosystems of fans, industries, money and collaborators. This all starts with empowering artists and using all of the assets and creative energy we have to integrate them into the economy. Because just like small business owners, we believe that artists deserve the same level of access to resources and loyal customers. They deserve to see their businesses grow and flourish just like they deserve the chance to live off their art and become their own CEOs. That's what we're up to at TIDAL.

[Presentation] We're back live with Jesse. Jesse, how are you doing?

What's up, Jack? I'm doing well.

Awesome. Well, you and Brian have been at the company for quite some time. And I'm asking you and Brian the list of the same question, which is that you, in particular, have been fundamental and instrumental in building things our customers see first and get to touch and hold, which is unique and the hardware -- team you've built and all the hardware you build for our customers. What are you most proud of? And what missteps have we made along the way?

Man, we've been at this a long time. I'm really proud of the way we've been able to elevate design and make it a really important touch point. It's hard to make the case for design all the time when you're being very technical and practical. But realizing it really connects to customers has been really valuable for us. As a company, I think we've been fearless. Being at this for a long time means making mistakes, trying new things, and I really appreciated that in what we've done and in working with you. And on the side of where maybe we haven't done so well, I think the pandemic gave us a really good nudge in the direction that we thought we needed to get, which was to be a global company, hire people everywhere, let people work where they feel most creative. And it's really letting us focus. And you can see it in our work now that we're really emerging into a global mindset with all of our products. So it's starting to feel really good.

Awesome. Moving on to TIDAL. What are investors not seeing in this acquisition in the platform generally, in music and Block, in our other ecosystems? Obviously, they've heard a bunch about creator economy. What does that mean to you? What does that mean to TIDAL? And what does that mean to our future? And if there is anything that they're not seeing or underappreciating right now, what are those things?

Yes, I think the big idea, and we've said ecosystem quite a few times today, the big idea is that musicians are part of an ecosystem. And that music streaming is one part of it, one part of their business, one part of our business. But the ecosystem is really about making connections between artists and fans, between artists and the industry, between artists and the collaborators around them, their whole ecosystem of people that work for them and with them in and around the music industry. And so what we're really building is something for creators and budding musicians, but eventually all artists to be able to capitalize on that interconnected story that you've heard told so well by both Brian and Alyssa.

Awesome. And we're going to talk about when we're going to hear more about Bitcoin next and you're leading to Bitcoin hardware products. So can you give a little bit more color into what you're excited about there? And what are some of the challenges that you see going forward?

Man, it's still early days for Bitcoin consumer activity. Brian has led the way with Cash App to get it into more people's hands and more exposure. But there's really a ton more that we can do to make it more mainstream, more accessible, more fluid and really to become that fundamental currency for the Internet. We also get lots of questions, and we have lots of conversations about the intersection between TIDAL and musicians and Bitcoin and NFTs. And there's a ton of curiosity, there's also a ton of noise. And I feel very flattered and feel a great wave of responsibility that we can be a trusted source, we can be a clear user interface, a great consumer experience, something that protects artists, let them share in the appreciation of their own work without some of them may have a noise that's in what is obviously a very early industry right now.

Awesome. All right. Well, why don't we get to it? We'll talk about Bitcoin. We'll talk about TBD, Spiral and of course, our Bitcoin hardware. Thank you so much, Jesse.

Cool. Thank you.

[Presentation] I said in my opening that we see Bitcoin as an extraordinary trend towards an open standard for global money transmission. What does that mean? Our reason for starting this company was to help people access the financial system as it move to plastic cards. That has also shifted from in-person to digital commerce. And while it's much more global, it's still exclusionary, closed and controlled by a few corporations. And it's still leaving people behind. It's safe to assume that every person on this planet will eventually have some way to access the open Internet. We can't make the same assumption about participation in the global financial system. In order for that to happen, we need a protocol that is native to the Internet, a standard that's inclusive, trusted and scalable to the entire population. You've likely heard that blockchain and crypto do just that. But for something as important as storing and exchanging value, we have to demand certain properties from this system. We believe such a system must be open, secure and scalable. Open ensures that the system is maximally transparent, both in its development and operation and accessible to any individual who wishes to use or further. Secure means that individuals hold the keys to unlocking its value and that it is resilient to all forms of attack or corruption from individuals, corporations and states. And scalable means that these attributes grow stronger as more people use it, while minimizing the negative impact on efficiency and usability. The Internet requires a currency native to itself. And in looking at the entire ecosystem of technologies to fill this role, it's clear that Bitcoin is currently the only candidate. It has proven resilience over a decade. Its development may feel slow relative to other candidates, but that's a result of the deliberateness required to preserve the attributes necessary for money storage and transmission. A Bitcoin standard is the Internet standard and why we've chosen it as our focus to continue broadening access to the global financial system. Choosing the focus on a Bitcoin standard forces you to change how you build. We must be just as open in our development looking for every opportunity to strengthen its openness, security and scalability. Our first real push into this was to create a team of open source engineers and ask them to work on whatever they thought best for Bitcoin. We call this team Spiral, and they decided to work on Lightning, a Layer 2 network on top of Bitcoin which increases its transactional capacity and privacy. 2 years after formation, Spiral launched the Lightning Development Kit, a software development kit to help wallet developers use Lightning in the easiest and fastest way. As Block, we had no assumptions we'd ever be able to use anything the Spiral team worked on. We only expected Bitcoin to be a bit stronger in some way. However, after an exhaustive exploration of all technologies, as Cash App looked to build in Lightning payments, they chose Spiral's LDK for its technical excellence and speed to market. That's a success story I'm very proud of. Building for the open ecosystem helped our company in the long term. And so we've decided to continue building in this way as we look to fill other gaps in the market, a hardware wallet for individuals to increase access to the standard, a bitcoin mining system to further decentralize and secure the network and TBD, a developer platform for identity, trust and Fiat to Bitcoin on and off ramps. All of these will be open sourced by default, developed in the open with the ecosystem, each with a complementary business model that Block can build for a new set of customers. We believe the Bitcoin standard will become the Internet standard. And by helping it become that, we will increase access to the global financial system and the economy and increase the potential for business and company. We're still very early, and we couldn't be more excited for what this will mean to the world. And now let's talk about Spiral with Steve.

We founded Spiral, formerly Corecrypto in 2019 to advance Bitcoin. We are a small unique team that is not directed or influenced by Block or its commercial interest. Instead, you can think of the broader Bitcoin ecosystem as our customer. We believe Bitcoin is more than an investment. It is the best version of money. With our help, we think Bitcoin can become the planet's preferred currency. To achieve this, we build and fund free open source projects that improve Bitcoin's user experience, security, privacy and ability to scale. Bitcoin's values are deeply aligned with Block's mission of economic empowerment. One of Block's core principles is that anyone should have the ability to participate in financial systems easily and without discrimination. We believe that Bitcoin can help deliver on this vision by allowing people worldwide to make payments efficiently, securely and at a low cost. With Spiral's efforts to improve Bitcoin, we are enabling more use cases, expanding the market opportunities and helping Block reach those that are underserved in new ways. For Bitcoin to become everyday money, it needs to support instant low-cost payments and be far simpler to use. The Lightning network is the technology that makes this possible. Yet Spiral identified several gaps in the ecosystem where more investment was needed. First, the development tools available for Bitcoin developers have historically been quite poor. Second, there has been very little attention given to user design. We created 2 new open source initiatives to remedy these problems, the Lightning Development Kit, or LDK, and the Bitcoin Design Community. Our small full-time team and network at Spiral guarantees have invested a lot into both. Our full-time engineering team exclusively focuses on LDK, making it substantially easier for developers to build great Lightning-enabled Bitcoin applications. 20 years ago, it could take years for a team of developers to build an application. Today's superior development tools allow a single person to create something compelling in weeks. LDK does that for building on Bitcoin. We are already seeing adoption of LDK by popular apps like Blue Wallet and innovative solutions such as Sensei. So how does our work impact Block? As Jack mentioned earlier this year, Cash App integrated with the Lightning network using LDK, making instant Bitcoin transactions available to tens of millions. The Cash App team came to this decision independently since it reduced potential years of integration time to just a few months. As Block integrates Bitcoin into more products, software built by Spiral can save them time, effort and resources. In addition to our full-time team's focus on LDK, Spiral's grant program is issued over 40 Bitcoin grants to developers, designers and PMs in over 15 countries. We believe this makes it the most impactful grant program in all of Bitcoin. Our grants funded security work on Bitcoin Core, strengthened Bitcoin's foundation via open source projects and kick-started the Bitcoin Design Community, which boasts over 3,000 creatives. This community has created the Bitcoin Design Guide, which is similar to Apple's human interface guidelines but for Bitcoin and it is now used to improve product experiences and interoperability. Finally, Spiral has established a credible and trusted voice in the Bitcoin community. We have reached new audiences through our distinct and humorous Twitter account and creative endeavors like our short film about LDK. Each member of our team regularly participates in public conversation about Bitcoin's future through public speaking events, podcasts, Twitter and various developer channels. We are also researching how women see and use Bitcoin to ensure that Bitcoin is accessible to all. Each of these builds credibility and helps us influence Bitcoin's future. Spiral will continue contributing to the foundation of Bitcoin, accelerating its adoption as the native currency of the Internet.

Bitcoin ownership is defined by one thing, a secret key. If you don't have the key, you don't have the money. The decentralized future of financial infrastructure is built on this simple idea. Today, the vast majority of the estimated 175 million global bitcoin owners, many of whom are located in emerging economies, don't actually have their keys. Instead, they rely on custodians, institutions who hold keys on your behalf, like the way most people manage most of their money today with traditional banks. Those who have access to custodial services choose to use them for convenience, concern about accidental loss and a traditional pattern of trusting banks and corporations. But custodial services, like a wallet on a crypto exchange are not available to everyone and customers are dependent on the policies, security and operational capabilities of the custodian and all the third parties they depend upon. Put simply, when a custodial wallet owns your Bitcoin keys, they own the decisions about when you can access your money, how your money is kept secure and whether you can even access their services in the first place. Self-custody of Bitcoin, however, hasn't offered a substantially better alternative yet. Today, keeping your own keys isn't as simple as it sounds and often isn't as safe as people need. Early adopters who hold their own keys today rely on a complex set of apps and hardware devices that are extremely technical and hard to use. And often, the only way to recover your money in case you accidentally lose your phone or hardware wallet is to rely on a 12 or 24-word secret phrase which we think customers will either lose over a long period of time or more likely at a fear of forgetting it, write it on a Post-It note on their desk. Even today's power users have to hold their breath and hope they don't make mistakes that result in accidental loss, failure to pass it on to their loved ones or fall victim to a hack or a scam. Our opportunity is to build a safe and easy way for regular folks to own Bitcoin and manage their money with confidence and on their own terms. To simplify ownership of Bitcoin for a broad audience, we're building a wallet. Our wallet breaks up the secret key into 3 pieces to reduce the stakes of losing any one piece. The 3 parts of the wallet are a mobile app, a secure hardware device and a self-serve recovery tool, which will help customers when they lose part of their wallet. The mobile app is the part of the wallet that customers will use to manage their money, enabling them to use the familiar interface of their phone for more frequent activity, including sending, receiving, paying and getting paid. More than 3 billion people use smartphones. They are an increasingly important part of people's lives, and the convenience of managing financial services via smartphone is compelling. Our mobile-first approach will enable us to reach a wide set of customers while staying focused on the product experiences that are most important to the future of digital money. Alongside a mobile app, we're including a hardware device that acts as a second layer of protection for larger transactions, which means anything above a specific limit that customers decide for themselves in the wallet. Think of this like the difference between a checking account for everyday spending where only the mobile phone is needed and a savings account for larger infrequent transactions that warrant a little more friction in exchange for security and thus require the hardware in addition to the mobile app. And even more importantly, if you lose or replace your phone because real people do this all the time, the hardware device is the way to bring in a new phone securely. We're also including recovery tools because people lose things, forget things and break things. We are designing a system for regular folks, so it has to be resilient and inspire confidence even when things go wrong. The wallet will enable fast, low-cost transfers to anyone in the world. And we will work with retail partners and exchanges to distribute hardware locally and help customers move between Bitcoin and local currencies. Our approach with this product is rooted in our history as a company. We understand the value of integrating hardware, software and services and building businesses and value models that connect with consumers. We realize that this might vary around the world. It might be different from the current base of existing custodial exchange and wallet customers. We're thinking about massively growing the addressable market by building for the next 100 million Bitcoin users in as many countries as possible. And we believe there are strong and diverse business model options to explore. We can imagine selling the hardware as a stand-alone product, given the value it provides in both security and recovery. The recovery tools are key to keeping funds safe over time, including over generations. So we can imagine offering a subscription service that helps customers regain access to their funds when they've lost a piece of their wallet. With a partnership ecosystem, we imagine driving trading volume to exchange partners to earn referral revenue along with increased hardware sales or both. Finally, a user-friendly, secure and resilient system for self-custody of your digital money is a great foundation for all kinds of financial services we can imagine in the future. In addition to building a broad and open ecosystem of partners, we can bring unique value to customers by connecting to existing parts of the Block ecosystem. Connecting the wallet and Cash App ecosystems can drive both wallet sales and Cash App trading volume, providing 44 million Cash App actives, an easy path to self-custody and providing wallet customers an easy way to buy and sell Bitcoin and connect to a broader set of financial services in the markets where Cash App offers them. Building best-in-class high-volume consumer hardware at Block capitalizes on the decade of hardware design, engineering, manufacturing and supply chain expertise that we have developed in the Square portfolio. We can set a high standard for the wallet as we invite the next 100 million consumers to join in. We are very excited about enabling ownership of Bitcoin on a massive global scale. The current number of Bitcoin holders does not correlate with the highest GDP countries in the world. North America ranks behind Asia, Europe and Africa. We think the future is similarly diverse and distributed. So our design, strategy, partnerships and country roadmap will reflect that. Self-custody can be an easy option for people everywhere especially the mainstream customers who have yet to participate but surely will soon. Our user-friendly wallet will include more people safely. A mobile app, a cloud service and a piece of hardware, all working together to be easy and resilient for regular people. We are developing this product in the open to earn the community's trust and demonstrate our values in the code and in the design for anyone to inspect and verify. Finally, building this wallet system among our other Bitcoin initiatives has technical customer and team connections at Block. This is our Bitcoin wallet. In the traditional banking system, banks are trusted to confirm and secure a ledger of transactions. With Bitcoin, the operations and security of the ledger are distributed. A Bitcoin miner contributes mathematical computation in exchange for a financial reward. This is how transactions are settled, securely and without a central authority. Any person or business can participate in mining with a mining computer system with only specialized computation, power for the computer and a connection to the Internet. Yet today, the barriers to entry for mining are very high. Mining systems are difficult and expensive to acquire, maintain and operate. As a result, mining is more concentrated than distributed, more exclusive than accessible. We believe that we can build high-performance mining components and a complete easy-to-use, cost-effective system that empowers more miners to participate, leading to a more efficient and more distributed network. As we look at the current landscape for Bitcoin mining, we see several opportunities to improve it and make it more accessible. The core technology for an efficient mining system is an application-specific integrated circuit or ASIC, that is optimized for lowest power and lowest cost Bitcoin computations. The manufacturing sale of Bitcoin ASICs today is concentrated among just a few companies, all headquartered in one country. This concentration introduces supply and cost risks and also amplifies geopolitical ones. We see an opportunity to build our own Bitcoin ASIC, one that is optimized for cost, performance and smart system integration. This ASIC will, of course, be part of any system we build. We also want to power other system ideas by making our ASIC broadly available for other system developers. Our ASICs will be available for sale along with data sheets, reference designs and companion software to make it work for others, all open source. Today, the same market concentration exists among mining systems, the complete product that includes computation, power management, cooling, software and network connectivity that tangibly empowers a miner to contribute. As a result, mining itself is also highly concentrated. Hash rate is a measure of computations per second in the Bitcoin network. According to a recent MIT and London School of Economics study, 50% of the current hash rate is controlled by the top 0.1% of miners, just 50 firms. Block can contribute here too, applying our expertise in system design, product development and managing a global supply chain to make mining systems more available. Success isn't solely a computational task but offering something that's easy to get, easy to use and maintain and simply convert power and a network connection into Bitcoin. We also see that mining systems are not yet optimized for clean energy use. With smart system integration, especially considering solar and other transient renewables, we can increase the efficient use of clean energy sources. With the core technologies and systems we are building, we can also explore creating a distributed mining cloud service that relies exclusively on clean energy. We believe there are consumers and businesses who are interested in mining, but don't want the burden of maintaining a system themselves. We can build a simple experience to purchase a remote miner and get connected to clean industrial energy sources through Block. This allows individuals to have a stake in Bitcoin mining on a more level playing field with larger firms who have more control and access over energy sources and equipment. Addressing all of these shortcomings will create a more durable and decentralized Bitcoin ecosystem. This also represents a sizable business opportunity for Block. We anticipate billions of dollars of mining-related capital expenditure as Bitcoin network demand increases. We are confident that Block can apply its hardware product expertise and design ethos to have substantial impact in this space. The market for Bitcoin mining is big and growing. Mining revenue reached nearly $17 billion in 2021, up from about $5 billion in 2020. As the mining revenue opportunity has grown, miners seeking to capture a portion of this growing market have invested heavily into new equipment. According to the Luxor Hash Rate Index, the total Bitcoin hash rate has grown 20% year-over-year and 67% over 2 years and that's despite the severe supply chain challenges in this time frame. We expect these rates will continue to increase, especially as we make new equipment available. Building a mining system inside the Block ecosystem has unique advantages and connecting points. Block's experience in hardware product development, including all disciplines of ASIC development, product engineering and operations allow us to solve end-to-end problems for customers. Our design philosophy prioritizes simplicity and ease of use, which contribute to wide adoption and access. Mining requires significant capital investment and the cost and the revenue profile is not entirely predictable. We can reduce barriers to entry with blocks lending and underwriting experience to broaden consumer access to Bitcoin hardware, helping miners smooth cash flow and invest for growth. Finally, miners will store their mine rewards in a Bitcoin wallet of some kind and this creates new opportunities for distribution and integration with our Bitcoin wallet or Cash App. We are excited about the opportunity to make Bitcoin mining more efficient and more distributed. That's what we're up to with Bitcoin mining.

At Block, we've been building payment systems to connect people to the economy for over 10 years. With our Square Reader, we connected millions of small businesses to the payment system, enabling them to make sales in our increasingly cashless society. With Cash App, we expanded the umbrella of banking services to bring in Americans who had been underserved or completely unserved by our financial system. We've made huge strides in increasing financial access but our efforts are limited by the very nature of our financial system. Today, over 1 billion people worldwide still lack access to a bank account. Of these people, 2/3 of them own an Internet-connected mobile phone, but why can't we reach them? The Internet and wireless technology has given us the information infrastructure we need to serve everybody, but money and payments have not kept pace. They are still the old paradigm. The legacy payment system is layers upon layers of proverbial duct tape, hiding a fundamental truth. Final settlement of payments is slow. It is capital intensive to facilitate at large volumes. Settlement is never quite final, and this all adds up to risks that get priced into the system in the form of expensive account fees or exclusion from the system itself. These downsides fall hardest on the most economically disadvantaged and leave them at even greater structural disadvantage in the new digital economy. We believe a technology like Bitcoin can fundamentally change the entire nature of the global financial system for the better. So we have our legacy payment system, and we have the new payment system. How do we get from the old to the new? With Onramps. This is TBDs mission, to bridge the old to the new, navigating the maze of complexity with simplifying APIs and SDKs and filling in the missing pieces needed in the form of trust and identity. To do this, we are building a new open source company from the ground up. We are focused on building open protocols, open standards and open development communities to create an ecosystem of tools that all participants in the economy can benefit from. Individuals, businesses, institutions and yes, even government. What Red Hat did for Linux, MuleSoft did for SaaS, Databricks did for data science, Elastic NV has done for search, TBD can do for money, payments and identity. The power of open source is that we get to collaborate with developers from all over the world and with other businesses and institutions who share our vision for a more open financial system. The open standards and open source software we are building can form a foundation for reinventing the entire suite of financial services across the Block ecosystem, allowing us to expand our reach beyond our traditional markets and into a truly globalized footprint. The great power and potential of the Internet has always been the democratization of access to information. This power has unleashed a torrent of innovation and fundamentally changed our world, but the account model of the Internet is broken. The way we authenticate and verify ourselves on the Internet has actually become increasingly centralized. Our identity on the Internet is represented by a small handful of very large companies. This model serves the interest of centralized platforms, but it doesn't serve the interest of individuals in terms of the privacy and control they must give up or the elaborance of passwords and log-ins they need to remember to manage their accounts. We need to fix this, and decentralized identity is our answer to building a more inclusive digital economy. Identity verification is one of the largest intractable problems for gaining access for the financially marginalized. In the U.S. new immigrants, even those who are well educated and compensated know the pain of trying to get access to financial services for the first time. Without an established record of credit, the onboarding experience is usually quite painful. Isn't it weird that the length of the credit file has something to do with how we verify identity? Does that really make sense? The scope of this problem is immense, leaving 1.1 billion people around the world unable to prove who they are, which is a travesty. Decentralized identity or DID takes the old paradigm of logins, passwords, and the increasing use of single sign-on through large, centralized services and replaces it with a secure token that you own and could use anywhere. It creates the infrastructure for allowing reusable and verifiable credentials that can be attached to your secure personal identity and be used to gain access to regulated financial services in a way that's regulatorily compliant, but still privacy preserving. These credentials can be proof of KYC, proof of driver's license or any other kind of credential, securely attached to an identity that you own and can securely prove as yours. This isn't just about individuals. This is also meaningful for businesses that want to but can't address large segments of the market due to the risks presented by onboarding customers with low fidelity identity data. These are tangible costs that lead businesses to exclude rather than include. Secure decentralized identity will allow businesses to serve more customers, build more streamlined customer experiences and lower cost for businesses. And ultimately, for the customers they serve. With decentralized identity, we have the foundation for building a truly decentralized protocol and network for connecting the world of legacy money to the world of digital money. This is tbDEX. This new protocol is the missing link to pull together 3 ingredients: the potential of the Internet to democratize information; the power of Internet native currency like Bitcoin; and decentralized identity into an open, permissionless and decentralized way to on-ramp and off-ramp to and from digital currencies, but more importantly, to build the trust relationships between individuals and institutions to lower the risks for all parties and ultimately drive transaction costs down for everyone while driving access and inclusion up. We believe tbDEX will power new ways to move money around the world securely and in a regulatorily compliant manner. Because we're building on decentralized identity, individuals can prove their identity with one or more trusted third parties and passport that information across many different providers of liquidity all over the world, which ultimately means less risk for businesses, less risk for consumer data breaches and actually getting closer to the elusive one-click 0 friction onboarding experience that we all want. For an individual who wants to participate, they will create their own wallet, onboard their own identity and establish the providence of that identity with a global ecosystem of trusted third parties and ultimately, directly on board from old money to new money. With this new financial substrate in place, we open the possibility to reinvent the entire suite of financial services at Block for the decentralized world. With an Internet native global currency, we can imagine new internationally native financial applications from Cash App to Square. We've talked a lot about these big abstract ideas. But for us, it comes down to one important purpose, access. We believe everyone should have access to the financial system. Imagine you're one of the millions of people around the world who have been impacted by the pandemic. You've lost your job and your bank account is overdrafted. It's been closed for nonpayment. And now you can't open a bank account anywhere because it's on your record. The monthly account fee hits hard, especially when every dollar matters. Under the new financial system, you could take your phone and create your own digital wallet to hold Bitcoin or stable coins. You can create your own digital identity and use all these different services that offer identity verification. You've created your own bank account, and you didn't have to ask permission to create it. You cash your paycheck through an online service that deposits stable coins into your wallet, using the tbDEX network for establishing trust between you and the check cashing service. You can convert your stable coin dollars directly into Bitcoin without ever leaving the wallet app because it's integrated into the tbDEX network, which provides liquidity all over the world. You can now send money to your family on the other side of the world quickly and cheaply without ever going through an intermediary. Now you're a citizen of the new decentralized economy as we all will be because of the future is TBD.

All right. We're live again with Mike Brock, who leads TBD for us. Mike, how are you doing?

Doing great.

Awesome. Mike, can you give -- can you start off by giving everyone a history of your work at Block?

I've been here a long time. I think I'm coming up on my ninth year anniversary here at the company. I joined -- I was one of the earliest employees on Cash App, where I led several of our initiatives within the Cash App ecosystem and settlement, our consumer banking initiative, Bitcoin. My team was also responsible for starting Cash App lend, the Borrow product. I was responsible for initially setting up Square crypto, now Spiral. here I am today as the lead of TBD.

So you mentioned a bunch of Bitcoin projects. Why Bitcoin? What is your philosophy behind it?

I'm not sure. The Bitcoin project, originally?

No, why Bitcoin in the first place? And what is your philosophy behind it?

My philosophy is that -- I mean, fundamentally, it's about trust. And if we're going to have an Internet native currency, it has to be something that we can all trust. And that -- and trust comes from -- it comes from time and openness and transparency, which are principles that are embodied in the Bitcoin ecosystem. And I believe that it's the only technology today that I would trust my own family with. So for me, that's what it ultimately comes down to, is the T word.

So investors don't have a lot of context for TBD just yet. A lot of them are learning on the fly through our white paper, through conversations like this. What are some of the future proof points that they should be looking towards to determine that we're on the right track and we're living up to the potential that we set out to push through?

Well, I mean it's the -- I think it's the classic measure of adoption. I think if we play our cards right, my hope is that we're building a network that ultimately provides for better experiences all around the world for financial access and moving money around the world. My belief is through the projects that we're working on in the open source community and the open standards community that we can truly bring to parity and better the experience as a financial access that people currently experience through more centralized platforms today. I think there's a lot of hard work to do. And our decentralized identity work is front and center in closing that usability gap. And so I would say that the signs that we should look for are -- I mean, quite honestly, we should see in the future more and more companies choosing to adopt these technologies on which to base new future products and services. And I think, for us, we view TBD in sort of this 2-stage approach to our strategy. One is investing in the ecosystem very deeply, building these open APIs, SDKs, open standards. And then secondly, building vital businesses that support businesses, institutions and even governments to be able to plug into these networks in a turnkey way. And so we see this as being a real opportunity. And I hope, over the next 12 months, we're going to have some really, really big proof points around that.

I think we will. Okay. We are finally at the homestretch. Thank you so much, Mike. We're going to kick it over to Amrita to discuss our financials. We're going to take a 5-minute break after that. And then we'll get into 30 minutes of Q&A with you all. So see you soon.

You've heard our vision market opportunity and the strategy behind each of our ecosystems. Before we take your questions, let's come back to how what we've shared today shows up in our numbers. There are 3 core pillars of our business model. First, we're focused on delivering growth at scale. We're building and scaling relevant products that empower customers in each ecosystem with a goal of serving more customers in more ways, enabling us to capture more of the addressable market. Second, we're guided by strong unit economics. And because we seek to deliver value to our customers across an ecosystem of products with differing rates of adoption and monetization, we look at our unit economics on a customer basis. We closely measure the performance of customer cohorts and trends around customer lifetime value as we deploy our investments. And third, we believe our business has attractive structural profitability. At the core of this are the strong structural margins in our primary ecosystems today, Square and Cash App. It's against these 3 pillars that we manage our business with discipline and orient our investments. Let's go a bit deeper in each area now. We evaluate our cohort economics based on our ability to acquire new customers, retain our relationship with them and provide additional value over time. We acquire customers because of frictionless onboarding, strong word of mouth and innovative distribution models across multiple entry points in each ecosystem. We retain our customers because we build intuitive products that work seamlessly together in real time, which helps earn trust. Over time, we've seen our customers use more products and engage more with existing products. This deepens our relationship with them and drives greater resilience and value for our business. This approach is how we've been able to scale our business more than 12x since our IPO in 2015 and more than 5x since our last Investor Day in 2017. How does that stack up to the industry? Let's compare Square's growth to industry benchmarks indexed to 2017. GDP growth has been strong, growing between 15% and 20% in the U.S. and globally over the last 5 years. Growth in payments volume has been even stronger, up nearly 50%, both in the U.S. and worldwide. Since 2017, Square's gross profit has roughly tripled in both the U.S. and globally. Cash App showed an even more impressive 44x increase in the U.S. and globally, albeit starting from a lower base. We believe this demonstrates our ability to gain share in the industries that Square and Cash App operate in despite the highly competitive landscape. Let's look at how our unit economics have driven this growth, starting with Square. To illustrate our cohort economics, I'm going to show you 2 Square cohorts of sellers and track their performance over time. On the left, we have our Q2 2015 customer cohort; and on the right, we have Q2 2017. We spent $27 million and $45 million, respectively, in sales and marketing to acquire these customers. After a year, both of these cohorts generated meaningful gross profit, recouping our initial investment for a payback period of 4 quarters. Now after 4 years, we've seen steady growth in cumulative gross profit over time. We have invested more to acquire the more recent cohort, which by now is more than 40% larger than the older one. What does this mean in terms of the returns on our investment or ROI for those 2 cohorts? After 4 years, each cohort has generated cumulative gross profit of more than 3x our initial investment. We care most about ROIs because they capture the longer-term arc of a customer's journey. Sellers might adopt more products over time as they grow or as our product set grows and these ROIs reflect the evolution of lifetime value. When we look at all of our Square cohorts, we see a similar trend around attractive long-term returns on our investment. We've anchored investments in our Square ecosystem around a return of 3x over 4 years, and we've seen ROIs continuing to increase long after that. Historically, we think we've been too efficient here. At less than 2% penetration of the potential market, we've been increasingly opportunistic recently by investing where we see attractive long-term returns. You heard from Alyssa about our expanding go-to-market strategy for Square with investments across brand awareness, sales and global markets. Part of what's driving our returns has been our ability to retain sellers. We've achieved positive gross profit retention for each of our quarterly and annual cohorts since 2012. Even if some sellers might churn, others grow and adopt new products such that each customer cohort has become a growing annuity stream for Square. This positive retention means that even without any new customers, our revenue base would grow every year based on our existing customers. This trend has held true for older cohorts, which were mostly micro sellers and for newer cohorts, which have indexed to larger sellers. It stayed true as our cohorts have grown in size with newer cohorts being larger than those preceding them, and it stayed true in challenging years for our sellers, like in 2020 with the impact of the pandemic. We've seen our ecosystem help sellers adapt to become stronger in 2021. Our positive gross profit retention is rare in our industry. Looking at industry benchmarks, you'll see that average retention is negative for merchant acquirers and public SaaS companies. Again, these are the markets we believe we are gaining share in. I talked before about the ability for customers to grow with our ecosystems. And in fact, about 1/3 of our larger seller GPV comes from sellers that were once in the micro category. Let's look at how we've seen this play out using an example based on an actual Square retail seller. This seller started out using us in one location and only for payments. Happy with their experience, they brought us to another location the next year. They began by using our point-of-sale software. As they expanded their inventory and hired more staff, they added Square for Retail to customize categories and help manage complexity. As demand grew, they created a website using Square Online and seamlessly synced their products from Square for Retail. When a larger retailer opened up nearby, our seller created a loyalty program, which their customers could manage through their Cash App accounts. To bill some of their customers remotely, they turned on Square Invoices. And finally, they accepted a Square Loan, which they used to invest in new plans for expansion. This example shows the power of our ecosystem for our sellers and for us. This seller was able to expand their business in new ways. And as they did, our gross profit increased by 3 to 4x. A similar trend extends to the overall Square business. You can see our business mix has shifted over time. In 2015, most of our gross profit came from sellers using Square for payments and not software. By 2021, as we grew with larger sellers, software and integrated payments became our largest revenue stream. And each of software and integrated payments, banking and international have grown much faster than stand-alone payments gaining share. We expect this mix will shift further as we continue to grow upmarket and help our sellers grow. Since our IPO, we've expanded the Square ecosystem meaningfully. As we've launched more products and scaled our investments, we've nearly doubled our active seller base and almost quadrupled our average gross profit per seller, creating a powerful compounding effect to drive growth. This is a demonstration of the increasing utility of our ecosystem across a widening range of sellers. Now let's shift to Cash App. You heard from Brian about the 3 key drivers of Cash App's business model: actives, inflows per active and monetization rate. We're going to dive deeper into each of these and how they relate to Cash App's cohort economics. We'll start with actives. We scaled Cash App to 46 million monthly actives by the end of March. Monthly actives have grown 3x over the past 3 years and more than 6x since 2017. Similar to Square, we've achieved this remarkable customer growth with an efficient cost of acquisition. In 2021, we spent approximately $10 to acquire a new transacting active. As you've heard from Brian, the virality of our peer-to-peer network is at the foundation of the efficient acquisition we've seen. We enhanced peer-to-peer with acquisition spend in a range of areas, including referrals and incentives to enhance network growth, brand and social investments to drive awareness and bring Cash App's aspirational brand to life and paid marketing, which is a newer and scaling channel for us. Together, these make up our $10 cost of acquisition. These aren't the only sales and marketing expenses for Cash App on our P&L though. There's also a portion of other sales and marketing costs related to peer-to-peer expenses, which don't factor into our acquisition cost, but we deduct them from gross profit as we measure paybacks and ROIs for Cash App. With that context, let's walk through cohort trends for Cash App. We're showing you 2 cohorts from different years, this time on a monthly basis. On the left, we have our July 2017 customer cohort. On the right is July 2019. We acquired them for $1.4 million and $3.9 million in acquisition spend, respectively. Now let's look at these cohorts after their first 12 months. What you see here is the cumulative gross profit net of peer-to-peer costs for each of these cohorts. Similar to Square, both of these cohorts have more than recouped our initial investment for a payback period of less than 1 year. As we look at them after 2 years, again, you see their gross profit net of peer-to-peer costs growing over time. As we stepped up investment from the newer 2019 cohort, the cohort size also grew significantly compared to the older one. The ROI on these investments is strong at more than 6x return over 3 years. Similar to Square, we care about longer-term ROIs for Cash App as they reflect the cross-sell opportunity we see in our Cash App ecosystem over time. Unlike Square, Cash App's ROIs aren't linear. As we've grown Cash App's product set and achieved greater product adoption at little to no incremental cost, ROIs inflected as these cohorts matured. This trend has remained similar across years. From 2017 through 2020, you can see that we became more efficient at attracting new Cash App customers. Returns trended well ahead of 6x ROI over 3 years. We believe this level is far too efficient. The lifetime value of our customers was increasing, but we didn't increase our investments at the same rate. We think we left opportunity for growth on the table. We started to rightsize this in 2021. We've been ramping our acquisition spend across channels and intend to deliberately increase our cost of acquisition as we orient ROI. As you can see, returns to date on our 2021 cohort are still pacing at a strong level, trending closer to prior cohorts. Cash App's cohort retention has supported these strong returns. Each of Cash App's annual cohorts achieved gross profit retention of more than 125% from 2017 through 2021. This means that from existing actives alone, Cash App's gross profit would have been growing 25% or more each year. And that factors in the impact from any actives that might have left in the meantime. Not only is each cohort growing over time, but we've been onboarding larger cohorts. The power of compounding here is immense. In our first couple of years, our 2020 and 2021 cohorts generated far greater gross profit compared to those in prior years as product adoption rates in the first month of onboarding grew. Our ability to drive greater utility for our actives has also resulted in increasing Cash App engagement on a weekly and daily basis. In 2021, an average of roughly 2 out of 3 Cash App actives made a transaction on Cash App in a given week. And perhaps more impressive, 1 in 4 transacted in a given day. And we're evolving the design of the app to support discovery and more frequent interaction, which will continue as we integrate Afterpay. This growing engagement has driven greater monetization. As our actives use Cash App more frequently and adopt more products, they bring in more funds to use in multiple ways. This has driven greater gross profit, which has a strong correlation to the growth of inflows. Over the past 3 years, annualized gross profit per active increased roughly 2.5x to $47 as of Q4 2021. We believe this has the potential to grow even further as we launch new products and as more actives are introduced to the existing products in our ecosystem. Our highest attached product currently, Cash App Card, is still only used by about 1 in 3 monthly actives. There is so much opportunity ahead. Let's explore an example of an ideal Cash App active. We'll take someone who starts by using peer to peer. Initially, they have a small network of friends to send and receive money. The average peer-to-peer active is generating some gross profit to get funds out of the app instantly every once in a while. When the active discovers that Cash App offers free rewards at interesting merchants, they decide to customize and order a Cash App card. At first, they only use it on transactions with Boost. But after a few months, they're using it almost every week on groceries, gas and other regular purchases. They then check out investing, initially to read some articles, then to buy and sell fractional shares of equities and to put some money into Bitcoin every week. By now the network of their friends and family has grown, and they're sending hundreds of dollars in peer-to-peer transactions every month, including to local businesses using Cash App. They are now using Cash App regularly and across a range of tools. It's one of the first places they go when managing their money, so they decide to direct deposit their paycheck into Cash App. Cash App Card now becomes their primary way to spend and take out money from ATMs. This illustrates the journey a customer can take as they find more utility and eventually grow their lifetime value, in this case, to more than $200 in gross profit annually. This is multiples above what the average customer is currently generating. Not all of these products are monetized. Products like investing, direct deposit and taxes are free, but they can drive more utility and ultimately inflows into Cash App. This is again why we measure unit economics on a customer level rather than a product level. For both Square and Cash App, our ecosystem approach allows us to be flexible with pricing and our business model, enabling different products to serve varied and self-reinforcing purposes. Not all actives follow the same journey as the example I just mentioned. But in aggregate, we have seen this growing adoption and engagement play out in Cash App's business model. As Brian shared, when customers use more products, they bring more inflows. And as inflows increase, that can drive greater gross profit. With only the current products in our ecosystem, we believe we have the potential to drive gross profit per customer multiples higher than what we're achieving today. As you heard from Brian, there are 3 ways we think about driving gross profit growth for Cash App: monthly actives, inflows per active and the monetization rate or gross profit generated on those inflows. Let's look at how these have contributed to Cash App's growth over time. From 2017 to 2019, the biggest driver of Cash App's gross profit growth was acquisition or growth in monthly actives. In recent years, the growth algorithm shifted. From 2019 to 2021, inflows per active became the primary driver of gross profit. We've increased inflows per active in a couple of ways: first, by cross-selling as customers use more products in our ecosystem, including the new products we added; and second, by driving greater engagement from customers on existing products. Growth in monthly actives was still a meaningful driver of gross profit over the past 2 years but became a lower portion of the mix. Looking ahead, we have multiple ways to drive growth across each of these 3 levers. As we look at Cash App's revenue streams, we see that not only are they rapidly growing, but they're diversifying. Cash App has 3 scaling monetization streams with peer-to-peer products, financial services primarily with Cash App Card today and with Bitcoin consumer trading. Our newer revenue streams have been scaling quickly, and each of these have a growing number of monetized features within them. We'll continue to diversify this mix over time, both by launching new products and monetization streams and by continuing to scale our existing products. Now that we've covered the cohorts in our Cash App and Square ecosystems, let's look at Afterpay. We believe Afterpay will be a strong complement to the cohort economics of Square and Cash App. From 2016 to 2021, we've seen Afterpay deliver positive volume-based retention, both with merchants and with consumers as well. More broadly, we think integrating and cross-selling Afterpay with our Square and Cash App ecosystems will be a strong complement to the lifetime value of each customer base, allowing our sellers to drive incremental sales and by unlocking commerce for Cash App consumers. Now that we've closed the Afterpay acquisition, we wanted to share more about how we're thinking about our balance sheet and our capital allocation priorities. We're in a strong liquidity position today. At the end of the first quarter, we had nearly $7 billion in liquidity available to us, including $6.3 billion in cash and equivalents and short-term securities on our balance sheet. Our cash position has benefited from strong free cash flow generation, which is a key longer-term priority for us. We're fortunate to be in a position of strength to think flexibly and holistically in how we manage our balance sheet and P&L. We think about the funding for each of our balance sheet products based on their unique performance characteristics around risk, return and duration. For Square loans, we've proven out a compelling return with an ability to manage risk loss. We've sold the vast majority of these loans off our balance sheet to third-party investors to participate in the economics while also mitigating our own exposure. And we plan to continue with a similar approach going forward. Afterpay's buy now, pay later consumer receivables have a similar profile, with an attractive return and short duration, turning over 15x per year. For now we're going to fund these with a mix of cash and warehouse facilities while also exploring other funding structures in a thoughtful way. More broadly, we also want to ensure there's room to experiment with products in new areas like Cash App Borrow. As we test and learn about these products, we'll fund them with our balance sheet. We will also grow them with discipline and with the goal of exploring other funding structures over time. Now let's shift to our profitability. Before getting into this section, I wanted to briefly touch on the topic of guidance. Today, we're not going to share longer-term financial targets, a carefully considered decision based on 2 factors. First, our business is highly dynamic, and giving a growth target projecting many years out would have many puts and takes for us. Just look at our 2017 Investor Day as a case in point. We guided to 20% to 25% top line growth. Since then, we've compounded overall company growth at more than 2x that rate. As we scale with creators and Bitcoin to 4 ecosystems with each at different stages, that dynamism only increases. Second, we want to maintain our focus on our purpose and our customers and give ourselves the opportunity to react quickly to the trends we see in our business. We want to make the right long-term decisions for our customers and our business, and we want to do this while maintaining rigor and discipline around our investments. What I just walked you through around our cohort economics, acquisition, retention, ROIs, form the pillars around our investment decisions. We invest when we see attractive returns, and we're prepared to scale back on investments when trends change as we've done at various points in our past. You've seen the results of this in our track record of performance. We are also sharing more on what we're investing in and why. We intend to hold ourselves accountable to driving long-term profitable growth at significant scale as we invest in our business. So we focus our disclosures today on areas that align directly with what we're investing in. We'll continue to provide transparency on real-time trends in our business as we have on our recent earnings calls. With that context, I'm going to walk you through our investment framework and the structural profitability of our ecosystems. We'll start with the investment framework. We look at our business as 3 distinct investment opportunities: the Square ecosystem, Cash App ecosystem and our emerging initiatives. Square and Cash App are more established businesses, which have found product market fit and have scaled business models. We evaluate investments here independently based on their intrinsic merits of driving long-term profitable growth and strong ROI. Our more nascent businesses fall into the emerging initiatives group. Cash App was once in the emerging bucket and has obviously grown well into its own, a path we hope to see over time for our businesses focused on creators and Bitcoin. These groupings dictate how we organize and allocate our resources. Each ecosystem makes holistic decisions around their teams, road maps, strategy and investments separately and in parallel. This enables us to move quicker and be dynamic with our investments. It also means that the decisions of one ecosystem don't constrain the other. And of course, teams are still collaborating across ecosystems where it makes sense, particularly to build durable connecting points between them. We evaluate our more mature ecosystems based on a framework of growth plus margin or gross profit growth plus profit margin. This helps balance trade-offs where we have opportunities to invest for growth and levels the playing field for businesses with different growth and margin profiles. We believe $1 invested today should return profitable growth over a period of time because that invested dollar is going towards reaching and building value for our customers. Now how has this investment framework driven the profitability we see in our established ecosystems? Let's look at the margin profiles of Cash App and Square today. We're showing you a new metric here called adjusted fully burdened profit margin. Here, we've taken all the expenses that directly impact each of Square and Cash App, and we've added allocated expenses from corporate teams who work across the ecosystems, like finance, legal and people. Together, these operating expenses make up the vast majority of what's in our P&L, although we're not including stock-based compensation. Looking at our 2021 performance on this basis, you'll see that each of our ecosystems drove strong profitability, Square at 34% and Cash App at 12%. If that's a fully burdened margin, let's now look at structural margin to get a sense of the structural profitability inherent in each ecosystem. We've grouped our operating expenses into fixed and variable. Variable expenses are what we incur to drive the next dollar of gross profit. Fixed expenses are investments that may drive longer-term growth but don't scale with an additional dollar of gross profit. This exercise helps illustrate the strong incremental profit our business can generate as we scale and where we make purposeful investments to drive long-term growth. In the fixed bucket, we have R&D investments across our product, engineering, data science and design teams. And we also have operational overhead. On the variable side, we have our customer acquisition investments, including traditional sales and marketing spend, and we have ongoing expenses to manage the business, including customer support, risk loss, and Cash App's other sales and marketing expenses. For now we're considering all discretionary sales and marketing as variable. But longer term, this is an area that could be fixed as we flex here as well. Square had an incredibly strong structural margin of 69% in 2021. This means that variable expenses were only about 30% of Square's gross profit. What does this structural margin mean? On the incremental dollar of gross profit, there's $0.30 of variable expenses to generate that growth. And with the other $0.70, we can either reinvest that back into our products or overhead or flow it through to profits over the long term. This structural margin has held in a similar range for Square from 2018 through 2021, with only a modest decline in 2020 during the pandemic. Where are we investing against this profitability? For Square, it comes back to the 3 strategic priorities Alyssa highlighted, omni-channel software, global expansion and growth upmarket. We're investing across product development to build new products and enhance existing ones and sales and marketing to drive awareness across global markets and increasingly upmarket. Cash App has seen a strong trajectory in its profitability. Cash App's structural margins are lower today given the variable expenses in its business, including peer-to-peer processing, risk loss and card issuance costs. Still, we've been able to improve Cash App's structural margins over time. As we've expanded our ecosystem, driven product adoption and added new monetization streams, Cash App's structural margins have increased from less than 10% in 2018 to roughly 37% in 2021, and we see further opportunity for expansion over the longer term. For Cash App, we're investing into 3 strategic areas: first, new product expansion. Of Brian's 7 pillars, the 2 I'd emphasize are commerce, including the integration of Afterpay and financial services, where we're broadening the product set. Second, customer acquisition, we're focused on growing with higher lifetime value customers, and we want to reach global audiences by bringing our ecosystem to new markets. Finally, we're focused on bringing inflows into Cash App by adding new inflow channels and investing in our infrastructure around deposits and limits to make it even easier to bring your funds into Cash App. Now let's shift our focus to the fixed expenses in our overall business. Here, we've driven meaningful leverage since our IPO and as our businesses scaled. As we look ahead, we don't anticipate further leverage from fixed costs in the near term given the addition of Afterpay this year and our scaling emerging initiatives. But longer term, we believe we have the potential to achieve additional leverage on this fixed expense base. Now turning to our emerging initiatives across our younger creator and Bitcoin ecosystems. We're bringing a similar disciplined approach to evaluating these initiatives using both operational and financial benchmarks. From an operating perspective, each of the specific business areas within these ecosystems have 2 check-ins per year. These are deep dives with relevant stakeholders across the company and their progress across several fronts, including the team, product road map, business model and go-to-market approach. We use these check-ins as an opportunity to monitor and quickly respond to trends in the market and our own progress so we can double down on the things that are working or pivot where they aren't. With regards to financial investment, we're using parameters that one would use for early-stage businesses. We want to enable these teams to refine their approach, to invent and learn about their products and customers but to do so in a disciplined way. So we've implemented an investment envelope for these businesses that for 2022 equates to 3% or less of our non-GAAP operating expenses. We used similar constraints when scaling Cash App in the early days years ago, which helped the team think creatively around products and monetization. We believe we're in a unique position to scale these ecosystems and these parameters can help us iterate quickly in a prudent way. Before we close, I want to come back to where we started. We are so early in our opportunity, less than 3% penetrated in a nearly $200 billion addressable market, one that continues to grow behind secular tailwinds that we believe favor ecosystems like ours. The macro environment we sit in today is as dynamic as ever for consumers and sellers between inflation, supply chain and recessionary concerns. If there is anything the early days of the pandemic taught us, it's that this is exactly the sort of moment in which our ecosystems can shine. Our ecosystems span multiple audiences. Within each ecosystem, we have a diverse customer base across sizes, geographies, verticals and demographics. These customers hire us for multiple jobs to be done which provides greater value to them and can add resilience to our business through more monetization streams. These can be enduring revenue streams, particularly in an inflationary environment as our pricing models are mostly variable and grow with volumes. We believe the secular tailwinds we talked about earlier allow us to gain share not in spite of but because of a shifting macro environment. For sellers, the ability to expand into new sales channels, reach and engage new customers, more efficiently manage staff and have one cohesive view of their business becomes even more important in periods of disruption. We believe the value of a software and integrated payments platform like Square's will only accelerate as a way for businesses to improve productivity and adapt quickly. For consumers, the last recession catalyzed fintech adoption. People shifted to manage their money on more modern platforms, driven by the younger next-gen consumer. In these dynamic times, we believe Cash App's focus on building intuitive products and providing fast access to funds becomes even more valuable. We are in a moment where consumers need us now more than ever. And among our emerging initiatives, Bitcoin adoption and the creator economy have continued to see rapid growth. It's early days here as the world increasingly moves towards people wanting to take control of their craft and their finances. Downturns are often catalysts to seismic shifts, and we want to be ready for future transformational opportunities. Before we turn to your questions, I'll leave you with the attributes I shared earlier today that we believe truly differentiate Block. With our ecosystem of ecosystems approach, which spans beyond just payments and across multiple industries, we are creating something entirely new, a category that doesn't yet exist. We're building a multidimensional company, serving a growing set of customers in pursuit of our purpose of economic empowerment and in an integrated fashion. We have profoundly outgrown the company we were at our last Investor Day 5 years ago, and I can't wait to see what the next 5 years brings. Now let's take your questions. [Break]

Welcome back. Thank you all for joining today. Now before we start the Q&A session, we wanted to let you know that we have posted slides to go along with several of the sections that we covered today as a helpful resource, and a video replay will be up shortly after the event. Now with that, let's open it up to Q&A with our analysts. We'll take our first question from Tien-Tsin at JPMorgan. Go ahead, Tien-Tsin.

You gave us a lot of good data, call it, a cheat code to help us figure out these markets that you're in, so appreciate that. So I'll ask maybe 2 if you don't mind. I'll sneak them all together. Just thinking about the structural margin being quite high and obviously very encouraging. But what about the OpEx side that's required to grow? And Amrita, like how you talk about, right, grow ambitiously but also in a disciplined way given the current market focus on profitability. So how should we think about that? And of course, EBITDA margin progression maybe over the next 3 to 5 years, what's the view there? And then the second question, if you don't mind, for any of the leaders, Jack, Alyssa, Brian or even Nick. I know Jack, we've talked about this before, right, connecting ecosystems. Building the ecosystem is hard, but connecting them is even harder. So how do you motivate the teams to do that, to work on cohesion when they're also busy, right, trying to build their own big businesses themselves? So those are my 2 questions.

These are great questions. Thank you so much, Tien-Tsin. I'll kick off on structural margins. So let me first start by grounding everyone in what we shared today. The structural margins that we shared today represent Square and Cash App margins net of variable costs. Like sales and marketing, customer service, those are the costs that drive growth or typically scaled with the incremental dollar of gross profit. So you can think of a structural margin as being like an incremental margin for our business. And in 2021, that was 69% for Square. It was 37% for Cash App, which is up from 4%, by the way, in 2018. So really nice to see that progression. Now where we invest beyond those variable expenses is in our fixed expense base, which is at our discretion. These are deliberate decisions that we take on where to invest across product, design, engineering and our corporate infrastructure. And those are the investments that help drive our product innovation and our long-term growth over time. That's part of how we've been able to expand our TAM, as you saw earlier today. Now we've also seen that we've been able to get leverage from these fixed expenses over time. As you saw in the presentation, they were 60% of gross profit at our IPO in 2015, and they were 30% of gross profit in 2021. Now while we don't expect to see leverage on the fixed expenses in the near term as we invest for continued profitable growth and to absorb and integrate Afterpay, we see a longer-term opportunity to drive further leverage over time, particularly through corporate overhead over the long term. Moreover, I think there are ways in our structural margins to drive efficiency. That's 69% and 37% over time as we scale and as we optimize our cost structure, particularly with Cash App, where we're still earlier in optimizing the cost structure. Ultimately, Tien-Tsin, as you know, our investments are guided by cohort and unit economics and the returns on investments that we see. So if we remain in an environment where we have visibility to those metrics and we continue to execute in a way that enables healthy metrics, we will invest to drive long-term profitable growth. We have pulled back at moments in our past where we've had lower visibility like at the start of the pandemic or in January of this year, as we just mentioned. So we're focused on being prudent in how we put our dollars to work in an efficient way. And with all of this, we envision a pathway ahead that looks very attractive over time and scales a large, profitable and efficient business. And maybe finally, what I'll share in margins before we get to your second question is that a lot of what I just said was focused on what lays ahead as we're still so early in our journey. But I'd reiterate that what we've already demonstrated is strong profitability. We shared those fully burdened profit margin figures, 34% for Square, 12% for Cash App in 2021. Those are burdened with all the relevant non-GAAP expenses for each ecosystem, including allocations for corporate overhead. So we already are showing our discipline in how we operate and that we continue to strive to operate with discipline as we build long-term profitable growth. I think we'll take the second question now.

Yes. I'll start with the -- so the question was around how do you incentivize ecosystems working together. I think even before that, we had to incentivize product teams within our ecosystems to work together in the first place. So even with Square, we had product teams that naturally wanted to do their own thing, and they didn't always look for opportunities to utilize each other. Alyssa came in and solved a bunch of this for us, and she can speak to how she did that. But one of the things she said is we need to build seductive adoption. So we need to make a product platform that people want to use because it just feels right. It feels amazing and it's going to take my own service, my own product to the next level and be able to demonstrate that, so have an internal understanding of -- or sorry, an understanding of the internal customer before anything else. So we were able to incentivize our own ecosystems to work together internally. And then we started to see -- and Brian can also speak to this. We started to see Cash App wanting to use some Square products and infrastructure and vice versa. And we tried to force a bunch of these connections, which ended up being quite small. Some of them worked, some of them are still working. Some of them are early. But there was one in particular that made sense to both of our leaders of our biggest ecosystems, Cash App and Square, Brian and Alyssa, and that was Afterpay. This was like the ultimate connection between ecosystems, and they determined that it was the right thing to do not just for their own ecosystems, which it was, but for Block in total and also for Afterpay. But I'll let Alyssa speak to more on that first. But the net of it is like we're still figuring out how to incentivize it into a framework structure, but we've proven we can do it both internal to the ecosystem and also across ecosystems.

Yes. As Jack shared, there's a number of different things that we've done here. Within Square, which is itself an ecosystem, as I talked about, like there are portions of Square that could each be their stand-alone company and the [Technical Difficulty] It's a combination of 3 things, as Jack alluded to, what we call seductive adoption, water rolls downhill. So where there are capabilities that usually benefit 2 products within the ecosystem or 2 ecosystems, those connections are really easy and pretty fluid because it's clear at the outset it's a win-win. And then I think you lost me through some of that. Going back, so seductive adoption. You all keep turning me off. Okay. Okay. All right. Number one is seductive adoption, water rolling downhill, where 2 teams are aligned, and it's a win-win for both. Number two, it's cultural. And this is, I think, a little bit of Square and Block's secret sauce, is how do you build a culture where folks look not only at what the local optimization is but also think about what the broader optimization is. And I think we've done a fantastic job of that across the company and within the various ecosystems. And then number three is mechanisms that help you reinforce to help show mutual benefit, so things like pro forma P&Ls and the like, where you can create internal incentives that align towards the broader outcome. So I think we've got a lot of evidence of our ability to do it initially within our ecosystems within Square and Cash App. And then now we're showing with Afterpay but also even with the connections between Square and Cash App for things like loyalty and payroll and the like that we're able to do this across ecosystem and looking forward to doing it more broadly across Block's new and emerging ecosystems as well.

And I have just one more point to add, which is you can create structures that drive cohesion bottoms up through seductive adoption, but we can also organize our organization in order to create the right incentives. So as it relates to the Afterpay acquisition, we've been very deliberate about integrating -- how we're integrating the Afterpay business and organization into Cash App and Square. We're being very deliberate about not leaving that to the side. So where we've taken the organization, we've created reporting lines, organizational structure where Afterpay is reporting into both Cash App and Square. We're building one kind of perspective on commerce because commerce really is that intersection, and it's a glue that's kind of starting to form a network around how we're building and how we're integrating and how we're collaborating. So that's just one final point to add.

Great. Thanks, Tien-Tsin. Now we'll hear from Tim at CS. Go ahead, Tim.

[Technical Difficulty]

Tim, we'll come back to you. Apologies for the technical difficulties. We'll take the next question from Darrin at Wolfe. Darrin, go ahead.

Look, I just want to touch on the globalization of the business. There's been, I know, about 4 to 5 markets built out for Square and Seller over the years. And it would absolutely seem now that internationalization is much more tangible and material opportunity post Afterpay. So if we could just touch on your ambitions globally relative to the 5 to 6 markets that Seller has done, and now maybe even adding the 8 to 9 markets with Afterpay. What kind of time frames do you think we can actually see in terms of real global build-out? And then what kind of KPIs would we look for, whether it's users moving outside the U.S. for MAUs and Cash App and then after we combine or the cross-border opportunities or beyond?

Yes. So going and growing global, obviously, 1 of our 3 key priorities. We've accelerated our pace of global launches over the last 12 months, and we got more work in the pipeline. We do think Afterpay's a medium-term accelerant there. Market expansion, there's a whole pipeline that we have of that. And so some of our pipeline up next predates the Afterpay acquisition. But we do think that there is opportunity a little further down the road to make sure that we've got Square and Afterpay in the same markets and then expanding further from there. We have broad global ambitions. We think that we obviously still have room to grow in the regions that we're in and see opportunity in new regions that we're not yet in. Ultimately, it goes back to that question of growth versus profitability in terms of how quickly we expand. Each new market that we launch is effectively a J curve of investment where it takes multiple years of losses before you break even and then before you're ultimately accruing. So in the past and in the future, our pace of international expansion is really just gated by the rate of burn that we want to take and how many markets we want to have in that -- in the earlier stages of the J curve at once.

Just adding one point, one point on Cash App. As we've looked to expand globally in the past, and I mentioned this earlier in my Q&A with Jack, going into each new market, you're reinventing and you're making sure you're resolving identity, you're resolving payments, you're resolving risk. And these networks take a long time to gestate. One of the big learnings that we've had as we've integrated Afterpay into the organization and built a better understanding for their history is how they've leveraged cross-border network effects to help propel them into new markets. And so the United States is a global market for Afterpay. They started in Australia. They now have 4 million actives across Australia and New Zealand. And their enterprise sellers, we're pulling them into new markets. So Urban Outfitters pulled them into the United States. They were able to use that relationship to build relationships with consumers. Now 13 million consumers in the United States leverage those relationships to build relationships with more sellers. And so the power of cross-border network effects are strong. And so going forward, as we invest in our global development pillar, we're thinking really critically about where do we have cross-border network effects with Cash App's business. And Afterpay is a huge new asset for us. They have -- we now have 3 million annual actives in Europe. We have traction in Canada, and we do believe that there is demand for U.S. consumers to send money across borders and for people in other markets to receive money from the network of customers that we have in the United States. So using cross-border network effect will be a major focus for us as we pursue international expansion with Cash App.

Thanks, Darrin. Now we'll try again with Tim at CS. Go ahead, Tim.

I want to talk about Cash App Pay, so really strong on the consumer side. You mentioned 80 million trailing 12-month actives, already pretty comparable to Venmo. But I want to touch on the merchant acceptance side. You mentioned some pretty exciting things today. You talked about building out a sales team to help Cash App Pay gain more merchant acceptance. You also mentioned a good early start with merchants even beyond Afterpay. You talked about DICK'S Sporting Goods, ASOS and some others that you've already gained traction with in terms of the large merchants. Maybe you could just expand upon that approach and how you plan to get broader merchant acceptance of Cash App Pay. And as a brief follow-up that's very related, to the extent you could touch on it, have a bundled sales approach where you could sell to that same merchant Afterpay, unbundled processing and, of course, Cash App Pay.

Yes. I'll kick it off, and I'm going to pass it over to Nick as Nick is really the driving force for our sales approach for Cash App Pay right now. So there's already great integration that's happening between the Cash App team and the Afterpay team. But I think the thing that's so exciting about Cash App Pay and what it represents in our commerce development pillar more broadly, is it really takes us back to the origin of Cash App and why we started Cash App in the first place. We started Cash App because we believed that by building relationships with consumers and by building vertically integrated experiences, we can help sellers make a sale. We certainly have been on a wild journey over the past 8 years to put ourselves in a position where we're now one of the strongest and most scaled consumer ecosystems in the United States to be able to do that. But we're coming full circle back to our original intention. And so as we're speaking with merchants, they're extremely excited about being able to tap into a network like ours that's serving millennial and Gen Z consumers. We're really serving the next generation, and they see the power of the platform in terms of increasing basket size, and Cash App is now one of the most relevant payment networks in the United States. And there's kind of no -- there's no questioning that and merchants are seeing that. But beyond that, as we look to the commerce engine that Afterpay has built, it's evolved into a lead generation platform as people develop preference. And so it's really resonating with merchants and it's extremely exciting. But Nick has really been the driving force behind all of our kind of early sales efforts with Cash App Pay, and we're seeing amazing integration there. So Nick, I want to pass it over to you and let you add on.

Yes, for sure. Look, firstly, there's an incredible team, I think, that sits in the organization that we've had the opportunity to mobilize around. In my mind, post kind of deal closing, there was a couple of key components that played into the conversation with these enterprise retailers. The first is incrementality. And so when we shared some data points around 6% of Cash App actives being Afterpay consumers, that represents a very significant incremental base that retailers can get access to, to drive growth of their platform. And so it's looking at like very significant incrementality beyond Afterpay's core base. The second point is the cash card actually represents a very significant portion -- or not very significant but a very meaningful portion of retailers' transaction volumes organically through the card network. And so to be able to have conversations with retailers, to talk to them about the value that's already been created organically and to talk to how do we kind of flip the switch where Afterpay drives 1 million leads per day but the opportunity to engage the Cash App audience to significantly elevate that exposure to retailers, that's kind of the core opportunity as we've spoken to kind of our retail partners. There are certainly 2 buckets. There's the existing Afterpay base of merchants to be able to bundle that from the perspective of a very simple integration, like no extra integration beyond what we already have. Existing settlement and contract flows makes it a very limited amount of lift for a retailer to turn live. But then there's a very significant base that are not part of the Cash App -- that are not part of the Afterpay ecosystem, I'm sorry, that haven't been verticals that we might have traditionally serviced just as a function of where Cash App is incredibly strong. And so I just think there's a very diverse opportunity here at play. And we have certainly started with the biggest retailers on the Afterpay platform to get that resonance from a very significant portion of our top 20 retailers in such a short period of time and suddenly exceed our expectations but excited as to where this goes to from here.

Great. Thank you. We'll now open it up to Lisa at MoffettNathanson.

Terrific. Thank you, and thanks for the great presentation today. Two from me. First one is probably for Amrita. Just a question about how should we think about the time to monetization and scaling of TIDAL and the Bitcoin-related projects. And also which 1 or 2 on the list in there do you guys anticipate might be the next home run like Cash App? And then my second question is for Alyssa. Can you just elaborate in your investment priorities for Square what you're doing to ensure that you win against the big SMB-focused e-commerce platforms that are starting to integrate payments into their platforms?

Thanks, Lisa. Let me start on your question on our emerging initiatives. And of course, Jesse, Mike, [ Alyssa ] should feel free to weigh in as well. So where I would bring you back to the start is how we operated Cash App in the early days, which was also an emerging initiative for us if you can believe it. And it's instructive in terms of the playbook that we take here as well. In those early days prior to monetization with Cash App, we experimented with discipline and with a defined investment envelope with rapid iteration in small ways to gain feedback quickly, and we intend to do the same thing here with the creator economy and with our Bitcoin ecosystem initiatives. The envelope of investment this year on our emerging initiatives amounts to about 3% or less of non-GAAP OpEx. And we meet regularly to discuss various aspects of the business from product to team to [indiscernible] to be able to do that rather quickly where we need to. [indiscernible] ramp from 2013 as a Hack Week project to 2017 with our first real monetization in scaling and now nearly half of Block's business. And we're prepared to be patient with these new initiatives as well so long as the milestones we've set out along the way continue to prove out. The final thing I would note here is that the TAM that we sized here today at nearly $200 billion does not include these emerging initiatives. Just as back in 2017 at our last Investor Day, our TAM didn't size and, frankly, probably couldn't have sized at that time Cash App's impact to our business and opportunity. And so now as we look at the next 5 years, we see tremendous opportunity to grow into really a transformational opportunity across both the creator ecosystem and the Bitcoin ecosystem.

And then following up on your second part of the question, Lisa. So earlier today, I talked through Square's 4 key capabilities, so commerce, customers, staff and banking. And the key to all that and one of the things that's unique or important, I should say, for in-person commerce is that staff capability. We -- obviously, omnichannel is growing. We're going from in-person to online, online e-commerce companies going from online to in-person. But in-person, that staff capability is really key. And we've spent years building out the functionality there. Whether it's scheduling, shift scheduling, it's payroll, it's staff communication or even things like deep permissions and audit functionality, those are capabilities that you don't typically see with e-commerce because e-commerce doesn't really have a concept of an employee, right? It's a website and there's orders and items and all the commerce capabilities. There's customers' capabilities. And many have added banking capabilities as well, too. But that staff capability is incredibly important for success in-person, and we have a rich set of things there. And so that's part of how we're winning. Like I could go on. There are more nuances there in terms of not only employees but also location management that are really unique to in-person. But that's a key differentiator. The number two is it's really -- it's our elegant and fast hardware, is a key differentiator for us relative to what had traditionally been e-commerce pure plays that are moving into omnichannel. So with in-person, if you've got a line of folks in your store, milliseconds matter in terms of how the speed of the app works and that deep integration between the software and the hardware. And again, something that you don't see necessarily -- and folks haven't spent the years optimizing if you're coming from an e-com world into an in-person world. So that beautiful hardware, coupled with deep integration with the software leading to fast checkout speed in order to optimize the business and increase the number of sales that you can do makes a big difference. And I think the proof point that we had as well, too, with the SoFi and the Super Bowl, part of that was the omni-channel capabilities, but another part of that was just our fast transaction speed. And so that's where both transaction, hardware and then staff capabilities, I think where we're well positioned against players that are coming to in-person from an online world.

Thanks, Lisa. We'll take the next question from Josh at KeyBanc. Josh, go ahead.

It's been great to get a little bit of insight into the organization and how you run it. So with that in mind, I wanted to ask a higher-level question. If you think about Cash App, I think it's about 2% penetrated. Square, something similar, very low single-digit percentage of the TAM, and it's both been 10 years or less. When we think about doubling the penetration from here, obviously, the network effects seem to be a really important part. It seems like, in some ways, it could accelerate the pace at which you penetrate the TAM. So I know there's a lot behind that. But are there really critical obstacles or connections between the ecosystem that you feel like you have to make in the next couple of years to really elevate the penetration to a much higher level?

Brian, do you want to start on this? Or would you like me to?

Yes. Yes, I'm happy to start on it. Yes, cool, so thank you for the question. So your diagnosis that the network is really the foundation of the ecosystem is spot on. We're using the network to really expand and to do demographic -- and do new demographics. As we talked about in the presentation, the network is expanding beyond the Southeast, moving into new geographies, new people with different income levels. And so that's helping us continue to expand just like a social network. But as we think about our ability to penetrate the TAM, it's a multivariable equation. The inflow framework that we shared is a great way to understand this. So we have 3 different levers to kind of drive gross profit, actives, inflows per active and monetization rate. And as we cross sell more financial services, we're able to get our customers to bring in more inflows. We're able to monetize those inflows to a greater extent, which is really having a compounding effect. So you're growing both actives, inflows per active and monetization rate. And these 3 variables together is helping to kind of create that compounding effect and that acceleration that you'd identified. When somebody starts adopting direct deposit, they're bringing in 6.6x the number of inflows that's compared to somebody that's using us only for peer to peer. And that's true for all of our products. When somebody adopts -- when they adopt all of our products, the inflows are increasing. So it is that kind of compounding effect that's driving it.

Yes. And I'd just add, Josh, that as Brian said, it's -- the network effects are not just what drives efficient customer acquisition for us, which is important as we scale to new demographics and eventually to new geographies. But the network effects are critical to how we present awareness and discoverability to new product areas within Cash App, and it's been critical to how we've been able to drive increasing product adoption, which ultimately drives increasing utility and drives increasing inflows and, therefore, monetization. And as we've seen over time, those network effects, as people build more connections throughout the Cash App ecosystem, improves retention and improves product adoption. So it's really critical to your point in how Brian and team have operated Cash App. And I think it's instructive for us as we build connections into Afterpay and into the broader commerce platform.

Thanks, Josh. Now on to Mike at Goldman Sachs.

I just have 2 on Cash App. First, could you talk a little bit about your ambitions and the product road map to expand Cash App Borrow's offering to larger personal loans or even secured loan products? What are some of the factors you're weighting as you evaluate something like that? And then second, I was wondering if you could talk a little bit more about the Cash App OS redesign. What are you seeing in early testing as it relates to engagement and retention? And what does the time line for that rollout look like?

Yes, starting with Cash App Borrow. So we're on a mission to redefine the world's relationship with money in the broadest sense. And when you think about an economy, we view money as being the oil that makes the economy work efficiently. And in any economy, credit is a fundamental pillar of an economy working. I think a lot of our customers, millennial and Gen Z, a lot of them saw their parents be harmed in the 2008 financial crisis. So I think a lot of them are intimidated by credit. These products feel unapproachable. There's fear involved. And a lot of the traditional products really do trap customers in a cycle of debt. And so I think we are -- as we approach credit, we're exploring products and services that are fair, that are transparent and that avoid trapping people into a cycle of debt. And Cash App Borrow is just our first product, and we have already 1 million customers on the platform who have adopted it, and they're seeing a tremendous amount of value add. But when we look across Afterpay as well, there are common denominators that exist between Cash App Borrow and Afterpay. These are fair products. They're transparent. People pay them off in 4 installment loans. And so this is really just the beginning for us. I think for all of our products across financial services, we have seeds of products that are live, that we're building, but they represent potential to go deeper into entire product categories. Whether it be brokerage or lending or banking, we've really only scratched the surface of what our potential is. But it's important that we kind of take it iteratively, and we learn and we're careful and we're really measured with how we think about building products in every single one of these categories and credit is no different. We're building up a track record of making sure that we understand how our customers are using the funds, making sure that we're able to underwrite them effectively. And right now, we're starting with short-duration products, which are relatively comfortable for us to kind of go deeper into, so certainly potential to go broader. As it relates to the operating system. Cash App, we expanded our application architecture, our navigation architecture several years back. It used to be Cash App was just a peer-to-peer payment service and had a payment pad and we optimized the entire experience for people sending peer-to-peer payments across the network, which has helped us build that community, scale up to 46 million monthly actives. And as we've built out better navigational flow for people to discover new products, the engagement across the platform has massively increased. Our 46 million monthly actives are now using the platform to transact 21x a month on average. And as they adopt more and more services, we see those inflows per active increasing. And as so we shared in the presentation, as we're continuing to expand into new services, whether that be Cash App Borrow or Taxes, we need to provide a new architecture for our customers to discover these services, to adopt these services. And we really think about each of these services as mini applets. They're almost like mini companies inside of Cash App. And so evolving to be more search oriented, provides a place for better discovery, rethinking about activity and getting more engagement there provides an opportunity for serendipitous discovery and certain transactions leading to additional transactions. So we're really excited about this initiative, and we think it presents awesome opportunity for us to integrate more services, including Afterpay but even going broader.

And we'll take our last question from Harshita at Bernstein. Go ahead.

Brian, Amrita, I have a question around instant deposits, the biggest revenue stream within Cash App. So what do you think is misunderstood about instant deposits within the investment community? And then instant deposit effectively results in outflows from your ecosystem. So how should we think about the growth of that revenue stream in the context of your inflow strategy? And Amrita, just a follow-up question. Any flavor we can kind of think about in terms of long-term structural margins within Cash App vis-a-vis Seller?

Yes. Great question. So the first thing -- I think to the first point about what's misunderstood about instant deposit, I think the thing to really orient you around is we think about our business almost like a recipe, and every single product is an ingredient in that recipe. Some -- you can almost think about each one like fat, salt, acid or heat. But we think about our products as some are incredibly well conditioned to help us acquire customers. In the example of our community, some of us are really well conditioned to help us drive engagement in the form of many of our financial services. And some of them are really well conditioned to help us drive the monetization rate on gross profit. And so Instant Deposit is a product that is really well conditioned to help us monetize. And I think that the thing that is maybe misunderstood is people thinking about Instant Deposit as it's a product and people are only paying for that product. We really disassociate the areas in the service where we choose to monetize from the specific product themselves because we think about it like an ecosystem, and we think that people are paying us for the convenience of the ecosystem broadly. So that's maybe one thing that I'd orient you around. The other point is that we really have diversified our monetization levers in Cash App. We have 4 revenue streams that make up over $200 million in gross profit each across business accounts, Bitcoin trading, instant deposit and then interchange fees on Cash App Card. Years back, instant deposit made up the overwhelming share of our monetization in Cash App. But as we introduce more products, we find opportunities for charging, and it leads to really awesome diversification. Money comes into the ecosystem. It also leaves the ecosystem. And we want to encourage that. We don't want to -- we don't have any intention of making sure that customers are only able to use Cash App -- use their money within Cash App. Things like Bitcoin withdrawals are really useful for customers, and we want to make sure that our outflows are as useful as our inflows. But as it relates to driving those inflows, it really comes down to product cross-sell as we build more and more financial services into the ecosystem. Because all the services work together cohesively, they're advantaged and they're really interesting and creative experiences that we can build at the intersections, whether that be between Boost and Cash Card or whether that be peer-to-peer payments and Cash App Card or even stocks and peer-to-peer payments. And that creates a competitive advantage, and it makes our products really attractive. So as our customers are using those products, in order to use them, they bring more money into the system. And so the whole system is really kind of driving that equation.

And to just follow on to Brian's answer, first on Instant Deposit, we think about multiple use cases for how people want to send and spend money. Instant deposit is one of them in addition to a plethora of others. So as Brian said, we're here to solve our customer use cases. We see some of the use cases like Cash Card growing disproportionately, but we're still seeing growth on instant deposit. We're still seeing a unique use case about moving money quickly outside of the ecosystem. Now what I think is really remarkable about Cash App over the past few years is, initially, we only monetized inflows when they left the ecosystem, whether through Instant Deposit or Cash Card. Now with Bitcoin investing with Cash App Pay, Cash for Business and with our products to come around commerce and financial services, Cash App Borrow, we can monetize inflows that -- or money that stays within Cash App and moves around because we're providing that incremental utility to our customers. So for us, this is really a journey about solving multiple use cases for a customer and ultimately, which gives us an opportunity to monetize in different ways. The second point about margins, what I would say for Cash App is that we are earlier -- relative to your question, I think, was relative to Square, we're obviously earlier in our journey in Cash App. As I mentioned earlier, in Tien-Tsin's question, I think that we have opportunity to improve upon our structural margins over time as we optimize our cost base. But I think the focus for us right now, as you heard throughout the presentation, is on healthy, strong cohort economics. And so the greatest similarity that I see between how we run the Cash App business with discipline and efficiency and how we run the Square business is that orientation to returns on investment and to strong customer retention and efficient customer acquisition. Those 3 pillars of how we invest in the Square business are just as true for how we invest in the Cash App business over time.

Great. That concludes the time we have for Q&A today. Jack, over to you.

Yes, I just want to thank you all for the time you've given us and for your partnership in building this amazing service. So on behalf of all of us at Block, thank you for the time, and we hope to talk to you soon.