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Hi, everyone. Thanks for joining our fourth quarter 2025 earnings call. Today's call will be 45 minutes. We have Jack and Amrita with us today, along with Owen Jennings, our business lead; and Nick Molnar, our Sales and Marketing Lead for Block.
We will begin this call with some short remarks before opening the call directly to your questions. During Q&A, we will take questions from conference call participants. We would also like to remind everyone that we will be making forward-looking statements on this call. All statements other than statements of historical facts could be considered to be forward-looking.
These forward-looking statements include discussions of our outlook, strategy and guidance as well as our long-term targets and goals and how we plan to operate moving forward. These statements are subject to risks and uncertainties, including changes in macroeconomic conditions and risks related to the workforce reduction we announced earlier today. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered an indication of future performance.
Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. Also note that the forward-looking statements, including earnings guidance for 2026 and our future operating plans discussed on this call are based on information available to us and assumptions we believe are reasonable as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. Further, any discussion during this call of our lending and banking products refer to products that are offered through Square Financial Services or our bank partners.
Within these remarks, we will also discuss metrics related to our investment framework, including Rule of 40. With Rule of 40, we are evaluating the sum of our gross profit growth and adjusted operating income margin. Also, we will discuss certain non-GAAP financial measures during this call. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter. These non-GAAP measures are not intended to be a substitute for our GAAP results.
Finally, this call in its entirety is being audio webcast on our Investor Relations website. An audio replay of this call and the transcript for Jack and Amrita's opening remarks will be available on our website shortly. With that, I'd like to turn it over to Jack.
Thank you all for joining us. Today, we shared a difficult decision with our team. We're reducing Block from over 10,000 people to just under 6,000. I said everything I needed to say to our team in an e-mail posted to Twitter. So please read it if you'd like.
What I want to talk to you about now is why I believe this is the right path for our company and what Block looks like going forward. We're making this change after delivering one of our strongest years. We set clear priorities for the year, and we executed on all of them. In 2025, gross profit growth more than doubled from the first quarter to the fourth quarter.
We surpassed Rule of 40 in the fourth quarter. We reignited Cash App network growth and engagement. We scaled our lending products and delivered strong returns. We accelerated Square GPV growth and had our strongest new volume added year on record.
We shipped our first Proto units, and we increased share repurchases to return more capital to shareholders. We have conviction in achieving the long-term financial targets we laid out at Investor Day and are meaningfully raising our initial outlook for 2026. We know how to grow this business, and this decision today is a choice about how we operate it going forward. The core thesis is simple. Intelligence tools have changed what it means to build and run a company.
We're already seeing it internally. A significantly smaller team using the tools we're building can do more and do it better. And intelligence tool capabilities are compounding faster every single week. I don't think we're early to this realization.
I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I'd rather get there honestly and on our own terms than be forced into it reactively. And this isn't just about efficiency.
Block serves millions of customers, sellers and consumers who are going to feel the economic effects of the same shift, small businesses that rely on us to get paid, to manage their money, to access capital, individuals navigating a financial landscape that's changing fast. Our job is to help them navigate it through it. That's not a new mission for us, but the urgency behind it is more pronounced and the speed at which we need to deliver is accelerating. So here's how we're going to operate from here.
First, intelligence will be at the core of how the entire company works, how we make decisions, how we build trust and manage risk, how we build products and how we serve customers. We're moving toward a model where our customers can build their own features directly on top of our capabilities that changes the nature of what we are as a company, and it dramatically increases the value we can deliver per customer. Second, extreme focus. There are 4 things we're going to focus on building now as a company, customer capabilities, interfaces where we can compose and deliver those capabilities, proactive intelligence based on our deep customer understanding and real-time data and an intelligence model to fully orchestrate the company's operations.
This allows us to best serve the master plan we laid out at Investor Day. And third, speed. A company of our new size has no excuse for being slow. We will decide faster, ship faster and learn faster.
The structure we're building is designed exactly for that. We believe Block will be significantly more valuable as a smaller, faster intelligence native company. Everything we do from here is in service of that. Amrita will now share more detail on the quarter and our outlook for the year.
Thanks, Jack, and thank you all for joining. The organizational changes we're sharing today represent a deliberate choice about Block's next phase of growth. The decision impacts many employees who played an important role in building Block, and we're deeply grateful for their contributions. As Jack mentioned, we're making this change after delivering a strong year across the business.
In the fourth quarter, we outperformed our guidance across gross profit, adjusted operating income and adjusted EPS, translating product velocity into strong financial performance. Block generated $2.87 billion in gross profit, representing 24% year-over-year growth. And we grew adjusted operating income 46% year-over-year to $588 million, delivering 3 points of margin expansion even as we invested in initiatives with strong ROIs that we expect to drive future growth. On a per share basis, we grew adjusted diluted EPS 38% year-over-year.
We repurchased $790 million of shares in the fourth quarter, bringing our total for 2025 to $2.3 billion. We exceeded Rule of 40 in Q4, and we believe we're on track to sustain it on an annual basis moving forward. Stepping back, 2025 was a pivotal year for Block. Gross profit growth more than doubled from the first quarter to the fourth quarter, leading to $10.36 billion in gross profit for the full year and growth of 17% year-over-year.
Even with additional investment in go-to-market, we grew adjusted operating income 30% year-over-year in 2025, delivering 2 points of margin expansion. Cash App monthly actives returned to growth in the second half of 2025, ending the year at $59 million, and we executed on our engagement strategies with primary banking actives growing 22% year-over-year to 9.3 million monthly actives in December. We grew consumer lending origination volume by 50% year-over-year in 2025, while sustaining strong margins and healthy risk loss performance. We accelerated Square GPV growth from 8.6% in 2024 to 10% in 2025 and delivered our strongest year ever for new volume added or NVA, as we expanded our distribution channels.
We continue to lean into our differentiated vertical integration and hardware design expertise with the launch of 2 new devices, Square Handheld and our second-generation Square Register to better serve a wider range of seller use cases. We began shipping Proto mining rigs with Proto gross profit scaling in the fourth quarter. Reviewing further some Q4 specifics. Cash App gross profit grew 33% year-over-year to $1.83 billion, accelerating relative to Q3. Throughout 2025, we focused on reigniting Cash App's network growth, and that work has paid off.
In Q4, we grew monthly actives to 59 billion. Our focus on deepening engagement is also working with primary banking actives attach rate growing meaningfully in Q4. These customers have generated nearly 10x the gross profit of peer-to-peer only actives and we believe they create a foundation for long-term inflows per active growth. Cash App Commerce enablement volume grew 17% year-over-year to $54.7 billion in Q4, driven by strength in Cash App Card, where we saw the strongest quarter for new Cash App Card actives in over a year and saw Cash App Green drive increased retention and Cash App Card volume.
Commerce monetization rate increased 4 basis points year-over-year as attach rates for Afterpay Post-Purchase continued to increase. We also grew consumer lending origination volume 69% year-over-year in the fourth quarter, with consumer lending variable profit growth consistent with originations growth. Within consumer lending origination volume, Borrow delivered an exceptional fourth quarter with origination volume growing more than 3x year-over-year. We leaned into Borrow offers for Cash App Green actives as one element of our new status program.
Many customers deeply value access to liquidity. And beyond strong stand-alone unit economics, we've seen Borrow drive deeper engagement across other parts of Cash App. Our lending strategy is focused on maximizing variable profit, scaling responsibly while maintaining disciplined risk management. That approach was on display in Q4 and early 2026. Q4 was the strongest quarter for first-time Borrow actives ever, which drove higher portfolio losses in December and January based on the mix shift to new cohorts, which have higher losses by design.
As of mid-February, all 2026 cohorts are trending below our risk loss targets, demonstrating our ability to quickly calibrate risk and adjust exposure for new cohorts based on the strength of our underwriting team, product design and our proprietary data and credit infrastructure. Turning to Square, where our distribution motion has continued to gain traction. 2025 was our strongest year ever for NVA growth of 17% -- with growth of 17%. That momentum continued into the fourth quarter with 29% year-over-year NVA growth. We saw progress across both marketing-led self-onboarding and sales channels, with sales-led NVA growing 62% year-over-year in Q4. In addition, we now partner with over 100 independent sales organizations, complementing our direct sales motion and extending our reach to more new sellers.
GPV grew 10.3% in Q4, and we've seen growth reaccelerate so far in Q1, with growth quarter-to-date as of February 24 of over 12% year-over-year. Square gross profit grew 7.5% year-over-year in Q4, driven by growth in financial solutions. Hardware costs and higher processing costs were each a 2 percentage point headwind to Square gross profit growth in Q4, consistent with the expectations shared at our Investor Day. Looking ahead, we expect our new organizational design to increase velocity.
We have seen significant improvement in AI tooling capabilities. We've seen engineering work that would have taken weeks to complete be done by a small team in a fraction of the time with agentic coding tools. These are reflected in our developer velocity metrics, where we've seen a greater than 40% increase in production code shipped per engineer since September. We've been prioritizing automation in how we build internally for the past couple of years as we've built bespoke tools and increased AI adoption.
Some of our automation work streams are nearly fully rolled out. Others are earlier in their maturity, and we expect to continue to develop automation improvements in parallel with the advancements of the underlying technology. The outcomes we have seen are encouraging, and the long-term impact will depend on thoughtful implementation at scale. We are taking this decisive action from a position of strength.
Gross profit growth accelerated throughout 2025, and we expect to sustain strong growth in 2026, with execution across a portfolio of ramping or new initiatives in Square and Cash App. In Cash App, we expect to compound our gains in our banking and commerce ecosystems, scale Cash App Green further and expand MoneyBot to our full customer base in the coming weeks and months. We launched Afterpay pre-purchase in February with strong early indications of demand and expect to scale it throughout the year. We also recently launched Pay-in-Four, buy now, pay later functionality for peer-to-peer transactions, which is a first for the industry.
Our focus is to ramp these products along with Borrow while maintaining healthy loss rates. In Square, we expect to ramp go-to-market motions further across self-onboarding, sales and partnerships. We're focused on excellence in our food and beverage products and accelerating product velocity across other verticals to continue to drive net volume retention higher. We recently launched Square AI to all markets and are excited to deliver more proactive intelligence capabilities to our sellers as we build towards ManagerBot.
We continue to be focused on connecting our ecosystems and believe we're finding product market fit with neighborhoods. Our focus now is on scaling. We're moving from an inbound motion to an auto enrollment motion for sellers, and we recently added in-store redemption capabilities to increase functionality for consumers and widen the addressable market to more sellers. Our guidance reflects this product velocity momentum.
For the full year, we expect year-over-year gross profit growth of 18% to $12.2 billion, an increase relative to our Investor Day guidance and an acceleration relative to what we delivered in 2025. For Q1, we expect year-over-year gross profit growth of 22% to $2.8 billion. In addition to the growth momentum we're seeing, our guidance also reflects a smaller cost structure going forward. We believe the actions we're taking today will enable us to deliver faster product innovation for customers in the future while also enabling us to invest meaningfully in our business. With this change in cost structure, combined with the investments we plan to make, we are increasing our guidance for adjusted operating income in 2026 to $3.2 billion, reflecting year-over-year growth of 54% and 6 points of margin expansion relative to 2025. We are increasing our expectation for adjusted diluted EPS in 2026 to $3.66, also reflecting year-over-year growth of 54%.
For Q1, we expect adjusted operating income of $600 million and adjusted diluted EPS of $0.67, reflecting year-over-year growth of 29% and 20%, respectively. Before wrapping up, a few additional considerations related to our guidance. Our Q1 operating income guidance includes a modest benefit from today's announcement, but we expect the organizational changes we announced today to begin to more meaningfully impact adjusted operating income in the second quarter with the full impact of our new cost structure more meaningfully improving profitability in the second half of the year. Given these timing dynamics and the pacing of investments in both risk loss and sales and marketing, we expect adjusted operating income margins to expand each quarter throughout the year from our Q1 starting point of 21%.
We expect these margins to expand at a faster rate in Q3 and Q4 relative to Q2, and we expect to deliver just under 60% of our 2026 adjusted operating income guidance in the second half of the year. Within OpEx, we expect higher risk loss growth in the first half of the year based on our strong Borrow growth rate expectations in Q1 and Q2. In Square, we continue to expect gross profit growth to be roughly in line with GPV growth later in the second half of the year. In the first half, we anticipate a continued spread between gross profit and GPV growth with some potential variability driven by hardware costs and the pace at which we move upmarket.
We view Square gross profit growth, excluding hardware costs as a clear measure of core profitability as we view hardware to be a customer acquisition investment to win larger, more retentive sellers. We expect increasing software attach rates to be a key driver of gross profit growth acceleration, and we expect to continue to evolve our pricing and packaging to ensure appropriate price to value while delivering attractive total cost of ownership for sellers. We have strong conviction in Cash App strategies to grow its network and deepen engagement, which have helped drive 2 quarters of sequential actives growth across monthly actives and primary banking actives.
While monthly actives may fluctuate from time to time, we continue to expect low single-digit actives growth in 2026 and over the long term. We expect approximately $60 million in net interest expense in Q1 and $200 million for the full year, up modestly from the expectations we shared on our third quarter earnings call as we deployed more capital into buybacks and Borrow growth in the fourth quarter. And finally, similar to last quarter, we expect a mid-20% non-GAAP effective tax rate in 2026. And with that, I'd like to open up the call to Q&A.
[Operator Instructions] Our first question comes from the line of Tien-Tsin Huang from JPMorgan.
Tien-Tsin Huang: Jack, I do want to ask a question to you, if you don't mind. And knowing you here, I'm sure you put a lot of heavy thought into this reduction in force. So I'd love to just hear a little bit more on why now? We're just, what, 3 months removed from Investor Day. So why are you ready to make this change now? And why is this the right level to run the company at?
Yes. There's a few things that have all been compounding towards this moment in this time. As you know, like we have been working very hard to functionalize the company. That's a big part of what gives us more confidence in making this move.
We were operating a company with basically 2 companies with inside of it, both having their own structure, a lot of duplication. And as we functionalized, it allowed us to act more like one company and recognize where there are common capabilities and common foundation. And we're still doing a lot of that work, but I have the confidence that we're in a place that we can move much faster there. I also believe we were one of the first -- we were the first agentic harness out in the market.
This is Goose. But something happened in December of last year, just last year, where the models just got in order of magnitude more capable and more intelligent. And it's really shown a path forward in terms of us being able to apply it to nearly every single thing that we do. So if there are any gaps in our usage of AI right now, it's an application gap.
And I'm really confident that we can go through the majority of our organization, certainly our development, but the majority of our organization and apply these tools in a much stronger way that has the effect of allowing us to ship much faster to explore a lot of the paths much broader, so we can run the right experiments and get to the right answers and get feedback immediately for product market fit and ultimately to operate more and more of the company in a way that I think all companies will eventually go. I do think the tools are at a state right now where every single company out there is going to run and grow in a fundamentally different way and be structured in a fundamentally different way.
And a big part of me wanting to do this right now is I wanted to get ahead of it. And I'm confident that we've laid the foundation in order to do that and to push really fast to get there. So we're in a place where like a lot of what we've been working with and all these threads are coming together in the right moment. And I want to make sure that we're ahead of the market, ahead of our customers' expectations and actually building for the future.
And I do believe that a lot of the expectation going forward is not just that we deliver intelligence to our customers through ManagerBot and MoneyBot, for instance, but the very end of that is that they can build their own features and build their own visualizations on top of our capabilities through our interfaces. We have incredible distribution. We have incredible understanding in real time of real transactional data on both sides of the counter. And we can proactively prompt our customers, and we can proactively compose interfaces that will fit the task before them, which I think is quite unique and not something that you can find certainly at other companies in our space, but also more broadly in technology.
And I intend that we win in this space and that we grow and bring this intelligence to both sellers and to individuals and ideally to bring them together into this one ecosystem we're calling neighborhoods.
Our next question comes from the line of Darrin Peller with Wolfe Research.
You can hear me okay?
Loud and clear.
Okay. Great. Look, I mean, there were some very strong trends, especially in Cash App, considering users growing again, inflows per active growth accelerating double digits. And also on Square, we're seeing new sales helping with NVA accelerate nearly 30%.
Just -- if you could just touch on what you think drives sustainable momentum across both the businesses and especially in light of the reduced headcount levels. Just want to touch on how you're sustaining this and how you really expect to sustain solid momentum like this as shown in your guidance, just again, just given the changes in the business.
Sure. I think we have a lot of conviction in our ability to sustain these durable growth rates. I think that there's 2 high-level ways to answer your question. The first is just around the org structure and the org size and what does that mean?
And then the second probably is just from a product development and road map standpoint, how are we feeling? So on the org structure side, to reiterate some of what Jack was talking about, what we've seen is that smaller, more nimble teams have allowed us to move faster and actually get products into our customers' hands more quickly. With the moves today, we are eliminating some of the organizational debt or organizational overhang that has existed. We're also inherently increasing talent density across the org, including the development org.
And obviously, we're getting all the benefits of the AI tools and the improvements in the foundational models, and that's flowing through to everything that we're doing, particularly on the software development side. So I'd say, overall, on the org structure and org side of things, we're feeling really confident, and we're actually feeling like this is going to help us execute more quickly and with more precision. On the second category, which is just product development road map and the growth levers that we have, again, we have really strong conviction in our road map and how that's going to flow through to gross profit growth.
I think the clearest signal is, in my mind, it's the increase to the gross profit guide that we gave today. But I would tend to break this down into a few different categories. I think we have, first, just like the core network growth of Cash App and Square. Then we have key product launches that we're planning on in the coming months and quarters that are very high conviction.
And then last, we have some of the bigger bets. I think those are green across the board. So we continue to have teams that are focused on core network growth, whether that's actives growth and inflows per active growth on the Cash App and Afterpay side or whether that's teams focused on net volume retention and driving new GTV on the Square side. From a product launch perspective, we have a ton of things that we've been shipping over the past few weeks and things that are coming down the pike from like how we're thinking about improvements and enhancements to Cash App Green, how we're thinking about scaling Cash App Card functionality and growing Cash App Pay, the Bitcoin improvements that we're making, Afterpay in the Cash Card pre-purchase just rolled out to the initial cohort a few weeks ago, and we're seeing really, really encouraging signs there in early data.
Similarly, on the Square side, we've shipped a number of key features that drive that food and beverage excellence. We have a number of other features that are coming down the pike in the coming months. We're continuing to refine our pricing and packaging. The list goes on.
And so we feel really confident in those levers and how they're going to flow through. But then, of course, it's not just about the near-term growth. It's also how are you investing in a way that's going to drive that durable growth over time. And so we have part of our development portfolio allocated to things like neighborhoods and scaling neighborhoods to MoneyBot, to ManagerBot to Cash App credit score, a lot of which we think kind of represent the future of the product experience for our interfaces at Block and which should drive gross profit growth, not just this year but into the future.
So overall, we're feeling really confident in our ability to sustain these healthy growth rates.
Our next question comes from the line of Ramsey El-Assal with Cantor Fitzgerald. Our next question comes from the line of Bryan Bergin with TD Cowen.
Hope you can hear me. I wanted to just follow up on the org changes and hoping you could talk more about how those changes today may flow through the financial outlook this year and potentially beyond. So I appreciate the cadence color. Just wanted to follow up on those cost impacts and how that may translate to where you can exit '26 on AOI.
Any important free cash flow impacts to be mindful of as well there as you go through '26 and beyond? And just also where are the investment dollars shifting to from headcount?
Bryan, it's Amrita. Happy to take the question. We'll start on sort of the cadence throughout the year around AOI and maybe even before that, starting on gross profit, and then we'll share some of the investment areas as well. So obviously, as you've heard, we've raised both our gross profit guidance from 17% growth at Investor Day for 26% to 18%, and meaningfully raised our adjusted operating income guidance.
From a gross profit perspective, in terms of the pacing throughout the year, we expect a very strong Q1 with 22% gross profit growth. And we've been prudent in our tax season assumptions with that. We also expect to sustain strong gross profit growth throughout the year and end the year in the mid-teens gross profit growth range, in line with the longer-term Investor Day guidance we gave in the mid-teens as we look forward as well. From a profitability standpoint, we expect to grow AOI nearly 30% in this first quarter and expect margins, as I noted earlier, to expand throughout the year off of that Q1 21% margin range.
Really, the reason for that margin expansion throughout the year is a couple of things. First, look, strong underlying unit economic strength in the business and incremental margins driving that leverage. Second, timing of some of the cost structure changes. As I noted earlier, you'd see a less meaningful impact on the -- from the cost structure changes to our Q1 results given the timing in the quarter and the notice periods for employees outside the U.S. as well as seeing some of that notice period dynamic flow through into Q2. Timing related to sales and marketing spend, where we expect to see some meaningful increase in spend from Q1 to Q2, again, on the back of strong returns that we're seeing where that can drive long-term profitable growth.
And then risk loss growth, as I noted earlier, being higher in the first half of the year on the back of really strong Borrow, continued growth for Borrow in the first half of this year. And so ultimately, that we're delivering strong AOI growth to start the year, but expect that to compound throughout the year with just under 60% of the $3.2 billion in AOI we expect to come in the second half of the year. And similar trends really as you look across EPS as well. Just to then quickly on the second part of your question, in terms of where our opportunities to invest are, they're really in addition to the normal course of our business across product innovation and go-to-market, there's 3 things that I'd call out here.
One is that we see meaningful opportunity to invest in our people, invest in hiring, invest in retaining a world-class team to deliver for our customers. Ultimately, we expect to hire some more senior AI engineering talent. We'll continue to level up our engineering and product capabilities. Second, as I noted, we're going to continue to invest in go-to-market to scale our customer acquisition efforts further.
And then third, we'll keep building on our AI infrastructure, including the tools and the capabilities ultimately that we're going to need to build a world-class organization. So those are some of the 3 areas of investment that I'd see playing out throughout the year as well.
Our next question comes from the line of Dan Dolev with Mizuho.
So yes, I just wanted to ask about your primary banking actives, Amrita and Jack. I mean this looks like a very, very strong quarter, 1 million PBAs added, accelerating growth to almost 23% and these customers generate over 10x profit per active. So this sounds very excited. I remember you guys have talked about this as kind of the Holy Grail is adding the banking active.
So I wanted to know kind of more what you're doing there and how exciting this one could be over time.
Thanks for the question, Dan. This is Owen. I can take the first crack at it. As you said, we're really, really excited about where primary banking actives came in, in Q4. As you know, we launched Cash App Green in November at Cash App Releases.
And the whole concept around Green was to expand access to the banking benefits that we offer to customers. We used to only offer those benefits to direct deposit actives. Now, we have a broader understanding of how customers themselves see banking primacy. And so if customers are spending more than $500 a month on Cash App Card, they're eligible for Cash App Green and everything that comes with it.
The results following the launch of Green were fantastic. So as you noted, 9.3 million primary banking actives in December, growing 22%, up about 1 million from September. I think over and above the count of primary banking actives, it's actually the engagement that's most exciting. As you noted, gross profit per active is almost 10x what we see for a peer-to-peer only active.
We've also seen since the launch of Green, cohort retention has improved for primary banking actives since we launched. And then we've seen incremental engagement across a number of different products and features on Cash App. For example, seeing incremental gross profit coming from Borrow, from Cash App Card, from Instant Deposit. And that's as you'd expect, as the Green program is really just an incredible incentive for customers to bring more and more of their financial life to Cash App.
I think one good example, just showing the increase in engagement is on personalized offers. So for Green customers, we're giving personalized instant discounts on Cash App Card to those customers. Before we launched Green, we saw engagement or like the attach rate with offers at around 2%. And then following Green, we see it at around 14%.
So just a massive shift in customer behavior that's coming from this program. I think ultimately, this is tied to our broader strategy around serving the modern earner. We continue to see a huge opportunity here as we talked about at Investor Day. This is a really big and it's a growing part of the U.S. population.
And these folks are typically underserved by the legacy financial system. And so what we're seeing is an increase in the number of individuals who are -- they're earning flexibly across hourly wages, across gig work, freelance work, they're entrepreneurs, they're solopreneurs and there's no perfect financial institution out there to serve their needs. And we think that this is a place where Cash App is leading and where Cash App will continue to lead. And I think the key part here is that this was the first launch of Green.
So we're really just getting started. I think on the last earnings call, I talked about how we love a complex system with lots of knobs and dials that we can tune in order to reward customers and steer customer behavior. This is just the beginning of our approach for how we're going to drive more and more primary banking actives, but it's a good first sign.
Our next question comes from the line of Jason Kupferberg with Wells Fargo.
Really good to see that the Q1 GPV reaccelerated 12% quarter-to-date despite some of the weather events out there. There is an easy compare, though in Q1. So just wanted to get your sense of visibility on the full year guide there, which I believe is low to mid-teens. And maybe if you can just touch on the vertical trends that you've seen quarter-to-date, if there's been any variation in trajectory among the major verticals.
I'll kick us off on some of the latest GPV trends and by vertical, and then I think Nick may add in on some of what we're seeing from a go-to-market perspective and how that inflects the curve in the future. If you take a step back, Jason, as we look across all of the updates and changes we've made from a product ecosystem to a distribution channel perspective, we believe the strategy that we've got in Square is paying off. When you look at the broader years of '24 versus '25, we accelerated GPV growth from 8.6% to 10%. We did see, of course, as you know, a moderation in the fourth quarter relative to the third quarter.
Again, through Tuesday, year-to-date, we've seen GPV growth reaccelerate to over 12% and in the U.S. as well, accelerating to over 7.5%. Ultimately, in the key verticals of focus for us, we've seen really strong results. Food and beverage GPV up 16% year-over-year, mid-market sellers also exhibiting continued strong performance in the fourth quarter. And we now view an opportunity to bring the playbook that we've used successfully in food and beverage over the past 12, 18 months to other verticals within the Square ecosystem to drive further strength as well.
And so as we look back at what we can deliver in '26, we continue to have conviction that we can accelerate GPV further in '26 relative to 2025. And again, that's on the back of some of the really continued progress that Nick and team are making from a new volume added perspective with our strongest year ever in 2025. But I'll turn it to you, Nick, to share more on that.
Yes. Thanks, Amrita. Look, as NVA continues to grow and has seen acceleration in '25, it does illustrate that it will build compounding cohort curves and only contribute more meaningfully in terms of GPV growth over the course of 2026. We did a lot of great work in 2025. As Amrita mentioned, we exited '25 with new volume added in Q4 above 29%. We saw very strong growth from a self-onboarded perspective and still 65% of our volume comes from our self-onboarded sellers, which is a real competitive advantage for Square.
Marketing is still holding the [ 4 to 5 ] quarter payback period, which is highly efficient. We saw an even steeper acceleration from a sales perspective. Sales-led NVA in Q4 was up 62%, as was referenced in the opening remarks, which significantly exceeded the 40% growth target that we spoke about late last year. We've stayed very focused on the marginal ROI as we've scaled our field sales team and our telesales team and our investment has been successful.
We had 15 U.S.-based sales reps in Q1. We're now over 140 by year-end, and we just did our first deal in Australia and the U.K. through our field team. So seeing that continue to expand. Over 50% of our inbound leads for our field team is through our partnership channel in Q4. And particularly with Cisco, where we're seeing 80% growth in referrals quarter-over-quarter, we've really lifted our strategic relationship with them and seeing strong progress. And if I just look forward to 2026, our existing reps will continue to scale just given time in seat and many of them were ramping during the course of 2025. We scaled our independent sales organization partners to over 100. We have a great team leading that, and it's complementing our direct to sales motion and scaling across multiple geographies.
And then as Owen mentioned, we're really seeing a lift in product velocity and quickly closing the gap from a competitive product set perspective. So 2025 is our strongest year ever in NVA, fueled by a transformed go-to-market motion across marketing, sales, partnerships, and I really expect that to continue to compound into 2026.
Our next question comes from the line of Will Nance with Goldman Sachs.
I was wondering if you could talk on MAU growth. I think it came in a little bit stronger than what the Street was looking for, I think more or less in line with what you talked about on the Investor Day. So could you just remind us about how you're thinking about the growth algorithm in Cash App from an MAU perspective?
Sure. Thanks. We're really happy with the growth in actives in the second half of last year and in particular, in Q4, in December. As you said, we hit 59 million monthly active accounts in December.
That was up from 58 million in September. This was driven by a few different things, efforts across multiplayer money, network enhancements, our go-to-market motion and then also just our focus on teams in the next generation. So on the multiplayer money side, we had some key launches. We rolled out peer-to-peer on web.
We're in the process of rolling out our new core payment flow. And that -- critically, that's connected to MoneyBot, and then it also is the flow that is built to support stablecoins. So continuing to tweak things there and get that rolled out to 100%. We also launched payment links, which just makes it easy to get paid into Cash App and you can send those links through text or DM or what have you.
We continue the evergreen work on the network enhancement side, just making sure that we're reducing friction where we can and making Cash App easy and simple to use. Teens and families, we've continued to invest in as well. And then right now, we're working on expanding access to Cash App Cards and savings accounts for children who are 6 to 12 years old. Right now, the teens program is for those 13 to 17 years old, and we've seen strength where we can kind of grow with those individuals, and we expect it to be the same for children who are 6 to 12. And then marketing is obviously always on full funnel across all of the channels, how we think about incentives, how we think about rewards.
I think critically, it's not just about the actives number itself. It's also about the quality of actives. So what we're seeing is higher engagement rates and higher attach rates for new actives. For instance, in December, 21% of new actives attached to a banking product, and that was up pretty meaningfully versus December of the previous year.
So all in all, we feel good about the growth algorithm. There's a number of things that are contributing to actives growth. We feel confident in that low single-digit year-over-year growth number that we've given. There might be some wiggles month-to-month or quarter-to-quarter, but we're feeling really good about where we are.
And of course, we're trying to do everything that we can to surpass those expectations.
Our next question comes from the line of Tim Chiodo with UBS.
Great. Let's shift gears a little bit. I want to talk about a new revenue stream. So Cash App Score recently was made available effectively as a service to other third-party lenders.
You mentioned that this is early, but you're already having some good conversations with some third-party lenders. My understanding is they would effectively be buyers of this service and incorporating it into their own underwriting flows as maybe a part of a more holistic approach to underwriting. But the main point is, I was hoping you could talk a little bit about the revenue opportunity and the pricing model.
Tim, thanks for the question. I'll just set the stage a little bit before I get into the details. I think what we're seeing in the U.S. is a lot of consumers moving away from credit cards and moving toward other forms of payment, and that's especially true for younger individuals. And so a byproduct of this is that a decent share of the population is now basically anonymous to the legacy credit bureaus.
But as time goes on, those folks are contributing more and more to the U.S. economy, and this is kind of the bet on the next generation and the modern earner that we've been talking about. But right now, to some extent, they're getting left out of the traditional credit model. On the flip side, meanwhile, we lent out $18.5 billion to consumers in Q4, and that number was up almost 70% year-over-year. We did that profitably.
And we were able to do that largely because of the unique data that we have on our customers that we use to generate a unique Cash App credit score for each of our customers. So then now we're thinking through how do we leverage this credit score. I think the first step is that we're going to show the Cash App credit score to our customers. I think there's a couple of benefits there.
First is just building transparent -- giving transparency and building trust with our customers. We also think this could be a meaningful driver of behavior, just incenting customers to engage more with Cash App in order to drive their credit score. I think second, to your point, we do intend to partner with certain third parties or allow third parties to buy credit score data from us. Since Investor Day, and we have a website out now as well, we've seen really, really strong demand from a number of different folks, and we've had a number of conversations.
So it's clear that there's a tremendous amount of demand out there. Also, just given the criticality of this for us going forward, we want to be super deliberate in terms of how we design that program and where we choose to monetize and the sorts of folks that we choose to partner with. And then there are subsequent things that you can imagine where it's not just a data mechanism taking place, but also there's actually UI within Cash App, where we're able to connect customers with certain credit offerings where maybe we don't power those things right now, but we can increase access and we can bring down cost because of the unique data that we have.
So at this point, I would say where we are is, it's always been clear to us internally that the credit score is extremely valuable. That's how we underwrite such a large book and do it so profitably. Now I think it's increasingly clear that it's valuable for consumers and it's seen as really valuable for other lenders. I think probably the most interesting thing that I would say here, and I'll end with this is that I think this is just further indicative of how critical Borrow and our lending products are to the Cash App ecosystem overall.
I think we have an opportunity here to build a very high-margin product, a very high-margin gross profit stream. But that could only really exist because of Borrow and Cash App Afterpay and our other lending products. And so it's just part of the overall ecosystem on the Cash App side and how we're trying to increase access.
Our next question comes from the line of Andrew Schmidt with KeyBanc.
I appreciate the move today. I got to ask on BNPL. A number of good comments there, momentum in Afterpay post-purchase, the new product that's rolling out in 2026. Just curious as a starting point, how 4Q came in versus expectations? And then how we should think about growth into 2026 across core Afterpay, post-purchase and then some of the newer products you're rolling out?
Thanks for the question. I'm happy to take this question. So Firstly, when I think about buy now, pay later, I think about it more from the lens of our kind of commerce consortium. And I think that more appropriately represents what's going on in the market.
It's no longer just about paying for. It's about pay now, paying for through our integrated merchant relationships, Afterpay on the Cash App Card, pay monthly. I think this is kind of the apples-to-apples view, and that's how we looked at it internally. As we've been kind of executing over the last period, we've been very focused on disciplined profitable growth for both Afterpay and Cash App [ will be as ] a focus for GPV and commerce volume was up 17% and consumer lending originations, as Owen mentioned, up 69% year-over-year, but really focused as well on being conscious from a risk loss perspective and scaling in the right way.
For Afterpay specifically, we added large partners like Fanatics and Endeavour Group, which is the largest liquor retailer in Australia. Post-purchase buy now, pay later has continued to gain traction and is one of the fastest-growing products which is primarily net new customers to Afterpay. And then as Owen also mentioned, we're in the early days of rolling out pre-purchase Afterpay on the Cash App Card, which we started in February, enabling financing for eligible actives. And so I'm happy by what we're seeing from a buy now, pay later perspective.
Cash App Pay as well. I know you didn't mention it, but it's important as part of this kind of commerce stack. It's continued to scale at a very meaningful pace, up 55% year-on-year and active surpassing 8 million in the fourth quarter. And when I look at these merchant partnerships, where we're seeing strong product market fit, new distribution opportunities like Instacart and Target.
It provides a unique and simple on-ramp for Afterpay down the track, given we designed this from a single integration, single contract, single settlement perspective. And then to your question and point on 2026, I still believe there's a very large and growing TAM, and we're very well positioned to capture it. 90 million Americans are expected to use buy now, pay later in 2026 and volume doubling by 2031. And given Cash App's scaled customer base and particularly the scale of the Cash App Card, it's differentiated owned by us, and I'm really excited to see that continue to -- for us to continue taking that to market.
So looking forward to the rest of 2026 and focus on our broader commerce performance.
Our next question comes from the line of Rayna Kumar with Oppenheimer.
Just want to go back to Cash App Borrow for a second. Can you talk specifically about your expectations for Cash App Borrow growth in '26? And separately, how have loss rates trended in Borrow and with BNPL?
Rayna, it's Amrita. Happy to see -- there's a little bit of feedback, okay, I think that's better. Yes, Borrow had an incredible quarter, as you saw, and we continue to be excited about the growth path for 2026 with Borrow. As I noted on the call, we expect to see even stronger growth in the first half of the year relative to the second half, and you'd see that flow through.
What we've seen so far is that variable profit margins continue to be strong. And even the fourth quarter with the pretty astounding 223% year-over-year origination volume growth, 50% quarter-over-quarter growth, even with that, we saw variable profit margins in line with our targets across both new and mature cohorts despite that triple-digit origination growth. Really, as we think about what's driving that Borrow growth, I think we'll continue to drive growth as we head into '26. And there's really 2 big drivers. One is, as you know, we've transitioned Borrow loan origination to SFS.
And SFS is now fully -- this is our Bank Square Financial Services. SFS is now fully originating all Borrow loans. And with that, we have both improved unit economics on Borrow loans and new states that we can expand into. And that expansion is underway, but we see an opportunity to go much further there.
And so that is a big driver, that expansion across new states and the improved unit economics is a big driver of the growth that you've seen in Q4, and we'd expect to see in '26. The second big thing is the deep integration of Borrow into this broader Cash App ecosystem and in particular, with our program around Cash App Green. In the fourth quarter, we leaned into those Borrow loans. We know that they're so attractive to the modern earner. And we saw a lot of success where customers were excited to either get their first Borrow loan or get a higher limit as they became a Cash App Green customer.
When we think if you step back again and think about Borrow, it is an important element for the modern earner and how they can address the variability in their income. These many customers have cited to us, they seek flexibility and Borrow provides that for them as they think about those periods in between paychecks. And that's really a primary driver here for why they would take out a Borrow loan and why we've seen such astounding product market fit across our customer base here. And again, expanding Borrow rapidly, but still doing that responsibly, given the product design attributes and given the very, very strong underwriting models that we've built through our 15 years of understanding lending and really strong growth across each of the 2 businesses from a lending perspective.
So that's really what's driven Borrow as we think about this past year and why we continue to expect strong momentum for Borrow into '26.
Our next question comes from the line of Ramsey El-Assal with Cantor Fitzgerald.
Ramsey El-Assal: So AI, you guys have woven AI into obviously, a lot of the conversations having a transformative impact across your business. So I have a 2-parter. I guess, first, do you see AI as a new competitive vector where Block has an opportunity, maybe a rare opportunity to sort of leapfrog competitors or redefine the competitive landscape? I guess second, what gives you guys the right to win here? What are Block's competitive advantages in AI?
Yes. I do. So I think it goes back to those 4 things that we want to focus on right now in terms of what we build as a company. The first that sets us apart is all of our capabilities that we've built up over time.
That's everything from our network and peer-to-peer. It's the fact that we can issue cards, that we can accept cards, that we can lend money to sellers and individuals. These are very, very hard to acquire as capabilities, and they're hard to maintain. And these are things that represent exact use cases that customers are coming to us in the first place for.
When you pair that with the interface, we have a massive install interface on the Square side with our merchants. We have the same on the Cash App side through an app and the website. What we'll be able to do is compose these capabilities fluidly to deliver them to all of our customers in real time in a much more personalized way, in a way that they're going to feel like they can actually build their features and their functionality themselves. I think that's a significant advantage.
I think the biggest advantage, though, is our understanding of our customers. We have an understanding of both sides of the counter. We have real-time data, which is very real transactional data, and we can connect it from the merchant to the consumer. And we can actually use that understanding to be a lot more proactive.
Instead of our customers coming to our intelligence systems and knowing what question to ask and what to prompt the AI, we can actually prompt our customers, and we can do it in the right time so that they can have an experience where they have an intelligence system that is looking to protect their business and to protect their individual finances and help them along whatever goals they might have. And these are out today and something that we're going to continue to build on. And then finally, is making sure that we're using this intelligence, and we're building these world models to help us orchestrate the company much better and be a whole lot more efficient about how we work and how we deliver and how we ship.
So I think all 4 of those together, I know all 4 of those together really set us apart. And a big part of the move we made today was to get us in position to do just that and to be ahead of our customers' expectations and to be ahead of the curve and actually being able to deliver that new functionality.
We will now take our last question from Bryan Keane with Citi.
Amrita, the guidance for '26 today is above what was outlined at the Analyst Day. What does that mean for the 2028 targets of $15.5 billion in gross profit and adjusted EPS of [ $5.50 ], and I think it was $4 billion in free cash flow. What's the bridge that needs -- that you need now to get there? Or are those targets a little bit different?
Bryan, thanks for the question. At the simplest level, what you're hearing from us today is we believe we have a path to accelerate the strategies we laid out at Investor Day. We've meaningfully raised our 2026 outlook, not just on profitability, but also on gross profit, showing that path to exiting this year still in that mid-teens growth range, which is really important as we think about heading into '27 and '28 because of the strong unit economics and incremental profitability in our business, that leads to that path of compounding profitability at a greater rate than gross profit. So while we're not updating our Investor Day targets on '27 and '28 today, what you see is a really credible and profitable path to delivering compounding profitability at meaningful scale in that '27, '28 view for our business, and we couldn't be more excited to get to work for 2026.
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