Okay, great. Welcome, everyone. We are so glad to have with us today a team from Block. So we're going to be introducing Owen Jennings to the investment community. This is Owen's first time doing a conference like this. Owen is Block's business lead. We'll get into his role in a second, but I want to just take a moment to thank Owen, but also Nikhil, Tory, Katie, the IR team that all made it out here today. So thank you for traveling to Arizona and being with us. All right. So we're going to get into introducing Owen and into some great topics. But first, I want to read a disclaimer, and then we'll get the ball rolling. So during this conversation, Owen may make forward-looking statements, which may include statements about market trends and conditions and Block's preliminary expectations for its future financial performance. These forward-looking statements are subject to certain risks, assumptions, and uncertainties. Owen may also speak as to certain non-GAAP metrics, which are not intended to be a substitute for Block's GAAP results. Please review Block's filings with the SEC, as well as its investor presentation on its investor relations website for comparable GAAP financial measures. Further references to Block's lending and bank products include those that are offered through Block's bank partners. So with that, as I mentioned, Owen is Block's Business Lead. He spent time on the Square ecosystem. He's spent time in Cash App. Owen, if you could introduce yourself and maybe some of the roles that you've played at Block over the last decade. Sure. Thanks so much, Tim. Thanks for having us. Appreciate it, so currently, I'm the business lead for Block. I oversee the product team, the marketing team, the business operations team, the customer operations team, and then customer support. I actually started my journey at Block about 11 years ago. I was a business associate on the Square side and then ended up leading business operations as we scaled really on the business side, building out sales, support, account management, marketing, web, things like that, went through the IPO, and then I joined Cash App in 2016 as one of the first product managers focused on growth. Over the past three years, I've been the chief operating officer for Cash App, and so I've been focused on the product roadmap, the marketing roadmap, ultimately how we're achieving our business goals, Rule of 40, Net Revenue Retention, et cetera. Then most recently, with these functional changes, I've taken on a bigger role leading roughly the same thing, but the business organization across the entirety of Block, all of the brands, and really focused again on the product roadmap, the marketing roadmap, and achieving our business goals. Excellent. All right. That's a great intro. All right, so in terms of the content that we're going to try and cover today, we're going to first start on functionalization, then we're going to touch on Cash App. We'll get into some of the current products, future products, then we'll get to one of the main topics of investor interest, Square's distribution approach and how that's evolving. We'll spend a little bit of time towards the end on the approach to lending across both ecosystems, and then we'll wrap up with some of the operating leverage, and we'll touch on some of the payback periods across both of the ecosystems, so with that, Owen, let's start with functionalization. Can you talk about the recent changes at the company and how the new leadership team or approach is changing the culture? Sure. So for the past several years, Block was organized in a business unit structure. So essentially, we had a CEO for the Square business, a CEO for the Cash App business, and so on and so forth. Most recently, we made a move to really organize at the discipline level. So now Jack's executive team is: there's an engineering and technology lead. There's a design lead, a business lead, who's myself. And I think we're seeing a bunch of benefits from these changes. I think first and foremost, really what we're able to do in this functional world is create centers of excellence for our disciplines. We have some of the top leaders in their respective disciplines working at Block. Nick Molnar, co-founder of Afterpay, who's our sales lead, is one of the best sales leaders in the world. Brooke Ellis, who's our design lead, is one of the best design leaders in the world, and so our ability to build these centers of excellence and hire and retain top talent is just way better in a functional world relative to the business unit structure where you're rebuilding the product team or the design team or the engineering team, rebuilding the habits and the rituals and the culture and the principles many times over, so that's one of the primary benefits. I think that the second benefit that we're seeing is really getting the entire executive team to operate and think at the Block level, so we don't have to do local prioritization just within Cash App or just within Square. We're now talking as an executive team about the opportunities that we have Block-wide. And then third, I think the functional model in general. There's no perfect org structure ever, but a functional model is more consistent with just increased flexibility and our ability to kind of start connecting the blocks in a better way, connecting the blocks. So working on things like Cash App Local, which is really a combination of some of the assets we have on the Square side and some of the assets that we have on the Cash App side. So it's been a few months, but it's starting to flow through really nicely, and I'm excited. Very nice, Owen. All right. We're going to move on to the next section, which is Cash App. So we're going to start with a little bit of an intro question talking about the audience served. How do you define it? So I would ground my answer really in our core belief that the U.S. financial system is just fundamentally broken for most Americans. And really, that's true globally. And so when Cash App found market fit initially, it was through peer-to-peer and instant deposit. And really where this was resonating was with customers who were liquidity constrained and where moving money instantly versus waiting one or two days was absolutely critical. And more and more as we built this out, we've seen our product suite really resonate with more and more customers. So when we look at the U.S. economy, there's a few kind of key things that I would call out. First, we have tens of millions of customers who are still unbanked or underbanked. We have 40 or 50 million customers who don't have access to credit. They're either credit invisible or they're credit unscorable. We have massive gaps in financial literacy and financial education, and we have massive gaps in terms of wealth-building opportunities for customers. And so that's really where Cash App comes into play. Our customers tend to skew lower income versus the U.S. population. They tend to skew non-white. They tend to skew younger. And I think that's true broadly in the fintech space. And so a lot of the features that we've built from peer-to-peer to the Cash App Card to Cash App Borrow, they do have a strong resonance with the average American who is not fully served by the traditional financial system. But more and more as we operate at scale, now we have 57 million actives, what we're seeing is that our product suite is just working in general for the average American. All right. That was a great intro into Cash App. We're going to move into some of the product improvements that you've already made. So it's a long list. So live phone support, overdraft protection, high-yield savings, the list goes on. Maybe you could just talk a little bit about what you've already accomplished with Cash App in terms of the product and what this might mean in terms of positioning yourself to be the primary account. Sure. So I think the past 18 months were pretty massive for Cash App. You mentioned some of the things that we launched, but an interest-bearing savings account yielding 4%, overdraft coverage. Some of these things are like core table stakes to really compete in the banking space, not just with the neobanks, but also with kind of the traditional banks like the Wells Fargos and the JPMorgan Chases of the world. And so at this point, we feel like our offering is incredibly compelling, and it's incredibly competitive, and we're starting to see that flow through. I personally, I use Cash App as my primary bank. I get my paycheck deposited. When that happens, my paycheck is automatically distributed into the S&P, into Bitcoin, into my savings account balance, and so on and so forth. So now for us, the focus is really on two things in terms of how we want to move forward. The first is continuing to build trust with our customers, and then the second is go-to-market and distribution. So on the trust side, I think it's important to just kind of understand the trajectory that Cash App has been on. When Cash App started, it was really a simple peer-to-peer utility that customers were using fairly infrequently, weekly or monthly. Increasingly, as we've built out additional financial services over time, we're seeing customers choose to use Cash App as their primary bank. But the difference in trust that's required for a customer to go from sending a few peer-to-peer payments a day to using us as their primary bank is pretty massive. And so we've been investing, and we're continuing to invest there. That manifests in things like the quality of customer support, our investments in reliability, continuing to polish our feature set, and also telling our story, increasing marketing, not just on the bottom of the funnel, but also brand marketing and kind of communicating the benefits to customers and making sure that the awareness is there. That's the first part. The second part is from a marketing perspective, we're excited to spend more. Marketing, I would split across the entire funnel. There's efforts that we've been working on that we've actually recently launched that's repackaging and positioning the benefits of banking with Cash App in the app. That helps solve some of the awareness problem just in terms of how you can use Cash App. Over and above that, we're ramping up our spend and our investment on lifecycle marketing, on referrals that are related to banking, on performance marketing, and also on brand marketing. This is really key for us because when you think about our customers, a lot of the story around Block has been inflows proactive and continuing to kind of drive increased engagement. The average customer on Cash App right now is bringing in about $5,000 a year. That's relative to median income in the U.S. of, I don't know, $40,000 or $45,000. So there's room to go. And so as we think about ramping up our marketing spend and really competing, we think that we'll be in a spot where we see more and more customers, either new customers or existing customers, who are choosing to use us as their primary bank. All right. That's a great segue into the next product, so adding BNPL functionality or Afterpay functionality to the Cash Card. There's really three prongs to this discussion, so one is just talking through some of the mechanics and the pre and post-purchase kind of aspect of it, how it works, and then the other two are more related to how Block benefits or Cash App benefits, the first being indirect benefits, meaning potential to drive more DD attach, and the other is the direct benefit, which would be some fees. Sure. Stepping back for a second, I think when we talk about Afterpay on the Cash App Card, really what we're talking about is just a fundamental shift in consumer credit in the United States. I think the traditional consumer credit card industry doesn't work that well for most customers. And in particular, we're seeing it with the younger generation, with younger customers. The hallmarks of that are basically generally a pretty large annual fee, generally not the most transparent terms and conditions, and then also customers getting stuck in a revolving debt cycle. And that whole business model is based on trying to get customers to carry bigger balances to charge interest on. It's very different than when we talk about Afterpay or Buy Now Pay Later on the Cash App Card, where you don't have that massive annual fee, and it's non-revolving. You take out a loan for a given purchase, and then when you purchase it back, when you pay it back, you can take out another one, and you can't get stuck in this revolving debt cycle, so we're starting to see this shift in the U.S., and we've seen really good signs both from testing in the U.S. on the Cash App side, but then also the Plus Card in Australia, which is performing incredibly well. When we think about the mechanics of it, I think there's a couple of things to call out just in terms of the differentiation. I think one is the access that we have to customer data is pretty incredible. We have tens of millions of customers who are using us for peer-to-peer, for debit card transactions, filing their taxes, taking out loans, so on and so forth. So we have this massive set of proprietary data that we're able to use to underwrite customers in a way where we can provide more access than they would otherwise get in kind of a status quo sort of way. And then second is, that's obviously just scale and distribution. Relative to some of the competitors who are out there, we're talking about a base of customers, 24 million customers who are using Cash App Card actively. So our ability to actually drive this shift in consumer spending behavior and the consumer credit market is just operating a bit differently than it is at some other companies. In terms of our focus, our initial focus is really on post-purchase, so Buy Now Pay Later for a purchase that's already happened. But of course, you can imagine this manifesting in a number of different ways, and we're actively exploring as we do the work to really bring Afterpay and Cash App closer together. The benefit of Afterpay on the Cash App Card is really that this is a huge carrot to start using Cash App Card. And the reason that that's so important is because the Cash App Card is kind of like this gateway for us. A typical customer doesn't download Cash App and then two days later or three days later set up their direct deposit and start getting their paycheck deposited into Cash App. There's this journey. There's this life cycle. We see a customer come in typically because of peer-to-peer, pay your friend back $10 for pizza. You send some other peer-to-peer payments. It feels pretty good. You get interested in the Cash App Card. You design your card. Let's say it's the metal card, and you draw your picture on it. It feels good. You start using it, and then you kind of reach that next step of becoming a direct deposit active. That's like the typical journey that we see. And so just like with instant discounts, what we used to call boosts, that really supercharged the Cash App Card and led to an increase in both engagement and acquisition. We expect to see the same thing for Afterpay on the Cash Card. And that's both useful in itself because we think that's a great product and it's serving customers, but it's also helping our customer base on that journey to the eventual goal that we've been talking about, which is direct deposit actives. All right. Another great segue. So some of the direct deposit approach is to bundle a bunch of products and make them available to direct deposit users. So with that as a backdrop, could you talk about some of the potential future products that could help with that DD bundle or DD attach? Some that come to mind for us are a potential secured credit card, then potentially later a full credit card. I see. So I want to be pretty clear that we think that our offering from a banking perspective and a direct deposit perspective is really compelling and really competitive. And so I think unlike 18 or 24 months ago when we might have been talking and saying, "Oh, there's this critical gap. There's this critical gap," we feel really, really strong. I think that there's some things that we'll continue to work on, like we've mentioned Bill Pay in various earnings letters and our desktop web experience and things like that. But by and large, we feel really strong. I think in terms of new functionality, obviously, ultimately, we're a technology company. We're building software, putting it in customers' hands, hoping they find it useful. It is definitely true that one of the features and products that customers are requesting from us, either through customer support channels or customer insights and research, is help either monitoring credit or building credit. And I think that could manifest in a bunch of different ways, and there's definitely things that are interesting there. And then just in general, any feature or any product that's going to help customers get access to money faster or get access to their money faster, that's typically where we see just tremendous resonance. I think market fit for peer-to-peer in the first place and instant deposit was based on giving customers instant access to liquidity. Cash App Card really took off because you could now instantly spend the money that was just sent to you. Cash App Borrow, obviously, seeing a tremendous ramp over the past couple of years, similarly that instant access to money. So those are some of the things that I would be thinking about as we continue to build our suite of products. Excellent. Thank you, Owen. All right. We're going to move past Cash App for now, and we're going to move over to Square, and we're going to talk about one of the main topics of discussion with investors, which is the evolving distribution approach, and that's partially the marketing spend that's set to ramp, but it's partially building out somewhat of a hybrid approach. There's direct field sales teams, right? There's telesales. There's partnerships with banks, with US Foods, with Performance Foods. The list goes on. Could you talk a little bit about how distribution and the philosophy behind it has evolved at Square? Sure. I want to ground this question in just our focus on US GPV growth. So we've aligned at the leadership level and kind of throughout the teams that driving US GPV growth and acceleration in US GPV growth is the primary focus and the primary goal right now on the Square side as it relates to distribution. But I would break GPV growth into two different pieces. You have same-store growth, and then you have new acquisition. And I think it's worthwhile to talk about both of them, and then I'll connect the acquisition side to the question on distribution. On the same-store growth side, some of it we can control, some of it we don't. Some of it is just macro conditions, what's happening with consumer spending, what's happening with interest rates. Ultimately, to some extent, Cash App and Square are both just an attach rate to the U.S. economy. And we've seen stable retention and stable churn curves, but we've seen some swings in GPV growth largely driven by macro factors. But there are things that we can do to continue to improve where we are from a churn and retention perspective, which is quite strong, and also to increase our share of wallet. So on the churn and retention side, I am focused and working on improving customer support, especially for up-market sellers. And then we're investing more in account management and relationship management. We see a really, really strong correlation between sellers who are engaging more, adopting more products, less likely to churn if they have an account manager or relationship manager. On the share of wallet side, there's work and things that we're thinking about in terms of food delivery and how we're capturing more of that, or in terms of online and how we're capturing a larger share of online sales. A lot of the work that we've done over the past couple of years on the orders migration, the single app reliability, continuing to invest in support and relationship management, we do see that flowing through to same-store growth. It's important because on a near-term time frame, same-store growth is actually the primary driver of any changes to GPV growth. A point of same-store growth is way more impactful than a point of acquisition on a near-term basis. Obviously, on the acquisition side, that's what's compounding over time. So if we then go to new volume added or acquisition, which is the other component of GPV growth, the first thing that I would say is it's incredible to have Nick Molnar at the helm. I think Nick is one of the best sales leaders in the entire world and is really pushing on all fronts to kind of improve our overall go-to-market motion. But the second part is it's not just sales. It has to be product, marketing, sales, partnerships all working together. And the reason I'm excited is after the acquisition of Afterpay, Nick and I actually worked really closely together. We co-led Afterpay for a few years together. And so we have that deep relationship, and we know how to make that work, even though there might typically be a seam between product and sales and marketing. And so our plans going forward are really to ramp spend on the Square side across the full funnel, not just the bottom of the funnel performance management, but across the full funnel, including brand spend. And we should invest meaningfully more in 2025 relative to 2024. And that's exciting because we need that to scale the sales team. We can't just go and hire 500 AEs if we don't have the leads. We want our account executives to be efficient and to have the leads that they need to do their job well. And so we will be scaling the account executive team globally. In addition, as you mentioned, we have a field sales team. This is a bit of a new motion for us. We actually have our first cohort that's ramping up right now. And that'll be more of a local play, but also a full end-to-end sales motion where folks are in local neighborhoods, going into stores, going into restaurants, have contracts in hand, have hardware, and have those conversations. It's exciting in its own right, but it's also connected to Cash App Local and that kind of localized strategy that we're pursuing as we connect the buyer side of our network with the seller side of our network. So really excited about that. And I guess the last piece on the account executive side is really it's not just about scaling the team. It's also making our team more effective. And so we think we have room on win rates. We think we have room on average deal size. We think we have room on deals per AE. And in general, automation is a key theme that we're talking about at the company. How can we leverage large language models and other machine learning tools to make everybody more effective, to make everybody more efficient? So really excited for that partnership between marketing and sales. And then on the partnership side, I think about partnerships kind of in three different buckets. So the first one is more of our verticalized partnerships. We've announced some of them like SalonCentric or US Foods or what have you, and we think there's a bunch of room there. The second is horizontal partnerships. I think we've talked about T-Mobile before and getting distribution from them. And then the last is kind of ISOs and resellers. I think on the partnership side in general, we feel like we have room, and we feel like it's really the early innings. This is one of the primary things that Nick is focused on and that Nick and I are talking about on a frequent basis. I think in general, one of the best parts about Square, especially if you look at the past decade, the share of new volume that we're adding that's coming from self-onboarded customers is quite large. We want to continue doing that, but we also want to shift some of the volume more towards sales-led. We should see an overall increase in new volume added with a larger percent of it coming from sales-led and partnership-led. I think we're really, really well set up to do that now, given the folks that we have in seat and given the focus that we have on accelerating U.S. GPV growth. Okay. Thank you, Owen. A minor follow-up there. So you mentioned the AE topic more broadly, right, which would be the office-based or telesales-related AEs, but also you mentioned the field sales folks that are being built out. The field sales teams, is that something that we should expect to be smaller and targeted in just a few core markets, or is that something that could get much larger? I'll give you the canonical annoying answer, which is, it depends on the data. In general, how we approach these things on the go-to-market side, whether it's marketing spend on a given channel or whether it's account executives or whether it's field sales, is what does the return profile look like? What am I getting from that incremental dollar? So I'm hopeful and optimistic. I think we've seen things like this work in other places, but it's just going to depend on the effectiveness of what we see. And I'm sure there will be a period where we're testing and ramping and figuring out precisely the right model. And then hopefully, we'll be able to scale to more and more geographies. All right. Great. We're going to move to the last two topics. So the second to last one is the approach to lending across the two ecosystems. So this is a big focus in the last shareholder letter. And you talked about with Square Capital, that's mainly being sold off to investors and has been for some time. And at least for the time being, Afterpay and Cash App Borrow, which are both shorter-duration loans, those are a thing on the balance sheet. But we have noted that you've been experimenting some with maybe externalizing some of those consumer loans, and the borrow loans are listed as held for sale. So we wanted to see if you could expand upon how Block views that balance of on-balance sheet, off-balance sheet, funding it yourself, selling it off, etc. Yeah. The first point is really that lending is a critical part of our business, both on the Square side and on the Cash App side. And it's useful in its own right as a standalone business, but then really the benefits that we get are at the ecosystem level. And so we see customers are more retentive, are stickier, are more engaged, are bringing in more money to the extent that they're engaged with Square Capital or with Cash App Borrow. On the Cash App side in particular, the likelihood of a customer to convert to become a direct deposit active is way higher if they've taken out a borrow loan in the past. So we love our lending products. They're a critical part of our strategy. From a return profile perspective, they're also quite attractive. I think that the return on invested capital on the Square side is north of 20%. I think on the Afterpay and the Cash App side, it's north of 30%. Those numbers should improve as we move more of these loans onto SFS, which is incredibly exciting and a really unique asset that Block has in the current environment. Because of all of the data that we have, and I talked about this a little bit, but because of the proprietary data, we're able to underwrite in a way that we feel really comfortable with. So we've been able to get that return profile while we're scaling, let's say, borrow at a very rapid pace and then reliably keep loss rates under 3%, and I think we've seen those low reliable loss rates on the Square side, on the Afterpay side, and on the Cash App side as well. And so when we think about how we want to use our balance sheet and what we want to hold on book and so forth, I think that right now we feel quite comfortable with the return profile that we're getting, and we feel comfortable holding these shorter-duration loans on our book. We also want the flexibility. Who knows what things are going to look like? And so we're setting ourselves up to have more flexibility both on the borrow side, the Afterpay side, and ongoing with the Square Capital side. But in general, we think that the duration of some of these products is like six weeks, four weeks. And so our ability to react to what's happening in the market, if macro conditions deteriorate or what have you, is way different than a longer-duration product. So we're excited to continue to invest in lending. We think that first-order benefits are great, but then really it's about making the Square package or banking with Cash App overall more attractive for our customers and prospective customers. All right. Excellent. Let's move to the last topic just in the interest of time, which is around operating expenses. So the way things are set up right now, at least in our model and I think in the minds of investors, is that you now have this ability to deliver plenty of growth in sales and marketing, as you mentioned, you're going to be reinvesting, but still delivering operating leverage. So it's sort of that sweet. In our model, we have very little growth in product development, very little growth in G&A, but lots of growth in sales and marketing, which I think is what investors really like to see. So with that context, maybe you could talk a little bit about the levels of reinvestment and then more specifically the types of paybacks that investors should expect across the two ecosystems, Square and Cash App. Sure. So I think we've proven ourselves on disciplined spend and OpEx management. I think it's been a tremendous four or six quarters, and we're going to continue to be disciplined. I think by and large how you're framing things is correct, which is we want to spend more on the marketing side. We want to spend more on the sales side. Those are dollars that one for one you can attribute to incremental growth, and we want to be driving an acceleration in volume growth, and so we intend to spend more both on the Square side as well as the Cash App side, and then there are other areas where we might find efficiency, and those are probably the areas where things could combine and kind of lead to this place where I think we've committed to our OI margin improving next year. So there's various things going on there. Through functionalization, there are now opportunities to think holistically. We can bid out to vendors as Block overall versus doing it three different times. We can find areas where we were doing the same process twice or three times and kind of combine that into one. Obviously, we have the 12,000-person headcount cap. That's not changing. And so inevitably, if you're looking at gross profit growth of X% next year and you're holding that headcount cap in place, you're going to be able to find margin and you're going to be able to invest in the marketing programs and the sales programs that you need to drive growth. So that's kind of how I'm seeing things. All right. Excellent. Since we have a little bit of time, let's hit two of those follow-ups. So then for Square, typically the payback period, I mean, it had been as low as sort of four, five quarters. It had extended a little bit maybe in 2022. In the last shareholder letter, you mentioned that the returns on marketing that you're seeing are now the highest or the best that you've seen in years. Is it right for investors to think about the Square ecosystem paybacks and sort of that four, five, six quarter payback period? I think it's right, and so anytime that you're kind of modulating spend, you end up seeing shifts in efficiency, so the more money you're spending, the harder it is to spend it efficiently and so on and so forth, and there's been a bunch of volatility in terms of how we've approached our marketing spend on the Square side and the Cash side for what it's worth. I think it's right to think about roughly five to seven quarter paybacks on a blended basis, and then obviously, certain programs that are newer or operating at a different scale, you might see spikes one way or the other, but I think that's by and large right, and I think we have room to meaningfully increase spend and drive GPV growth specifically in the U.S. while keeping super efficient payback periods, so that's our plan. Excellent. All right. It looks like we're going to have time to squeeze in this last one. So Cash App, when you're spending those dollars, how do you specifically focus them on getting more primary account or direct deposit-like users? So I think that there's three different pieces. So one on lifecycle marketing, we can be incredibly targeted. So through push notifications, SMS, email, etc., we have models that understand the different cohorts and segments of customers, and we can kind of use propensity models to give the right offer to the right customer at the right time. From a performance marketing standpoint, largely we're focused on the Cash App Card. It's been more effective for us to bring someone in through the Cash App Card, and then subsequently they'll choose to get their direct deposit into Cash App versus an advertisement that is just focused on direct deposit itself. The brand marketing spend will kind of soften the edges of the network, and we'll be able to talk about it more and more and really increase awareness. But really from a performance perspective, it's focused on Cash App Card. And then the last piece is referrals. So one of the first products that I worked on at Cash App was our referral program. It's an incredible program. It drove a lot of our growth, especially in the early years. And you can imagine us applying the same learnings we have around that dynamic system where you're introducing breakage, how you're targeting customers to either Cash App card adoption or direct deposit adoption. And we're in the early stages of testing that. So it's really a multi-pronged approach, but I think we have the levers that we need to continue to get more and more customers using direct deposit. Thank you, Owen. On behalf of everyone at UBS, I again want to thank Owen. Owen, pleasure meeting you and having you doing your first conference. Thank you so much. Appreciate it. A lot of fun. You did a great job. Thanks. So again, a thank you to you from everyone at UBS and also to Nikhil, Katie, and Tory from the IR team. Thank you for making the trip. Pleasure hosting.