Block (XYZ) Investor update summary

Investment philosophy and capital allocation

• Growth and profitability are managed together, with a strong focus on ROI and unit economics for each investment.

• Investments are scaled only when there is conviction in KPIs and returns, with precise measurement for go-to-market and longer-term product development initiatives.

• Achieved significant margin expansion and improved profitability guidance for 2026, while maintaining meaningful investment in AI and go-to-market initiatives.

Go-to-market and product innovation

• Expanded distribution channels for Square, including third-party sales and partnerships, leading to increased reach and strong self-onboard performance.

• Field sales team performance improved, delivering more large deals and higher realized GPV, with ISO channel ramping significantly.

• AI investments have accelerated product velocity, enabling the launch of 130 features in H1 and new collaborative tools like Buzz.

• Neighborhoods product has scaled seller onboarding by over 10x, showing potential as a major driver of Cash App customer acquisition.

Lending and credit performance

• Lending portfolio managed granularly by product and cohort, with healthy unit economics and dynamic risk management.

• Originations grew 59% YoY, with newer products like Borrow and Afterpay driving higher loss rates but also higher variable profit and ROIC.

• Shift to a six-week Borrow construct aligns with Afterpay, improving variable profit margins and customer experience.