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seller ecosystemSquare Banking includesSquare Savings, SquareChecking, and Square Loans.Square, Inc. is a financialservices company, not abank. Banking servicesare provided by SquareFinancial Services, Inc., aSquare subsidiary, or SuttonBank, Members FDIC.1. In a 2020 survey of 2,200sellers conducted by Square,we found that the SquareDebit Card was the firstbusiness debit card for morethan 50% of those sellers.A mid-market sellergenerates more than 500,000 in annualized GPV.A larger seller generatesmore than 125,000 inannualized GPV.Seller GPV (Gross PaymentVolume) representspayment volume from ourSeller ecosystem. Seller GPVis composed of the totaldollar amount of all cardpayments processed bysellers using Square, net ofrefunds, and ACH transfers.It does not include GPV fromour Cash App ecosystem.Enhancing our ecosystem of productsIn continuing our commitment to expand access tofinancial services, we launched Square Banking forour U.S. sellers, which includes Square Savings,Square Checking, and Square Loans (formerlyknown as Square Capital). Square Savings, poweredby Square Financial Services, simplifies budgetingfor sellers by allowing them to automatically setaside funds from daily sales into savings accounts.Square Checking provides sellers with an FDICinsured account that lets them access funds forbusiness expenses using their Square Debit Cardor for paying employees via Square Payroll. Webelieve that many sellers have had to rely onpersonal bank accounts, which create challengeswhen it comes to understanding the state of theirbusiness, accounting, and taxes.¹ With the newlylaunched account and routing numbers, sellerswho also sell goods on other platforms, such asAmazon or Etsy, can direct all of their businessfinances to one consolidated home with Square.These critical banking tools work seamlessly withother Square solutions, giving sellers a unified lookat their payments, account balances, and spendingdirectly on their Square Dashboard or Point of Sale.Growing upmarketMid-market sellers showed strong momentum in thesecond quarter as GPV from these sellers doubledsince the same period in 2019, and representedmore than one-third of total Seller GPV. We believethe breadth of our omnichannel software offeringsis a primary reason that mid-market sellers join andstay with Square. These sellers use more productson average, and in the second quarter, software andintegrated payments accounted for approximately75% of mid-market seller gross profit. Our dynamicsoftware is designed to support a range of sizes,verticals, and use cases: We offer in-person softwaresuch as Point of Sale and Square for Restaurants,online software such as Square Online and Invoices,and other software products that amplify theecosystem’s value proposition and have improvedretention, such as Loyalty. Our cohesive ecosystemallows for seamless integrations across online andoffline channels, while allowing sellers to easilymanage their employees and understand theircustomers and performance in one place. Softwareand integrated payments have been the fastestgrowing products in the Seller ecosystem,delivering average annual gross profit growth ofnearly 50% over the past four years, and haveimproved seller retention.Square Savings brings more fair, accessiblefinancial services to small business ownersby removing the friction from setting asidefunds, enabling sellers to effortlessly save apercentage of every Square sale they make.This account offers a 0.50% annualpercentage yield, and has no minimumdeposits, balance requirements, or accountfees. These terms are subject to change.seller gpv mix by seller size 38.8B 26.1B 6.9B 7.5B 13.7B 500KAnnualized GPV 11.6B 125K– 500KAnnualized GPV 13.4B 125KAnnualized GPVPercent LargerSellers 20.8B 5.6B 6.3B 11.7B 9.0B55%57%65%2019Q22020Q22021Q2Note: We determine seller size based on annualized GPVduring the applicable quarter. This only includes SellerGPV. Larger sellers are defined as greater than 125K inannualized GPV.software and integrated payments havegrown as a % of seller gross profitFinancialServicesSidecarPaymentsSoftware 1Software and integrated payments includes gross profit fromin-person and online software that is monetized via embeddedpayments and/or monthly software subscription fees.Sidecar payments includes gross profit from Square’s Pointof Sale app where sellers only use payments without usingany software features.Financial Services includes gross profit from Square Bankingand instant transfers.square q2 2021 6

In a survey of 500 Australiansmall businesses conductedby Square, we found thatonly one in four smallbusinesses used fundingaccessed through afinancial institution, whilemore than half had to relyon friends and family orpersonal finances.Expanding globallyOur international strategy is focused on investingfurther into brand and product awareness whileimproving product parity in new and existingmarkets. We recently launched brand awarenesscampaigns in countries around the world with afocus on driving a broader understanding of ourproduct capabilities. In the second quarter, webegan offering loans to Square sellers in Australia,our first international market for Square Loans.During an important time of recovery, we believewidening access to credit will help our Australiansellers continue growing their businesses andcreating new jobs. We also launched instanttransfers in Canada, allowing sellers to transfertheir funds to a bank account as soon as they’rereceived. In May, we entered Ireland with our mostcomprehensive new market launch yet, with tensoftware products and three hardware devices.Small businesses make up nearly all of Ireland’stotal businesses, while the market’s paymentsand point-of-sale landscape has historically beendominated by traditional providers, presentingan opportunity for Square to stand out byoffering innovative, omnichannel solutions.In an effort to increase awareness of Square’s brand andvalue proposition, we recently launched brand marketingcampaigns in Ireland and Japan.seller highlightWe’re a relatively young business and somany banks wouldn’t even look at us. Thosethat would, would include hidden fees ortake a long time to approve. With Squareeverything was incredibly transparent andreally straightforward. Life is volatile atthe moment, and the speed and ease ofgetting a Square Loan has enabled us toinvest and grow our delivery service so wecan operate no matter what COVID-19restrictions are in place.”CameronThe Little LarderQueensland, Australiasquare q2 2021 7

FinancialDiscussionrevenue and gross profitA reconciliation of nonGAAP metrics used in thisletter to their nearest GAAPequivalents is provided atthe end of this letter.We deduct bitcoin revenuebecause our role is tofacilitate customers’ accessto bitcoin. When customersbuy bitcoin through CashApp, we only apply a smallmargin to the market costof bitcoin, which tends tobe volatile and outsideour control. Therefore,we believe bitcoin grossprofit better reflects theeconomic benefits as wellas our performance fromthese transactions.Total net revenue was 4.68 billion in thesecond quarter of 2021, up 143% year overyear. Excluding bitcoin, total net revenue inthe second quarter was 1.96 billion, up 87%year over year. Gross profit was 1.14 billion inthe second quarter of 2021, up 91% year overyear, and up 57% on a two-year CAGR basis.Transaction-based revenue was 1.23 billionin the second quarter of 2021, up 80% yearover year, and transaction-based gross profitwas 543 million, up 85% year over year. Weprocessed 42.8 billion in GPV in the secondquarter of 2021, up 88% year over year.Transaction-based gross profit as a percentageof GPV was 1.27% in the second quarter of2021, down 2 basis points year over year anddown 5 basis points quarter over quarter.Subscription and services-based revenue was 685 million in the second quarter of 2021,up 98% year over year, and subscription andservices-based gross profit was 561 million,up 90% year over year. Growth in the quarterwas driven by our Cash App and Sellerecosystems as well as the acquisition of TIDAL,which closed in the second quarter of 2021.During the second quarter of 2021, we saw significantgrowth in bitcoin revenue year over year. While bitcoinrevenue was 2.72 billion in the second quarter of 2021, upapproximately 3x year over year, bitcoin gross profit was only 55 million, or approximately 2% of bitcoin revenue.gross profit 1.14B 964M 794M 804M50%45%56%57%59%52%79%91%Q3Q4Q12021Q2 597M37%2yr CAGR28%YoY GrowthQ22020gross payment volume (gpv ) 42.8B90% 31.7B 22.8B91% 32.0B 1Q2Cash AppBusinessGPVNote: Seller GPV and Cash App Business GPV arerepresented as a percent of total GPV. Cash App BusinessGPV is defined on page 9.square q2 2021 8

cash app ecosystem revenueand gross profitCash App delivered strong growth in the secondquarter of 2021, generating 3.33 billion of revenueand 546 million of gross profit, which increased177% and 94% year over year, respectively. On atwo-year CAGR basis, revenue and gross profit forour Cash App ecosystem grew 258% and 128%,respectively. Excluding bitcoin, Cash App revenuewas 606 million in the second quarter, up 87%year over year. We continued to drive acquisition ofnet-new transacting active Cash App customersand adoption of our broader ecosystem ofproducts, as well as strong growth in customerinflows driven primarily by consumer spending.Cash App Business GPV iscomposed of the total dollaramount of Cash for Businessand peer-to-peer paymentssent from a credit card, anddoes not include GPV fromour Seller ecosystem.Cash App Business GPV was 4.1 billion, up 107%year over year. Cash App generated 111 million oftransaction-based revenue during the second quarterof 2021, up 107% year over year. Growth was drivenby an increase in the number of business accountsand in the number of transactions.Cash App generated 495 million of subscriptionand services-based revenue during the secondquarter, up 83% year over year. Growth in thequarter was driven primarily by transaction feesfrom both Cash Card and Instant Deposit.Bitcoin revenue is the totalsale amount of bitcoin tocustomers. Bitcoin costs arethe total amount of bitcointhat we purchase. Wepurchase bitcoin to facilitatecustomers’ access to bitcoin.Cash App generated 2.72 billion of bitcoin revenueand 55 million of bitcoin gross profit during thesecond quarter of 2021, each up approximately 3xyear over year. Bitcoin revenue and gross profitbenefited from year-over-year increases in theprice of bitcoin and bitcoin actives, and growth incustomer demand. Compared to the first quarterof 2021, bitcoin revenue and gross profit decreasedon a quarter-over-quarter basis, driven primarily byrelative stability in the price of bitcoin, whichaffected trading activity compared to prior quarters.In future quarters, bitcoin revenue and gross profitmay fluctuate as a result of changes in customerdemand or the market price of bitcoin, particularlyas we lap strong growth rates on a year-over-yearbasis in the second half of 2020.square q2 2021 9

seller ecosystem revenueand gross profitWe use gross profitretention to measure ourability to help our sellersgrow over time.Gross profit retentionrate is calculated as theyear-over-year gross profitgrowth of a quarterly sellercohort, averaged over thelast four quarters (excludinggross profit from hardware,Square Gift Cards, Caviar,and Weebly prior to theacquisition). For example,retention for our 2019cohort is the average annualgross profit growth fromsellers onboarded in 2019.We do not include hardwareor Square Gift Cardsbecause they are typicallynon-recurring in nature,and we view hardware asan acquisition tool andnot a profit center for ourbusiness. A seller cohortrepresents the new sellersonboarded to Square duringa given period.In the second quarter of 2021, our Seller ecosystemgenerated 1.31 billion of revenue and 585 millionof gross profit, up 81% and 85% on a year-over-yearbasis, respectively. On a two-year CAGR basis,revenue and gross profit for our Seller ecosystemgrew 23% and 30%, respectively.In the second quarter of 2021, Seller generated 1.12 billion of transaction-based revenue, up 78%year over year, and 21% on a two-year CAGR basis.We saw an improvement in card-present volumesbehind regional reopenings, with particular strengthin the U.S. driven in part by consumer spending andthe impact of government disbursements. Even asin-person activity improved, online channels andinternational markets continued to deliver stronggrowth. We also saw improvements in retention asGPV from existing cohorts in aggregate came inabove their 2019 levels in the second quarter, withparticular strength from recently acquired cohorts,which index to larger and more omnichannel sellers.During the quarter, transaction-based gross profitfor our Seller ecosystem was affected by a lowerpercentage of debit card transactions, a lowerproportion of card-not-present volumes, and adecrease in average transaction size on a year-overyear basis. Although these factors decreased on ayear-over-year basis, we recognize that these trendsremained elevated relative to historical periodspartly as a result of changes to consumer behaviorsdue to COVID-19 and government disbursements,which may not continue in future quarters.During the second quarter of 2021, Seller GPV wasup 86% year over year and 22% on a two-year CAGRbasis. Looking at the components of Seller GPV, weobserved the following trends during the secondquarter of 2021. Products: Card-present GPV was up 128%year over year, and up 19% on a two-yearCAGR basis. We saw a strong recovery incard-present volumes in the second quarter,driven primarily by regional reopeningsand strong consumer spending. Cardnot-present GPV was up 41% year overyear and 28% on a two-year CAGR basis,driven primarily by growth from our onlinechannels, including Square Online, Invoices,Virtual Terminal, and eCommerce API. Geographies: Our largest U.S. metropolitanareas experienced a greater improvementin Seller GPV growth year over yearcompared to the rest of the U.S., primarilyas a result of further regional reopenings.Our international markets achieved strongSeller GPV growth year over year during thesecond quarter despite periodic regionallockdowns affecting in-person activity.Card-not-present GPVincludes our online channelsand card-not-present manualkey entry transactions.square q2 2021 10

Seller generated 151 million of subscription andservices-based revenue during the second quarterof 2021, up 101% year over year, and up 30% on atwo-year CAGR basis.We began facilitatingaccess to PPP loans inresponse to the COVID-19pandemic, and PPP loanswere not part of the ordinarycourse of operations forSquare Loans prior to 2020.Future PPP loans or similargovernment programs willdepend on governmentaction and, at this time, wedo not know to what extentthese types of programswill continue, if at all.Hardware is sold primarilyas an acquisition tool, andgenerating positive grossmargins from hardwaresales is not the primary goalof the hardware business. Square Loans: Square Loans (formerlySquare Capital) achieved strong gross profitgrowth during the second quarter of 2021,facilitating approximately 105,000 loanstotaling 778 million in originations. PPPloans totaled 151 million across more than15,000 loans. Flex loans totaled 627 millionacross more than 89,000 loans. After pausingflex loan offers from early March to lateJuly of 2020, we continued to expand loanoffers during the second quarter behindimprovements in underlying Seller GPVtrends, nearing pre-pandemic quarterlyorigination levels for core flex loans. Software subscriptions and Square Debit Carddelivered strong growth during the quarter,outpacing overall Seller gross profit growth.Hardware revenue in the second quarter of 2021was 44 million, up 126% year over year, generatinga gross loss of 18 million, and up 40% on atwo-year CAGR basis. Revenue growth was drivenprimarily by strong unit sales across our SquareRegister, Square Terminal, and third-partyperipheral product offerings.corporate and other revenueand gross profitCorporate and Other generated 39 million inrevenue during the second quarter and 10 millionin gross profit, and comprised areas outside ourSeller and Cash App ecosystems.square q2 2021 11

operating expensesOperating expenses were 1.02 billion in thesecond quarter of 2021, up 64% year over year, andnon-GAAP operating expenses were 787 million,up 57% year over year.Product development expenses were 327 millionon a GAAP basis and 205 million on a non-GAAPbasis in the second quarter of 2021, up 57% and65% year over year, respectively, driven primarily byheadcount and personnel costs related to ourengineering, data science, and design teams.Sales and marketing expenses were 375 million ona GAAP basis and 359 million on a non-GAAP basisin the second quarter of 2021, up 58% and 57% yearover year, respectively.We offer the peer-to-peerservice free to our CashApp customers, and weconsider it to be a marketingtool to encourage the useof Cash App. Cash App marketing expenses were up 44%year over year, driven primarily by increasesin peer-to-peer transactions and relatedtransaction losses, Cash Card issuances,advertising, and referrals and incentives. Other sales and marketing expenses, includingadvertising, personnel, and other costs, wereup 82% year over year as we increased salesand marketing spend for our Seller ecosystem,including performance marketing, brand andawareness marketing, and sales headcount,as well as lapping the reduction in sales andmarketing expenses in the second quarterof 2020 due to the onset of COVID-19.General and administrative expenses were 221million on a GAAP basis and 175 million on anon-GAAP basis in the second quarter of 2021, up62% and 57% year over year, respectively. Theincrease was due primarily to additions to customersupport, finance, legal, and compliance personnel.Each quarter, we estimatetransaction losses thatmay materialize in futureperiods related to thatquarter’s volume. Theseestimates are typicallybased on predictive datascience–based models,which historically havebeen close to future actualrealized losses.Transaction and loan loss expenses were 48 millionin the second quarter of 2021, up 28% year overyear, and up 19% on a two-year CAGR basis. Growthduring the quarter was related primarily to strongyear-over-year growth in Cash App. During thesecond quarter, we released provisions of 13 millionfor transaction losses related to our Seller businessfrom the first quarter of 2021. Given the variabilityof potential outcomes related to the macroenvironment, actual realized losses may differmaterially from our estimates for provisions.square q2 2021 12

The accounting rules forbitcoin will require us torecognize any decreases inmarket price below carryingvalue as an impairmentcharge, with no upwardrevisions recognized whenthe market price increasesuntil the sale of that bitcoin.The bitcoin impairment lossis a GAAP expense.Non-GAAP operatingexpenses exclude bitcoinimpairment losses.In the fourth quarter of 2020 and first quarter of2021, we invested 50 million and 170 million,respectively, in bitcoin. As an indefinite-livedintangible asset, bitcoin is subject to impairmentlosses if the fair value of bitcoin decreases belowthe carrying value during the assessed period. Inthe second quarter, we recognized a bitcoinimpairment loss of 45 million on our bitcoininvestment. As of June 30, 2021, the fair value ofour investment in bitcoin was 281 million based onobservable market prices, which is 127 milliongreater than the carrying value of the investment.square q2 2021 13

earningsAs of the end of thesecond quarter, we soldour entire investment inDoorDash for a cumulativegain of 321 million.In the second quarter of 2021, net income was 204 million. During the second quarter, werecognized a gain of 77 million driven primarily bythe sale of our remaining investment in DoorDash.Net income was 173 million when excluding the 77 million gain on our equity investments and the 45 million loss related to the impairment of ourbitcoin investment. Net income per share was 0.45and 0.40 on a basic and diluted basis, respectively,in the second quarter of 2021, based on 455 millionweighted-average basic shares and 523 millionweighted-average diluted shares. Exclud

Square Checking, and Square Loans (formerly known as Square Capital). Square Savings, powered by Square Financial Services, simplifies budgeting for sellers by allowing them to automatically set aside funds from daily sales into savings accounts. Square Checking provides sellers with an FDIC insured account that lets them access funds for