Block, Inc.

Capital structure and performance · Debt management and refinancing

We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs. We fund our operations primarily through debt and equity financings, bank credit agreements, warehouse funding facilities, and cash from operations.

Capital structure and performance · Financial performance volatility

We have generated significant net losses in the past, and we intend to continue to invest in our business. Thus, our profitability may decline. We intend to continue to make investments in our business, including with respect to our employee base, sales and marketing, development of new products, services, and features.

Customer and revenue · Customer retention and subscription renewal

Growth in transacting actives on Cash App and customers' level of engagement with our products and services on Cash App are important to our success and long-term financial performance. However, the growth rate of transacting actives has fluctuated over time and may slow or decline in the future.

Market position and competition · Competitive pressure and market share loss

Substantial and increasingly intense competition in our markets and industry may harm our business. We compete in markets characterized by vigorous competition, changing technology, evolving industry standards, changing customer needs, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services.

Strategic execution · Merger acquisition and divestiture risks

Acquisitions, strategic investments, new businesses, joint ventures, divestitures, and other transactions we enter into could fail to achieve strategic objectives, disrupt our ongoing operations or result in operating difficulties, liabilities and expenses, harm our business, and negatively impact our results of operations.

Market position and competition · Pricing pressure and margin compression

We may also face pricing pressures from competitors. Some competitors may offer lower prices by cross-subsidizing certain services that we also provide through other products they offer. Such competition may result in the need for us to alter our pricing and could reduce our gross profit.

Innovation and product development · Product development and randd investment risks

Our long-term success depends on our ability to develop products and services to address the rapidly evolving market for commerce and financial services, and, if we are not able to implement successful enhancements and new features for our products and services, our business could be materially and adversely affected.

Market position and competition · Disruptive competitors and new market entrants

For example, companies not traditionally associated with the payments industry have introduced products or services that are or may become competitive with our business. We compete against many companies to attract customers across our products and services, and some of these companies have greater financial resources and substantially larger bases of customers than we do.

Customer and revenue · Customer concentration and key customer dependence

Our sellers and customers have no obligation to continue to use our services, and we cannot assure you that they will. We generally do not have long-term contracts with our sellers and customers, and the difficulty and costs associated with switching to a competitor may not be significant for many of the services we offer.

Legal and litigation · Intellectual property disputes

Assertions by third parties of infringement or other violation by us of their intellectual property rights could harm our business. Third parties have asserted, and may in the future assert, that we have infringed, misappropriated, or otherwise violated their copyrights, patents, and other intellectual property rights.

Industry regulation · Capital and liquidity requirements

Our subsidiary Square Financial Services is a Utah state-chartered industrial loan company, which requires that we serve as a source of financial strength to it and subjects us to potential regulatory sanctions and additional risks. The FDIA requires that we serve as a source of financial strength to Square Financial Services.

Digital transformation and innovation · Artificial intelligence and automation

As part of this plan, we expect an increased reliance on automation, proactive intelligence capabilities and AI tools that we believe will enhance productivity and maintain operational efficiency. We may not realize the expected cost savings, operating efficiencies or other anticipated benefits of these initiatives within the anticipated timeframe, or at all.

Economic and market conditions · Market volatility and financial crises

From time to time, we have experienced and may continue to experience material and adverse impacts to our business as a result of the uncertainty and volatility in the banking and financial services sectors, adverse macroeconomic conditions, including inflation, heightened or uncertain tariffs, and interest rate increases.

Social and demographic · Public perception and reputation

We have also been from time to time in the past, and may in the future be, the target of incomplete, inaccurate, and misleading or false statements about our company and our business that could damage our reputation and brands and deter customers from adopting our services or our products.

Geopolitical and trade · Trade policies tariffs and sanctions

Some of our hardware devices manufactured outside of the United States are subject to tariffs when imported to the United States. These tariffs negatively affect our gross margin on the impacted products, and increases in our pricing as a result of tariffs may adversely affect demand for our products.

Economic and market conditions · Economic recession and downturns

Volatility in general macroeconomic conditions could materially and adversely affect our business and financial results. Our performance is subject to economic conditions and the impact of such conditions on levels of spending by businesses and individuals. Most of the sellers that use our services are small businesses, many of which are in the early stages of their development, and these businesses are often disproportionately adversely affected by economic downturns.

Economic and market conditions · Inflation and deflation pressures

In particular, inflation and economic volatility, including the impact of heightened tariffs, a potential recession, and market expectations regarding the same, have impacted and may continue to impact consumer spending in general and at these businesses.

Human capital and workforce · Talent acquisition and retention

We depend on key management, as well as our experienced and capable employees, and any failure to attract, motivate, and retain our employees could harm our ability to maintain and grow our business. Our future success is significantly dependent upon the continued service of our executives and other key employees.

Human capital and workforce · Key personnel dependence and succession

If we lose the services of any member of management or any key personnel, we may not be able to locate a suitable or qualified replacement, and we may incur additional expenses to recruit and train a replacement, which could disrupt our business and growth.

Reputation and brand · Esg environmental social governance performance

Increased scrutiny from investors, regulators, and other stakeholders relating to sustainability issues could result in additional costs for us and may adversely impact our reputation. Investors, regulators, customers, employees and other stakeholders continue to focus on sustainability matters.