SEGMENT AND GEOGRAPHICAL INFORMATION

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHICAL INFORMATION

The Company reports its operating segments to reflect the manner in which the Company's chief operating decision maker ("CODM") reviews and assesses performance. Accordingly, the Company has two reportable segments: Square and Cash App. The results of Afterpay have been equally allocated to the Cash App and Square segments as management has concluded that Afterpay's BNPL platform will contribute equally to both the Cash App and Square platforms. Further, Afterpay does not have a segment manager who reports to the CODM. Rather, the operations of Afterpay are managed by the segment managers of Cash App and Square, who are responsible for allocating resources and evaluating the performance of Afterpay. Products and services that are not assigned to a specific reportable segment including but not limited to TIDAL, TBD, and Spiral are aggregated and presented within a general corporate and other category. Square and Cash App are defined as follows:

•Cash App includes the financial tools available to individuals within the mobile Cash App, including peer-to-peer payments, bitcoin and stock investments. Cash App also includes Cash Card which is linked to customer stored balances that customers can use to pay for purchases or withdraw funds from an ATM.

•Square includes managed payment services, software solutions, hardware, and financial services offered to sellers, excluding those that involve Cash App.

The primary financial measures used by the CODM to evaluate performance and allocate resources are revenue and gross profit. The CODM does not evaluate performance or allocate resources based on segment asset data, and therefore such information is not included.

Information on the reportable segments revenue and segment gross profit are as follows (in thousands):

	Three Months Ended March 31, 2022
	Cash App		Square		Corporate and Other (i)		Total
Revenue:
Transaction-based revenue	$	109,241	$	1,123,728	$	—	$	1,232,969
Subscription and services-based revenue	622,309		282,650		54,598		959,557
Hardware revenue	—		37,326		—		37,326
Bitcoin revenue	1,730,793		—		—		1,730,793
Segment revenue (ii)	$	2,462,343	$	1,443,704	$	54,598	$	3,960,645
Segment gross profit (iii)	$	623,659	$	661,221	$	10,080	$	1,294,960

	Three Months Ended March 31, 2021
	Cash App		Square		Corporate and Other (i)		Total
Revenue:
Transaction-based revenue	$	91,959	$	867,774	$	—	$	959,733
Subscription and services-based revenue	436,589		121,092		—		557,681
Hardware revenue	—		28,788		—		28,788
Bitcoin revenue	3,511,068		—		—		3,511,068
Segment revenue	$	4,039,616	$	1,017,654	$	—	$	5,057,270
Segment gross profit	$	495,485	$	468,016	$	—	$	963,501

(i) Corporate and other represents results related to products and services that are not assigned to a specific reportable segment. Comparable prior period amounts have not been disclosed as they were not material.

(ii) The revenue for both Cash App and Square for the three months ended March 31, 2022 includes $64.9 million each from Afterpay post-acquisition results.

(iii) The gross profit for both Cash App and Square for the three months ended March 31, 2022 includes $46.1 million each from Afterpay post-acquisition results.

A reconciliation of total segment gross profit to the Company’s income (loss) before applicable income taxes is as follows (in thousands):

	Three Months Ended March 31,
	2022		2021
Total segment gross profit	$	1,294,960	$	963,501
Less: Product development	484,761		310,141
Less: Sales and marketing	501,562		349,460
Less: General and administrative	444,276		195,909
Less: Transaction, loan, and consumer receivable losses	91,150		20,395
Less: Bitcoin impairment losses	—		19,860
Less: Interest expense, net	15,748		253
Less: Other expense (income), net	(33,472)		27,528
Income (loss) before applicable income taxes	$	(209,065)	$	39,955

Revenue

Revenue by geography is based on the addresses of the sellers or customers. The following table sets forth revenue by geographic area (in thousands):

	Three Months Ended March 31,
	2022		2021
United States	$	3,721,597	$	4,963,335
International	239,048		93,935
Total net revenue	$	3,960,645	$	5,057,270

No individual country from the international markets contributed in excess of 10% of total revenue for the three months ended March 31, 2022 and 2021.

Long-Lived Assets

The following table sets forth long-lived assets by geographic area (in thousands):

	March 31, 2022		December 31, 2021
United States	$	8,250,330	$	1,426,103
Australia	5,008,040		26,680
Other international	2,203,920		55,088
Total long-lived assets	$	15,462,290	$	1,507,871

Assets by reportable segment were not included, as this information is not reviewed by the CODM to make operating decisions or allocate resources, and is reviewed on a consolidated basis.