good day ladies and gentlemen and 00:02 welcome to the square second quarter 00:04 2020 earnings conference call 00:06 i would now like to turn the call over 00:08 to your host jason lee 00:10 head of investor relations please go 00:12 ahead sir 00:15 hi everyone thanks for joining our 00:16 second quarter 2020 earnings call we 00:18 have jack and rita with us today 00:20 we'll begin this calls and short remarks 00:2 2 before open call directly to your 00:24 questions 00:24 during q a we will take questions from 00:26 our customers in addition to questions 00:28 from conference call participants 00:30 we would also like to remind everyone 00:32 that we will be making forward - looking 00:34 statements on this call 00:35 actual results could differ materially 00:37 from those contemplated by our 00:38 forward - looking statements 00:40 and report results sho uld not be 00:41 considered as an indication of future 00:43 performance 00:44 please take a look at our finds with the 00:46 sec for a discussion of the factors that 00:48 could cause a result to differ 00:50 also note that the four looking 00:51 statemen ts on this call are based on 00:53 information available to us as of 00:55 today's date we disclaim any obligation 00:57 to update any foreign working statements 01:00 except as required by law during this 01:02 call we will provide preliminary gross 01:04 profit gross results for the month of 01:05 july 01:06 these represent our current estimate for 01:08 july performance as we have not yet 01:10 closed our 01:10 accounting financials for the month of 01:12 july and our monthly results are not 01:14 subject to interim review by our 01:16 auditors 01:17 as a result actual july results may 01:19 differ from these estimates 01:21 also we will be discussing certain 01:23 non - gaap financial measures during this 01:25 call reconciliations to the most 01:27 directly comparable gas financial 01:28 measures are provided in the show of the 01:30 letter 01:30 on our investor relations website these 01:33 non - gaap measures are not intended to be 01:34 a substitute for our gap results 01:37 additionally in the second quarter of 01:38 2020 we changed our offering segments to 01:40 reflect 01:41 how we review and assess our operations 01:43 and began reporting on seller and cash 01:45 app 01:45 as separate segments as such we 01:48 introduced additional disclosures in the 01:49 shareholder letter on our investor 01:51 relations website 01:52 as well as our quarterly report on form 01:54 10q 0 1:55 the quarter ended june 30th 2020 for 01:58 revenue and gross profit 01:59 for our seller and cash app offering 02:01 reporting 02:02 segments as a reminder we just 02:04 discontinued the use of adjusted revenue 02:06 in the third quarter of 2019 02:08 following the receipt of and comment 02:10 letter from and discussions with the fec 02:12 our statement of operations continues to 02:14 disclose total net revenue 02:16 transaction based costs and bitcoin 02:18 costs det ermined in accordance with dow 02:20 which are the key component of adjusted 02:22 revenue 02:23 there are no changes to any other gaap 02:25 or non - gaap metrics 02:27 we have posted a spreadsheet on our 02:29 investor relations website with our 02:30 hist orical financials and additional 02:32 details related to our income statement 02:35 finally this call in its entirety is 02:37 being audio webcast on our investor 02:38 relations website 02:40 an audio replay of this call will be 02:42 available on our website shortly 02:44 with that i'd like to turn over to jack 02:48 good morning everyone and thank you for 02:49 joining us so earlier today 02:51 uh due to the media's early release of 02:53 our quarterly financials 02:54 we moved up to our investor call to this 02:56 morning we're conduct 02:58 conducting an investigation into this 03:00 early release in consultation with both 03:02 internal 03:03 and external counsel coven 19 continues 03:06 to be at the top of our minds 03:08 as economies closed reopen and close yet 03:10 again 03:11 this has been extremely hard on the 03:13 people we serve our sellers 03:15 their employees and all the individuals 03:17 who use kasha 03:18 folks right now are struggling to keep 03:20 their businesses open pay their 03:21 employees 03:22 pay rent and even buy food for their 03:24 families 03:25 we're doing our best to learn and build 03:27 to support our customers but this is 03:29 obviously much bigger than us at square 03:32 parts of the world lack a coordinated 03:33 strategy to get out of this crisis 03:35 and that hurts more people every single 03:37 day it's up to all of us to take 03: 39 whatever action we can to end this 03:41 from wearing a mask to protect ourselves 03:43 and our families 03:44 to using whatever platform we have to 03:46 demand that our elected officials 03:48 coordinate better just can't wait for an 03:50 election da y 03:51 on top of that the fear pain and 03:53 suffering our black customers 03:55 employees and neighbors have felt every 03:57 day for the past hundreds of years due 03:58 to racist systems and policies 04:01 must be acknowledged and fixed we're 04:03 seeing a bit more acknowledgement 04:04 but not nearly enough change we also 04:06 can't wait for an election day 04:08 we're taking action as an employer we're 04:10 investing in black and racial and ethnic 04:12 minority communities 04:14 and we're looking for ways to drive 04:15 racial justice through our business 04:17 and products i will also be personally 04:19 putting more funds into organizations 04:21 driving policy change 04:22 through the start small initiative i 04:24 announced months ago 04:26 we're always open to feedback and ideas 04:28 on ways we can do our part 04:29 on these issues please let us know if 04:32 you have any 04:33 and now some updates on your business 04:34 before i turn to amrita in your 04:36 questions 04:37 starting with the cash up in june cash 04:40 app had more than 30 million 04:41 active customers transacting on our 04:43 service and in july we expect to achieve 04:46 gross profit growth 04:47 of more than 200 percent year - over - year 04:50 we saw our customers increasingly use 04:52 their cash card as their primary 04:53 spending device 04:55 seven million people paid with their 04:57 cash card in june 04:58 double compa red to last year we also saw 05:01 an increase in people using direct 05:03 deposit for recurring paychecks 05:05 strengthened by stimulus and 05:06 unemployment checks 05:08 and tax refunds cash up his culture 05:12 and continue to show this with creative 05:14 approaches to marketing 05:16 we announce we ride with bubba wallace 05:18 and you'll see his cash up design car 05:20 in uniform throughout the nascar season 05:23 and we partnered with hood by air a 05:25 phenomenal streetwear brand to create a 05:27 limited edition 05:29 hba cash cards you can purchase with 05:31 proceeds going to black 05:33 and lgbtqa communities 05:36 as i mentioned earlier our sellers have 05:39 had to navigate an immense amount of 05: 40 uncertainty and challenges 05:42 they've used our ecosystem to reach 05:44 their customers in new ways 05:45 and in the second quarter gpb from 05:47 online channels was up more than 50 05:49 percent year - over - year 05:51 one in three new online sellers 05:53 onboarded in the second quarter were 05:55 entirely new to square 05:57 and many of these sellers adopted other 05:58 parts of our ecosystem 06:00 including in - person commerce for example 06:03 the coffee tree roasters in pittsburgh 06:05 joined square 06:06 by launching an online store previously 06:08 never having a website 06:10 this quarter they converted their five 06:11 locations to square hardware 06:13 for their in - person point - of - sale system 06:16 we're also seeing an increase in contact 06:18 with payment 06:19 as customers don't want to use paper 06:20 cash during due to covert risk 06:23 in march 1 in 12 of our sellers were 06:25 cashless 06:26 and b y the end of the june that shifted 06:29 to one in four 06:30 of our sellers operating cashless we 06:33 launch on - demand delivery functionality 06:35 which enables sellers to take control of 06:36 their fulfillment process by offering 06:38 delivery to th eir customers 06:40 directly from their websites and our 06:42 sellers gain the benefit of square scale 06:44 by retaining more 06:45 of the economics compared to using a 06:47 third - party delivery service 06:50 during the quarter we facilitated 06:52 paycheck protection program loans 06:54 providing a financial lifeline to more 06:56 than 80 000 small businesses around the 06:58 country 06:59 for a total of 873 million in ppp loans 07:03 through the program we re ached 07:05 traditionally underserved sellers 07:07 the average ppp loan through square 07:09 capital was less than 07:10 eleven thousand dollars or one - tenth the 07:13 average small business administration 07:14 loan 07:16 and finally we're saying goodbye to 07:17 aaron zamas our head of communications 07:19 and people 07:20 who's been helping us not only with this 07:22