Amrita Ahuja: Hey, thanks for the question, Darrin. So, I think what I’ll do is I’ll first hit what we’re seeing in terms of Square GPV in the second quarter and into July, and then we’ll hit upon the verticalization efforts for the Square business. So what we’re seeing in terms of July trends was fairly consistent with what we’ve seen really through May. We’ve seen stability in GPV trends from May through July, with July coming in at that 12% year-over-year basis, consistent with the second quarter also at 12%. If you unpack that by vertical in the second quarter, food and drink TPV grew by 17% year-over-year. Retail GPV grew by 9% year-over-year. Services also by 9%. Services, of course, encompassing a number of sub-sectors, beauty, health and fitness, home and repair, professional services.
We have seen some moderation trends across the discretionary and non- discretionary verticals which we have talked about since really that mid-Q4 timeframe, and that’s really broad-based across a number of different verticals. From a geographic perspective, what we’ve seen is, international markets had continued to also see some of those macro-related headwinds, which were more pronounced in Australia in the second quarter, albeit with overall growth ex-BNPL, continuing to be at a much faster rate of growth in the overall base of the business at 35% year-over-year growth for those international markets in the second quarter. And again, from a month-to-month perspective, generally seen greater stability from May through July on those GPV trends for Square.
Driving the — diving into your verticalization question now, which I think is a key question for us as we think about continuing to grow up-market, where we have seen outsized growth. From a gross profit perspective, up-market grew 20% year-over-year in the second quarter for us. This is a key area for us as we continue in our strategic focus on bringing larger sellers onto our platform and acquiring those sellers across our key verticals of restaurants, retail, and beauty. Within our sales team, our focus has been on providing our reps with the right tools, industry knowledge and signals to prospect, and to acquire sellers across those three verticals. Let’s take inbound and outbound sales, within inbound, we began verticalizing our US inbound sales team last year.
We completed that in April of this year and since that completion, we’ve seen an improvement in gross profit added per account executive and in software attach rates, still early but encouraging trends there. Now for outbound, we finalized verticalizing our US outbound sales team in July, so just this past month. Our account executives have now completed their industry training programs, which enables them to really deepen their knowledge within the assigned vertical that they’ve got. And we anticipate our account execs will continue to ramp through Q3 and hopefully be fully ramped into Q4. With those changes, our goal is to increase gross profit account added per account exec and software attach rates as we’ve seen with the inbound sales team, and as we see those signals and gain confidence there on our processes and results, we’ll look to continue to scale the outbound sales team over time.
Ultimately, we will be iterating on this in the coming quarters and years as this is a long-term initiative for us to continue to go up-market and with our vertical points of sale and to drive those sustained results over time. We’d expect to see these results paying-off and driving growth into 2024. And expect our overall go-to-market spend to target that three times ROI over four years.
Darrin Peller: Okay. Thanks, Amrita.
Operator: And we’ll take our next question from Tim Chiodo with Credit Suisse.
Tim Chiodo: Great. Thank you for taking the question. I want to talk about seller sales and marketing or Square sales and marketing a little bit. So this year’s marketing expense, you mentioned, it’s benefiting from some of the annualization of the pullback that you had on brand, awareness, and some of the experimental stuff, so a shift towards more efficient spent. But sometimes there is a concern from investors that, because the dollar amount is lower, that the size and health of the new cohorts coming in might actually be a little bit smaller, but we gather that the payback periods have really come in more than the four to five range, and they had expanded to maybe six to seven at one point last year. So with all that context, maybe you could talk about the health and the size of the cohort that you’re bringing in now for Square.
Amrita Ahuja: Sure, happy to take that. Thanks for the question, Tim. Let me start with the cohort trends on payback periods and then we can dive into what we’re seeing in the first half of the year in terms of spend and customer acquisition. So, in 2022 — for our 2022 cohort, we’re seeing trends toward a six to seven-quarter payback, which is slightly higher than our expectations as these cohorts have cured. Square sales and marketing spend was up approximately 20% year-over-year in 2022 compared to 2021. From a 2023 cohort perspective, we’re targeting approximately a five-quarter payback as we expect payback to improve compared to last year, and have a more meaningful impact to growth in 2024. And as I just mentioned, our longer-term target across the go-to-market investments for Square remains the 3 times ROI over four years.
