When you look at the first half of this year, we have pulled back on sales and marketing spend. Through the first half of the year, Square sales and marketing is down 6% year-over-year, and we expect continued pullback for the rest of the year. Again, we’re focused on optimizing our mix of investments across channels and driving efficiency, so we pulled back meaningfully on our brand and awareness channels on a year-over-year basis, as well as sales, and we’ve reduced the size of the team meaningfully as we focus on reorganizing the teams and enhancing our data and incentives as I was just speaking to on the sales team. Despite those pullbacks, we’ve seen strong growth in acquisition over the past two quarters, with year-over-year growth in acquisition improving in the second quarter compared to the first quarter.
This is with Square sales and marketing down slightly year-over-year in the second quarter and down 6% through the first half of the year.
Operator: And we’ll take our next question from…
Tim Chiodo: Perfect. Thank you.
Operator: Thank you. And we’ll take our next question from Lisa Ellis with MoffettNathanson.
Lisa Ellis: Hey, good afternoon, thanks for taking my question. I was hoping to drill in a little bit on the initiatives you have underway to connect Block’s to ecosystems. In the shareholder letter and prepared remarks, you called out a few different ones with Cash App Pay also I saw 15% growth in Cash for Business, and a couple of other highlights in there, can you just kind of take a step back and update us some of your current overall strategy for connecting ecosystems and maybe some data points on the benefits you see in the organization, the kind of network effects, as well as maybe some of the profitability that you see. Thank you.
Jack Dorsey: Yes, I can start with that. So as we’ve talked about, we do believe our power and especially resilience in our business as it is the fact we have multiple different ecosystems serving different audiences, and I’ve been spending a lot of my time and focus on looking for opportunities with the teams to connect them. Some of the ones we mentioned earlier on the remarks are mostly between Square and Cash App, so Payroll and Cash App Taxes was a big one. Cash App and Square through Afterpay is the biggest part of my focus right now and I’m really excited about the strategy. We continue to refine it and look for opportunities to build a really compelling experience within the Cash App that builds network effects and increases our network effects within Cash App, but also enables us to have an app that people are checking every day, because there’s something interesting and especially as we balance that with Square and our network of sellers like it’s even more unique and more compelling.
Cash App and our Bitcoin hardware, specifically the Bitcoin Wallet, we announced a partnership in a launch. There will be a global first product. We will be launching in the most countries we’ve ever launched in to start. And we’re constantly looking for other ones, there’s a lot around Cash App Pay and Square, especially around local offers and local merchants and we continue to find more and more connections and that doesn’t speak to the future ones, which would be titled in looking at opportunities for Square, especially musicians looking forward to sell merchandise for ticketing, and TBD, we believe with its protocol will enable both Cash App and Square and even entitled to move much faster and move much faster globally. So we’re excited about that.
So we have a mix of external products facing features that connect the two ecosystems and a lot of internal stuff as well. We’re using more shared resources or shared learnings and able to move much faster as an individual ecosystem because the work is already done by a peer ecosystem.
Lisa Ellis: Thank you.
Operator: We will take our next question from Ken Suchoski with Autonomous Research.
Ken Suchoski: Hi, good afternoon. Thanks for taking the question. It’s good to see the strong growth coming out of Square’s International markets yet again. I believe Square recently highlighted that many of its verticalized software products are now available in some of the company’s largest international markets. Can you just talk about the opportunity here from a software penetration perspective compared to the US and how — I guess, how have been these verticalized software products in these local markets can help you sustain the momentum behind the international business in terms of GPV growth and gross profit growth?
Jack Dorsey: Yes, thanks for the question. I’ll start. So our priority with Square is to achieve parity across each of our markets, meaning, that we launch all our features in any one particular market globally. There is various challenges to doing that, Square Loans being an example, different regulatory environments, that just increases the workload. And every new market that we take on, it does have some cost to us doing more features for the general product, so we’re always avoiding that costs and making sure that we’re picking the right markets at the right time. We made a lot of strides in Q2 with the launch of 30 products across our global markets for Square. One of the most notable was Tap to Pay on Android and that’s available to sellers in the US, Australia, the UK, Ireland, France, and Spain.
This is a big deal as TAP becomes the dominant way to pay, more and more people are using their phones, especially outside of the United States and Europe and Australia. And then, we also launched our second-generation Square Reader in the UK, Canada, Australia, Japan, France, Ireland, and Spain, and this improves the battery life, stronger connection, NFC performance, and it allows sellers around the world to take secure payments from just about anywhere, it’s extremely affordable. Australia continues to be very strong in the 12 months ending in June, almost half of Square’s gross profit in Australia came from sellers that used for monetized products, which is up from less than one-third two years ago. And we’ve seen our Square banking products contribute to some of the strong gross profit growth we’ve seen in international markets as well.
