Amrita Ahuja: Yeah. You know that the overall strategy is that as customers save more of their funds with us, they make us more of their primary banking partner and then we can offer them more financial services, some of which we monetize. We have had a history of thinking about our ecosystem in terms of the entirety of the value we provide with some products being free, like our tax product, our investing product, our peer-to-peer product, when you use a debit card, and some products being monetized. And with a savings launch where we’re offering a yield for customers who direct deposit with us, a strong yield for customers who direct deposit with us at 4.5%, and a more modest yield for customers who use Cash App Card at about 1.5%.
What we’re providing is an incentive for customers to bring more inflows into Cash App. And we see a strong correlation with inflows into Cash App driving gross profit and customers being more engaged with the broader set of products across Cash App. What we’ve seen so far, look, it’s early days of these savings balances. We have balances from Cash App Savings accounts totaled 200 million as of the end of the fourth quarter, representing 6% of overall customer funds. But as we’ve introduced more recently the yield, we’ll be looking to more opportunities to attract savings and inflows and ultimately engagement with a broader suite of financial services.
Peter Christiansen: Great. Thank you.
Operator: Your next question comes from the line of Jason Kupferberg from Bank of America. Please go ahead.
Jason Kupferberg: Thank you. I was just looking at Page 18 of the shareholder letter, showing the Cash App gross profit mix. I think at least some of that is a new disclosure which we appreciate. It shows you become a lot less dependent on instant deposit financial services becoming a much bigger part of the pie. I think it was 38% in 2023. So I’m just wondering as you execute on the bank, the base strategy, is there any kind of target in mind in terms of the percent of Cash App gross profit that may come from financial services, say by 2026, as you pursue the Rule of 40 that year? And just separately, Amrita, real quick, any comments on free cash flow for 2024? Thank you.
Amrita Ahuja: Sure. Look financial services at 38% in 2023 as a percent of Cash App gross profit versus 29% two years prior, is obviously a key growth factor for us within Cash App, as you note in our new disclosure in the shareholder letter, and it’s one that we’re going to continue to focus on as we grow out the broader set of products. As you’ve been hearing today, and as you saw in Jack’s note in the shareholder letter. So that is one that I would continue to focus on. We still have seen growth in instant deposit and other parts of the ecosystem, but just not as fast as some of the financial services products. So we’ll continue to lean in there. With respect to free cash flow, I’d orient you to the trend lines across EBITDA. Obviously, the free cash flow metric is a different calculation, but it directionally where we expect to grow our profitability on an EBITDA basis, we also would expect to grow our free cash flow over time.
Jason Kupferberg: Thanks.
Operator: Your next question comes from the line of James Faucette from Morgan Stanley. Please go ahead.
James Faucette: Thanks very much. Just wanted to ask a question on the seller business, it looks like the growth rate in U.S. decelerated a little bit, but international continues to look quite good. And just wondering how we should think about the trajectory of U.S. versus international anticipate the mix. And any sense as to — in what timeframe, particularly the U.S. could be bottoming and where you think you can get that growth rate back to especially as you focus on product, et cetera, as Jack has talked about. Thanks.
Jack Dorsey: James, it’s a big [Multiple Speakers] sorry, U.S. growth is a big focus for us and a lot of our focus right now is going to be on restaurants, food, and beverage. And as I said earlier, like — I think there are significant product gaps that we have line of sight into, that will be unlocked this year that we can move much, much faster on from a development and product standpoint that we’ll see results from and much greater outcomes. And we’ll continue to push around the world, of course. But I really want to make sure that we advance even faster than we have in the past on the U.S. I think that’s really a function of all the changes that we’re making with reorg, with how the product is packaged and how we think about onboarding in particular and making it super easy for people and then putting a much stronger go-to-market on top of that.
Amrita Ahuja: Yeah, and I just add, you know in addition to our focus areas in the U.S., we can benefit from those product initiatives in international markets as well. And we’re enthusiastic about what we see in the markets outside the U.S. We think we’re less than 1% penetrated in those markets that we’re currently in, outside the U.S. with a long runway for growth. And we saw GPV growth in the fourth quarter in the markets outside the U.S. grow 26% year-over-year, with gross profit growth about 28% year-over-year now representing 13% of Square’s gross profit. And obviously, that’s grown over time. So we have opportunities to continue to refine and push our product velocity in the U.S. and ultimately that will help with the significant TAM opportunity that we see outside the U.S. as well.
Operator: We will now take our last question from Andrew Bauch from Wells Fargo Securities. Please go ahead.
Andrew Bauch: Hey guys, thanks for squeezing me in. Just wanted to revisit the direct deposit assumptions that you’re kind of making. I mean, it’s nice to see that — the 6 times data point, for those who are depositing 2,000-plus. But can you give us a sense on what the path to increasing that paycheck direct deposit mix ultimately looks like in 2024 and 2025? Are there certain unlocks you kind of need to achieve to see that ramp?
Jack Dorsey: Hi. I think, the biggest unlocks are going to be product. And we want to make sure that it’s super easy to get into Cash App and to see where you can do with it from a banking relationship standpoint. I want to put my money into something that I trust first and foremost, and that has a significant utility. And that utility is broad but also highly connected and works very fluidly. And that’s what we want Cash App to be. We have a lot of the pieces there. We’re going to spend this year really focused on making sure they sing and they really work in a way that makes people feel great, in the same way, that designing a Cash App Card feels. We want that across the Board for every single one of our features. And it really starts as I said before with trust.
We need to make sure that Cash App is seen as reliable, as dependable, and with a great customer base on top of it. And this is a constant iteration to make sure that we earn that trust. But then it really comes back to like — now that I have the input set, what are the outputs and what can I do with my money on Cash App, that certainly I would be able to do in a traditional bank, but what’s the plus, plus, what can I do more of within Cash App than I could do on another traditional bank? It really starts, I mean, as you know, with peer-to-peer and the fact that it’s an app and it just works and it’s fast and easy and meets my expectations and hopefully in many cases exceeds them. But there’s a lot of work to get that right and a lot of connections we can make to do that.
And a lot of it comes back down to just new functionality on top of what we already have.
Amrita Ahuja: And Andrew, I’d point you to Cash App Card as well as a key proof point for us as we bring more awareness to our financial services capabilities and ultimately to direct deposit. In the same way that peer-to-peer is the awareness driver for overall Cash App. We see Cash App Card as the awareness driver for our financial services and banking products and direct deposit. What we’ve seen with Cash App Card now at 23 million monthly active, growing twice as fast as our overall monthly active base at over 40%. Attached is that, we’re at true scale in terms of the ability to drive awareness here. We surpassed $1 billion in gross profit in 2023 for Cash App Card and that growth was three times higher than instant deposit where customers are sending their funds outside of Cash App.
So we’re giving people more reasons to keep their funds within Cash App. And what we’ve seen in terms of the behaviors and the engagement on Cash App Card has been healthy, not only with a growth in actives but also growth and spend per active, which means that we saw meaningful growth in overall spend on Cash App Card in 2023. And finally, point you to that strong engagement where our customers using our banking products are ultimately more engaged with Cash App Card monthly actives bringing in over two times more inflows, 2.3 times more inflows, and those direct deposit monthly actives bringing in seven times more inflows than a peer-to-peer active. So there is a key thing — the kernel here that’s working with Cash App Card that we can then bring people into the deeper suite of financial services and ultimately to direct deposit.
Andrew Bauch: Absolutely. Makes sense. Thank you.
Operator: Ladies and gentlemen, thank you for participating in today’s program. This does conclude the program. You may all disconnect.
