Block (XYZ) risk factors, 2025 10-K

Risks Related to Our Business and Our Industry

1. 01We have generated significant net losses in the past, and we intend to continue to invest in our business. Thus, we may not be able to maintain profitability or our profitability may decline
2. 02Our business depends on our ability to maintain, protect, and enhance our brands
3. 03Our efforts to expand our product portfolio and market reach, including through acquisitions, may not succeed and may reduce our revenue growth and profitability
4. 04Our long-term success depends on our ability to develop products and services to address the rapidly evolving market for payments and financial services, and, if we are not able to implement successful enhancements and new features for our products and services, our business could be materially and adversely affected
5. 05Substantial and increasingly intense competition in our markets and industry may harm our business
6. 06Developments in the cryptocurrency market subject us to additional risks
7. 07We have experienced certain of these risks in connection with our past acquisitions, and any of the foregoing could harm our business and negatively impact our results of operations
8. 08Operating or expanding our business globally subjects us to new challenges and risks
9. 09We are subject to risks related to the banking ecosystem, including through Square Financial Services, our bank partnerships, and FDIC and other regulatory obligations
10. 10Our loan products are subject to risks related to availability of capital and general macroeconomic conditions, and increase our exposure to customer defaults
11. 11TIDAL subjects us to risks and uncertainties related to the music industry

Operational Risks

1. 12We, our sellers, our partners, and others who use our services obtain and process a large amount of sensitive data. Any real or perceived improper or unauthorized use of, disclosure of, or access to such data could harm our reputation as a trusted brand, as well as have a material and adverse effect on our business
2. 13Our products and services may not function as intended due to errors in our software, hardware, and systems, product defects, or due to security breaches or incidents or human error in administering these systems, which could materially and adversely affect our business
3. 14Systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our products or services, or those of our sellers, could harm our business and our brand, and subject us to substantial liability
4. 15Significant natural or other disasters, including pandemics, could also have a material and adverse impact on our sellers or other customers, which, in the aggregate, could in turn adversely affect our results of operations
5. 16Our risk management efforts may not be effective, which could expose us to losses and liability and otherwise harm our business
6. 17While we maintain a program of insurance coverage for various types of liabilities, we may self-insure against certain business risks and expenses where we believe we can adequately self-insure against the anticipated exposure and risk or where insurance is either not deemed cost-effective or unavailable
7. 18We are dependent on payment card networks and acquiring processors, and changes to our relationships with payment card networks and acquiring processors could harm our business
8. 19We depend on key management, as well as our experienced and capable employees, and any failure to attract, motivate, and retain our employees could harm our ability to maintain and grow our business
9. 20If we do not continue to improve our operational, financial, and other internal controls and systems to manage growth effectively, our business could be harmed
10. 21These challenges have increased as we shift to a more distributed workforce. If we are not successful in developing and implementing the right processes and tools to manage our enterprise, our ability to compete successfully and achieve our business objectives could be impaired
11. 22Many of our key components are procured from a single or limited number of suppliers. Thus, we are at risk of shortage, price increases, tariffs, changes, delay, or discontinuation of key components, which could disrupt and materially and adversely affect our business
12. 23Our services must integrate with a variety of operating systems. If we are unable to ensure that our services or hardware interoperate with such operating systems and devices, our business may be materially and adversely affected
13. 24A deterioration of general macroeconomic conditions could materially and adversely affect our business and financial results
14. 25We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs, and our existing credit agreement and our Senior Notes contain, and any future debt financing may contain, covenants that impact the operation of our business and pursuit of business opportunities
15. 26Servicing our Notes may require a significant amount of cash, and we may not have sufficient cash or the ability to raise the funds necessary to settle conversions of the Convertible Notes in cash, repay the Notes at maturity, or repurchase the Notes as required following a fundamental change
16. 27We are subject to counterparty risk with respect to the convertible note hedge transactions
17. 28Our bitcoin investment is subject to volatile market prices
18. 29We are exposed to fluctuations in foreign currency exchange rates
19. 30We may have exposure to greater-than-anticipated tax liabilities, which may materially and adversely affect our business
20. 31We have in the past recorded, and may in the future record, significant valuation allowances on our deferred tax assets, which may have a material impact on our results of operations and cause fluctuations in such results

Legal, Regulatory, and Compliance Risks

1. 32Our business is subject to extensive regulation and oversight in a variety of areas, all of which are subject to change and uncertain interpretation
2. 33Our business is subject to complex and evolving regulations and oversight related to privacy, data protection, and information security
3. 34We are subject to risks related to legal and regulatory matters
4. 35As a licensed money transmitter, we are subject to important obligations and restrictions
5. 36We are subject to a number of regulatory risks in the BNPL space
6. 37Our subsidiary Cash App Investing is a broker-dealer registered with the SEC and a member of FINRA, and therefore is subject to extensive regulation and scrutiny
7. 38Cash App Investing is subject to net capital and other regulatory capital requirements; failure to comply with these rules could harm our business
8. 39Our subsidiary Square Financial Services is a Utah state-chartered industrial loan company, which requires that we serve as a source of financial strength to it and subjects us to potential regulatory sanctions and additional risks
9. 40Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand
10. 41Assertions by third parties of infringement or other violation by us of their intellectual property rights could harm our business
11. 42Increased scrutiny from investors, regulators, and other stakeholders relating to environmental, social, and governance issues could result in additional costs for us and may adversely impact our reputation

Risks Related to Ownership of Our Common Stock

1. 43The dual class structure of our common stock has the effect of concentrating voting control within our stockholders who held our stock prior to our initial public offering, including many of our employees and directors and their affiliates; this will limit or preclude your ability to influence corporate matters
2. 44The market price of our Class A common stock has been and will likely continue to be volatile, and you could lose all or part of your investment
3. 45Our Class A common stock is listed to trade on more than one stock exchange, and this may result in price variations between the exchanges
4. 46The convertible note hedge and warrant transactions may affect the value of our Class A common stock
5. 47Anti-takeover provisions contained in our certificate of incorporation, our bylaws, and provisions of Delaware law could impair a takeover attempt