Digital payments firm Block is turning its sights on teenage users.
The Oakland, California-based company sees the youngest users of the peer-to-peer payment platform Cash App as a chief avenue for future growth, Block executives said in prepared remarks during an earnings call Thursday and in a related letter to shareholders.
"Teens are Central to our next generation strategy," CEO Jack Dorsey wrote in the second-quarter shareholder letter.
Keeping teen users — who can send and receive payments with their parents permission — on Cash App is a way to secure lifelong users, the letter said.
“Cash App is resonating with the next generation,” Block Chief Financial Officer Amrita Ahuja contended during the earnings call.
"In July, we increased teen focused referrals and campaigns, and are now expanding into creator content, interactive ads, and new formats across various social media channels in an effort to drive broader awareness and adoption," read the letter, signed by Dorsey and Ahuja.
Cash App had five million active monthly teen accounts in June, according to the shareholder letter. Of those accounts,1.7 million graduated from a sponsor account — which a teen can use under a parent’s supervision — to an individual account that month, Ahuja said during the earnings call.
The company introduced teen accounts on Cash App in 2021. A Block spokesperson did not immediately respond to a request for comment about how that figure has changed in the past 4 years.
In other earnings developments, the majority of loans through Block's Cash App lending service now originate from Block's bank, Square Financial Services, Ahuja said.
She expects that trend to continue. "We plan to continue to expanding SFS origination throughout the second half of the year," Ahuja said during prepared remarks in the earnings call.
Additionally, Block's buy now, pay later service, Afterpay, has one million monthly active users on the Cash App debit card, according to the earnings report. The use of the Cash App BNPL and lending services helped drive the app segment’s profits, Ahuja said.
Gross profit from the platform grew 10% year over year in the first quarter, a figure that the CFO acknowledged was a disappointment, but bounced back in the second quarter, posting 16% year over year profit growth.
Block also plans to launch a pooled payment feature on Cash App, which lets multiple people make combined payments for large purchases such as a down payment on a vacation.
Block’s reported second-quarter net income nearly tripled to $538 million in net income for the quarter, rising from $195 million in the year-ago quarter.
The company reported second-quarter revenue of $6.05 billion, declining 1.6% from the same quarter in 2024.
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by finopulse.
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