2018 Q1 Shareholder Letter — Square

Q1 2018 Shareholder Letter SQUARE.COM/INVESTORS FEATURED SELLER • SisterHearts in Arabi, LA 1

HIGHLIGHTS: • We continue to accelerate growth at scale: In the first quarter of 2018, total net revenue grew 45% year over year and Adjusted Revenue grew 51% year over year, compared to 36% and 47%, respectively, in the fourth quarter of 2017. • Together with Weebly, we will provide sellers with one cohesive solution to start or grow an omnichannel business. • Larger sellers come to Square for our ecosystem: More than half of larger sellers use multiple Square products. • In the UK, we recently launched Instant Deposit and Cash App—two of our fastest-growing services. FIRST QUARTER 2018 KEY RESULTS: GROSS PAYMENT VOLUME (GPV) TOTAL NET REVENUE NET INCOME (LOSS) $17.8 Billion +31% YoY $669 Million +45% YoY ($24) Million $17.4B $17.9B $17.8B $669M 2017 2018 $16.4B $585M $616M Q1 Q2 Q3 Q4 Q1 $13.6B $552M $462M 33% YoY 32% YoY 31% YoY 31% YoY 31% YoY 22% YoY 26% YoY 33% YoY 36% YoY 45% YoY ($15M) ($16M) ($16M) ($16M) Growth Growth Growth Growth Growth Growth Growth Growth Growth Growth Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 ($24M) 2017 2018 2017 2018 GPV MIX BY SELLER SIZE ADJUSTED REVENUE ADJUSTED EBITDA $307 Million +51% YoY $36 Million +33% YoY 13% 16% 20% >$500K $307M $41M Annualized GPV $283M $36M $36M 26% 27% $125K–$500K $240M $257M $34M 27% Annualized GPV 61% $204M $27M 57% 53% <$125K Annualized GPV 39% YoY 41% YoY 45% YoY 47% YoY 51% YoY 13% 15% 13% 15% 12% Growth Growth Growth Growth Growth Margin Margin Margin Margin Margin 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q1 Q1 2017 2018 2017 2018 Total net revenue in the first quarter of 2018 includes $34 million of bitcoin revenue (see page 7 for further detail). A reconciliation of non-GAAP metrics used in this letter to their nearest GAAP equivalents is provided at the end of this letter. Adjusted Revenue is defined as total net revenue less transaction-based costs and bitcoin costs. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Adjusted Revenue. 2

TO OUR SHAREHOLDERS: MAY 2, 2018 We continue to accelerate growth at scale, expanding our ecosystem for sellers and individuals. In the first quarter of 2018, total net revenue was $669 million, up 45% year over year, and Adjusted Revenue was $307 million, up 51% year over year. This is an increase from the fourth quarter of 2017, when total net revenue and Adjusted Revenue grew 36% and 47%, respectively, year over year. Gross Payment Volume (GPV) was $17.8 billion, up 31% year over year. Net loss in the first quarter was $24 million, which is an increase of $9 million from a net loss of $15 million in the first quarter of 2017. Adjusted EBITDA was $36 million in the first quarter of 2018, compared to $27 million in the first quarter of 2017. We achieved an Adjusted EBITDA margin of 12%, which reflects our reinvestment in the business to drive long-term growth. Together with Weebly, we will provide sellers with one cohesive solution to start or grow an omnichannel business. Omnichannel commerce—enabling sellers to engage with buyers wherever they are—is our top focus area in 2018. Square started with in-person commerce: Our integrated hardware, point-of-sale software, and managed payments have enabled sellers to begin accepting payments in just minutes. Today, it is important that sellers can reach buyers as they move between channels (in person, online, in apps): On average, omnichannel 1 shoppers spend 3.5 times more than single-channel shoppers. We are building tools that enable sellers to manage their entire business with one integrated solution. Weebly online store In April, we entered into an agreement to acquire Weebly, a San Francisco- based technology company that provides customers with tools to easily build a professional website or online store. We will combine Weebly’s web ON THE COVER: presence tools with Square’s in-person and online offerings to create one Maryam Henderson-Uloho is the founder of cohesive solution for sellers of all types, including restaurants, retailers, and SisterHearts, a thrift store, housing facility, and bridge for ex-offenders to transition service providers. An integrated suite of services will make critical business back into society. SisterHearts has been tasks like engaging with customers, managing orders, growing sales, and on Square for four years and uses Square Register and Square Marketing to run the making informed business decisions easier than ever for sellers. business. 3

Weebly will expand Square’s customer base globally and add a new recurring revenue stream. Weebly has millions of customers and more than 625,000 paid subscribers. Square will provide Weebly customers with access to the company’s ecosystem of managed payments, hardware, and software, which complement Weebly’s services, including free website hosting, premium (paid) website hosting, online store, and marketing tools. Nearly 40% of Weebly’s paid subscribers are outside the U.S., which will help accelerate Square’s global expansion. We will continue to provide an open platform to offer sellers the flexibility to select and integrate the third-party solutions that are best for their business. In the first quarter, the number of sellers that are integrated with a third-party solution increased nearly 80% year over year. Today, we offer more than 100 third-party partner integrations across a diverse range of third-party apps: website builders such as GoDaddy, Wix, and WooCommerce; points of sale such as SuiteRetail and Vend; and back- office systems like SAP Business One, Intuit, and Xero. Larger sellers come to Square for our ecosystem: More than half of larger A larger seller generates more than sellers use multiple Square products. $125,000 in annualized GPV. Larger sellers often have business needs that extend beyond payments, TOTAL NET REVENUE AND ADJUSTED such as managing multiple employees and locations and tracking REVENUE GROWTH OF LARGER SELLERS inventory. Square provides integrated solutions to meet these diverse Adjusted Revenue Growth YoY (%) needs—saving sellers the time and burden of stitching together individual Total Net Revenue Growth YoY (%) products from different vendors. 60% 60% Larger businesses, like other Square sellers, choose Square because they 50% value our cohesive ecosystem: More than half of larger sellers used two or 47% more Square products during 2017. As these sellers use more products, we 40% deepen our relationship with them, and they drive meaningful growth for Q2 Q3 Q4 Q1 Square: In the first quarter, total net revenue from larger sellers grew 47% 2017 2017 2017 2018 year over year, and Adjusted Revenue from larger sellers grew 60% year Excludes subscription revenue from partners and hardware revenue. over year. We continue to build remarkable products that meet the needs of sellers of every size. In the fourth quarter of 2017, we launched Square Register, our first product that combines hardware, point-of-sale software, and 4

payments technology into a powerful, all-in-one offering. Square Register TOP INDUSTRIES USING SQUARE does not require a third-party mobile device, and the customer display REGISTER creates an opportunity to establish a seller-buyer connection. The average Food & Drink annualized GPV of a Square Register seller is more than $300,000, 37% demonstrating that this product is resonating with larger sellers. And Services Square Register is gaining traction with our existing sellers and attracting 28% new sellers: Nearly a third of Square Register units ordered in the first Retail quarter were from sellers new to Square. 23% Based on number of active sellers. Pokeatery is a quick-serve restaurant that specializes in poké, a raw fish–based dish found in Hawaiian cuisine. The business switched from its merchant services account to Square for our cohesive ecosystem and simple, transparent pricing. Pokeatery uses Square Register in its four locations in Northern California and Austin, Texas. The point-of-sale software has been easy for employees to use, the hardware is an ideal fit for the fast-casual environment, and customers love the look. Owner Derek Chung likes the ability to connect with his customers via Customer Directory, and two locations also use Square Loyalty and Square Marketing. For the catering business, Pokeatery uses Square Invoices—it makes billing and payment simple, and customers value the security. Additionally, Pokeatery Austin uses Square Payroll to easily manage its more than 15 employees. Pokeatery continues to grow and will open a fifth location later Pokeatery (You might think this looks like steak, but this year. it’s ) In the UK, we recently launched Instant Deposit and Cash App—two of our fastest-growing services. We know that all sellers value speed—particularly when it comes to their money. The launch of Instant Deposit helps to solve two of the biggest challenges UK businesses face: managing cash flow and gaining fast access to funds. Settlement of funds in the UK typically takes three days 2 With Instant Deposit, sellers in the UK can with other payment processors. now receive their money in minutes at the tap of a button, even outside business hours. In the first quarter, Cash App remained the #1 Finance App in the App Store, and we are excited to bring the product to the UK. The app is available to download from the App Store, Google Play, and on the web at 5

cash.me/uk. Cash App features free peer-to-peer money transfer—making it an easy way to send and receive money between UK bank accounts—and customers receive the funds into their bank in minutes. Similar to the U.S., we see an opportunity in the UK to expand the suite of financial services we offer individuals. As we’ve seen in other markets, Square is growing in communities outside urban centers: More than three-quarters of active Square sellers in the UK are outside London. As more than half of UK bank branches have closed 3 people are underserved by the financial system, particularly in since 1989, areas like Holywell, Wales. Philip Jones owns a computer store in Holywell and stopped accepting cards in 2014 because of the fixed monthly fees UK Cash App he incurred (even if he did not process card payments during the month). However, with only one bank branch remaining in the town, he was no Active sellers are those who have longer able to effectively run his business as cash only. With Square’s processed 5+ payments in the last 12 months. affordable hardware and transparent pricing, Philip was able to accept cards again. We will continue to provide access to tools to empower people to participate and thrive in the economy. FINANCIAL DISCUSSION: Gross Payment Volume (GPV) In the first quarter of 2018, we processed $17.8 billion in GPV, up 31% year over year. This was consistent with 31% year-over-year growth in the fourth Holywell, Wales quarter of 2017, highlighting continued growth at scale. We continue to see strength from larger sellers. In the first quarter of 2018, GPV from larger sellers grew 44% year over year and accounted for 47% of total GPV, up from 43% of total GPV in the first quarter of 2017. Revenue Total net revenue was $669 million in the first quarter of 2018, up 45% year over year. This includes $34 million of bitcoin revenue as we fully launched the ability to buy and sell bitcoin in the Cash App in January. Excluding bitcoin revenue, total net revenue was $635 million, up 37% year over year. 6

All bitcoin revenue and costs are related to Cash App activity and are TOTAL NET REVENUE recorded based on the following: $669M $585M $616M $552M • Bitcoin revenue is the total sale amount of bitcoin to customers. $462M • Bitcoin costs are the total amount of bitcoin that we purchase. We purchase bitcoin to facilitate the buying of bitcoin conducted by Cash 22% YoY 26% YoY 33% YoY 36% YoY 45% YoY App customers. Growth Growth Growth Growth Growth • Adjusted Revenue from bitcoin is our bitcoin revenue less our bitcoin Q1 Q2 Q3 Q4 Q1 costs. 2017 2018 Adjusted Revenue was $307 million in the first quarter of 2018, up 51% year over year. Adjusted Revenue in the first quarter of 2018 includes $0.2 Under U.S. GAAP, the current determination million related to bitcoin. is that bitcoin sales are accounted for as gross revenue under ASC 606, Revenue from Contracts with Customers, given Square Transaction-based revenue was $523 million in the first quarter of 2018, up currently controls the bitcoin prior to sale. 30% year over year. Transaction-based revenue as a percentage of GPV was 2.93% in the first quarter of 2018, down from 2.96% in the first quarter of 2017. Transaction-based profit as a percentage of GPV was 1.09% in the FINANCIAL IMPACT FROM BITCOIN Bitcoin revenue $34.1M first quarter of 2018, up from 1.07% in the first quarter of 2017. Excluding Bitcoin costs – $33.9M unused promotional processing credits associated with the contactless Adjusted Revenue from bitcoin $0.2M and chip reader in the first quarter of 2017, transaction-based revenue as a percentage of GPV was consistent year over year. Transaction-based profit continued to benefit from growth in higher-margin products and improvements in our transaction cost profile. GPV from higher-margin ADJUSTED REVENUE products—Invoices, Virtual Terminal, and eCommerce API payments— $307M doubled year over year. $283M $240M $257M Subscription and services-based revenue was $97 million in the first $204M quarter of 2018, up 98% year over year. Growth was driven primarily by Instant Deposit, Caviar, and Square Capital. Instant Deposit benefited 39% YoY 41% YoY 45% YoY 47% YoY 51% YoY Growth Growth Growth Growth Growth from volume growth in both our seller base and the Cash App. Cash Card Q1 Q2 Q3 Q4 Q1 is also becoming a more meaningful contributor to subscription and 2017 2018 services-based revenue growth. In the first quarter of 2018, Square Capital facilitated over 50,000 business loans totaling $339 million, up 35% year Adjusted Revenue is defined as total net revenue less transaction-based costs and over year. bitcoin costs. Hardware revenue in the first quarter of 2018 was $14 million, up 60% year over year, driven by the launch of Square Register, which began shipping 7

in December 2017, and continued growth in Square Stand and third-party AS A PERCENTAGE OF GPV: peripherals. Transaction-based revenue Transaction-based profit Operating Expenses/Earnings 2.93% 2.96% 2.94% 2.93% 2.93% Operating expenses were $276 million in the first quarter of 2018, up 47% 1.09% year over year and up 9% from the fourth quarter of 2017, representing 41% of total net revenue. Non-GAAP operating expenses were up 49% year over year, representing 72% of Adjusted Revenue. 1.07% 1.04% 1.05% 1.07% Q1 Q2 Q3 Q4 Q1 • Product development expenses were $105 million on a GAAP basis and 2017 2018 $69 million on a non-GAAP basis in the first quarter of 2018, up 53% and 52%, respectively, year over year. This primarily reflects increases in engineering, product, data science, and design personnel costs. Transaction-based revenue as a percentage • Sales and marketing expenses were $77 million on a GAAP basis and of GPV in the first quarter of 2017 would have been 2.94% when excluding unused $72 million on a non-GAAP basis in the first quarter of 2018, up 55% and promotional processing credits associated 56%, respectively, year over year. This increase was driven primarily by with the contactless and chip reader. We provided sellers with promotional processing costs related to our Cash App peer-to-peer transfer service, growth in credits for pre-orders of our contactless and advertising expenditures, and sales and marketing personnel costs. chip reader at launch. • General and administrative expenses were $76 million on a GAAP basis and $62 million on a non-GAAP basis in the first quarter of 2018, up 33% and 38%, respectively, year over year. The year-over-year increase was due primarily to increased finance, legal, and support personnel costs. • Transaction, loan, and advance losses were $18 million in the first quarter of 2018. Transaction losses as a percentage of GPV continue to trend below our 0.1% historical average, underscoring ongoing improvements in risk management. Net loss in the first quarter was $24 million, compared to a net loss of $15 million in the first quarter of 2017. Net loss per share, basic and diluted, was $0.06 for the first quarter of 2018, compared to a net loss per share of $0.04 in the first quarter of 2017. We had 396 million weighted-average shares as of the first quarter of 2018. Adjusted EBITDA was $36 million in the first quarter of 2018, compared to $27 million in the first quarter of 2017, up 33% year over year. We achieved an Adjusted EBITDA margin of 12% as we continue to reinvest in the business to drive long-term growth. 8

Adjusted Net Income Per Share (Adjusted EPS) was $0.06 based on 462 NET INCOME (LOSS) million weighted-average diluted shares for the first quarter of 2018, 2017 2018 representing a $0.01 improvement year over year. Q1 Q2 Q3 Q4 Q1 Balance Sheet/Cash Flow ($15M) ($16M) ($16M) ($16M) We ended the first quarter of 2018 with $1.2 billion in cash, cash equivalents, restricted cash, and investments in marketable securities, up ($24M) from $1.1 billion at the end of the fourth quarter of 2017. Positive Adjusted EBITDA and proceeds from employee stock option exercises contributed ADJUSTED EBITDA to the increase in the balance at the end of the quarter. $41M $36M $34M $36M $27M 13% 15% 13% 15% 12% Margin Margin Margin Margin Margin Q1 Q2 Q3 Q4 Q1 2017 2018 A reconciliation of non-GAAP metrics used in this letter to their nearest GAAP equivalents is provided at the end of this letter. Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Adjusted Revenue. Adjusted EPS is calculated by dividing net loss, excluding share-based compensation expense, amortization of intangible assets, amortization of debt discount and issuance costs, and gain or loss on sale of property and equipment, by the weighted-average number of shares of common stock during the period, including the dilutive effect of all potential shares. 9

GUIDANCE: Q2 Current 2018 Previous 2018 Total net revenue $740M to $760M $3.00B to $3.06B $2.82B to $2.88B Adjusted Revenue $355M to $360M $1.40B to $1.43B $1.30B to $1.33B Year-over-year growth 49% 44% 34% (midpoint) Adjusted EBITDA $60M to $64M $240M to $250M $240M to $250M Net income (loss) per share $(0.04) to $(0.02) $(0.04) to $0.00 $(0.08) to $(0.04) Adjusted EPS (diluted) $0.09 to $0.11 $0.44 to $0.48 $0.43 to $0.47 Based on our results in the first quarter, we are raising our full-year guidance for total net revenue and Adjusted Revenue to reflect the ongoing momentum of our business and the acquisition of Zesty, which closed on April 19. Given the significant market opportunity ahead of us, we will continue to reinvest in our business to drive future growth and are therefore maintaining our full-year Adjusted EBITDA guidance. Full-year 2018 guidance does not include the impact from the Weebly acquisition. We will update guidance after the completion of the transaction, which is subject to customary closing conditions including regulatory approvals and is expected to close during the second quarter of 2018. We have not reconciled Adjusted EBITDA and Adjusted EPS guidance to their GAAP equivalents as a result of the uncertainty regarding, and the potential variability of, reconciling items such as share-based compensation expense and weighted-average fully diluted shares outstanding. Accordingly, a reconciliation of these non-GAAP guidance metrics to their corresponding GAAP equivalents is not available without unreasonable effort. However, we have provided a reconciliation of GAAP to non-GAAP metrics in tables at the end of this letter. It is important to note that the actual amount of such reconciling items would have a significant impact if they were included in our Adjusted EBITDA and Adjusted EPS. 10

Earnings Webcast MEDIA CONTACT [email protected] Square (NYSE:SQ) will host a conference call and earnings webcast at 2:00 INVESTOR RELATIONS CONTACT p.m. Pacific time/5:00 p.m. Eastern time today, May 2, 2018, to discuss [email protected] these financial results. The domestic dial-in for the call is (866) 393-4306. The Conference ID is 9398412. To listen to a live audio webcast, please visit Square’s Investor Relations website at square.com/investors. A replay will be available on the same website following the call. We will release financial results for the second quarter of 2018 on August 1, 2018, after the market closes, and will also host a conference call and earnings webcast at 2:00 p.m. Pacific time/5:00 p.m. Eastern time on the same day to discuss those financial results. Jack Dorsey Sarah Friar CEO CFO 1 How to Survive in an Omnichannel World: Best Practices for Omnichannel Retailing, Euromonitor International 2 Merchant Machine 3 Tackling financial exclusion: A country that works for everyone? 11

“Square is so unique compared to other payment providers—the platform is clean and easy to use. I’ve used Square Capital to grow my business, and the payback is simple. “And Square Appointments has made it easy for both me and my customers, reducing cancellations and missed appointments.” Pedro Dungo Owner Fitted by Pedro 12

SAFE HARBOR STATEMENT This letter contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements regarding the strategies, areas of focus, and future performance of Square, Inc. and its consolidated subsidiaries (the Company); the Company’s expected financial results for future periods; future growth in the Company’s businesses and products; the expected closing and impact of the Company’s recent proposed acquisitions, including our expectations regarding our ability to integrate such acquisitions and their impact on our growth and financial results; the Company’s expectations regarding scale, profitability, and the demand for or benefits from its products, product features, and services in the U.S. and in international markets; and management’s statements related to business strategy, plans, and objectives for future operations. In some cases, forward-looking statements can be identified by terms such as “may,” “will,” “appears,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Such statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause the Company’s actual results, performance, or achievements to differ materially from results expressed or implied in this letter. Investors are cautioned not to place undue reliance on these statements. Actual results could differ materially from those expressed or implied, and reported results should not be considered as an indication of future performance. Risks that contribute to the uncertain nature of the forward-looking statements include, among others, the Company’s ability to deal with the substantial and increasingly intense competition in its industry; changes to the rules and practices of payment card networks and acquiring processors; the Company’s ability to consummate, and the impact of, any potential acquisitions or divestitures, strategic investments, or entries into new businesses; the effect of evolving regulations and oversight related to the Company’s provision of payments services and other financial services; the effect of management changes and business initiatives; and changes in political, business, and economic conditions; as well as other risks listed or described from time to time in the Company’s filings with the Securities and Exchange Commission (the SEC), including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which is on file with the SEC and available on the investor relations page of the Company’s website. Additional information will also be set forth in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2018. All forward-looking statements are based on information and estimates available to the Company at the time of this letter and are not guarantees of future performance. Except as required by law, the Company assumes no obligation to update any of the statements in this letter. KEY OPERATING METRICS AND NON-GAAP FINANCIAL MEASURES To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (GAAP), we consider certain operating and financial measures that are not prepared in accordance with GAAP, including Gross Payment Volume, Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted EPS, and non-GAAP operating expenses. We believe these metrics and measures are useful to facilitate period-to-period comparisons of our business and to facilitate comparisons of our performance to that of other payments solution providers. We define Gross Payment Volume (GPV) as the total dollar amount of all card payments processed by sellers using Square, net of refunds. Additionally, GPV includes Cash App activity related to peer-to-peer payments sent from a credit card, and Cash for Business. Adjusted Revenue is a non-GAAP financial measure that we define as our total net revenue less transaction-based costs and bitcoin costs. We believe it is useful to subtract transaction-based costs and bitcoin costs from total net revenue to derive Adjusted Revenue as this is a primary metric used by management to measure our business performance, and it affords greater comparability to other payments solution providers. Substantially all of the transaction-based costs are interchange and assessment fees, processing fees, and bank settlement fees paid to third-party payment processors and financial institutions. While some payments solution providers present their revenue in a similar fashion to us, others present their revenue net of transaction-based costs because, unlike us, they pass through these costs directly to their sellers and are not deemed the principal in these arrangements. Under our standard pricing model, we do not pass through these costs directly to our sellers. We also deduct bitcoin costs because we consider our role in the bitcoin transactions to be facilitating customer access to bitcoin. Since we only apply a small margin to the market cost of bitcoin when we sell bitcoin to customers, and we have no control over the cost of bitcoin in the market, which tends to be volatile, we believe deducting bitcoin costs is a better reflection of the economic benefits as well as the Company’s performance from the bitcoin transactions. Adjusted Revenue has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, and non-GAAP operating expenses are non-GAAP financial measures that represent our net loss and net loss per share, adjusted to eliminate the effect of share-based compensation expenses, amortization of intangible assets, amortization of debt discount and issuance costs in connection with our offering of convertible senior notes in the first quarter of 2017, the gain or loss on the sale of property and equipment, and impairment of intangible assets, as applicable. In addition to the items above, Adjusted EBITDA and non-GAAP operating expenses are non- GAAP financial measures that also exclude depreciation, other cash interest income and expense, other income and expense, and provision or benefit from income taxes, as applicable. Basic Adjusted Net Income (Loss) Per Share is computed by dividing the Adjusted Net Income (Loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted Adjusted Net Income Per Share is computed by dividing Adjusted Net Income by the weighted-average number of shares of common stock outstanding, adjusted for the dilutive effect of all potential shares of common stock. 13

We have included Adjusted EBITDA and Adjusted EPS because they are key measures used by our management to evaluate our operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, we believe that Adjusted EBITDA and Adjusted EPS provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain variable charges. Adjusted EBITDA and Adjusted EPS have limitations as financial measures, should be considered as supplemental in nature, and are not meant as substitutes for the related financial information prepared in accordance with GAAP. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. 14

Consolidated Statements of Operations UNAUDITED In thousands, except per share data THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Revenue: Transaction-based revenue $ 523,037 $ 403,478 Subscription and services-based revenue 97,054 49,060 Hardware revenue 14,417 9,016 Bitcoin revenue 34,095 — Total net revenue 668,603 461,554 Cost of revenue: Transaction-based costs 327,911 257,778 Subscription and services-based costs 30,368 15,876 Hardware costs 19,702 12,662 Bitcoin costs 33,872 — Amortization of acquired technology 1,580 1,807 Total cost of revenue 413,433 288,123 Gross profit 255,170 173,431 Operating expenses: Product development 105,095 68,582 Sales and marketing 77,266 49,900 General and administrative 75,501 56,935 Transaction, loan and advance losses 18,031 11,891 Amortization of acquired customer assets 269 205 Total operating expenses 276,162 187,513 Operating loss (20,992) (14,082) Interest and other expense, net 2,819 499 Loss before income tax (23,811) (14,581) Provision for income taxes 175 509 Net loss $ (23,986) (15,090) Net loss per share: Basic $ (0.06) $ (0.04) Diluted $ (0.06) $ (0.04) Weighted-average shares used to compute net loss per share Basic 395,948 366,737 Diluted 395,948 366,737 15

Consolidated Balance Sheets UNAUDITED In thousands, except share and per share data Assets Mar 31, 2018 Dec 31, 2017 Current assets: Cash and cash equivalents $ 738,586 $ 696,474 Short-term investments 200,048 169,576 Restricted cash 27,688 28,805 Settlements receivable 700,646 620,523 Customer funds 152,661 103,042 Loans held for sale 78,821 73,420 Other current assets 91,933 86,454 Total current assets 1,990,383 1,778,294 Property and equipment, net 98,170 91,496 Goodwill 58,327 58,327 Acquired intangible assets, net 14,138 14,334 Long-term investments 176,672 203,667 Restricted cash 9,802 9,802 Other non-current assets 32,120 31,350 Total assets $ 2,379,612 $ 2,187,270 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 19,556 $ 16,763 Customers payable 881,754 733,736 Settlements payable 116,902 114,788 Accrued transaction losses 28,309 26,893 Accrued expenses 57,997 52,280 Other current liabilities 27,214 28,367 Total current liabilities 1,131,732 972,827 Long-term debt 362,965 358,572 Other non-current liabilities 74,935 69,538 Total liabilities 1,569,632 1,400,937 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.0000001 par value: 100,000,000 shares authorized at March 31, 2018 and December 31, 2017. None issued and outstanding at March 31, 2018 and December 31, 2017. — — Class A common stock, $0.0000001 par value: 1,000,000,000 shares authorized at March 31, 2018 and December 31, 2017; 287,921,742 and 280,400,813 issued and outstanding at March 31, 2018 and December 31, 2017, respectively. — — Class B common stock, $0.0000001 par value: 500,000,000 shares authorized at March 31, 2018 and December 31, 2017; 112,462,337 and 114,793,262 issued and outstanding at March 31, 2018 and December 31, 2017, respectively. — — Additional paid-in capital 1,682,581 1,630,386 Accumulated deficit (871,307) (842,735) Accumulated other comprehensive loss (1,294) (1,318) Total stockholders’ equity 809,980 786,333 Total liabilities and stockholders’ equity $ 2,379,612 $ 2,187,270 16

Consolidated Statements of Cash Flows UNAUDITED In thousands THREE MONTHS ENDED Cash Flows from Operating Activities Mar 31, 2018 Mar 31, 2017 Net loss $ (23,986) $ (15,090) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 10,160 9,437 Non-cash interest and other expense 4,847 1,534 Share-based compensation 46,824 31,670 Transaction, loan and advance losses 18,031 11,891 Deferred provision (benefit) for income taxes (654) 99 Changes in operating assets and liabilities: Settlements receivable (81,452) 54,586 Customer funds (49,619) (13,953) Purchase of loans held for sale (344,976) (252,170) Sales and principal payments of loans held for sale 337,092 242,431 Other current assets (13,444) 6,105 Other non-current assets (1,256) 141 Accounts payable 1,990 (1,459) Customers payable 147,977 (11,132) Settlements payable 2,114 (15,378) Charge-offs to accrued transaction losses (12,842) (11,178) Accrued expenses 2,703 3,930 Other current liabilities 3,165 (368) Other non-current liabilities 5,379 2,902 Net cash provided by operating activities 52,053 43,998 Cash Flows from Investing Activities Purchase of marketable securities (50,221) (181,851) Proceeds from maturities of marketable securities 45,450 15,569 Proceeds from sale of marketable securities — 3,996 Purchase of property and equipment (8,083) (6,508) Payment for investment in privately held entity — — Purchase of intangible assets (1,584) — Business acquisitions (1,055) (1,600) Net cash used in investing activities: (15,493) (170,394) 17

Consolidated Statements of Cash Flows (continued) UNAUDITED In thousands THREE MONTHS ENDED Cash Flows from Financing Activities Mar 31, 2018 Mar 31, 2017 Proceeds from issuance of convertible senior notes, net — 428,250 Purchase of convertible senior note hedges — (92,136) Proceeds from issuance of warrants — 57,244 Payment for termination of Starbucks warrant — (54,808) Principal payments on capital lease obligation (665) (247) Proceeds from the exercise of stock options, net 31,354 39,280 Payments for tax withholding related to vesting of restricted stock units (27,651) — Net cash provided by financing activities 3,038 377,583 Effect of foreign exchange rate on cash and cash equivalents 1,397 1,058 Net increase in cash, cash equivalents and restricted cash 40,995 252,245 Cash, cash equivalents and restricted cash, beginning of period 735,081 488,745 Cash, cash equivalents and restricted cash, end of period $ 776,076 $ 740,990 18

Key Operating Metrics and Non-GAAP Financial Measures UNAUDITED In thousands, except GPV and per share data THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Gross Payment Volume (GPV) (in millions) $ 17,827 $ 13,647 Adjusted Revenue $ 306,820 $ 203,776 Adjusted EBITDA $ 35,894 $ 27,025 Adjusted Net Income Per Share: Basic $ 0.07 $ 0.05 Diluted $ 0.06 $ 0.05 Adjusted Revenue Reconciliation UNAUDITED In thousands THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Total net revenue $ 668,603 $ 461,554 Less: transaction-based costs 327,911 257,778 Less: bitcoin costs 33,872 — Adjusted Revenue $ 306,820 $ 203,776 Adjusted EBITDA Reconciliation UNAUDITED In thousands THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Net loss $ (23,986) $ (15,090) Share-based compensation expense 46,824 31,670 Depreciation and amortization 10,160 9,437 Interest and other expense, net 2,819 499 Provision for income taxes 175 509 Gain on sale of property and equipment (98) — Adjusted EBITDA $ 35,894 $ 27,025 19

Adjusted Net Income (Loss) Reconciliation UNAUDITED In thousands, except per share data THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Net loss $ (23,986) $ (15,090) Share-based compensation expense 46,824 31,670 Amortization of intangible assets 1,851 2,121 Amortization of debt discount and issuance costs 4,393 1,390 Gain on sale of property and equipment (98) — Adjusted Net Income $ 28,984 $ 20,091 Adjusted Net Income Per Share: Basic $ 0.07 $ 0.05 Diluted $ 0.06 $ 0.05 Weighted-average shares used to compute Adjusted Net Income Per Share: Basic 395,948 366,737 Diluted 461,761 404,319 Adjusted Revenue Guidance Reconciliation UNAUDITED In thousands THREE MONTHS ENDED YEAR ENDED Jun 30, 2018 Dec 31, 2018 Total net revenue $ 740,000 - 760,000 $ 3,000,000 - 3,060,000 Less: Transaction-based & bitcoin costs 385,000 - 400,000 1,605,000 - 1,635,000 Adjusted Revenue $ 355,000 - 360,000 $ 1,395,000 - 1,425,000 20

Non-GAAP Operating Expenses UNAUDITED In thousands THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Operating expenses $ (276,162) $ (187,513) Share-based compensation 46,793 31,670 Depreciation and amortization 8,580 7,531 Litigation settlement expense — — Gain on sale of property and equipment (98) — Non-GAAP operating expenses $ (220,887) $ (148,312) Product development $ (105,095) $ (68,582) Share-based compensation 30,482 19,356 Depreciation and amortization 5,473 3,712 Non-GAAP product development $ (69,140) $ (45,514) Sales and marketing $ (77,266) $ (49,900) Share-based compensation 4,961 3,935 Depreciation and amortization 609 77 Gain on sale of property equipment 4 58 Non-GAAP sales and marketing $ (71,692) $ (45,830) General and administrative $ (75,501) $ (56,935) Share-based compensation 11,350 8,379 Depreciation and amortization 2,229 3,537 Gain on sale of property and equipment (102) (58) Non-GAAP general and administrative $ (62,024) $ (45,077) Depreciation and Amortization by Function UNAUDITED In thousands THREE MONTHS ENDED Mar 31, 2018 Mar 31, 2017 Cost of revenue $ 1,580 $ 1,906 Product Development 5,473 3,712 Sales and Marketing 609 77 General and Administrative 2,229 3,537 Amortization of acquired customer assets 269 205 Total depreciation and amortization $ 10,160 $ 9,437 21