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COMMITMENTS AND CONTINGENCIES | 12 Months Ended
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Dec. 31, 2024
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Operating and Finance Leases The Company’s operating leases are primarily comprised of office facilities. The Company's leases have remaining lease terms of one year to 12 years, some of which include options to extend up to five year terms, or include options to terminate the leases with advanced notice. None of the options to extend the leases have been included in the measurement of the right-of-use asset or the associated lease liability. There were no finance lease obligations as of December 31, 2024. The components of lease costs for the year ended December 31, 2024 were as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023
Fixed operating lease costs | $ | 57,232 |  |  | $ | 77,659 |
Variable operating lease costs | 22,344 |  |  | 22,555 |
Short-term lease costs | 1,939 |  |  | 3,332 |
Sublease income | (1,119) |  |  | (11,933) |
Total lease costs | $ | 80,396 |  |  | $ | 91,613 |
Other information related to operating leases was as follows:
| Year Ended December 31,
| 2024 |  | 2023
Weighted-average remaining lease term | 6.2 years |  | 7.0 years
Weighted-average discount rate | 3.75 | % |  | 3.62 | %
Cash flows related to leases were as follows (in thousands):
| Year Ended December 31,
| 2024 |  | 2023
Cash flows from operating activities: |  |  |
Payments for operating lease liabilities | $ | (74,129) |  |  | $ | (93,890) |
Supplemental cash flow data: |  |  |
Right-of-use assets obtained in exchange for operating lease obligations | $ | 36,976 |  |  | $ | 7,106 |
Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2024 are as follows (in thousands):
2025 |  | $ | 65,306 |
2026 |  | 63,169 |
2027 |  | 58,422 |
2028 |  | 54,115 |
2029 |  | 48,153 |
Thereafter |  | 85,662 |
Total |  | $ | 374,827 |
Less: Amount representing interest |  | 40,927 |
Less: Lease incentives |  | 2,642 |
Total |  | $ | 331,258 |
The Company recognized total rental expenses for operating leases of $52.1 million, $75.8 million, and $93.6 million during the years ended December 31, 2024, 2023, and 2022, respectively. Purchase Commitments From time to time, we may enter into non-cancelable purchase obligations related to cloud computing infrastructure. The commitment amounts in the table below are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, and the approximate timing of the actions under the contracts. As of December 31, 2024, the future minimum payments under the purchase commitments were as follows (in thousands):
|  |  | Payments Due By Period
2025 |  |  | $ | 345,622 |
2026 |  |  | 263,300 |
2027 |  |  | 315,100 |
Total |  |  | $ | 924,022 |
Litigation and Regulatory Matters The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, investigations, and regulatory proceedings. In January 2025, the Company entered into a consent order with the Consumer Financial Protection Bureau (“CFPB”) to settle claims from the CFPB related to, among other things, Cash App's handling of customer complaints and disputes. Pursuant to the consent order, the Company paid a $55 million civil monetary penalty in January 2025 and agreed to pay between $75 million and $120 million in restitution to certain Cash App customers. The settlement amounts are reflected in the financial statements as of and for the year ended December 31, 2024. In January 2025, the Company entered into a settlement agreement and consent order (the “settlement agreement”) with various state money transmission license regulators (the “MTL regulators”) related to aspects of its Bank Secrecy Act/anti-money laundering program. Pursuant to the settlement agreement, the Company agreed to pay $80 million in administrative penalties and costs, with payments expected to be completed in or around February 2025. The settlement amount is reflected in the financial statements as of and for the year ended December 31, 2024. The Company is continuing negotiations with the New York State Department of Financial Services ("NYDFS"), one of its MTL and virtual currency regulators, related to, among other things, aspects of its Bank Secrecy Act/anti-money laundering and bitcoin programs. In January 2025, NYDFS presented the Company with potential terms for resolving this matter, and the Company is engaging in conversations with NYDFS to determine whether this matter can be settled on acceptable terms. The Company has accrued a liability for an estimated amount in connection with this matter in accordance with ASC 450. The accrued amount was not material to the financial statements as of December 31, 2024. The Company received subpoenas from Attorneys General from multiple states, seeking the production of information related to, among other things, Cash App’s handling of customer complaints and disputes. In June 2024, the state Attorneys General presented the Company with the results of their investigations. In December 2024, the state Attorneys General presented the Company with potential terms for resolving this matter and the Company is engaging in conversations with the state Attorneys General to determine if this matter can be settled on acceptable terms. The Company is unable to predict the likely outcome of this matter, which may include one or more public orders, and cannot provide any assurance that the state Attorneys General will not ultimately take legal action against the Company or that the outcome of these matters will not have a material adverse effect on the Company. The Company also received inquiries from the SEC and Department of Justice (“DOJ”) shortly after the publication of a short seller report in March 2023. In July 2024, the Company received a follow-on inquiry from the SEC. The Company believes these inquiries primarily relate to the allegations raised in the short seller report, the Company’s compliance and risk practices, and related disclosures. The Company continues to cooperate with both agencies. The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company. In June 2024, the Office of the Treasurer and Tax Collector of the City and County of San Francisco (the "Tax Collector") finalized its audit and issued an assessment of San Francisco’s gross receipts tax, including interest and penalties, following its gross receipt tax audit for fiscal years 2020, 2021 and 2022. The Tax Collector has asserted that incremental taxes are owed on a portion of the receipts generated by the Company related to sales of Bitcoin. The Company strongly disagrees with the Tax Collector’s assessment and plans to vigorously pursue all available remedies. In January 2025, the Tax Collector rejected the Company’s request for redetermination, and the Company paid the assessed amount of $71.4 million and plans to file a claim for a refund. Given the amount must be paid to initiate the dispute process and will be returned in full or used to settle any final amount due to the Tax Collector, the Company views the amount as a deposit asset in the period the payment is made. Should the Company not reach a settlement or prevail in its legal challenge, the Tax Collector may challenge the Company’s gross receipts tax position going forward, including for 2023 and 2024. The Company estimates that it could incur losses associated with taxes, interest, and penalties that range from approximately $0 to $97 million in the aggregate for the fiscal years 2020, 2021, 2022, 2023 and 2024. Additional taxes, interest, and penalties for future periods could be material as well. Given the Company has concluded that a loss for this matter is not probable, the Company has not recorded a liability for the exposure related to the dispute with the Tax Collector on San Francisco’s gross receipts tax. The Company regularly assesses the likelihood of adverse outcomes resulting from litigation and regulatory proceedings and adjusts the financial statements based on such assessments. The eventual outcome of these matters may differ materially from the estimates the Company has currently accrued in the financial statements. In addition, the Company is subject to various legal matters, investigations, subpoenas, inquiries, audits, claims, lawsuits and disputes, including with regulatory bodies and governmental agencies. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability, if any, with respect to any of these other matters. Although the Company may be subject to an adverse decision or settlement, it does not believe that the final disposition of any of these other matters will have a material adverse effect on its results of operations, financial position, or liquidity. However, the Company cannot give any assurance regarding the ultimate outcome of any of these matters, and their resolution could be material to the Company's operating results.

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