STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2025

Common Stock

The Company has two classes of authorized common stock outstanding: Class A common stock and Class B common stock. Class A common stock and Class B common stock are referred to as "common stock" throughout these Notes to the Consolidated Financial Statements, unless otherwise noted. Holders of the Company's Class A common stock and Class B common stock are entitled to dividends when, as and if, declared by the Company's board of directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2025, the Company did not declare any dividends. Holders of shares of Class A common stock are entitled to one vote per share, while holders of shares of Class B common stock are entitled to ten votes per share. Shares of the Company's Class B common stock are convertible into an equivalent number of shares of its Class A common stock and generally convert into shares of its Class A common stock upon transfer. The holders of Class A common stock and Class B common stock have no preemptive or other subscription rights and there are no redemption or sinking fund provisions with respect to such shares.

Conversion of Convertible Notes and Exercise of Convertible Note Hedges

As of the maturity date on March 1, 2025, certain holders of the 2025 Convertible Notes had converted an immaterial aggregate principal amount of their 2025 Convertible Notes. The Company settled the conversions through the issuance of an immaterial amount of shares of the Company's Class A common stock and paid a total of $1.0 billion in cash to settle the remaining unconverted principal balance, and interest, as of March 1, 2025. Additionally, there were no convertible note hedges exercised, and no shares were received as of December 31, 2025.

Warrants

In conjunction with the 2025 Convertible Notes offering, the Company sold the 2025 Warrants whereby the counterparties had the option to purchase a total of approximately 8.3 million shares of the Company’s Class A common stock at a price of $161.34 per share. The 2025 Warrants expired evenly over a 60 trading day period starting on June 1, 2025 and ending on August 26, 2025. None of the warrants were exercised.

In conjunction with the 2026 Convertible Notes offering, the Company sold the 2026 Warrants whereby the counterparties have the option to purchase a total of approximately 1.9 million shares of the Company’s Class A common stock at a price of $368.16 per share. The 2026 Warrants expire evenly over a 60 trading day period starting on August 1, 2026. None of the warrants were exercised as of December 31, 2025.

In conjunction with the 2027 Convertible Notes offering, the Company sold the 2027 Warrants whereby the counterparties have the option to purchase a total of approximately 1.9 million shares of the Company’s Class A common stock at a price of $414.18 per share. The 2027 Warrants expire evenly over a 60 trading day period starting on February 1, 2028. None of the warrants were exercised as of December 31, 2025.

Share Repurchase Program

In November 2025, the board of directors of the Company authorized an increase to the Company's share repurchase program to repurchase up to an additional $5 billion of the Company's Class A common stock, for a total authorization of $9 billion. During the year ended December 31, 2025, the Company repurchased 36.5 million shares of its Class A common stock for an aggregate amount of $2.3 billion, excluding excise tax, which were immaterial. As of December 31, 2025, $5.3 billion remained available and authorized for repurchases under this share repurchase program.

Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. The repurchase program does not obligate the Company to acquire any particular amount of its Class A common stock and may be suspended at any time at the Company’s discretion. The timing and number of shares repurchased will depend on a variety of factors, including the stock price, business and market conditions, corporate and regulatory requirements, alternative investment opportunities, acquisition opportunities, and other factors.

Stock Plans

The Company maintains two share-based employee compensation plans: the 2015 Equity Incentive Plan ("2015 Plan") and the 2025 Equity Incentive Plan ("2025 Plan"). The 2025 Plan became effective as of June 17, 2025 and replaced the 2015 Plan as of such date, such that no further awards will be granted under the 2015 Plan. Any awards outstanding under the 2015 Plan as of the date the 2025 Plan became effective will remain outstanding under the 2015 Plan in accordance with their existing terms.

Under the 2025 Plan, shares of the Company's Class A common stock are reserved for the issuance of incentive and nonstatutory stock options (ISOs and NSOs, respectively), stock appreciation rights ("SARs"), restricted stock awards, restricted stock units ("RSUs"), performance awards, and other stock and cash-based awards to eligible employees, directors, and consultants. The awards must be granted at a price per share not less than the fair market value at the date of grant. A maximum aggregate of 80,000,000 shares were reserved for issuance pursuant to awards under the 2025 Plan. As of December 31, 2025, there were 31.7 million shares outstanding under the 2015 Plan and 76.2 million shares available for future issuance under our 2025 Plan.

A summary of stock option activity for the year ended December 31, 2025 is as follows (in thousands, except share and per share data):


	Number of Stock Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding, beginning of the period	2,578	$	72.17	5.11	$	67,966
Granted	1,769	55.66
Exercised	(514)	25.83
Forfeited	—	—
Expired	(76)	143.45
Outstanding, end of the period	3,757	$	69.29	6.95	$	29,151

Exercisable, end of the period	1,947	$	78.37	5.27	$	15,377

Aggregate intrinsic value represents the difference between the Company’s estimated fair value of its common stock and the exercise price of outstanding, in-the-money options. Aggregate intrinsic value for stock options exercised for the years ended December 31, 2025, 2024, and 2023 was $20.2 million, $145.1 million, and $96.1 million, respectively.

The total weighted-average grant-date fair value of options granted was $28.62, $45.81, and $39.13 per share for the years ended December 31, 2025, 2024, and 2023, respectively.

Restricted Stock Activity

Activity related to RSUs during the year ended December 31, 2025 is set forth below:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, beginning of the period	37,079	$	70.51
Granted	19,273	64.19
Vested	(16,829)	72.60
Forfeited	(8,236)	67.42
Unvested, end of the period	31,287	$	66.31

The total fair value of shares vested was $1.2 billion, $1.2 billion, and $873.0 million in the years ended December 31, 2025, 2024, and 2023, respectively.

Employee Stock Purchase Plan

The Block, Inc. Amended and Restated 2015 Employee Stock Purchase Plan ("ESPP") was approved by stockholders on June 17, 2025. The ESPP allows eligible employees to purchase shares of the Company’s Class A common stock at a discount through payroll deductions of up to 25% of eligible compensation, subject to any plan limitations. The ESPP provides for 12-month offering periods that commence on the first trading day on or after May 15 and November 15 of each year. Each offering period includes two purchase periods, which commence on the first trading day on or after November 15 and May 15, and terminate on the last trading day on or before May 15 and November 15, respectively. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or the last trading day of the applicable purchase period. A maximum aggregate of 34,000,000 shares of the Company's Class A common stock are available for purchase under the ESPP. As of December 31, 2025, 12.5 million shares had been purchased under the ESPP and 21.5 million shares remained available for future purchase under the ESPP.

Share-Based Compensation

The fair values of stock options granted were estimated using the following weighted-average assumptions:


	Year Ended December 31,
	2025		2024		2023

Dividend yield	—	%	—	%	—	%
Risk-free interest rate	3.98	%	4.65	%	3.48	%
Expected volatility	57.91	%	62.92	%	62.32	%
Expected term (years)	4.62		6.02		6.02

The following table summarizes the effects of share-based compensation on the consolidated statements of operations (in thousands):


	Year Ended December 31,
	2025		2024		2023
Cost of revenue	$	545	$	707	$	601
Product development	874,680		903,262		902,130
Sales and marketing	114,390		131,233		130,665
General and administrative	225,865		237,355		242,701
Total	$	1,215,480	$	1,272,557	$	1,276,097

The Company recorded a tax expense related to stock-based compensation of $26.5 million during the year ended December 31, 2025 and a tax benefit related to stock-based compensation of $322.0 million and $228.2 million during the years ended December 31, 2024 and 2023, respectively.

The Company recorded $38.3 million, $25.0 million, and $63.3 million of share-based compensation expense related to the Company's Amended and Restated 2015 Employee Stock Purchase Plan during the years ended December 31, 2025, 2024 and 2023, respectively. The Company capitalized $31.8 million, $41.2 million, and $30.9 million of share-based compensation expense related to capitalized software during the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, there was $2.1 billion of total unrecognized compensation cost related to outstanding stock options and restricted stock awards that are expected to be recognized over a weighted-average period of 2 years.