Good day, ladies and gentlemen. And welcome to the Square First Quarter 2019 Earnings Conference Call. I would now like to turn the call over to your host, Jason Lee, Head of Investor Relations. Please go ahead.

Hi, everyone. Thanks for joining our first quarter 2019 earnings call. We have Jack and Amrita with us today. First, we want to remind everyone of the format of our earnings call. We have published a shareholder letter on our Investor Relations website, which was available shortly after the market closed. We will begin this call with some short prepared remarks before opening the call directly to your questions. During Q&A, we will take questions from our sellers in addition to questions from conference call participants. We would also like to remind everyone that we will be making forward-looking statements on this call. Actual results could differ materially from those contemplated by our forward-looking statements. Reported results should not be considered as an indication of future performance. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. Also, note that the forward-looking statements on this call are based on information available to us as of today's date. We disclaim any obligation to update any forward-looking statements, except as required by law. Also, during this call, we will discuss certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are provided in the shareholder letter on our Investor Relations website. These non-GAAP measures are not intended to be a substitute for our GAAP results. Finally, this call in its entirety is being audio webcast on our Investor Relations website. An audio replay of this call will be available on our website shortly. With that, I’d like to turn it over to Jack.

Good day, everyone. And thanks for joining us on our call today. I wanted to start off just by talking about some of the highlights from the quarter, and pass it off to Amrita for some of her comments. So one quarter ended into 2019, what's been top of mind for me and us has been around ecosystem that we're building. This is our strongest competitive differentiator. It not only benefits our customers, wholesales and increasingly individuals with the Cash App, but also benefits our internal teams. For our internal teams, it allows us to move a whole lot faster. Some examples of this is because we had and built the e-commerce API, we're able to very quickly build virtual terminal and built to scale, and because we built the Cash Card that enabled us to build the Square Card to offer a similar offering for sellers. This quarter, we re-launched Square for Retail with an applet model. This allows us to add features like invoices that were originally developed for Square point of sale, directly to Square for Retail. So generally, we’re going to continue to invest into this ecosystem. We do think it sets us apart from all of our peers and competitors in the industry, allows us to move faster and faster every single day. We’ve been improving our tools for sellers to combine online and in person sales. We’ve been talking about omni-channel for quite some time. This quarter, we launched the new Square Online store. And we made it so that -- it has automatic syncing of both online and in-person data. So all of the sellers' items, orders, inventory and prices are synced automatically, which is another result of our ecosystem and using our internal tools to have much more impact and to move faster. We’ve also been increasing our product velocity in our markets outside the United States; So Square Online store launched in Australia, Canada, the UK and the United States. Square Invoices launched in all of our markets at once. We want to see more of our products to do this. And Japan has been a very interesting story. I was in the country a few months ago. And we’re starting to see a lot more tailwinds within the market rather than headwinds. There’s a few things fueling us. One, the government is working to double card payments, and they are pushing and incentivizing both consumers and also sellers to use more digital means of payments instead of paper cash. Two, we launched Square Stand and our Square contract person chip card reader in Japan. This is a huge upgrade from the reader that we had in the market in the past. It allows our sellers to automatically pay wirelessly or through a wire. It allows them to hold their iPad and hook it up to the new Square reader. And just as an overall better experience than we were providing in the market in the past. And three, we have a new partnership with SMBC, which is distributing our readers in all of their bank branches around the country. So now any one of our Japanese sellers to be can go to the local bank branch, pick up a Square card reader and be in business. And it is that parity with what we offer in the United States and our other markets. This all combined with the fact that Japan is hosting the 2020 Olympics International Rugby League where you have a bunch of individuals from all around the world who are coming to the market, expecting to pay the way that they don’t have to usually with card or with a phone, makes it a perfect storm of situation where we can really see a potential for a lot of growth. So we’re really excited about Japan and our increased velocity in our markets outside the United States. So with that, I'll hand it over to Amrita.

Thanks Jack. I’d like to share three highlights this quarter; first, we continued to deliver strong revenue growth at scale; second, we continued to build out our seller ecosystem, including the launch of Square Invoices as a standalone app; and third, we’re raising revenue guidance for the full year 2019 on the basis of strong underlying trends across our business. So first, driving growth at scale. The momentum across both our seller and cash app ecosystems drove total net revenue growth of 43% year-over-year or 39% excluding acquisitions and adjusted revenue growth of 59% year-over-year or 49% excluding acquisitions. Within our seller ecosystem, GPV from mid-market sellers grew 50% year-over-year. Mid-market sellers, which we define as those with over a half of million dollars in GPV, are now 24% of overall GPV, up from only 6% five years ago. Within our Cash App ecosystem, we're seeing powerful network effects at play. We see strong growth in monthly active customers with Cash App consistently ranking as a top 20 overall app in the iOS app store, and we daily utility in Cash App. We also saw growth and engagement as measured by transaction frequency per active customer. With the compounding effects of growing reach and growing engagement practice, Cash App volumes grew nearly 2.5 times year-over-year. Second, we continue to build out of seller ecosystem. The proof point this most recent quarter was the launch of Square Invoices as a standalone App. Invoices is a great example of investment in scaling, an important product to our sellers. This is a product that targets the large market opportunity with $1 trillion in consumer invoices in annually in the U.S. alone. We began Invoices five years ago as a feature in our dashboard. Then added it to the Square point of sale app. And now we have expanded the offering with a dedicated standalone mobile app. Invoices has reached impressive scale processing over $5 billion in GPV over the last 12 months with over 350,000 active sellers, and we see significant runway ahead. Finally, we are increasing our full year revenue guidance to reflect ongoing momentum in the business. We are raising our full year 2019 total net revenue by $60 million, and we're raising year adjusted revenue guidance by $30 million. This represents a 43% growth rate, an increase of 2 points compared to our prior guidance. The increase was primarily driven by outperformance in Cash App, as well as continued strengths across our seller business. We're maintaining adjusted EBITDA guidance of $405 million to $415 million. We plan to use our momentum in delivering growth at scale to reinvest back into the business as we execute on our long-term opportunities of omni-channel, financial and international. And I'll now turn it back to the operator to start the Q&A portion of the call.

[Operator Instructions] The first question comes from Tien-tsin Huang of JPMorgan. Please go ahead, your line is open. Tien-tsin Huang: So I wanted to ask on the EBITDA upside this quarter versus your guidance. It looks like it was bigger than usual by our count and is bigger than the revenue upside belief as well. So can you detail a little more for us what fuel the upside to hurt Cash App and is there any more you can give us on that? And then also, again like you said, you're re-investing but holding EBITDA guidance, which makes sense. But where are you prioritizing your investments from here, I'm curious between consumer, and seller and something else you guys have going on, what's changing in your priorities as well? Thanks.

So to explain what happened in Q1, our business is demonstrating success at scale across the portfolio. We had strong adjusted revenue growth of 59% in the first quarter and excluding M&A, 49% on an organic basis. This is driven by both the outperformance in Cash App, as well as broad strengths across seller business. I'll break it down in the revenue beat into the two component pieces, between transaction based profit and subscription and services. From a transaction based profit perspective, we grew 27% year-over-year in the first quarter based on the strength of the seller ecosystem. We continue to see stable trends with positive revenue retention, a consistent three to four quarter payback period for new sellers and new cohorts to sellers increasing in adjusted revenue contribution. And we’re moving into even larger seller, as I just mentioned, GPV from mid-market sellers grew 50% year-over-year. From an SNS revenue standpoint, we doubled organically year-over-year with broad strengths. A couple of things to highlight there, in particular with Cash App. We drove outperformance. As you heard, volume grew nearly 2.5 times year-over-year, which highlights the continued growth in terms of reach and engagement on the platform. As you heard last quarter from us, our monthly actives in December, 15 million monthly actives, was up more than 100% year-over-year. And we continue to see that growth in terms of strong monthly active growth with revenues outpacing growth in monthly active customers. Cash Card is an important piece of that. Cash Card drove higher engagement in the quarter. We saw rapid growth in Cash Card adoption within the customer base with increasing attach rates, and an increase in the frequency of usage per card active. We also saw strength with Square Capital with originations growing 50% year-over-year based on the core flex loan product. And so for EBITDA, you saw the adjusted revenue beat flowing through the bottom line. We also had some timing of expenses in the quarter, which we now expect to materialize later in the year. And we plan to reinvest this upside back into the business for the remainder of the year. We’re optimizing for compelling reinvestment opportunities whenever they occur. And they’re based on when it’s the right time for our marketing and product development timeline to reinvest. So you’ll see that flow through in future quarters.

Your question comes from Darrin Peller of Wolfe Research. Please go ahead, your line is open.

I just want to touch again on the -- just given how strong subscription and services keeps holding up. Cash App volume, it’s good to see it was up 2.5 times. I mean I guess that’s showing the strength of the double end of users is showing better engagement. If you can just comment on how much of that doubling is actually being monetized. How many of those users are now being monetized so far? And how much does that contribute to cash app drivers contribute to subscription and services? And then if I could just add on. The business debit card, you touched on, Jack, before. I mean how has that been going so far? It seems like a good opportunity to add more revenue after a tough comp year from last year. Thanks guys.

I’ll start off with your question on Cash App. You’re right. We saw strong growth in subscription and services in the quarter, doubling on an organic basis. With respect to Cash App, what we’re really focused on is driving a strong business model, which we’re seeing play out here through network effects, through engagement growth, all of which should lead to meaningful revenue growth. And we’re beginning to see that play out now in our financials. The opportunity here is vast to enable access to financial services for the over 65 million of total in the U.S. alone that are unbanked or under-banked. And clearly, with our success consistently in the top 20s in the iOS app store, we’re achieving mainstream scale. So the way we think about the business model for Cash App is first driving reach. The network effects within the business and the frictionless on-boarding that the product teams have focused on have driven really efficient acquisition at scale. You've seen that play out with the doubling of the monthly active. You also see that in our financials. What we spend to acquire a monthly active is a fraction of what traditional financial institution spends, and that's inclusive of ongoing P2P costs. From an engagement perspective with Cash App, we have talked about how the product velocity and the speed of mobile developing on the mobile platform has enhanced the daily utility of the app. Our teams have released Cash Card, boost direct deposit of currency, all within relatively recent time period. And another proof point of that daily utility is if you look in our filings, you'll see that we've tripled the amount of customer stored funds within Cash App. And that obviously Cash App volume is growing even faster than monthly active as we shared. Cash Card is a big part of this where we are driving engagement and higher life time values. From a monetization standpoint, we have a number of business models in place today. As you know, instant deposit, Cash Card, cash for business, P2P funded through Credit Cards, cryptocurrency, but this is just the beginning. The hard part is the engagement and our team is nailing that. So as we launch more features, as we launch more services, as grow daily utility, we believe monetization will follow.

On Square Card, just to remind everyone this is a card that we enable sellers to receive. And basically, it allows them to download the Square point of sale and give a place to store their money, and also a card that's Master Card branded that they can use anywhere. So basically, they don't have to make a trip to the bank to get into business, which is pretty cool. And one of the biggest reasons we did Square Card was to give our sellers faster access to their funds, has been a consistent team through our history. The faster we give access to funds, the more people can make smart decision about how to build their business. So it ultimately leads to these businesses growing overtime. So we found in our early pilot over 40% of Square Card sellers did not previously have a business debit card, so they are actually mixing their business funds for their shop with personal funds. So this also allows them to segment those funds. The early read on this just one interesting metric that we can share is that active Square Card sellers are spending over 20% of their GPV through the card. So this is pretty excellent and a strong leading indicator that there is product market fit, and something that provides a lot of utility to get access to their funds to actually focus on what matters most, which is building the business. So we think there is a long run way here. As I said earlier in my opening, this is all based on Cash Card functionality and that system. So we have learned a ton through our Cash Card, and we expect to take all those learnings and make it better for our seller audience.

Thank you. Your next question comes from the line of Eric Ciancaglini, a Square Seller. Please go ahead, your line is open.

It's Eric Ciancaglini, I am a Square seller. The name of my business is Chank's Pizza Cones. We actually serve pizza in a cone shape. And my question is -- so we use Square Payroll, and I'm also a Square shareholder. And I'm curious to know your strategy for adding payroll to the Square services. Was it mainly because you’ve seen ability to drive additional revenue through users that use Square Now, or are you focusing on capturing new users as more of a strategic move for bigger market share?

We traditionally just look at what are the most critical needs for sellers and is there anything that we can build that would be differentiated in the market that’s bringing some new value. And with Payroll, we looked pretty deeply at a lot of time that was being spent just managing employees within each one of our sellers' shops. We already had an ability to use time cards within our register, and just about like a natural move to also figure out how to use that system to pay people as well. And it really speaks to something we want to do more of and see more of is, see a lot more overlap between the seller ecosystem and the individual ecosystem that we’re building with cash. So one of the things that we did for Payroll for instance is employees can be paid via the cash app. So we believe that’s extremely easy and fast way to get paid but also to utilize your money much faster as well for those employees. So as we looked at the opportunity and that we saw where we could add some value, we decided to do it. But generally, that’s how we think about our strategy going forward is identifying real critical needs, where there are gaps within our ecosystem and then figure out what we can bring to the table that’s unique and differentiated and much stronger than what’s out there today.

Your next question comes from the line of Josh Beck of KeyBanc. Please go ahead, your line is open.

I wanted to follow up on the seller card, sounds like nice product market fit with the stat you gave there. How should we think about the adoption curve? It seems like you have a very good channel to these sellers through the dashboard, email or otherwise. So it feels like the adoption curve to be fairly strong. So how should we think about that? And then secondly, when we think about the build with the Square pipeline, obviously, you have a really good relationship with Eventbrite where it's more of online gateway capacity. How should we think about the pipeline of opportunities there?

So on Square card, I don’t believe we’ve done much in a way of traditional marketing or any push outside of the product itself. So we do think there’s a lot of opportunity to make it known that we are doing this. But right now, we’re making sure that the sellers that we see that would really benefit from it have access to it. So there’s a number of things we can do, both in terms of on boarding but also with sellers that are currently utilizing Square to surface this much higher. As I said, we just haven’t prioritized that yet, because we still want to make sure that the products feels really amazing, works provides utility and then really turn on the gas. So that’s where we are in the adoption curve, it's still early and we’re getting a lot of really great feedback from our sellers. I think it's one of our most well received launches in recent time, and something that we definitely exceeded our expectations and the results so far. On build with square and Eventbrite, we see Eventbrite certainly as amazing partner but also a prototype of another marketplace. We have a marketplace within Caviar. We have marketplace within Eventbrite. And we do believe that we should be building within our developer platform more opportunities for marketplaces like Eventbrite. So we get to learn a lot from this partnership and that will need to more opportunities outside of any one company that any marketplace that exists can utilize our services. So that's ultimately the goal.

The next question comes from Jim Schneider of Goldman Sachs. Please go ahead, your line is open.

I was wondering if you can maybe you can comment on the further development and traction you're getting with your vertical specific software, specifically things like Square for restaurant. I think there was some anecdotal evidence that you have some competitive takeaways there. So maybe talk about how that is going, as well as the traction on your other more traditional retails solutions. Any metrics you can provide as an update on that front will be helpful. Thank you. A - Jack Dorsey: So just backing up a little bit. When we think about vertical points of sales, we don't just run in ourselves to Square for retail and Square for restaurants. We have Invoices for example. We have Appointments. So this is a broader ecosystem of what we see in terms of vertical adoption. In the actual points of sales with restaurants and retail. Restaurants, we're pretty pleased with the adoption and what we're seeing. And one of the things that we believe is another one of our differentiators is how self-serve our system is and our ecosystem. And this has proven with restaurants, with 65% of restaurant sellers have self on-boarded, which is amazing, because it really de-taxes a bunch of work we might otherwise have to do with customer support or account management, or sales. So that's a great sign that we're building the technology in the right way. It's intuitive. People can figure it out and then get up and running. You pair that with the average analyzed GPV of a restaurant seller, it's over 650,000. So we are reaching large restaurants and they are on-boarding themselves, so those two data points are excellent in our view. On the Square for retail side, as you've probably been following, we had to do a little bit of a reboot here. One of the things that we did well with Square for restaurants is we took a lot of time talking with restaurant owners and operators. And just really decomposed everything that they had to work with every single day, and what was frustrating them and how we could improve it. And that made a product that found in pretty product market fit right away. We did not do that with the original Square for Retail. So we rebooted the whole thing following that pattern, and we're seeing some equally good results from that move. In contrast, about 85% of retail self onboard versus the 65% on restaurant, and nearly 40% of those sellers are new to Square, which is excellent. Average annualized GPV of Square for retail seller is nearly 250,000. So again, we continue to be attractive to the very small and the very large with the exact same software. And this is out of intent of wanting to build something that that scales from the very small to very large. I don’t know was that your whole question, or did I miss something?

It was. Thank you, Jack. And then maybe one for Amrita. Just philosophically, as you approach the EBITDA guidance, I think you had previously talked about seeing similar margin improvement from a margin percentage basis as we saw last year. Obviously, you’re taking out the revenue but with EBITDA the same. So maybe -- I understand the timing of expense is part of it. But maybe just give us an update about how you’re philosophically thinking about the EBITDA margin piece of the equation? Thank you.

Our financial priorities remain the same, which is driving long term top line growth and growth in absolute dollars of adjusted EBITDA. We have a number of levers in our business to achieve this. First, given the opportunity we see and given the efficiency of returns we see in the investment in our business, we’re being very deliberate in reinvesting into those opportunities. So in our ’19 guidance, you see that we’re leading with this. We’re maintaining our EBITDA guidance to 60% year-over-year growth at the midpoint, while raising guidance on revenue to 43%. We focused on financial discipline. We focused on operating excellence. And you’ve seen that play out with OpEx leverage in our business. And we expect overtime adjusted EBITDA growth to continue to outpace adjusted revenue growth as it has for each of the last five years. Again, our reinvestment that we’re focused on includes investing into the cash app, which is historically we’ve been investing in and it’s bearing fruit in a meaningful way now, as well as investments in our salary ecosystem, which are driving growth. You’re seeing that play out with things like investments in hardware through Square Register and Terminal, investments in software and payments with virtual terminal and invoices and scaling launches of our more recent launches like Square card developer and online. So ultimately, these investments are supported by a strong business model with positive attributes related to the efficiency of those investments and multiple monetization levers down the road across both seller and individual ecosystems.

As a reminder, we ask the participants please limit themselves to one question and then return to the queue. The next question comes from Lisa Ellis of MoffettNathanson. Please go ahead, your line is open.

I have a question about the Square online store, phenomenal to see that launch this quarter, the re-launch of Weebly. Can you talk about when you’re looking -- a little more detail on that, when you’re looking at your seller base. Do you have a sense for what proportion of that base or candidates for adding the online store? How you’re going after them from a sales marketing perspective? And then also a little bit of a sense of how the economics of one of those sellers changes when they add the online store. I mean is it like a double of the type of revenue you’re seeing? Can you just dimensionalize that for us a little bit? Thank you.

So we’re also pretty pleased with the launch of the Square online store. It does capture a lot of the intent and interest of the thesis we had with Weebly. The biggest underlying trend here is that we are seeing sellers all over want to optimize their sales for anywhere their customers are, so that is in person, that is online and also within mobile apps. So our strategy is to make sure that feels very fluid and they don’t really have to think about where their customers are coming from, which puts a lot of the emphasis on how the dashboard works and consolidates everything, how we sync data across all those channels. And we've tried to make it as effortless as possible and there is still some work to do there. So far we have seen about 70% of Square online sellers have used Square before expanding online. And as we have seen generally when a seller does go online or an online seller goes offline, they do increase their sales and that is good. I don't have the exact metrics around what those look like. But we are making sure that, one, our seller know that this option is available, it's an easy flip of a switch. And if they want to do anything a little bit more custom or personalized to their business, they can utilize our API or our hire our developer to utilize the API. So marketing ideally starts within the products but we are going to continue to experiment and test as well. And, anything you want to say, Amrita, about economics?

We know that 30% of larger sellers serve their customers via more than one channel on Square. So we are very focused on expanding our opportunities across going deeper within sellers and providing new ways that sellers can onboard.

Your next question comes from Rayna Kumar of Evercore ISI. Please go ahead, your line is open.

[Technical difficulty] and if you can speak about some of the other markets you're interested in terms of…

We didn't hear your full question, we got you at the end and it was very muted…

Let me try again. What's your progress has been in some of your international markets, like the UK, Canada and Australia? And if you can also discuss some of the other markets you may be interested in entering?

So I'll start there. One of the reasons Weebly was very interesting to is because they are operating in markets that we're not in, and that give us a lot more understanding and learning and to help us make better informed decisions about where to go next. Right now, we are so focused on making sure that we have more and more product parity with United States around all of our markets. So Japan is the most notable recent example of this where, as I said earlier, we do a lot of tailwinds now especially with the government incentivizing both consumers and also merchants to adopt digital money and move away from paper cash. So we've been in that market for quite some time and this is first time we have seen that broad-based government support, as well as other events coming up that will put much more focus on Tokyo and also on paying with cards and also funds. So we're pretty pleased with that. And then in terms of more broadly, we’re working to make sure that we can launch more and more of our products in all of our markets Square Invoices, the app launch in all of our markets at once. So that’s what we want to see up a lot more of. And we continue to make progress around the world with the markets that we’re currently in, maybe Amrita can speak to some of the details?

So as Jack mentioned, we are really focused on increasing our product velocity for launches outside of the U.S. And that really means completing our feature set, bringing what we've worked hard to build here in the U.S. to our international markets. Again, you’ve seen that more recently with the global launch for Invoices as a standalone app and 25% of Invoices downloads to-date actually come from outside of the U.S. You see that with the launch of the Square online store across the U.S., UK, Canada and Australia. And you see that with the hardware launches that Jack mentioned in Japan. We see strong net promoter scores in most of our international markets anywhere from 60 to 80 across the UK Canada and Australia. And we’ve got ongoing brand campaigns in each of our international markets now. We launched a brand campaign in the UK and saw efficiency from that and now they’re reaching feature completeness across our portfolio. And some of the other markets, we're beginning to roll out those brand campaigns across the other international markets. Overall, it’s a large opportunity for us. We see $6 trillion in household spend across our current international markets, which is 2x what it is in the U.S. So we see a big opportunity ahead of us and we'll try to continue to execute.

Your next question comes from the line of Bryan Keane of Deutsche Bank. Please go ahead, your line is open.

What I wanted to ask is Square moved up to market to the mid to large clients. I assume Square is likely replacing incumbents. So curious on what’s winning versus the competition? Is it all just the omni-solution you guys can provide? And just thinking do you guys have enough in the sales channels to go after that larger market? Thanks.

So we continue to see the larger sellers find value and utility in our base offerings. So we built products with intent of the same software scaling from very small to very large, and that continue to resonate even with larger sellers. And we continue to see larger sellers self on board. We continue to see them take advantage of the broader ecosystem. So all these things combine towards what differentiates us from our competitors. But if I only had to pick one it would be the ecosystem. And just like all the tools in one place and how quickly we’re moving to add new tools or to improve them. We continue to see large sellers also utilize our API in significant ways. This has been a very strong offering for larger sellers, because can hook up legacy systems and can also customize an entire point of sale, but still use our hardware, which you can’t find at any of our peers. And then I’ll pass it over to you Amrita.

I’ll add to Jack’s comments. We’re focused, as he said, on building products that serve large sellers, whether you look at our hardware products like Square Terminal or Square Register, both of which over index to lager sellers' Square Terminal with $165,000 GPV registered with $300,000 GPV, or the developer platform, as Jack mentioned, which over indexes to mid market sellers and then the verticals, which Jack had earlier mentioned, over indexing the larger sellers. We are also trying to reach sellers from a marketing standpoint. So we have got products that address larger sellers and small sellers and then we want to reach from a marketing perspective these larger sellers. So just in April this last month, we launched a new ecosystem marketing campaign, reaching 7 million small and medium size businesses across the U.S., focused on expanding awareness of the full breadth and ecosystem of products that Jack was referring to. We know that over 50% of larger sellers already use two or more of our products. So we are focused on continuing to grow that through this ecosystem marketing campaigning and continue to build out strong products that address this market.

Your next question comes from Ramsey El-Assal of Barclays. Please go ahead, your line is open. Ramsey El-Assal: I wanted to ask again about online, your online strategy. Obviously, your advantage in terms of linking online and offline sales for retailers and get that that's what makes Square online store compelling. Can you do something similar at other platforms, like WooCommerce or Magento, or Shopify those types of commerce platforms? I mean is there a bigger e-commerce like omni-channel addressable market that you can go after by opening up and working to integrate online and offline through those folks?

We have focused more on omni-channel rather than just pure e-commerce, because that's really where our sweet spot is with sellers. But you can imagine us favoring one more in the future given how much activity is happening with e-commerce. So all this is going into our strategy around the developer platform. We want to make sure that we are testing the very small but also the very large. Eventbrite is a good example of the very large where we are testing a marketplaces strategy on top of the developer platform. So we do believe that there is a ton of room here. And we just want to make sure that we are optimizing for the best experience first. We don't believe that we need to be first to market to win customers. We just have to provide something that really adds differentiated value to the marketplace and that's where our focus and that's what we're proven now.

Your next question comes from Bob Napoli of William Blair. Please go ahead, your line is open.

The purchase volume, while very impressive at 27% growth, has decelerated somewhat. And there are -- you've certainly waken up a lot of competitors in this space, Jack and investing more heavily to compete with Square. Are you seeing more competition, whether it's -- and I know you've built the ecosystem and others are trying to build something similar to that. But are you seeing more competition, whether it's from Clover or TSYS or other merchant acquirers or fintech companies?

We are definitely seeing competition on the edges. We have a lot of firms out there that are making solution around payments, around payroll, around delivery, around everything that we see, P2P or whatnot. But again, I think it really comes back to this concept of ecosystem and how all these things tie together. And we have built I think fundamentally model within the finance that we benefit a lot from. And we do expect people to copy aspects of this. But we want to make sure that we're focused on being the best author and really focusing on the quality of the experience, the elegance, the fact that it has entered this so it’s self served that it work seamlessly with all tools that we provide and also third party tools and that continues to win. But we do expect competition on the dynamic. But I think we've pretty good and proven track record of being able to scale that and something that is meaningful, both for sellers, individuals and also us.

And Bob, just on your GPV point just to give you a little bit of context there. So in the first quarter, GPV was $23 billion, up 27% year-over-year. Over the trailing four quarters, we had approximately $90 billion of GPV. What we’re seeing drive growth there -- outsize growth is a couple of things. First, larger sellers, which we’ve been talking about, we see continued strength there. Over half of our GPV mix now comes from larger sellers and mid-market sellers as we shared is growing 50%, or grew 50% year-over-year in the first quarter. We have multiple levers of growth within scaling our new payment channels. A couple of examples of that, Invoices, as we discussed. $5 million in GPV over the training four quarters is growing much faster versus the blended overall GPV rate; and some of the products that Jack was referencing developer, verticals, online, these are all relatively younger products and they’re growing meaningfully faster. So we’re going to continue to push them. But GPV is only one measure of the value that we provide our sellers. When we think about the ecosystem, we think about adjusted revenue, which is how we measure our business and how we incent our teams to grow. And again, adjusted revenue grew 59% year-over-year, which captures we think the full breadth and value of the ecosystem beyond just payments, including also subscription and services.

Your next question comes from Dan Perlin of RBC Capital Markets. Please go ahead, your line is open.

The transaction cost as a percentage of GPV was a little better than what we had anticipated. And conversely the profit dollars associated with that, profit margin was also better. The question I really have is, is there something that’s happening as a result of Cash App or Cash Card that it changing this funding mix, so to speak, as we think about that? And if so, is this trend something we should be tracking little more closely like commensurate with the Cash App growth? Thanks.

No. Cash App, you should think of it separately from transaction costs. As a reminder, both GPV and transaction and profit growth exclude cash app. Separately as you’ve heard us say, Cash App has continued to outperform and drove revenues for us and for the overall business with volumes up 2.5 times nearly year-over-year. But I would think of that separately from transaction costs perspective.

And that’s true for Cash Card as well?

That’s right.

Your next question comes from James Faucette of Morgan Stanley. This will be the last question.

Jack, I wanted to ask an industry question of you. We have seen obviously a move to consolidate some of the up market merchant acquirers and participants in the market. And I know in the past, you have indicated that you didn't feel like you could achieve everything you wanted to if you are part of a bigger organization. But I'm wondering how you are thinking about consolidation and if that make sense for Square to be looking at doing something similar, or it's on M&A activity et cetera in this space? Or do you prefer still very much an organic approach to the market?

Well, a bit of both, if I'm understanding your question correctly. We do see that others are consolidating and acquiring. But they do so in a fairly typical pattern that we resisted, which is look at just the parts of the equation instead of building a greater ecosystem. So we do have a significant M&A strategy in terms of looking for really great teams, really great products. And if we determine that they will help the ecosystem or add a new potential solution that a seller is facing in a critical way or an individual within Cash App is facing in a critical way that we will acquire it. We tend to do much smaller ones than our peers because we've managed to find really great teams that every single person in the organization has really high impact, and that's what we want to optimize for ultimately. But it comes down to -- we're constantly looking at the rising of what companies are out there, start-ups, current companies and making decisions based on what we see and the quality of the people, the quality of the work, quality of the product. We haven't historically taken a position of just buying revenue or buying customers. We want to buy technology and that is what we're focused on. So I do think we will continue to see consolidation, but that doesn't worry me. What I want to push on is we continue to enrich our ecosystem and make it stronger and stronger, and stronger. By doing so we add resilience, we add the durability, we hired for multiple jobs by seller, by an individual rather than just be dependent upon one. So all of these things are what we want to drive and M&A is certainly a channel to do so.

I'd like to turn the call back over to the company for closing remarks.

Thank you everyone for joining our call. I would like to remind everyone that we will hosting our second quarter 2019 earnings call on August 1st. Thanks again for participating today.

Ladies and gentleman, thank you for participating in today's program. This does conclude the program. You may now disconnect.