All right, everyone. I'm Will Nance. I cover payments and fintech here at Goldman. I am delighted to have Amrita Ahuja here, CFO and COO of Block. Amrita, you've been here several times, but it's my first time interviewing you, so really appreciate you being here.
Thanks for having me, Will.
Before we kick off, I'm gonna go ahead and read a quick disclosure. So, during this conversation, Amrita may make forward-looking statements, which may include statements about market trends, conditions, and Block's preliminary expectations for its future financial performance. These forward-looking statements are subject to certain risk, assumptions, and uncertainties. Amrita may also speak as to certain non-GAAP metrics, which are not intended to be a substitute for Block's GAAP results. Please review Block's filings with the SEC, as well as its investor presentation on its investor relations website for a discussion of the company's risk factors and for reconciliations of non-GAAP metrics to their most directly comparable GAAP financial measure. So with that, Amrita, thanks so much for joining us today.
Yeah. Thanks, Will.
So maybe we'll just kick it off on macro. There has been a lot of noise in the market recently on the health of the consumer, as well as lots of organizational and product changes within the organization. So maybe just to dwell on some of the near-term results, are there any call-outs in terms of either the health in the customer base, or on the product and go-to-market side that are worth highlighting today?
Sure. So let's speak a bit about our Square business and then our Cash App business. With Square, as we said in the second quarter, we've seen some macro impact to consumer discretionary spend, and those trend lines are both consistent with what we've seen in some prior quarters, as well as consistent across external benchmarks that we look at, whether it's macro indices in various markets or it's peer and network data. We have not seen a change to turn to the Square business. What we see on the Cash App side is more resilient, and we're looking, of course, across the span of discretionary and non-discretionary spend when we look at Cash App, as well as the metrics that we see being a factor of the health of our customers and also their engagement on our platform.
But as you know, for Cash App, what we saw in the second quarter was 10% growth year-over-year on inflows per active, obviously, with growth in actives as well, and for key products like Cash App Card, where we have 24 million monthly actives, we saw not only growth in actives, but also spend per active and obviously overall spend on the platform, so continued healthy trends for Cash App and for our customers using our Cash App platform.
Yeah, makes sense. And I think it's clear the company is aiming to return to its strong roots of product development to help fuel some of the growth across the organization. It would be great to get a status update on some of the product and organizational realignments that Jack and the team have been talking about the last few earnings cycles. So I guess, what are your current expectations around some of the product initiatives, and how do the organizational realignments position the company for, you know, higher product velocity going forward?
Yeah, absolutely. Let's talk about our functionalization, our organizational structure change that we've just completed a few weeks ago. So why move from a business unit structure to a functional structure? And I'll speak a bit about what those functions are as well. What we believe this functional reorganization will enable us to do is to drive greater collaboration and alignment across the company. Our Cash App business was already functionalized, and we saw that that led to not only teams being able to work together in service of the overall roadmap and initiatives, but it led to faster decision-making and better execution. And so earlier this year, we brought that functional structure to our Square teams. It was already functionalized within our emerging teams, and as I mentioned, Cash App. And then over this past month, we also functionalized Jack's direct reports, the overall company.
This was minimally disruptive to 99% of the teams who didn't see a reporting structure change because they were already reporting into a functional lead. But at the top level of the company, we now have disciplined leaders who are, you know, demonstrate operational excellence across their expertise and their discipline. So what are those leads? We've talked already about engineering and our CTO that we have in place. We've talked already about design and the importance of having an engineering and design-led company. We also announced in Q2 our sales lead, which is Nick Molnar, the co-founder of Afterpay. He's bringing a tremendous amount of urgency and entrepreneurial spirit to sales, not only across enterprise sales for Afterpay or for Cash App, but also SMB sales to Square, and we can talk more about that.
Yeah.
But there are five other key leads that are worth pointing out, in addition, obviously, to the teams that I look after. So, we have an ecosystem lead now, and that's Brian Grassadonia, who's our first Square product lead when we were just a 20-person company in our very early days. You all know Brian as our Cash App CEO, and he really founded Cash App within Square and brought it to be a $4 billion-plus annualized gross profit business with 57 million monthly actives. And he is gonna be responsible for connecting the dots across Square and Cash App, Proto, our emerging initiatives, and there's really no one better placed to do that than Brian.
We've also got what we're calling a business function, which is Owen Jennings, who is the COO previously of Cash App, also been at the company for a decade plus, and he's gonna be looking across our product, marketing, and customer success functions. Really placed as that operational tactician to keep the trains running on time, making sure that we are putting the right level of investment and focus on our key product initiatives, and that's coupled with our marketing messages and how we go to market from a customer success standpoint.... We've got our hardware lead, Thomas Templeton, again, has been at the company, I think, about a decade as well.
Previously led our Square hardware, and then launched our Proto mining and Bitcoin mining, as well as self-custody products, and he's now looking across hardware for the whole company, which we really see as a true differentiator for Block. And then we've got two additional functions. We've got a new, net new function, which we don't yet have a title for, but you can think of the comps to other companies being a chief risk officer, and this person will look across customer protection, trust and safety, risk management, compliance, et cetera, reporting directly into Jack. We're really excited about this role. This person would have not only technology experience but deep regulatory and banking partnership experience. And then finally, probably our coolest named function is our science function.
The science team is data scientists, AI, and machine learning experts, people who not only build the models but iterate on the underwriting model, underwriting models that power many of our products, expanding financial inclusion, and helping to manage our fraud, credit, risk loss rates as well. So those are kind of the nine key reports into Jack. Much of what the rest of the company sees doesn't change in terms of how we operate, in terms of how we make decisions, in terms of what products they're working on, but this new reporting structure gives us a great deal of excellence across the different functions, and an ability to prioritize all of our product roadmap across Block cohesively, as we bring alignment and collaboration across the different product areas.
Got it. So sticking with product, you've announced a number of product initiatives, including adding pre-auth capabilities, simplifying the onboarding and mobile app experience. Could you update us on where you are on that product roadmap for seller? And then, are there any incremental data points to share about the reception to some of these enhancements from customers?
Sure. Yeah. So there's three big product areas that we've been focused on and that are at different stages of release. First is our onboarding platform, so this is how customers ramp into Square, and sign up, and take their first payment. It's a critical flow for us, not only in terms of making sure that we're able to attract customers into the platform, but that we see them complete that flow. And what we are doing effectively is taking that onboarding flow from 10+ minutes and 30 screens down to 4 screens.
Now, it's still early days. We've re-released this over the past few months, but the early data that we're seeing here is encouraging. Everything from seeing more sellers taking that first payment, to seeing higher CSAT scores, to seeing higher expected lifetime values. These are, you know, modest improvements that compound across each other and that compound over time. And more importantly, the new onboarding platform gives us a way to more rapidly test and iterate based on what we're seeing across these four different steps and across our different seller types and different markets. So we're encouraged by what we're seeing in these early days of having deployed the new onboarding flow to our Square sellers. The second key thing that you noted is our orders migration. This is really about making...
Shifting from a payment centricity to an order centricity in that, in that buyer and seller relationship. We are in the imminent days of release more broadly across our orders migration, sort of week for week, in, in terms of when the launch will happen. But we're already seeing three different things that we've either launched or tested using our orders migration, orders platform, sort of features that we've already built. First is the kiosk, Square Kiosk, which we launched in May, brought it to the National Restaurant Association, have gotten great feedback already and continuing to ramp that product. Second, as you noted, is Bar Tabs. This is really important for food and beverage sellers, we know, especially as we go to more full-service restaurants versus QSRs.
And we are now in testing on Bar Tabs with sellers across the Square ecosystem and are looking to ramp that and launch that over the coming months. And then, the third is important for food and beverage, but also for services sellers, and that's the ability to take a deposit upfront before the seller even comes in. We see that that's really important for things like beauty salons and other services. So that's for orders migration and the key products that orders migration helps us unlock in the weeks and months to come. And then, the third top priority product, release or feature functionality improvement is what we're calling the Single App Model. So Square today has five different apps in the App Store.
What we're gonna be doing, and which we hope to have in sellers starting to see this and sellers starting to interface with this by the end of the year, is a singular app experience, no matter what type of seller you are. If you look at, again, the success that we've had with Cash App, we don't have a separate app for Borrow, we don't have a separate app for investing, we don't have a separate app for Card or for insights on managing your card spending. It's all within the same app, and what we believe that's enabled us to do with Cash App is, first, from a business perspective, from our perspective, scale our engineering, design, and marketing capabilities toward that singular app experience versus fragmenting it across five different apps, where there may be branches of code and that sort of thing.
Secondly, from a customer perspective, you're taking the onus off the customer and having to choose which app to even select before they've even truly bought in to the ecosystem that we're offering them. It also gives us an opportunity, we believe, as we've done with Cash App, to serve up to that customer discoverability around all the other products that we offer, many of which are horizontal, and irrespective of the type of customer, type of vertical that they're in, payroll, team management, marketing, and loyalty. Those are important for any type of seller, and we have that opportunity to surface it to them at the right time through that singular app experience. Those are the three top product priorities for Square. Mind you, there are a number of other things that we're working on as well.
Maybe one just to call out is Tap to Pay, which we've seen be really important to our international sellers in ramping you know especially the smaller sellers in our international markets. We had a lot of success when we launched that in the U.K., and more recently in July, launched that in France. So the business keeps going. Those are our top three priorities, but there's many more that we're working on.
Got it. Maybe switching over to go-to-market, you mentioned this a little bit earlier, but, the past quarter, the shareholder letter focused a lot on the go-to-market initiatives-
Yeah.
... including a focus on both direct and indirect distribution, elevating Nick Molnar to run a more centralized sales function. Where are you in that process, and just what should investors be looking for as guideposts as you execute on that strategy?
Yeah. As we think about reaching more sellers, there's really four parts to that strategy: one around product, one around marketing, sales, and then partnerships. With product, it's not only all the things that I just mentioned, but it's really around leveraging that self-serve capability that we have, so onboarding is absolutely critical. It's not only important for the new sellers who come into our ecosystem, but it's important to be able to get up and running quickly for new employees at existing sellers or for new, you know, doors that they may open, new franchises, new establishments for those existing sellers. So onboarding and the ability to come up to speed quickly, no matter who you are across the ecosystem, is critically important, so that's really around the product initiatives that we're working towards.
Secondly, from a marketing perspective, you know, we're seeing some of the strongest ROIs that we've seen in years, and so what we've said is that we expect to be ramping our marketing initiatives in the back half of this year and into next year behind a lot of these product improvements that we're bringing to market. Third, from a sales perspective, as you noted, we're incredibly excited that Nick, who's been with the company now for nearly three years as part of the Afterpay acquisition and is a co-founder of Afterpay, is leading sales across all of Block now.
We saw through Nick's agency, not only the continued growth and scaling of the Afterpay business, but also the Cash App Pay business within Cash App, and now he brings that founder energy to Square, where he's recently hired a new head of SMB sales, and where their focus for these next 90 days is on ramping that sales team and driving incremental profitability. We think there's a tremendous opportunity here and room for us to run as sales brings on more net-new customers who wouldn't have come through those self-onboarding channels as they reach them through things like partnerships, which is our fourth key strategy within go-to-market for Square. What you heard from us in this last quarter is a focus on vertical partnerships. There's really three types of partnerships that we look at.
Vertical, which is things like the food distributors, which, you know, through our partnerships with food distributors now across the U.S., we reach 40% of restaurants, and these food distributors are really key to helping to evangelize the, the things that these customers or potential customers can do through the Square platform, and we really have tight alignment with them in enabling and bringing more feature functionality and more retention, more opportunities for growth, more choice for them to those restaurants. But there's also horizontal partners, things like networking equipment providers or telecom, and there's third-party resellers, where we are doing more and more testing in markets outside the U.S. and potentially down the road, even in the U.S.
Got it.
So those are kind of the four key areas of go-to-market, and we're making incremental improvement across each one.
Makes sense. Payments has always been a competitive business. How do you think about Square's differentiation today, and how has that developed over time, particularly as the ecosystem strategy has evolved? And then, you know, separately, what do you see that kind of works well at your competitors that might be opportunities-
Yeah.
... for Square to learn from?
Yeah. Well, on to hit that last part first, and to tie it to what we just talked about, I think we have learned a lot from competitors on sales and partnerships, and that's part of where you see us really moving and driving improvement and reevaluating what were previously sacred cows for us. You know, whether it's using contracts so that we can more flexibly price, it's deploying field sales, or it's deploying these partnerships and more aggressively across our markets across the world. Where we feel we are truly differentiated is through the ecosystem. We don't address just one type of vertical. We don't address just food and beverage or just retail or just services. We address them all, and that enables these sellers to have greater flexibility as they grow their business.
We don't address just one channel, just online or just in person, or just mobile or just social, we address it all. So the breadth of the ecosystem enables us to attract more sellers, and those sellers then have greater functionality to be able to flex their business as they see fit. Onboarding, I think, is a key differentiator. I already spoke to that one. The integration of our products across each other is a key differentiator, whether it's hardware, software, or our banking products. Our customers' money and their data can flow seamlessly across these different products. Banking is a key differentiator. This is one that we've been working on for almost a decade now.
2015 is when we launched what we call Square Loans now, and now the banking feature and functionality across the debit card, Square Loans, the savings platform, a deposit platform, you know, the ability to really plan for a rainy day ahead, to put funds away in different folders, whether it's payroll or taxes, this and all of that to be integrated so that the money flows seamlessly across their payments platform and this banking platform, and our underwriting, which is fairly unique in the ability to open up access to customers who may not get underwritten elsewhere, so our banking platform or brand, which ultimately, you know, is about trust and transparency and speed, no hidden fees, and then finally, I think one of the key areas that we haven't yet fully leveraged is data and insights.
And this is something that I think we can make more apparent, through the design of our dashboard and through our Single App Model. But our data, the data and insights that we help these sellers collect really, you know, can help them drive greater customer insights, insights about different elements of their business to improve themselves using our platform, and I think we've just scratched the surface on that.
Got it. So maybe we can spend a little bit of time on the Bank the Base strategy.
Yeah.
Cash App has continued to see very strong product attach rates across, you know, the Cash App Card, despite being in the early innings for direct deposit, with Bank the Base being a key priority for the company. What are some of the strategies that you have to establish account primacy among your customers, and what is a reasonable goal for investors to expect over the next couple of years on that strategy?
Yeah. So, you know, in terms of the proof points, I think in the near term, certainly this year and maybe even next year, the key proof point metric to look at is inflows per active. I think longer term, you'll wanna look at things like paycheck direct deposit actives. But inflows per active, growing at double-digit percentages year-over-year in the first half of this year, with the backdrop of an uncertain macro environment, is I think a key indicator that our financial services and banking platform, and that all of the products that we've built out there are working, and we need to do even more to drive them.
So whether it's, you know, the tried-and-true products that we've been ramping over the past few years, things like Cash App Card and our instant offers, what we used to call Boost, attached to Cash App Card, you know, with twenty-four million monthly actives and this instant rewards program, it's all free, without minimums that many banks would ask you for, or it's access to investing. You know, free investing through stocks, or the ability to purchase a dollar of Bitcoin or sell a dollar of Bitcoin, or it's the access to a short-term loan through Borrow, using our unique underwriting capabilities as we see the flow, inflows and outflows of payments and of dollars for these customers. Those are some of the key products that are true differentiators from a financial services perspective, and we've made a lot of improvements recently this year.
This year, some of the launches being savings yield at 4.5% for direct deposit customers, priority phone support, you know, overdraft protection, and then the very recent enhancements that we've made just in the past few months around the extension of a web platform. You know, we started as opposed to traditional banks, who start with brick-and-mortar and a website, we started with mobile first and are now building into the web capabilities that we know, many of our customers. Especially when you're building trust or you're expanding your demographics, that web platform is actually really critical, and that's just now something that we're building towards. Or it's things like card and spend insights, or it's to the future, looking at buy now, pay later.
Really bringing Afterpay's capabilities to the Cash App Card, which enables our customers to manage their cash flow, you know, with greater agency, using our platform. So now we've got sort of all the pieces in place, many of the pieces in place. Of course, there'll always be more that we can do, and very recently, many of these features being launched. So as we look to the next phase, it's about packaging, it's about discoverability, building awareness through brand campaigns, it's about lifecycle marketing, and it's about incentives. If you think about what Cash App actually has done very, very well over the past five years to drive the... you know, to really juice the network effects that we have in our business, it's leveraging and dialing the knobs around referrals in localized markets and across demographics to bring more customers into the platform.
So referrals being a very efficient way to drive customer acquisition, and using that booster, or now what we call Offers platform, that's attached to Cash App Card to drive engagement within the platform. So a lot of expertise that we've built through the years, again, on, you know, a nuanced way of pulling levers for both customer acquisition and engagement that we can bring to bear to the banking, you know, ecosystem that we built within Cash App.
Yeah. I think a lot of investors have been impressed with just the sustained levels of growth within Cash App over the years. I mean, more recently, the strength in attach rates for things like Cash App Borrow, and some of the early testing on BNPL, on Cash App Card-
Mm-hmm.
... have been some of the latest in terms of just execution lens. You, what are you most excited about the current product roadmap here? And, you know, how would you tie back some of the product initiatives to sort of the inflows framework as you think about the business?
Yeah. Well, I think some of the ones that you just mentioned in terms of rapidly ramping, you know, utility within our ecosystem. So, first, if you think about Cash App Borrow, this is the ability to get, you know, typically $100 or $200 line of credit from Cash App. We determine eligibility, we offer it to customers who we're seeing their inflows and their outflows, and they are then able to use this to manage, you know, towards the next payday or to manage towards the next milestone in their financial livelihood. We saw, you know, originations volumes for Cash App Borrow ramp by three times in the second quarter. It's obviously becoming scaled, an important part of our business, an important part of how our customers are managing their cash flows and really their working capital.
We're excited about the opportunity. It's really, frankly, if you think about the drivers into our, you know, primacy of a banking relationship-
Right.
... two key products there being Cash App Card, where we're at 24 million monthly actives, and Cash App Borrow, where we're rapidly ramping across our active base. And as we've ramped, those originations, we've continued to see healthy unit economics and healthy risk loss rates. I think another product that, you know, or set of products, we talked a lot about financial services, but we're really excited about the commerce opportunities, within Cash App. And you see that come out in a product like buy now, pay later on Cash App Card, that is really the intersection of commerce and financial services. You also see it in a product like Cash App Pay, which, you know, we spoke about Borrow ramping volumes by 3x in the second quarter. Cash App Pay ramped by 7 times-
Wow!
in the second quarter. Obviously, still early days, but the pipeline that we have across the merchants who are really excited about what they're seeing from a Cash App Pay perspective is exciting. It's, you know, the unit structure, unit economic structure is such that it's a very competitively priced product for those merchants, and it's, from a consumer standpoint, incredibly easy to use. We ramped to four million monthly actives earlier this year. So, and again, a lot of those merchant relationships that we have across Afterpay are an incredible first step for Cash App Pay to build that enterprise relationship. So we're excited about both financial services and commerce opportunities across Cash App.
Maybe sticking with the BNPL theme, growth has remained very strong. I think the credit trends have also seemed pretty healthy. I think they actually improved modestly this past quarter. How are you thinking about the evolution of this category of spending, kind of big picture in the ecosystem, and then more specifically for Block, what is the opportunity set for you to differentiate the Afterpay opportunity over time?
Yeah. We're I mean, look, we've seen strong traction this year, and in even some of the quarters at the back half of last year, they give us a tremendous confidence that this is here to stay. Buy now, pay later is a big part of how Millennial, Gen Z, digital natives manage their cash flows throughout a given month or across a couple of months, and this is part of why we saw 20% plus GMV growth for Afterpay so far this year, 21% in the second quarter.
It's on the back of not only core buy now, pay later, but also newer products, like our single-use payment card, which opens up the aperture of buy now, pay later across merchants that we may not even have a direct relationship with, as well as products like gift cards, where we've been ramping so far this year. We ramped into the U.S. and then launched more recently into Canada in the second quarter. And so across both the core buy now, pay later products, and also I should note, you know, even within core buy now, pay later, there's more that we can be doing given the data that we have and given that both internal and external data we collect.
For instance, one of the strong, you know, in, sort of data points that we have across core BNPL is in Australia. We were able to expand the limits for many of our existing, frequently active customers to up to $4,000, which drove frequency, retention, and obviously, volumes for us in Australia. So there's things like that that we can be continually improving upon to enhance the customer experience and ultimately enhance growth for us across core BNPL, but also some of these newer products, like single-use payments and gift cards.
Not to mention the integration into core products within our existing ecosystems, whether it's offering buy now, pay later to small merchants within Square, or it's offering buy now, pay later retroactively into Cash App Card, which we're deep in testing on now and are very excited about the early returns we're seeing.
Yeah, I know. It's clear it's a big part of the ecosystem strategy, and, you know, I wanna ask a couple financial questions here in a second. But before we do that, maybe just a high-level question on the ecosystem strategy.
Yeah.
You know, Block is unique in having a true two-sided network. You can add value to the merchant side as well as to the consumer side. What inning do you think we are in terms of kind of reaping the benefits of the ecosystem strategy? And is there some level of scale that you need on sort of either or both sides of the network, where the intersection of the two creates opportunities-
Yeah.
... for just much greater economics and opportunities for you?
Yeah. I think it's early, and I think that we see a path now, also with Brian leading our ecosystem strategy, this sort of building connection points at the highest level of the company. I'm incredibly optimistic about this as a new horizon of growth for Block to truly connect our ecosystems. You know, we have a few pieces in place today, whether it's deploying Cash App Pay first at Square merchants, so we can test and iterate and learn, and then deploy across other merchants. Or it's things like Square Loyalty, where Cash App can effectively be a buyer loyalty app for Square merchants. So we've already obviously been working on smaller products and features throughout time, but we have even bigger way opportunities to come, and it doesn't necessarily require...
You know, one of the theses that we're testing is whether you actually need to have the density of overlap, or you can create enough incentive and positive flywheel to actually draw people into the other side of the ecosystem through the strength of whether it's Square or Cash App. So one of the things that we're currently testing in one market in the U.S. that we're excited about is our local initiative. And what this Cash App Local initiative is, is effectively using Cash App as a bit of a buyer and seller app, where there's a landing page for a Square seller. Our buyer or Cash App customer can order from there and interact and get a incentive for that order with that Square seller, get rewards for buying at that Square seller.
And that Square seller gets the benefit of access to this fifty-seven million monthly active customer base of highly attractive digital natives, who are deeply engaged, you know, with the Square platform, whether they're purchasing with Cash App Pay or Cash App Card, where our monthly actives are spending six times a week and, you know, continue to come back, and they get that discoverability that comes through it. So we're in testing with this Cash App Local initiative that is really the intersection, sitting at the counter between the seller and the buyer, whether it's a Square seller and a Cash App buyer. And it's early days, but we're excited about that initiative and what we can do with it.
Maybe one more that I'd point out in terms of how we think about an ecosystem strategy, developing expertise in one area and leveraging it somewhere else, I'd point to our Bitcoin mining initiative, which we're incredibly excited about. We announced a few months ago a deal with Core Scientific, and we've got more in the pipeline to come, but what this is is taking the expertise that we've built up over the past 15 years with our hardware team within Square, and leveraging it in a new area where we also have deep expertise with Bitcoin, but we have the chip design capabilities, and we have the supply chain relationships to bring it to life in a way that most other companies can't, so that's another example of an ecosystem initiative that is early days and very exciting.
Got it. So we've got a couple minutes left here. I wanted to ask, just on the, some of the rule of 40 targets that you laid out several quarters ago, you've made pretty significant progress. I think the updated guidance for this year is roughly rule of 35 in 2024 . You seem to be well on your way to achieving those targets. How would you frame sort of the last mile-
Yeah.
... in getting there? And, you know, do you see any changes to the OpEx or headcount framework for the company once you achieve that goal?
Yeah. I mean, look, just to reflect on where we've come, you know, the first half of 2023, we were at Rule of 29. The first half of 2024, we were at Rule of 39, and that ten-point improvement only comes when you're able to continue to sustain growth at high levels, so 20% plus, and drive operating leverage and improvement in your cost structure, so rapidly ramping margins. So that ten-point improvement is something that obviously we worked hard for, but we have even more that we can do. As we think about our cost, we talked a lot about growth opportunities and product roadmap, but as we think about cost, there's really four key things that drive our cost. One is our people cap. So we've put a cap in place at 12,000 people for the company.
Today, we are smaller than we were a year ago, even though we've grown at 20% plus growth rate so far this year, and we intend to keep that people cap in place. That's gonna force us to prioritize better, it's gonna focus to find redundancies where we've had redundancies in our prior business unit structure, and it's gonna focus us on operating our business with greater efficiency and, and certainly driving leverage in areas like stock-based compensation, which is very important for us. Secondly, it's corporate overhead expenses. Everything from real estate to T&E, to software fees, cloud fees, professional fees, et cetera, where we're ticking down the list and making improvements. Third, it's structural costs. Where do we find opportunities across our unit economics through our partner ecosystem?
We've already found some of those, and I think that there's even more for us to look for as many of those contracts come up over time. And then finally, AI. How do we drive engineering enablement, design expertise, both to make ourselves more efficient, customer service and sales, as well as to drive feature functionality for our customers? And I think we're still in early in that opportunity, both to drive sustained long-term profitable growth and to do that more efficiently across our cost base.
Got it. In the last couple minutes here-
Mm-hmm.
... just one on capital allocation. The company's generated roughly $1.4 billion in adjusted free cash flow over the past 12 months. Company just announced a $3 billion repurchase-
Yep.
... authorization. It would be great to just get your updated thoughts on how you're thinking about capital allocation.
Yeah. I mean, it's quite simple. It's reinvest and return. It's we're reinvesting in our business in important areas to drive growth. We've talked a lot about go-to-market and sales and product marketing initiatives across the business, so some of those cost efficiencies that I mentioned we're finding may drop to the bottom line, and some of them, we may reinvest in our business to drive sustained growth into the future, and then other, you know, excess capital will return, so we had our inaugural share repurchase program last year at $1 billion, and now we've upped that to $3 billion in the years to come, so we're focused on enabling that maturation of the company and optimizing our overall capital allocation and balance sheet.
Great. Amrita, I really appreciate the time here. We're, unfortunately, out of time, but thank you so much for joining us.
Thanks, Will.