Welcome to the Square 4th Quarter 2020 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 Q4 2020 earnings call. We have Jack and Amrita with us We will begin this call with some short remarks before opening the call directly to your questions. During Q and A, we will take questions from our customers 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 Report 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 the results 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 Looking statements, except as required by law. During this call, we will provide preliminary gross profit gross results for the month of January February. These represent our gross profit gross Results for January and current estimates for February performance. These numbers are not final as we have not yet closed our accounting financials for the month of February and our monthly results are not subject To interim review by auditors.
As a result, actual January and February results may differ from these estimates. Also, we will discuss certain non GAAP financial measures during this call. 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 Finally, this call's entirety is being audio webcast on our Investor Relations website. An audio replay of this call will be available on our website With that, I'd like to turn it over to Jack.
Thanks, Jason, and thank you everyone for joining us today. 2020 was a tough year for many. Our focus was to help our customers through it all, which required us to adapt and evolve quickly. I believe this is an important attribute for any organization and I'm proud we continue to demonstrate it. We also took the opportunity to act more broadly By announcing our plans for our operations to be carbon net 0 by 2,030 and launched our Bitcoin Clean Energy Investment Initiative, A $10,000,000 commitment to support companies that will help drive adoption and efficiency of renewables within the Bitcoin Ecosystem.
We plan to reinvest any gains back into the funds and are exploring opening it up for participation by like minded companies. We'll share more details on our environmental and social initiatives next month in our 2020 corporate social responsibility report. In addition, today we announced $170,000,000 purchase of Bitcoin on top of the $50,000,000 we bought in the 4th quarter. Why are we doing this? We believe the Internet needs a native currency and we believe Bitcoin is it.
We believe it has the highest probability of empowering more people in the economy in a fair way. We're doing a lot to ensure this from a product, open source development And open patent perspective and by us owning Bitcoin, our incentives are aligned with skin in the game. And now for some updates on our business. Cash App continued to see strong adoption both from new and existing customers. In December, Cash App had more than 36,000,000 monthly active customers, Up 50% compared to last year.
We saw customers increase their usage of products beyond peer to peer transactions, including use of our Visa Cash Card, Cash Boost and Bitcoin. Boost is our instant rewards program within our Cash Card that enables customers to receive unique discounts Based on their location and other attributes. In the Q4, Active Boost customers spent double that of other Visa Cash Card customers. We also recently launched a special boost, which a customer unlocks after receiving their first paycheck in the Cash App and a Bitcoin boost, Giving people a way to earn Bitcoin on all cash card purchases. As more of the world has discovered the value of Bitcoin, Cash App continued its focus to make Bitcoin more accessible and more useful.
One example of this is enabling people to change the default denomination unit from BTC to Satoshis, which is 100,000,000 of a Bitcoin, also known as Sats, to help people realize you don't have to own a full Bitcoin and can stack Sats instead. In the Q4, Bitcoin volumes per customer increased more than 2.5 times compared to the same period last year, Mostly driven by buying activity of both existing and new customers. In 2020, more than 3,000,000 customers bought or Sold Bitcoin and Cash App. And in January 2021 alone, more than 1,000,000 customers bought Bitcoin for the first time. Our seller ecosystem continued to grow upmarket and attract larger sellers as we saw mid market sellers use 2.5 of our products on average in 2020.
Nearly all mid market sellers use our team management product to schedule staff and view real time performance and sales analytics for the workforces. And in 2020, approximately half of our mid market GPB came from sellers with integrations into our developer platform, Which enables a data driven way to process payments using custom software, build unique commerce experiences and connect with existing businesses. Our sales team has played an important role in our growth upmarket. In the Q4, 40% of mid market seller GPV came from sellers who had been engaged by our sales The team also focuses on educating existing sellers about our broader ecosystem. We use machine learning to identify sellers most likely to adopt more products Which of our solutions are likely to be most relevant?
This will have a 15% increase in product adoption among existing mid market sellers in 2020. We plan to continue this work and intend to double our sales team in 2021. So what's our focus for the year ahead? For Cash App, we're going to focus on increasing the transaction limits across the ecosystem, expand our deposit capabilities and increase the quality of our customer service, All in order to strengthen our foundation and reach new customers. We're also going to double down on our commitment to Bitcoin and continue to look for new ways to connect our product lines For the seller business, we will continue to focus on growing our omni channel capabilities, expand globally And with that, over to Amrita.
Thanks, Jack. There are 3 topics I'd like to cover today. 1st, a look at our performance in 2020 and in the Q4 where we delivered strong gross profit growth. 2nd, an update on our business through mid February and what this could mean for growth going forward. 3rd, a look at our cohort economics For Cash App and Seller, which give us confidence to invest for the long term.
Despite 2020 being a year of extreme uncertainty, our results in the Q4 In 2020, gross profit was $2,730,000,000 up 45% year over year or 48% excluding Caviar. It was a year of strong growth where we improved our gross profit growth rate over 2019 and also diversified our ecosystems. Seller generated $1,510,000,000 of gross profit in 2020, an increase of 8% compared to 2019. Our online channels delivered more than 50% GPC growth year over year and became a growing portion of our mix. Cash App delivered incredible growth in 2020, up more than 2.5 times year over year to $1,230,000,000 in gross profit and now represents nearly half of the company's gross We have continued to diversify Cash App's business model with scale.
In 2019, Cash App had only one revenue stream with $100,000,000 in And in 2020, we had 4 with approximately $100,000,000 or more, each of which grew at over 100% year over year. 2020 was also a year that we invested in our business and in our customers with compelling returns. We invested in our customers in a variety of ways, including by Accelerating critical product launches, allowing sellers to pause software subscriptions, helping sellers and individuals access government funds, And providing useful awards for Cash App customers through Boost at a time they needed it most. We also invested in our business by continuing to build out our team To drive product innovation and by deploying go to market initiatives to expand our reach. Let's now turn to the Q4 where gross profit was $804,000,000 Up 52% year over year or 54% growth excluding Caviar.
Looking at other drivers for the first for the quarter, First, we're seeing growing engagement and monetization with Cash App. In the Q4, Cash App generated $377,000,000 in gross Profit, an increase of 162 percent year over year. Cash App benefits from the compounding effect of growing our customer base while also increasing engagement and monetization per customer. We saw these dynamics drive growth in the 4th As we scaled our network to more than 36,000,000 monthly transacting customers, an increase of 50% year over year. At the same time, we increased gross profit per monthly transacting active customer by 70% year over year to $41 in the 4th quarter.
By expanding the breadth of our product ecosystem, refining features and continuing to build on our foundation, we've driven greater engagement across our In 2020 Q4, we increased adoption across all of our products beyond peer to peer for Cash App. Newer customers are coming to Cash App for our ecosystem as they have increasingly adopted multiple products such as Cash Card and Bitcoin within their 1st month After onboarding. Moving to seller where our omni channel offerings are driving growth. Gross profit In the Q4, it was $427,000,000 up 13% year over year with seller GPV up 6% year over year. To help sellers adapt during the pandemic, we have continued to build out our omni channel capabilities and these offerings Again, meaningful traction.
Omnichannel and online sellers represented more than half of seller GPB in the 4th quarter, which is up from 1 third 2 years Our mid market category, which consists of sellers with more than $500,000 in annual GPV is where we see our largest Market opportunity for the seller business and a focus area for our acquisition efforts. We saw strength here in the Q4 despite the impact of the pandemic. Gross profit from our mid market sellers grew 27% year over year, which is approximately 2 times the gross profit growth of our overall seller business. Looking at profitability, adjusted EBITDA was $185,000,000 in the 4th quarter. The year over year increase was driven by Gross profit growth and also benefited from the release of $43,000,000 in transaction loss provisions related to our seller business as actual loss Rates trended more favorably than we had previously estimated.
Next, we wanted to share early trends in our Cash App and Solar businesses during the Q1 And what this could mean for growth going forward. In January, Cash App delivered gross profit growth of 164% year over year, a 2 point improvement From the Q4. We achieved strong acquisition of customers and drove increased product adoption With our highest monthly total of new transacting active customers for Bitcoin, stock brokerage, and Cash Card. January growth benefited from government fund disbursements, which began during the last few days of December and led to an increase in funds pulled into Cash App. Based on trends during the 1st 3 weeks of February, we estimate Cash App's gross profit growth to be approximately 130% year over year.
Growth in February decelerated compared to January as the impact from government fund disbursements normalized, partly offset by continued strength And acquisition and peer to peer network volumes. We are watchful of broader macro trends and any new policies which could influence the pace of growth. As a reminder, we will start lapping particularly challenging growth comparisons in the second and third quarter of this year. In January, our seller ecosystem achieved 15% gross profit growth, a 2 point improvement from the 4th quarter and GPV grew 5% year over year. Through the 1st 3 weeks of February, solar GPV was up 2% year over year, a 3 point deceleration from January.
But excluding the temporary impact Of recent weather across regions in the U. S, we estimate seller GPV growth would have been comparable to January and we would have seen an improvement certain regions where restrictions have eased. Looking ahead, we expect to continue to observe variability related to the macro environment And regional shelter in place restrictions, which could impact our performance. We also began to lap the initial impact of the pandemic on the seller business in late March. Seller gross profit grew faster than GPV in 2020 in part due to higher transaction margins, which benefited from a greater mix of debit, Card not present transactions, higher average transaction sizes and from our card present price change implemented in November 2019.
We expect to last these mix changes for transaction margins and for transaction margins to normalize towards the end of the first quarter. So, GTV may grow faster than transaction profit as in person transactions resume in future quarters. Finally, in 2021, we are investing for long term profitable growth. Given the opportunity ahead of us, we expect to increase non GAAP operating Excluding risk loss by 41% year over year or an incremental $800,000,000 to $900,000,000 compared to 2020 We intend on continuing to invest where we see attractive returns even in the face of variability in macro trends. And as a result, adjusted EBITDA margins may vary depending on top line growth.
Both our Cash App and It may vary depending on top line growth. Both our Cash App and seller ecosystems have delivered strong cohort economics Including acquisition, retention, paybacks and returns on investment. Cash App has proved out and scaled a strong business model. We have acquired new transacting active customers for less than $5 on average in paid marketing through 2020. For existing customers, we've increased their engagement over time with gross profit retention of more than 130% for each of the last 3 years.
As a result, we've achieved strong returns on investment of 6 times or greater over a 3 year period With 2020 cohorts pacing ahead of even this. And we intend to ramp our investment into new marketing channels And strategies in 2021. We have also been encouraged by sellers' cohort economics. We saw strong customer acquisition in 2020 onboarding our largest cohort of new sellers on a gross profit basis, which is pacing at an estimated 5 quarter payback. In In the midst of the pandemic in 2020, gross profit retention stabilized at down approximately 10% year over year in the second half of the year.
Our more recently acquired seller cohorts have seen a stronger rebound in gross profit than older cohorts, which is partly driven by stronger acquisition of larger sellers in Prior to the pandemic, seller had achieved positive gross profit retention and returns on investment of 3 times over 3 years as sellers Stayed with Square and grew their businesses with us. Looking ahead to a recovery, we plan to continue investing behind these stronger In summary, we remain committed to our purpose of economic empowerment by continuing to serve our existing customers and reaching those We're focused on driving long term profitable growth and are eager to invest behind a compelling Returns for both our Cash App and seller ecosystem. I'll now turn it back to the operator to start the Q and A portion of the call.
Your first question is from the line of Tien tsin Huang with JPMorgan.
Thanks so much. Nice to speak to you all. Just a lot of good information here. I had a big picture or maybe a simple question On priorities, if you're investing a lot and it seems to make sense here, are you prioritizing user acquisition first Followed by improving engagement or product development across both ecosystems, given what you're talking about here with low CAC and big ROI, I can definitely make the argument for you guys to spend more. So just your thoughts on acquisition versus engagement here in 2021?
Thanks for the question, Tien Tsin. We've historically shown An ability to do both. When you think about our TAM expansion over the years from our last Investor In 2017 to our more recently disclosed TAM opportunity of $160,000,000,000 we've grown TAM by $100,000,000,000 $40,000,000,000 on Seller business with new product launches, new geographic expansions and $60,000,000,000 on the Cash App ecosystem. And we see an opportunity For a further TAM expansion, investments in new products and in new markets. And all of that is while also growing the base of our customers.
Cash App grew by 50% in terms of monthly transacting customers at the end of this year to 36,000,000. And we onboarded our largest cohort of Square sellers during 2020 with each quarter Growth on a year over year basis for our cohorts that we've added. So we see an opportunity in both areas and we've shown again a track Record of focus on both expansion of opportunity as well as going deeper in our existing markets. Maybe I'll explain a little bit about what we're Seeing in terms of cohort economics that lead us to continue to want to invest in both areas. So as you mentioned, we're planning to invest $800,000,000 to $900,000,000 in terms of incremental investment in 2021.
That's roughly 50% of that step up will Go towards sales and marketing and about a quarter of it will go towards R and D across both ecosystems. The final piece will go towards G and A, which Continues to build on the foundation for the company. But as we think about best sales and marketing growth, what's giving us the desire and Confidence to lean in here are the cohort economics, which are really compelling as you think about the combination of both efficient acquisition And engagement on the existing products that we have, let alone engagement on the products that we could be building in the future, we are building for the future, with Cash App, We've seen a 6x ROI over 3 years on the back of efficient acquisition at less than $5 per customer. Again, calling upon our network effects, very strong network effects that we've seen strong volumes in peer to peer and that continues to be a strong front door But then also very strong gross profit retention at over 130% for each of the last three years as our we've maintained the vast majority of Customers have been growing on our platform. For the solar business, similarly, we've seen cohort economics pacing a 5 quarter payback, 3x Return on ROI over 3 years and historically prior to the pandemic positive gross profit retention.
So we see an opportunity in terms of the cohort economics that we're driving to continue to lean in. And finally, we do see an opportunity to drive Further engagement with our existing products. When we think about, as we mentioned in our seller within the seller ecosystem, Continued increasing mix toward mid market sellers, larger sellers who tend to adopt more products, 2.5 products Today, we see an opportunity for uplift. When our sales team uses AI and ML technology, they see a 15% uplift And product adoption. And similarly for Cash App, we've seen in the 1st month that our Cash App Customers onboard into our ecosystem and increasing proclivity to adopt new products like stocks, like Bitcoin, Cash Card.
But there's so much more opportunity here as we think about increasing product adoption for our current customer set To go even deeper to provide daily utility to those customers. So we're really focused on both and have showed a track record here driving Both acquisition engagement along with broader TAM expansion.
For sure. Appreciate the thoughts and metrics.
Your next question is from the line of Darrin Peller with Wolfe Research.
All right. Hey, thanks guys and congrats on a good year, a tough obviously tough environment for everybody. Look, when we look at omni channel and online being greater than 50% of total seller GPV, clearly online and card not present experiences are resonating. And we saw 12% QTV growth overall, including cash flow business and obviously helped by that mid market for larger business client.
Can you
just touch on what's resonating with both consumers on the merchant side and Square's offerings enabling this? Because the move from what you previously being much more Core Present Centric to where you are now 50% omni has been pretty dramatic. And when we think about all of that, where do you see that going in terms of And the ability and investments you can make in that to keep that level of really sustainable 50% plus potentially. Thanks guys.
Hey, Darren. Thanks for the question. So omni channel is a really big part of our strategy because it's not just focused on Serving e commerce or offline, it's looking for opportunities in every single way that A business might attract customers. That's through marketplaces. It's through the API.
I think the most attractive thing It's really it's flexibility. We are now seeing a lot more of our mid market sellers and larger sellers utilize our APIs platform so that they can build a custom solution and really make sure that they're crafting the experience that they want. We think there's a continued great opportunity here that is going to be a big part of our focus On our roadmap for some time, as we add new capabilities to the platform, as we add new methods and new channels for people to sell in. The second part that I think differentiates us is we're not just focused on one vertical, we are flexible enough to handle any vertical. And as I've talked about on previous calls, a lot of what we're seeing today is creativity with sellers.
They're Mixing and matching up different verticals. So you have typically restaurant type businesses who are doing more retail things and Vice versa, on services, we're doing more retail. And we don't really take a point of view on what category you should be. We We want to make sure that we're just there to help you make the sale no matter what you're trying to sell and whatever channel you're trying to sell it with. So, obviously, We saw a lot of this momentum with COVID, as people open their eyes towards the rest of our platform and we Quickly, we prioritize a lot of our efforts to make sure that we could support that growth and that we could enable more of it.
I don't think that behavior is necessarily going away. I think before COVID, there were a lot of merchants who were Hesitant to try new things or the thing that was working, they wanted to stick with. But it was a forcing function that people allowed They've also opened their eyes to more. And they found a lot more efficiency and they found a lot more sales because of it. So We're going to continue watching and learning, but we think this is a pretty stable path for us.
And, Gary, just to add to your point about investments and sustainability, we've seen over 50% growth From our some GPV from our online channels for about 2 years now. Now in 2020, we saw an acceleration in that Square online growth Compared to 2019 and we're going to continue to push there in terms of our product development and feature richness. When you think of the market As well to your point, that's our largest sellers now are 60% of seller GPV in the 4th quarter, up from 52% 2 years ago and we have gross profit from the end market outpacing the blended seller average by 2 times and with our cohorts Now coming in indexing to larger, we see an opportunity to continue to invest, against the Ecosystem, when we think about addressable market for larger sellers, we're at less than 1% penetrated in that opportunity. And there's 3 areas Of investment to help us unlock that. First is marketing, which you talked about, awareness marketing around the broader The system coupled with product specific campaigns targeting the products that resonate with larger sellers, Whether it's vertical points of sale, online, restaurants, etcetera.
2nd is the sales team. We'll be doubling the size of our Sales team in 2021, so that we can continue to increase our outbound research outreach to And then third, product. As Jack mentioned, our developer platform is really key for serving Our complex seller needs, our vertical software additionally. These are some of the areas that we'll be increasingly investing in to drive further opportunity here.
That's really helpful. Thanks, Henry. Thanks, guys.
Now a question from a Cash App customer, Ignacio I'm sorry if I mispronounce it, Ignacio Diaz Garza.
Hello. Good afternoon, everyone. My name is Ignacio Diaz Garza, and I'm a Cash App customer, and I'm a founder of a surfing platform called Honda. I use Cash App to invest in stocks and Bitcoin, send money to friends as well as spending using the Cash Card. My question is, Does Kashuk plan to provide more education for customers in its investing product?
For example, adding more in-depth financials,
Yes. And thank you for being a customer. We do plan on adding more We think a big part of what we did both with Bitcoin and also with our Stocks product It's making sure that people have the information available to them to make informed decisions. And we've done this recently by putting News articles right in the app, so you'll be able to see all the latest Bitcoin news or all the latest news on any particular stock that you visit. And we created 2 instructional books for both Bitcoin and for stocks.
And we think there's a lot of opportunity to do even more within the product. And also, as we look at improving our customer service, as I mentioned in my opening remarks, There's going to be more opportunity to do things there as well. So we think education is a big part of what we need to do and it's definitely on the road
Perfect. Thank you so much.
Your next question is from the line of Lisa Ellis with MoffettNathanson.
Good afternoon. Thanks for taking my question. Good stats here on Cash App. I believe a year ago, the gross profit mix within Cash App With roughly 60% interest deposit, if I'm remembering right, 30% cash card and about 10% in bit Coin and other miscellaneous fees. But obviously a lot has happened in the last year and I know you called out The high adoption rates of some of the other products over the course of last year.
Can you give some updates on what the current GP mix Looks like for Cash App and how you see that evolving? Thank you.
Sure. Thanks for the question, Lisa. So let me sort of step back and talk about the strong unit economics and the growth of the business model over I spoke a little bit earlier already to efficient acquisition driven through network effects for growing our customer base While also growing the per customer engagement and monetization through strong retention within Cash App, retention at over 130% And ARPU, gross profit per customer growing 70% year over year to $41 in the 4th quarter. When you think about how we've been Able to do that. It's the growth in the breadth of the platform for Cash App was now 4 revenue streams driving more than $100,000,000 each, Approximately $100,000,000 to more than $100,000,000 each in gross profit in 2020 versus only one back in 2019.
And that includes, as you mentioned, some of them in deposit, cash card, cash for business and Bitcoin now. But we still think we are in the early days. As customers have used multiple products on the platform, they've generated 3 to 4 times greater gross Profit historically. And this has led to our growing gross profit per customer. And we're still early here.
CashGuard has our Strongest adoption to date and still remains at roughly 1 in 4 in terms of adoption from the monthly active Into the broader monthly active base and its monthly cash card usage and Bitcoin is at about 1 in 10. So we see a real opportunity to drive Adoption, further adoption into our existing base of products and with our existing base of customers and then layer on top of that the To grow the customer base and grow the product set over time. One of the really interesting ways that I think Cash App has to drive That sort of differential product adoption is the Boost aspect of Cash Card. Boost has been an interesting lever It's been a powerful tool to drive engagement and adoption not only with Cash Card, but also to graduate our customers To a broader ecosystem of products so that we can diversify their experience, provide greater daily utility and ultimately build multiple revenue streams Within our app, within as you think about Boost as a tool within Cash Card, it's differentiated in that it provides it Fans access really to instant rewards, no credit profile or fee required and those rewards can be personalized to the customer in real time.
And so it has been an acquisition tool for us and it's also been an engagement driver. Boost Active spend 2 times more on their cash card than other card active. Well, what we started experimenting with in the Q4 is how Boost is a differentiated tool to graduate Customers to the broader ecosystem of products. In the Q4 as Bitcoin demand was growing, we launched a Bitcoin boost Where Cash Card customers could get rewards in Bitcoin. And what we saw there was that half the customers boosted were new to Bitcoin And nearly a third of those who are new to Bitcoin went on to purchase their make their first Bitcoin purchase in the following month.
Similarly, we drove a boost with Paycheck deposits where we launched a unique boost for new direct deposit customers. And we've experimented with Flash Boost for a given time or for a merchant that Broadcast over social media. And so those have given greater awareness within the Cash App ecosystem of the broader product Which I think is a key lever that we have moving forward and how we can influence product adoption and ultimately growth of multiple revenue streams within Cash App.
Terrific. Thank you.
Your next question is from the line of Timothy Chiodo with Credit Suisse.
Great. Thanks a lot for taking my question. I wanted to touch on Credit Karma. Maybe you could give some added context around the e tax filing opportunity for Cash App, Whether it be retention, reactivation, new users and also how this could be something that we really should look for in Q1 for years to come. And then also a little bit more on the potential to turn some of these users into direct deposits starting with the tax refund and then obviously, hopefully, Hey, roll down
the road. Yes. We saw a pretty obvious opportunity in acquiring Credit Karma. As we've talked about on these calls, our roadmap consists of making sure that we're focused on the most critical needs And for our customers and accessing the economy and providing them really simple tools to empower them, tax is obviously A big part of that and anything we can do to make it easier for people to manage and file their taxes It's something we're signing up for. More than 2,000,000 individuals filed their taxes using Credit Karma tax last year.
And a lot of these solutions are pretty complicated and time consuming. And as we've done with all of our products within Cash App and throughout the seller ecosystem, We want to take a very strong point of view that they should be simple and work really hard to simplify them as much as we can. And as to your other question, we think any of these Critical solutions to problems people are having generally accessing the financial system will lead to using other products in our This is our whole strategy. People might come in because they receive money from a friend using the peer Your aspect and then may discover the ability to buy stocks or buy bitcoin, then discover that they can get a card and They can get their paycheck deposited to it and now they can file the taxes with it. So, each one of these things we believe positively reinforces the other.
And we have people who are hiring us to serve multiple jobs instead of being dependent And overly dependent upon just one, which would be a single point of failure for us. So, we think there's a lot of opportunity here and we're starting with Cash App. There's Probably more we can do on the solar side as well, but it's a really strong start and one we're pretty excited about.
Great. Thanks a lot. Yeah. And I was just a follow-up, but it sounds like you kind of touched on it. I was wondering if there was anything you could mention in terms of maybe there's an opportunity to leverage the Credit Karma tax Styling assets into the seller ecosystems, but it sounds like maybe that's down the road.
Yes. That's the other benefit of our ecosystem strategy and the We have 2 is that a lot of what we build for Cash App might be able to find its way easily into seller and vice versa and We've demonstrated that in the past. So we expect a lot more of those internal efficiencies and eventual future sharing as time goes on.
Great. Okay. Thanks a lot for taking those questions.
Thank you.
One question. Our next question is from the line of Archita Rawat with Bernstein.
Hi, good afternoon. Thank you for taking my question. So you disclosed cash outages at $36,000,000 up 50% year over year. Now as you look at your user base today and do competitive benchmarking, how much overlap do you see between Cash App users and users of other Similar platform and also, how does the customer acquisition and engagement of DashShap different versus your investors? Thank you.
Yes. So, Back to the previous answer, like I think our greatest strength both in Cash App and Seller is the fact that we are creating ecosystem of tools and And solutions for people. We're not focused on just being peer to peer or just being stock investment or just being Bitcoin purchase, but finding the simplest and easiest and most successful path for each, we believe is going to be the strongest approach. And of course, there's probably some overlap in many of those, but our thesis And what we're driving towards is when you find everything in one place and it's super easy and you can do things because of the connections that you can't do on other platforms Because they're all in one app, they're all in one service, that ultimately is the winning service and the winning pick. So, we imagine there's a lot we can do and we've shown some of these things like the Boost program and That's tied to direct deposit that other services just aren't able to do.
So in terms of acquisition, We don't have to be focused on just one thing. We need to show that like someone coming in for peer to peer, It's the easiest way to send money ever. And once they come in for that, that it's very simple for them to discover everything else So we're really looking internally and inward at how we make all of these features more accessible and Bring them to the surface for people so that they can activate them right away and start using them and not have to go to multiple apps To do the things they want to do every single day. And the same is true as I sell that for Cash App, the same is true for the solar business as well.
Thanks very
much.
Your next Question is from the line of Josh Beck with KBCM.
Thanks for taking the question. I wanted to follow-up a little bit More on Boost. It certainly seems like it's expanded beyond rewards program and you're finding lots of other Use cases to drive new product adoption.
The other thing that this could
be happening is you're acquiring a lot of scale With respect to spending patterns, spending categories. So I'm curious, have you had or progressed Much on the advertiser discussions in terms of maybe wanting to help fund some of those rewards or do we really think about it as It's really in a heavy engagement in multi product adoption phase and monetization, perhaps via Advertising contribution that's further down the road.
Yes. You're pointing to Sorry, sorry, Marina. You have the potential, but our focus right now is we think there's a lot of experiments that we can run We'll indicate like the ultimate actions that we should go with the business program. I'm really excited about the location aspect. Being able to understand where some is and Specifically, like what local sellers are around them and offer them a reward that they're actually going to value and actually going to use and do so instantly It's really, really powerful.
And we can expand that by opening up down the line. But This is another area where it shows the strength of having these 2 ecosystems, both on the seller side and also on the individual side. We're still in the phase of making sure that we're building a product that people value that is extremely easy. You don't even To think about it in order to use it and continue looking for opportunities To broaden it, but right now, focus on making sure all the capabilities and the attributes are there and it's just getting stronger and stronger every day.
And I'd just add Josh that we have the ability to be dynamic in how we should Spend with respect to Boost, the way we built the program is a flexible dynamic and potentially personalized program. And so we've been able to manage our costs And returned more efficiently and frankly on a week by week basis. About less than 5% Cash Card transactions were boosted in the 4th quarter. So we sort of see Boost as punching above its weight, frankly, in terms of its ability to impact The broader ecosystem given the relatively only 1 in 20 transactions are actually boosted, it really shows Cash Card Utility extends beyond Booth. And of course, we're working on expanding our merchant relationships.
We've seen, Booth's ability to drive a lift And acquisition at a compelling and low customer acquisition costs for various partners. So we'll continue to be working with them. On Cash Card spend more broadly, we've seen average spend per customer increase in the Q4 on a year over year basis With continued mix of spend being very diverse across food, grocery, gas, utilities, retail, Along with growth in card not present and mobile wallet use cases during COVID. So there are multiple ways that we can use the Card program coupled with a boost program to drive unique returns for our customers and increasingly potential for merchants as well.
Okay. It sounds like lots of levers there. So appreciate the context from both of you. Have a great day.
Thanks. Thank you.
Your next question is from the line of Dan Dolev with Mizuho.
Thank you. And thanks for taking my question. So, Jack, in the past, we talked about kind of the Holy Grail being Connecting the 2 ecosystems and you came up with the Cash by Cash App Aperol line recently. And we think this is maybe an attempt To think about how to connect the 2 ecosystems and then down the road maybe even offer like an alternative Can you talk about kind of the long term strategic vision of this move and what it means for the future? Thank you.
Yes. The team did an amazing job with the Cash by Cash App. So we wanted to cash Cash is definitely a reach culture and we want to make sure that we're emphasizing that as much as we can. We have a really cool customer base And they love the Cash App and we wanted to ensure that the people could express that in various ways and We launched the apparel line, but it also gave us an opportunity to demonstrate, both the power of Having something like Square Mine Store in our company and also what it means to be able to pay with the Cash App directly. And This is obviously early, but you can imagine where it might go as We make it even faster.
We make it even easier. And I think it draws both On the Cash App ecosystem and has acquisition opportunities there and also for the seller ecosystem, It has an opportunity there. And when you pair it with things like what we can do with Boost as well, we have a pretty powerful way to drive a lot of traffic And connect all the dots. So, as we've talked about on this call, I think there's A lot of opportunities between the two ecosystems and we are going to explore the most important ones. We've done a lot of Internal connections between the two systems and now we're focused on more of the customer facing connections.
And I believe They're quite powerful. So, I think both Cash App and the seller business have an opportunity to strengthen each other. And We're showing that off a little bit with cash by cash out, but there's a lot more to come.
Thank you. Well, thanks again. Amazing results. Appreciate it.
Thank you.
Your next question is from the line of George Mihalos.
Thank you for taking my question and congrats on very strong results again. Just wanted to ask the strength that you're seeing in the with the mid market sellers, How vertical specific is that or is it sort of broad based? I know you have a number of very vertical specific solutions out there that Are designed to resonate with somewhat larger merchants. And also the 40% of sales Coming in from your sales force efforts, what was that number maybe a year ago? Thank you.
Yes. Maybe I can start us off here. Thanks for the question, George. What we're seeing with mid market sellers is fairly broad based strength, Particularly during COVID, if you think about the pairing of strength in our omni channel efforts as well as Moving up market, we've been able to progress in our ability to serve restaurants. You can think about just even more recently the couple of products that we've launched Where that helps many restaurants adapt quickly in this changing environment without having to charge You can think of that as the interactive kitchen display system on demand and seller powered delivery and QR codes for self-service.
That helped us unlock, help sellers adapt, restaurants adapt and help us unlock going upmarket with restaurants. When we think about verticals, we found success, relative speaking success in this environment, We have seen the strongest year over year growth in verticals like health and fitness, home and repair and retail verticals in the 4th As well as those verticals have helped continue to find ways to adapt in this challenging environment. And as we think about the sales team, Again, looking given the strong returns that we've seen here, 5 quarter payback historically with the sales team, we want Double down on that. This year, we expect to double the size of our sales team this year. And that 40% Sort of engagement of our mid market sales coming via the sales team as we've enabled Greater efficiency for our sales team through AI and ML technologies.
And as mid market sellers have taken on more products On our ecosystem, we see, as I mentioned earlier, mid market tellers peaking on 2.5 products on average in our ecosystem. And we think Given the variety, the breadth of products that we provide across hardware, software, payments and financial Services that there's an even greater opportunity to offer those additional products to larger sellers over time to be able to meet their more complex needs.
Thank you for the color.
Thanks.
Your next question is from the line of Dan Perlin with RBC.
Thanks. Good evening. And there's a lot To digest here, so I appreciate all the information. The question I have is maybe
for Amrita, can you just talk a little bit
about the cadence of this investment
That you guys have outlined, understanding you highlighted $110,000,000 or so in the Q1. It kind of suggests that maybe it's a little more back end loaded. And I just feel like given all Opportunity that is facing the company. It might have been bigger. And then I think if I'm not mistaken, you also took up the high end of
that range, maybe $50,000,000 So
I'm just wondering what was for an opportunity that you saw that you wanted to seize upon. Thank you.
Sure. Yes. So the overall investment Step up that we envision for 2021 is $800,000 $900,000,000 Previously, we've said $800,000,000 to $850,000,000 This is really just about us completing our annual plan So it's our budgeting process and seeing opportunities to lean in given the strong results we've driven from a cohort economic and payback in ROI perspective We were talking about earlier. So we see this as really just a refinement of the earlier numbers we shared with you and a reflection of the opportunity ahead. In terms of how those investments spread across the business and then how they spread across the year, as you think about the ecosystems, we plan to invest Directly about 60% of that step up into Cash App and 40% into Seller.
And in terms of areas of spend, about Half is a step up going into sales and marketing and about a quarter each in the product development and G and A as we build upon the foundation and expand our product breadth. In terms of timing, as mentioned, Q1 is an important quarter for us to lean into investments From a sales and marketing perspective, especially as you think about the seller ecosystem where many sellers are thinking about Who they're going to hire for their various needs coming out of the holiday period. And so that is an area that we But if you think about the broader 800 to 900, of course, there's a component there that's related to hiring and that hiring will Staged throughout the year and compound in terms of its impact throughout the year. So that's a little bit of the progression that you see as well from quarter to quarter.
Okay, great. Thank you.
Thanks.
And our last question is from Jason Kupferberg with Bank of America.
Hey, Jason. Just a 2 parter on Bitcoin. First off, the revenue there, I think it was only up around 7% or 8% quarter over quarter, even though obviously the price of Bitcoin skyrocketed and there's Obviously, there's been a lot of retail trading, so I was curious if there were any noteworthy call outs there. And then just wanted to get your guys' perspective on pros and cons of Bitcoin versus the types of central bank digital currencies that are being discussed more actively by various governments around the world. Thank you.
I can maybe hit the first topic that you hit, Jason, in terms of Bitcoin quarter over quarter growth. We've continued to see strong adoption with 3,000,000 customers across Bitcoin Throughout the year for Cash App and in January, saw 1,000,000 new to Bitcoin in the year in the month. So increasing awareness that's building through time. And I think you'll see that reflected in the results as well With Bitcoin gross profit, which is how we sort of anchor to the economic impact to our business, Bitcoin gross profit growing Meaningful on a year over year basis and also on a quarter over quarter basis. As we think about the opportunity as well from a volumes perspective, Bitcoin in the 4th quarter grew 2.5 times On a year over year basis in Cash App and continues to be a strong front door for us As we see product adoption increasing for customers in their 1st month on Cash App.
So we're excited about the opportunity that we see But you're right, it's still early days. Only about 1 in 10 customers on Cash App are using the Bitcoin product and we see an opportunity to grow that over time.
And our thesis around Bitcoin is really quite simple. We believe the Internet We'll have a native currency. The Internet has broken through so many barriers all around the world for every industry. And we do think money and currency are a big part of that future. And it doesn't take a lot to imagine that Certainly, that will exist and that it will be Bitcoin.
And the reason why is It is completely open. It is driven by consensus. It is something anyone can see and no particular third party can Not only in investments, but also through products and through development. It gets even more trusted and more solid and more secure And something that more people can utilize. And that's our goal is to help people Understand what Bitcoin is, what it can be used for and make it a whole lot more useful and accessible for anything that they want to do on the Internet.
And 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 be hosting our Q1
Ladies and gentlemen, thank you for participating in today's program. This does conclude the program. You may