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 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'll 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.
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'll 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. 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 would like to turn over to Jack.
Good day, everyone, and thanks for joining us on our call today. I wanted to start off just by talking a little bit about some of the highlights from the quarter and pass it off to Amrita for some of her comments. One quarter into 2019, what's been top of mind for me and us has been around our ecosystem that we're building. This is our strongest competitive differentiator. This not only benefits our customers, both sellers 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 were able to very quickly build Virtual Terminal and get it to scale.
Because we built the Cash Card, that enabled us to build the Square Card to offer a similar offering for sellers. This quarter, we relaunched 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. 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. It 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 omnichannel for quite some time. This quarter, we launched the new Square Online store, we made it so that it has automatic syncing of both online and in-person data.
All of a seller's 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 U.S. Square Online store launched in Australia, Canada, the U.K., and the U.S. Square Invoices launched in all of our markets at once. We want to see more of our products do this. Japan has been a very interesting story. I was in the country a few months ago, we're starting to see a lot more tailwinds within the market rather than headwinds. There's a few things fueling this.
One, the government is working to double card payments, they are pushing and incentivizing both consumers and also sellers to use more digital means of payments instead of paper cash. Two, we launched a Square Stand and our Square Contactless and 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 pair wirelessly or through a wire. It allows them to hold their iPad and hook it up to the new Square Reader and just is an overall better experience than we were providing in the market in the past. Three, we have a new partnership with SMBC, which is distributing our readers in all of their bank branches around the country.
Now any one of our Japanese sellers to-be can go to their local bank branch, pick up a Square Card Reader, and be in business. It is at parity with what we offer in the U.S. and our other markets. This all combines with the fact that Japan is hosting the 2020 Olympics, the Rugby World Cup, 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 know how to, usually with card or with a phone. Makes it a perfect storm of a situation where we can really see a potential for a lot of growth. We're really excited about Japan and our increased velocity in our markets outside the U.S. 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. Third, we're raising revenue guidance for the full year 2019 on the basis of strong underlying trends across our business. 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 half a 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. We drive daily utility in Cash App. We also saw growth in engagement as measured by transaction frequency per active customer. With the compounding effects of growing reach and growing engagement per active, Cash App volumes grew nearly two and a half times year over year. Second, we continue to build out our 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 our investment in scaling an important product to our sellers. This is a product that targets a large market opportunity with $1 trillion in consumer invoices sent 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. Now we've 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. We see significant runway ahead. Finally, we're increasing our full year revenue guidance to reflect ongoing momentum in the business. We're raising our full year 2019 total net revenue by $60 million. We're raising full year adjusted revenue guidance by $30 million. This represents a 43% growth rate, an increase of two points compared to our prior guidance. The increase was primarily driven by outperformance in Cash App, as well as continued strength 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 services and international. I'll now turn it back to the operator to start the Q&A portion of the call.
To ask a question, please press star one on your telephone keypad. In order to allow everyone time for questions, we ask that you please limit yourselves to one question each. The first question comes from Tien-Tsin Huang of JPMorgan. Please go ahead. Your line is open.
Hi. Thanks so much. I wanted to ask on the EBITDA upside this quarter versus your guidance. Looks like it was bigger than usual by our account, and it's bigger than the revenue upside, I believe, as well. Can you detail a little more for us what fueled the upside? I heard Cash App and strength in seller. Any more you can give us on that? Also, again, like you said, Amrita, you're reinvesting by holding EBITDA guidance, which makes sense, but where are you prioritizing your investments from here? I'm curious between consumer and seller and everything else you guys have going on, what's changing in your priorities, if at all? Thanks.
Sure. Thanks for the question, Tien-Tsin. 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 strength across the 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 of sellers increasing in adjusted revenue contribution. We're moving into even larger sellers.
As I just mentioned, GPV for mid-market sellers grew 50% year-over-year. From an SNS revenue standpoint, we doubled organically year-over-year. With broad strength, a couple of things to highlight there, in particular with Cash App, we drove outperformance. As you heard, volume grew nearly two and a half 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 products. For EBITDA, you saw the adjusted revenue beat flowing through to the bottom line. We also had some timing of expenses in the quarter, which we now expect to materialize later in the year. 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 timelines to reinvest. You'll see that flow through in future quarters.
All right. It's clear. Thank you.
Your next question comes from Darrin Peller of Wolfe Research. Please go ahead. Your line is open.
All right. Thanks, guys. I just want to touch again on the, just given how strong Subscription and services keeps holding up. Look, Cash App volume is good to see it was up two and a half times. I guess that's showing the strength from the doubling of users is showing better engagement. If you can just comment on how much that doubling is actually being monetized, how many of those users now are now being monetized so far, and how much does that contribute, the Cash App drivers contribute to Subscription and services? 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.
Thanks for the question, Darrin. I will start off with your question on Cash App. You are right, we saw strong growth in Subscription and services-based revenue in the quarter, doubling on an organic basis. With respect to Cash App, what we are really focused on is driving a strong business model, which we are seeing play out here through network effects, through engagement growth, all of which should lead to meaningful revenue growth, and we are 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 adults in the U.S. alone that are unbanked or underbanked. Clearly, with our success consistently in the top 20s in the iOS App Store, we are achieving mainstream scale. The way we think about the business model for Cash App is first driving reach.
The network effects within the business and the frictionless onboarding that the product teams have focused on have driven really efficient acquisition at scale. You have seen that play out with the doubling of the monthly actives. You also see that in our financials. What we spend to acquire a monthly active is a fraction of what traditional financial institutions spend, and that is 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, cryptocurrency, all within a relatively recent time period. Another proof point of that daily utility is if you look in our filings, you will see that we have tripled the amount of customer stored funds within Cash App.
That obviously Cash App volume is growing even faster than monthly actives, as we shared. Cash Card is a big part of this, where we are driving engagement and higher lifetime 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. As we launch more features, as we launch more services, as we grow daily utility, we believe monetization will follow.
Darrin, this is Jack. On Square Card, just to remind everyone, this is a card that we enable sellers to receive. Basically it allows them to download the Square Point of Sale, and get a place to store their money, and also a card that is Mastercard branded that they can use anywhere. Basically they do not have to make a trip to the bank to get into business, which is pretty cool. One of the biggest reasons we did Square Card was to give our sellers faster access to their funds. This has been a consistent theme throughout our history. The faster we give access to funds, the more people can make smart decisions about how to build their business. It ultimately leads to these businesses growing over time.
We found in our early pilot that over 40% of Square Card sellers did not previously have a business debit card, they're actually mixing their business funds for their shop with personal funds. 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. This is pretty excellent and a strong leading indicator that there's product market fit, and something that provides a lot of utility to get access to funds to actually focus on what matters most, which is building the business. We think there's a long runway here. As I said earlier in my opening, this is all based on Cash Card functionality and that system.
We've learned a ton through our Cash Card, and we expect to take all those learnings and make it better, but for a seller audience.
That's really helpful. Thanks.
Thank you.
Thank you.
Your next question comes from the line of Eric Ciancaglini, a Square seller. Please go ahead. Your line is open.
Yeah. Thanks, guys. It's Eric Ciancaglini . Again, I'm a Square seller. The name of my business is Chank's Pizza Cones. We actually serve pizza in a cone shape. My question is, 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 see an 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?
Thank you for the question, Eric, and thanks for using Square. 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. With Payroll, we looked pretty deeply at a lot of the time that was being spent just managing employees within each one of our sellers' shops. We already had an ability to use timecards within our register, and it just felt like a natural move to also figure out how to use that system to pay people as well. It really speaks to something we want to do more of and see more of, is kind of see a lot more overlap between the seller ecosystem and the individual ecosystem that we're building with Cash.
One of the things that we did for Payroll, for instance, is employees can be paid via the Cash App. We believe it's an extremely easy and fast way to get paid, but also to utilize your money much faster as well for those employees. As we looked at the opportunity, and we saw where we could add some value, we decided to do it. Generally, that's how we think about strategy going forward, is identifying real critical needs and 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.
Great, thanks.
Your next question comes from the line of Josh Beck of KeyBanc. Please go ahead. Your line is open.
Thanks for the question. I wanted to follow up on the Square Card. Sounds like nice product market fit with the stat that 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, it feels like the adoption curve could be fairly strong. How should we think about that? Then secondly, when we think about the Build with Square pipeline, obviously you have a really good relationship with Eventbrite, where it's more of an online gateway capacity. How should we think about the pipeline of opportunities there?
Thanks for the question, Josh. On Square Card, I don't believe we've done much in the way of traditional marketing or any sort of push outside of the product itself. We do think there's a lot of opportunity to make it known that we are doing this. Right now we're making sure that the sellers that we see that would really benefit from it have access to it. There's a number of things that we can do, both in terms of onboarding, 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 product feels really amazing, works, provides utility, and then really turn on the gas. 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 times, and something that we definitely exceeded our expectations in the results so far. On Build with Square and Eventbrite, we see Eventbrite certainly as an amazing partner, but also a prototype of another marketplace. We have a marketplace within Caviar, we have a marketplace within Eventbrite. We do believe that we should be building within our developer platform more opportunities for marketplaces like Eventbrite. We get to learn a lot from this partnership, and that will lead to more opportunities outside of any one company, but any marketplace that exists can utilize our services. That's ultimately the goal.
Very helpful. Thanks, Jack.
Thank you.
Your next question comes from James Schneider of Goldman Sachs. Please go ahead. Your line is open.
Good afternoon. Thanks for taking my question. I was wondering if you could maybe comment on the further development and traction you're getting with your vertical specific software, specifically things like Square for Restaurants. I think there's some anecdotal evidence that you have some competitive takeaways there. Maybe talk about how that is going as well as the traction on your sort of other more traditional retail solutions. Any kind of metrics you could provide as an update on that front will be helpful. Thank you.
Yeah. Just backing up a little bit, when we think about vertical points of sales, we don't just limit ourselves to Square for Retail and Square for Restaurants. We have Invoices, for example, we have Appointments. This is a broader ecosystem of what we see in terms of vertical adoption. In the actual points of sale with restaurants and retail, restaurants, we're pretty pleased with the adoption and what we're seeing. 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 is proven with restaurants. 65% of restaurant sellers have self-onboarded, 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. 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. We are reaching large restaurants, and they are onboarding themselves. Those two data points are excellent in our view. On the Square for Retail side, as you probably have been following, we had to do a little bit of a reboot here. One of the things 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. That made a product that found some pretty significant product market fit right away. We did not do that with the original Square for Retail.
We rebooted the whole thing, following that pattern, we're seeing some equally good results from that move. In contrast, about 85% of retail sellers self-onboard, versus the 65 on restaurants, nearly 40% of those sellers are new to Square, which is excellent. Average analyzed GPV of Square for Retail seller is nearly $250,000. Again, we continue to be attractive to the very small and the very large with the exact same software. This is out of intent of wanting to build something that scales from the very small to the very large. Was that, I don't know, was that your whole question, or did I miss something?
It was. Thank you, Jack.
Okay.
Maybe one for Amrita. Just philosophically, as you approach the EBITDA guidance, I think you had previously talked about kind of seeing a similar margin improvement from a margin percentage basis as we saw last year. Obviously, you're taking up your revenue, but leaving EBITDA the same. Maybe I understand the timing expenses 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.
Sure. 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. In our 2019 guidance, you see that we're leading with this. We're maintaining our EBITDA guidance of 60% year-over-year growth at the midpoint while raising guidance on revenue to 43%. We focus on financial discipline, we focus on operating excellence, and you've seen that play out with OpEx leverage in our business. We expect over time adjusted EBITDA growth to continue to outpace adjusted revenue growth as it has for each of the last five years.
Our reinvestment that we're focused on includes investing into the Cash App, which historically we've been investing in, and it's bearing fruit in a meaningful way now, as well as investments in our seller 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. 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.
Thank you.
As a reminder, we ask that 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.
Hi. Terrific. Thanks for taking my question. Question about the Square Online store. Phenomenal to see that launch this quarter, the relaunch of Weebly. Can you talk about when you're looking a little more detail on that, like when you're looking at your seller base, do you have a sense for what proportion of that base are candidates for adding the online store, how you're going after them from a sales marketing perspective? 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.
Lisa, thank you for the question. 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. That is in person, that is online, and also within mobile apps. 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. We've tried to make it as effortless as possible. There's still some work to do there.
Far, we have seen about 70% of Square Online sellers have used Square before expanding online. As we've seen generally, when a seller does go online or an online seller goes offline, they do increase their sales, and that is a goal. I don't have exact metrics around what those look like. We're making sure that, one, our sellers know that this option is available. It's an easy flip of a switch. If they want to do anything a little bit more custom or personalized to their business, they can utilize our API or hire a developer to utilize the API. Marketing ideally starts within the product, but we're going to continue to experiment and test as well. Anything you want to say, Amrita, about economics?
We know that 30% of our larger sellers serve their customers via more than one channel on Square. We're very focused on expanding our opportunities across going deeper within sellers and providing new ways that sellers can onboard.
Terrific. Thanks to both of you.
Thanks, Lisa.
Your next question comes from Rayna Kumar of Evercore ISI. Please go ahead. Your line is open.
Yeah, if you can speak about some of the other markets you're interested in entering.
Rayna, we didn't hear your full question. Caught you at the end, and it was very muted.
Okay. Let me try again.
There you are.
There you go. What's your progress been in some of your international markets, like the U.K., Canada, and Australia? If you can also discuss some of the other markets you may be interested in entering.
I'll start there. One of the reasons Weebly was very interesting to us is because they are operating in markets that we're not in. That gave 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 the United States around all of our markets. Japan is the most notable recent example of this, where as I said earlier, we do see 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.
We've been in that market for quite some time. This is the first time we've 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 phones. We're pretty pleased with that. 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 launched in all of our markets at once. That's what we want to see a whole lot more of. 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.
Sure. As Jack mentioned, we are really focused on increasing our product velocity for launches outside of the U.S. 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., U.K., Canada, and Australia. 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 60-80 across the U.K., Canada, and Australia. We've got ongoing brand campaigns in each of our international markets now.
We launched a brand campaign in the U.K. Saw efficiency from that. Now that we're reaching feature completeness across our portfolio in 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. We see a big opportunity ahead of us. We'll try to continue to execute.
Very helpful. Thank you.
Your next question comes from the line of Bryan Keane of Deutsche Bank. Please go ahead. Your line is open.
Yeah. Hi, guys. Wanted to ask as Square moves up the market to the mid to large clients. I assume Square is likely replacing incumbents. Curious on what's winning versus the competition. Is it all just the omni solution you guys can provide? Just thinking, do you guys have enough in the sales channels to go after that larger market? Thanks.
Yeah. I'll start off. We continue to see the larger sellers find value and utility in our base offerings. We've built products with intent of the same software scaling from very small to very large, and that continues to resonate even with larger sellers. We continue to see larger sellers self-onboard. We continue to see them take advantage of the broader ecosystem. All these things combine towards what differentiates us from our competitors. If I only had to pick one, it would be the ecosystem, and just 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 they 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. I'll pass it over to Amrita.
Yeah, sure. I'll just add to Jack's comments. We're focused, as you said, on building products that serve larger sellers, whether you look at our hardware products like Square Terminal or Square Register, both of which over-index to larger sellers, Square Terminal with $165,000 GPV, Register with $300,000 GPV, or the developer platform, as Jack mentioned, which over-indexes to mid-market sellers. The verticals, which Jack had earlier mentioned, over-indexing to larger sellers. We're also trying to reach sellers from a marketing standpoint. We've got products that address larger sellers and smaller sellers, then we want to reach from a marketing perspective, these larger sellers. Just in April, this last month, we launched a new ecosystem marketing campaign reaching 7 million small and medium-sized 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, but we're focused on continuing to grow that through this ecosystem marketing campaign and continuing to build out strong products that address this market.
Okay, great. Thanks for the call.
Thank you.
Your next question comes from Ramsey El-Assal of Barclays. Please go ahead. Your line is open.
Hi, guys. Thanks for taking my question. I wanted to ask again about your online strategy. Obviously, you're advantaged in terms of linking online and offline sales for retailers, and I get that's what makes the Square Online store compelling. Can you do something similar at other platforms like a WooCommerce or a Magento or Shopify, those types of commerce platforms? Is there a bigger e-commerce, like omni-channel addressable market that you can go after by kind of opening up and working to integrate online and offline through those folks?
Yeah. We have focused more on omni-channel rather than just pure e-commerce, because that's really where our sweet spot is with sellers. You can imagine us favoring one more in the future, given how much activity is happening with e-commerce. All this is going into our strategy around the developer platform. We want to make sure that we're 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. We do believe that there's a ton of room here. 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 what we're focused on, and that's what we're proving out.
Great. Thanks.
Thank you.
Your next question comes from Bob Napoli of William Blair. Please go ahead. Your line is open.
Thank you for the question. The purchase volume, while very impressive at 27% growth, has decelerated somewhat. You certainly have waken up a lot of competitors, in this space, Jack, and they're investing more heavily, to compete with Square. I know you've built the ecosystem, and others are trying to build something similar to that. Are you seeing more competition, whether it's from Clover or Toast or other merchant acquirers or fintech companies?
Yeah. We are definitely seeing competition on the edges. We have a lot of firms out there that are making solutions around payments, around payroll, around delivery, around everything that we serve P2P or whatnot. Again, I think it really comes back to this concept of ecosystem and how all these things tie together. We have built, I think, a fundamentally new model within finance that we benefit a lot from, and we do expect people to copy aspects of it. We want to make sure that we're focused on being the best out there, and really focusing on the quality of the experience, the elegance, the fact that it is intuitive, so it's self-serve, that it works seamlessly with all tools that we provide and also third-party tools. That continues to win. We do expect competition on that dynamic.
I think we have a pretty good and proven track record of being able to scale that into something that is meaningful both for sellers, individuals, and also us.
Bob, just on your GPV point, just to give you a little bit of context there. In the first quarter, GPV was $23 billion of 27% year-over-year. Over the trailing four quarters, we had approximately $90 billion of GPV. What we're seeing drive growth there, outsized 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 billion in GPV over the trailing four quarters, is growing much faster versus the blended overall GPV rate.
Some of the products that Jack was referencing, developer verticals, online, these are all relatively younger products, and they're growing meaningfully faster. We're going to continue to push them. GPV is only one measure of the value that we provide to 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. 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.
Great. Thank you. Appreciate it.
Thank you.
Your next question comes from Dan Perlin of RBC Capital Markets. Please go ahead. Your line is open.
Thanks. Good evening. The transaction cost as a percentage of GPV was a little bit better than what we had anticipated, and conversely, the profit dollars associated with that and the profit margin was also better. The question I really have is there something that's happening as a result of Cash App or Cash Card that is changing this funding mix, so to speak, as we think about that? If so, is this trend something we should be tracking a little more closely, like commensurate with the Cash App growth? Thanks.
Thanks for the question, Dan. No. Cash App you should think of as separately from transaction costs. As a reminder, both GPV and transaction profit growth exclude Cash App. Separately, as you've heard us say, Cash App has continued to outperform and drove revenue growth for us and for the overall business, with volumes up two and a half times nearly, year-over-year. I would think of that separately from a transaction cost perspective.
That's true for Cash Card as well?
That's right.
Okay. Thank you.
Thank you.
Your next question comes from James Faucette of Morgan Stanley. This will be the last question.
Thank you very much. Jack, I wanted to ask kind of an industry question of you. We've seen, obviously, moves to consolidate some of the up-market merchant acquirers and participants in the market. I know in the past you've indicated that you didn't feel like you could achieve everything that you wanted to if you were part of a bigger organization. I'm wondering how you're thinking about consolidation, and if it makes sense for Square to be looking at doing something similar or its own M&A activity, et cetera, in the 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. They do so in a fairly typical pattern that we've resisted, which is look at just the parts of the equation instead of building a greater ecosystem. We do have a significant M&A strategy in terms of looking for really great teams, really great products. 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 is really high impact. That's what we want to optimize for ultimately.
It comes down to we're constantly looking at the horizon of what companies are out there, startups, 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. I do think we'll 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 durability. We're hired for multiple jobs by a seller, by an individual, rather than just be dependent upon one. All these things are what we want to drive, and M&A is certainly a channel to do so.
That's great. Thank you.
Thank you.
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 second quarter 2019 earnings call on August 1st. Thanks again for participating today.
Ladies and gentlemen, thank you for participating in today's program. This does conclude the program. You may now disconnect.