Block, Inc.XYZ
Block, Inc. Commitments Disclosure
COMMITMENTS AND CONTINGENCIES
Operating and Finance Leases
The Company’s operating leases are primarily comprised of office facilities. The Company's leases have remaining lease terms of one year to eleven years, some of which include options to extend up to five year terms, or include options to terminate the leases with advanced notice. None of the options to extend the leases have been included in the measurement of the right-of-use asset or the associated lease liability. There were no finance lease obligations as of December 31, 2025.
The components of lease costs for the year ended December 31, 2025 were as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Fixed operating lease costs | $ | 56,379 | $ | 57,232 | |||||||
| Variable operating lease costs | 22,722 | 22,344 | |||||||||
| Short-term lease costs | 1,504 | 1,939 | |||||||||
| Sublease income | (394) | (1,119) | |||||||||
| Total lease costs | $ | 80,211 | $ | 80,396 | |||||||
Other information related to operating leases was as follows:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term | 5.4 years | 6.2 years | |||||||||
| Weighted-average discount rate | 3.83 | % | 3.75 | % | |||||||
Cash flows related to leases were as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Payments for operating lease liabilities | $ | (71,849) | $ | (74,129) | |||||||
| Supplemental cash flow data: | |||||||||||
| Right-of-use assets obtained in exchange for operating lease obligations | $ | 38,919 | $ | 36,976 | |||||||
Future minimum lease payments under non-cancelable operating leases (with initial lease terms in excess of one year) as of December 31, 2025 are as follows (in thousands):
| 2026 | $ | 66,746 | ||||||
| 2027 | 67,850 | |||||||
| 2028 | 61,793 | |||||||
| 2029 | 55,819 | |||||||
| 2030 | 51,204 | |||||||
| Thereafter | 44,333 | |||||||
| Total | $ | 347,745 | ||||||
| Less: Amount representing interest | 34,822 | |||||||
| Less: Lease incentives | 738 | |||||||
| Total | $ | 312,185 | ||||||
The Company recognized total rental expenses for operating leases of $58.2 million, $52.1 million, and $75.8 million during the years ended December 31, 2025, 2024, and 2023, respectively.
Purchase Commitments
From time to time, we may enter into non-cancelable purchase obligations related to cloud computing infrastructure. The commitment amounts in the table below are associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, and the approximate timing of the actions under the contracts.
As of December 31, 2025, the future minimum payments under the purchase commitments were as follows (in thousands):
| Payments Due By Period | |||||
| 2026 | $ | 419,504 | |||
| 2027 | 404,504 | ||||
| 2028 | 355,000 | ||||
| 2029 | 370,000 | ||||
| 2030 | 410,000 | ||||
| Thereafter | 392,000 | ||||
| Total | $ | 2,351,008 | |||
Litigation and Regulatory Matters
The Company is currently subject to, and may in the future be involved in, various litigation matters, legal claims, investigations, and regulatory proceedings.
Regulatory and Governmental Matters
The Company received subpoenas from Attorneys General from multiple states, seeking the production of information related to, among other things, Cash App’s handling of customer complaints and disputes. In June 2024, the state Attorneys General presented the Company with the results of their investigations. In December 2024, the state Attorneys General presented the Company with potential terms for resolving this matter and the Company is engaging in conversations with the state Attorneys General to resolve this matter on acceptable terms. The Company is unable to predict the likely outcome of this matter, which may include one or more public orders, and cannot provide any assurance that the state Attorneys General will not ultimately take legal action against the Company or that the outcome of these matters will not have a material adverse effect on the Company. It is probable that the Company will incur a loss in connection with this matter, and the loss could be material; however, the Company cannot estimate the amount of possible loss or range of loss at this time.
The Company also received inquiries from the SEC and Department of Justice (“DOJ”) shortly after the publication of a short seller report in March 2023. In July 2024, the Company received a follow-on inquiry from the SEC. The Company believes these inquiries primarily relate to the allegations raised in the short seller report, the Company’s compliance and risk practices, and related disclosures. The Company continues to cooperate with both agencies. The Company is unable to predict the likely outcome of these matters and cannot provide any assurance that the SEC or DOJ will not ultimately take legal action against the Company or that the outcome of any such action, if brought, will not have a material adverse effect on the Company.
Litigation Matters
On January 17, 2025, a putative federal securities class action was filed in the U.S. District Court for the Northern District of California against the Company and certain of its officers alleging violations of Sections 10(b) and 20(a) of the Exchange Act on behalf of a putative class of persons who purchased or otherwise acquired the Company’s Class A common stock between February 26, 2020 and August 1, 2024. The plaintiff alleges, among other things, that the Company made materially false or misleading statements regarding its anti-money laundering (“AML”) and compliance programs and seeks unspecified damages, attorneys’ fees and other costs. On June 18, 2025, plaintiffs filed an amended consolidated complaint. On January 6, 2026, the court denied the Company’s motion to dismiss.
In addition, between February 5, 2025 and April 24, 2025, multiple shareholder derivative actions were filed in the U.S. District Court for the Northern District of California against certain of the Company’s current and former directors and officers based on allegations substantially similar to the securities class action. The plaintiffs seek unspecified damages, attorneys' fees and other costs. On May 7, 2025, the Court ordered that the actions were related and renamed the related cases as “In re Block, Inc. Shareholder Derivative Litigation.” On January 6, 2026, the court denied the Company’s motions to dismiss in the derivative actions.
A separate derivative action making similar claims and requesting similar damages was filed on October 9, 2025 in the U.S. District Court for the Northern District of California that has not been consolidated.
It is reasonably possible that the Company will incur a loss in connection with these federal securities and derivative matters, and the loss could be material; however, the Company cannot estimate the amount of loss or range of loss at this time.
Tax Matters
In June 2024, the Office of the Treasurer and Tax Collector of the City and County of San Francisco (the "Tax Collector") issued an assessment of San Francisco gross receipts tax, including interest and penalties, for fiscal years 2020 through 2022, asserting the Company owes incremental taxes on a portion of the receipts generated by the Company related to sales of bitcoin. The Company paid the assessed amount of $71.4 million in January 2025. In September 2025, the Tax Collector issued an assessment of gross receipt tax, including tax, interest, and penalties, of $42.7 million for fiscal years 2023 and 2024, which the Company paid in October 2025. In both cases, the Company paid the assessment in order to preserve its rights to dispute the assessments and initiate the dispute process. The Company strongly disagrees with the Tax Collector’s assessments and plans to vigorously pursue all available remedies. Given the assessed amounts must be paid to initiate the dispute process and will be returned in full or used to settle any final amount due to the Tax Collector, the Company views the amounts as deposit assets.
The Company estimates its aggregate exposure for fiscal years 2020 through 2024 could be up to $114 million, which is the full amount of the assessments already paid. The Tax Collector may continue to challenge the Company's gross receipts tax positions. The Company has currently concluded that a loss for this matter is not probable.
The Company regularly assesses the likelihood of adverse outcomes resulting from litigation and regulatory proceedings and adjusts the financial statements based on such assessments. The eventual outcome of these matters may differ materially from the estimates the Company has currently accrued in the financial statements.
In addition, the Company is subject to various legal matters, investigations, subpoenas, inquiries, audits, claims, lawsuits, arbitrations, and disputes, including with regulatory bodies and governmental agencies. The Company cannot at this time fairly estimate a reasonable range of exposure, if any, of the potential liability, if any, with respect to any of these other matters. Although the Company may be subject to an adverse decision or settlement, it does not believe that the final disposition of any of these other matters will have a material adverse effect on its results of operations, financial position, or liquidity. However, the Company cannot give any assurance regarding the ultimate outcome of any of these matters, and their resolution could be material to the Company's operating results.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 24, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 26, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.