From CNBC: 2024-11-07 21:56:13

Block reported third-quarter revenue that fell short of Wall Street expectations, causing the stock to initially drop after hours. However, investors focused on profitability metrics, leading to a rebound. The company’s earnings per share were 88 cents adjusted, beating the expected 87 cents, with revenue at $5.98 billion, lower than the expected $6.24 billion.

Finance chief Amrita Ahuja highlighted the company’s gross profit growth, with $2.25 billion, up 19% from last year. Net income was $283.7 million, or 45 cents per share, compared to a loss of $88.7 million a year ago. The Cash App business reported $1.31 billion in gross profit, a 21% increase year-over-year.

Despite missing analysts’ estimates for gross payment volume at $62.4 billion, Block expects a 14% increase in gross profit for the fourth quarter. The company acquired Afterpay for $29 billion, focusing on buy now, pay later services. CEO Jack Dorsey emphasized lending products like Square Loans and Cash App Borrow.

Block’s lending products utilize AI for faster decisions and better risk management, maintaining low loss rates. Analysts see lending as a key driver for Cash App user monetization. The company is exploring opportunities for an advertising business within Cash App and cost-cutting measures by scaling back Tidal and winding down TBD.

Dorsey highlighted Block’s focus on making bitcoin more accessible through Cash App and holding 8,300 bitcoin on its balance sheet, worth about $630 million. The company aims to leverage its position in the cryptocurrency market for future growth and innovation.



Read more at CNBC:: Block (SQ) earnings Q3 2024