On August 1, 2024, Block Inc (SQ, Financial) released its 8-K filing for the second quarter of 2024. Founded in 2009, Block provides payment services to merchants and operates Cash App, a person-to-person payment network. In 2023, Square's payment volume was a little over $200 million.
Performance Overview
Block Inc (SQ, Financial) reported total net revenue of $6.16 billion for Q2 2024, up 11% year-over-year but below the analyst estimate of $6.35 billion. Excluding bitcoin revenue, revenue was $3.54 billion, up 13% year-over-year. The company reported a net income of $195 million, translating to earnings per share (EPS) of $0.31, which missed the analyst estimate of $0.33.
Key Financial Achievements
Block Inc (SQ, Financial) achieved a gross profit of $2.23 billion, up 20% year-over-year. Cash App's gross profit grew 23% year-over-year, driven by increased inflows per active user and higher monetization rates. Square's gross profit grew 15% year-over-year, supported by strength in software, integrated payments, and banking products.
Income Statement Highlights
| Metric | Q2 2024 | Year-over-Year Change |
|---|---|---|
| Total Revenue | $6.16 billion | +11% |
| Gross Profit | $2.23 billion | +20% |
| Net Income | $195 million | N/A |
| EPS | $0.31 | N/A |
Balance Sheet and Cash Flow
Block Inc (SQ, Financial) ended Q2 2024 with $10.3 billion in available liquidity, including $9.5 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities. The company issued $2.0 billion in senior unsecured notes due in 2032 and repurchased 5.7 million shares of its Class A common stock for $390 million.
Strategic Initiatives and Challenges
Block Inc (SQ, Financial) is focusing on enhancing its sales, partnerships, marketing, and product strategies. The company announced that Nick Molnar, CEO and co-founder of Afterpay, will lead a centralized sales function across Block. The company is also ramping up investments in its partnerships ecosystem and improving its marketing strategy to drive growth.
"We’re currently on track to reach Rule of 40 by 2026, with Adjusted Operating Income margins expanding significantly year over year for both Square and Cash App," the company stated in its shareholder letter.
Analysis
Block Inc (SQ, Financial)'s mixed results highlight both opportunities and challenges. While the company missed EPS expectations, it missed revenue estimates, indicating potential headwinds in its core business. However, the strategic initiatives and strong growth in gross profit suggest a positive outlook for long-term growth.
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Explore the complete 8-K earnings release (here) from Block Inc for further details.
