Block Inc (SQ) Stock Surged 17.5% on Upbeat Revenues, Profits

The Block Inc (NYSE: SQ) stock price surged 17.5% after releasing its third-quarter financial results. The fintech company generated revenues worth $5.6 billion during the quarter, slightly surpassing analyst estimates of $5.5 billion. The figure marked significant growth compared to the same quarter last year, which reported revenue of $4.5 billion.

The company reported a net loss of $29 million for the quarter. Although it exceeded analysts' predictions of a $67 million loss, it represented an increase from the $15 million loss reported in the third quarter of the previous year.

Block's adjusted earnings per share (EPS) came in at $0.55, surpassing analyst estimates of $0.45. This performance indicates the company's ability to generate profits despite some losses, underscoring its overall financial strength.

The company had previously guided for full-year adjusted EBITDA of $1.5 billion. However, it now anticipates adjusted EBITDA to fall within the range of $1.66 billion to $1.68 billion. Block is now guiding for adjusted full-year operating income between $205 million and $225 million, a significant increase from its prior guidance of $25 million.

Block’s 2023 gross profit is now expected to range from $7.44 billion to $7.46 billion. For 2024, the company guided to $875 million in adjusted operating income. Bitcoin revenue grew substantially, reaching $2.42 billion from $1.76 billion. Gross profit increased by 21% to $1.9 billion from $1.57 billion.

Notably, Cash App, Block's payment platform, experienced impressive revenue growth of $3.58 billion, a 34% year-over-year increase. Square revenue also grew by 12% to reach $1.98 billion.

Jack Dorsey, Block’s CEO and Co-founder, said: “I believe we were getting in our own way throughout the company. As I've dug in through both the lens of Square and also our investment framework, I found a lot of silos, a lot of redundancy, a lack of desire for teams to work together.”

In its shareholder letter, Block expressed optimism for a significant improvement in Adjusted Operating Income margin on a year-over-year basis in 2024 compared to 2023, provided there are no unforeseen macroeconomic challenges.

In the letter, Jack Dorsey expressed gratitude for their trust and support. The company had been the subject of a short seller report earlier in the year, alleging that its Cash App product facilitated fraud.

Block Inc (SQ) stock price. 

The Block Inc (SQ) stock price surged 17.45% to trade at $51.65 from Thrusday’s closing price of $43.98.