World Stock Watch

Block’s Q3 Earnings: A Mixed Bag

Revenue Falls Short, but Key Segments Shine

Financial technology company Block (NYSE:SQ) reported its third-quarter earnings, meeting expectations but falling short of revenue estimates, leading to a 10% decline in shares during after-hours trading. Despite this, the company’s key business segments demonstrated strong growth.

Adjusted Earnings Per Share Meet Projections

Block reported adjusted earnings per share of $0.88, in line with analyst projections. However, revenue for the quarter came in at $5.98 billion, missing the consensus estimate of $6.24 billion.

Gross Profit Sees Impressive Growth

On a more positive note, Block’s gross profit grew 19% year-over-year (YoY) to $2.25 billion. Cash App, a significant contributor, generated $1.31 billion in gross profit, up 21% YoY, while Square contributed $932 million, a 16% YoY increase.

CEO Jack Dorsey Weighs In

“We outperformed our gross profit and profitability guidance in the third quarter of 2024,” said CEO Jack Dorsey. “Cash App continued its strong performance, driven primarily by growth in inflows per active and an increase in monetization rate.”

Operating Income and Adjusted Operating Income Margin Expand

Block reported operating income of $323 million and adjusted operating income of $444 million for the quarter. The company’s adjusted operating income margin expanded to 20%, reflecting strong growth and disciplined expense management.

Full-Year Guidance Maintained and Raised

For the full year, Block maintained its gross profit guidance of at least $8.89 billion, representing 18% YoY growth. The company also raised its full-year outlook for adjusted operating income to at least $1.56 billion, or an 18% margin.

Key Takeaways

Block’s Q3 earnings report was a mixed bag, with revenue falling short of estimates but key business segments showing strong growth. The company’s adjusted earnings per share met projections, and gross profit saw impressive growth. Despite the revenue shortfall, Block’s CEO remains optimistic about the company’s performance and future prospects.