01—Abstract
Summary
Summary of the 10-Q filed May 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Block, Inc. (XYZ) reported first-quarter 2024 results in this Form 10-Q, filed May 2, 2024.
Total net revenue was $5.96 billiona, up from $4.99 billion a year earlier, a 19% increase. Bitcoin revenue of $2.73 billion drove much of the growth; excluding bitcoin revenue, total net revenue rose 14%. Gross profit reached $2.09 billion, up 22% year over year, with Cash App gross profit of $1.26 billion and Square gross profit of $820.3 million.
Operating income was $249.7 millionb, compared with an operating loss of $6.2 million a year earlier, and net income attributable to common stockholders was $472.0 million, or $0.74 per diluted share. Results include a $233.4 million gain from remeasurement of the company's bitcoin investment, which is recorded in other income. The company reported Adjusted Operating Income of $364.3 million and Adjusted EBITDA of $705.1 million, compared with $51.0 million and $368.4 million in the first quarter of 2023.
Total liquidity was $8.02 billionc at March 31, 2024, including $5.75 billion of cash and cash equivalents and an undrawn $775.0 million revolving credit facility. The company repurchased 3.6 million Class A shares for $252.1 million in the quarter, leaving $591.1 million authorized under its $1 billion program. The filing also flags risks that investors should weigh.
The Consumer Financial Protection Bureau has issued a Notice and Opportunity to Respond and Advise (NORA) indicating it is considering recommending legal action related to Cash App customer complaint handling, and the company is also responding to SEC and Department of Justice inquiries following a March 2023 short seller report. The company cannot estimate the range of potential liability beyond accrued amounts, which were not material at March 31, 2024. Total debt principal was $4.15 billiond, and the company's credit ratings are non-investment grade (BB+, BB+, Ba2).
02—Key points
Key Highlights
- Total net revenue of $5.96 billion, up 19% year over year; excluding bitcoin revenue, up 14%.
- Gross profit of $2.09 billion, up 22% year over year; Cash App gross profit $1.26 billion (up 25%) and Square gross profit $820.3 million (up 19%).
- Operating income of $249.7 million versus an operating loss of $6.2 million a year earlier; Adjusted Operating Income of $364.3 million versus $51.0 million.
- Net income attributable to common stockholders of $472.0 million, including a $233.4 million gain from bitcoin remeasurement; diluted EPS of $0.74 versus $0.16.
- Adjusted EBITDA of $705.1 million versus $368.4 million in the prior-year quarter.
- Total liquidity of $8.02 billion at March 31, 2024, including an undrawn $775.0 million revolving credit facility.
- Repurchased $252.1 million of Class A common stock in the quarter; $591.1 million remains authorized. CFPB NORA process regarding Cash App customer complaint handling is ongoing.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2024, Block kept $0.08.
- Revenue$5.96B100.0%
- Cost of revenue−$3.86B64.8%
- Gross profit$2.09B35.2%
- Operating costs−$1.84B31.0%
- Operating income$249.7M4.2%
- Interest, other & tax$221.1M3.7%
- Net income$470.8M7.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed May 2, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $5.96B$4.99B | +19.4% |
| Cost of Revenue | $3.86B$3.28B | +17.9% |
| Gross Profit | $2.09B$1.71B | +22.2% |
| R&D Expenses | $720.57M$626.94M | +14.9% |
| Operating Expenses | $1.84B$1.72B | +7.2% |
| Operating Income | $249.74M-$6.17M | +4146.4% |
| Net Income | $470.82M$98.32M | +378.9% |
| EPS (Basic) | $0.77$0.16 | +381.3% |
| EPS (Diluted) | $0.74$0.16 | +362.5% |
| Shares Outstanding (Basic) | 616.40M602.23M | +2.4% |
| Shares Outstanding (Diluted) | 637.36M623.58M | +2.2% |
05—Questions
Frequently Asked Questions
What drove the increase in revenue?
Bitcoin revenue rose $567.4 million, or 26%, to $2.73 billion, and subscription and services-based revenue rose $316.1 million, or 23%, driven mainly by Cash App financial services products, the BNPL platform and Square banking products. Transaction-based revenue increased $88.5 million, or 6%. Excluding bitcoin revenue, total net revenue grew 14%.
How much of the profit came from the bitcoin investment?
The company recognized a $233.4 million gain from remeasuring its bitcoin investment, which is included in other income, net of $237.8 million. Gross profit from bitcoin was only 4% of total gross profit for the quarter, per the filing.
What is the status of the CFPB matter?
In December 2023 the CFPB notified the company through its NORA process that its Office of Enforcement is considering recommending legal action related to Cash App customer complaint and dispute handling. The company says it cannot predict the outcome, has accrued an amount that was not material at March 31, 2024, and is cooperating with the CFPB and state Attorneys General.
How is the company returning capital to shareholders?
During the first quarter of 2024 the company repurchased 3.6 million Class A shares for $252.1 million under its October 2023 $1 billion authorization, leaving $591.1 million available. The filing says the program is intended to offset a portion of dilution from share-based compensation.
What are the company's main debt obligations?
Total principal outstanding was $4.15 billion across the 2025, 2026 and 2027 convertible notes ($1.0 billion, $575.0 million and $575.0 million) and the 2026 and 2031 senior notes ($1.0 billion each). The 2025 Convertible Notes are classified as current, with $997.2 million of carrying value at March 31, 2024.
06—Continue