01—Abstract
Summary
Summary of the 10-Q filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Block, Inc. reported second-quarter 2024 total net revenue of $6.16 billiona, up 11% year over year from $5.53 billion, and gross profit of $2.23 billion, up 20%.
Operating income was $306.6 millionb, compared with an operating loss of $132.1 million a year earlier. Net income attributable to common stockholders was $195.3 million, or $0.31 per diluted share, versus a net loss of $102.0 million in the prior-year quarter. Results were affected by a $70.1 million loss from remeasuring the company's bitcoin investment.
Adjusted EBITDA was $759.5 millionc, compared with $384.4 million in the second quarter of 2023. Cash App gross profit rose 23% to $1.3 billion and Square gross profit rose 15% to $922.6 million. Bitcoin revenue accounted for 42% of total revenue in the quarter, but bitcoin generated only 3% of total gross profit.
The company issued $2.0 billiond of 6.50% senior unsecured notes due 2032 in May 2024, and ended the quarter with $10.3 billion in available liquidity. Total debt principal was $6.15 billion. The board also authorized an additional $3 billion share repurchase on July 25, 2024, after the prior $1 billion program was completed as of July 31, 2024.
Six-month operating cash flow was $1.01 billion, compared with $407.7 million a year earlier. The filing also flags several open regulatory matters.
The CFPB has authority to settle or pursue enforcement action related to Cash App complaint handling, and SEC and DOJ inquiries continue following a March 2023 short seller report. The company estimates a possible San Francisco gross receipts tax loss of $0 to $76 million for fiscal years 2020 through 2024, which it has not accrued because a loss is not considered probable.
02—Key points
Key Highlights
- Total net revenue of $6.16 billion in Q2 2024, up 11% year over year; gross profit of $2.23 billion, up 20%.
- Operating income of $306.6 million versus an operating loss of $132.1 million in Q2 2023; net income attributable to common stockholders of $195.3 million versus a net loss of $102.0 million.
- Adjusted EBITDA of $759.5 million, compared with $384.4 million in Q2 2023.
- Cash App segment gross profit of $1.3 billion, up 23%; Square segment gross profit of $922.6 million, up 15%.
- Bitcoin investment remeasurement produced a $70.1 million loss in Q2 2024; bitcoin revenue was 42% of total revenue but only 3% of total gross profit.
- Issued $2.0 billion of 6.50% senior notes due 2032; available liquidity of $10.3 billion at June 30, 2024.
- Board authorized an additional $3 billion share repurchase on July 25, 2024; the prior $1 billion program was completed as of July 31, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Block kept $0.03.
- Revenue$6.16B100.0%
- Cost of revenue−$3.92B63.7%
- Gross profit$2.23B36.3%
- Operating costs−$1.93B31.3%
- Operating income$306.6M5.0%
- Interest, other & tax−$116.7M1.9%
- Net income$189.9M3.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 1, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $6.16B$5.53B | +11.2% |
| Cost of Revenue | $3.92B$3.67B | +6.9% |
| Gross Profit | $2.23B$1.87B | +19.7% |
| R&D Expenses | $713.16M$694.67M | +2.7% |
| Operating Expenses | $1.93B$2.00B | −3.6% |
| Operating Income | $306.56M-$132.11M | +332.1% |
| Net Income | $189.87M-$102.04M | +286.1% |
| EPS (Basic) | $0.32$-0.17 | +288.2% |
| EPS (Diluted) | $0.31$-0.17 | +282.4% |
| Shares Outstanding (Basic) | 617.67M606.69M | +1.8% |
| Shares Outstanding (Diluted) | 634.22M606.69M | +4.5% |
05—Questions
Frequently Asked Questions
How did Block's profitability change in the second quarter of 2024?
Block moved from an operating loss of $132.1 million in Q2 2023 to operating income of $306.6 million in Q2 2024. Net income attributable to common stockholders was $195.3 million, or $0.31 per diluted share, compared with a net loss of $102.0 million in the prior-year quarter. Adjusted EBITDA rose to $759.5 million from $384.4 million.
What drove growth in the company's segments?
Cash App segment gross profit was $1.3 billion in Q2 2024, up 23% year over year, driven by financial services products. Square segment gross profit was $922.6 million, up 15%, driven by banking products and software and integrated payments.
How much liquidity and debt does Block have?
At June 30, 2024, Block reported approximately $10.3 billion in available liquidity, including $9.5 billion in cash, cash equivalents, restricted cash, and marketable debt securities, plus $775.0 million undrawn under its revolving credit facility. Total debt principal was $6.15 billion, including the $2.0 billion of 2032 Senior Notes issued in May 2024.
What regulatory matters does the filing disclose?
The CFPB has advised that it may settle or pursue enforcement action related to Cash App's handling of customer complaints and disputes. State Attorneys General presented investigation results in June 2024, and the company received SEC and DOJ inquiries following a March 2023 short seller report. The company has not recorded a material accrual for the CFPB matter. For a San Francisco gross receipts tax assessment, the company estimates a possible loss of $0 to $76 million but has not recorded a liability because a loss is not considered probable.
What did the company do with its share repurchase program?
Block repurchased 9.3 million Class A shares for $641.6 million in the first half of 2024. The original $1 billion program was completed as of July 31, 2024. On July 25, 2024, the board authorized up to an additional $3 billion in repurchases.
06—Continue