01—Abstract
Summary
Summary of the 10-Q filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.
Block, Inc. (XYZ) reported a strong third quarter of 2024 in this Form 10-Q, with total net revenue of $5.98 billiona for the three months ended September 30, 2024, up from $5.62 billion a year earlier, and net income attributable to common stockholders of $283.8 million, compared with a net loss of $88.7 million in the prior-year quarter.
Gross profit rose to $2.25 billionb, and operating income was $323.0 million versus an operating loss of $9.9 million. Management highlighted Adjusted Operating Income of $443.5 million and Adjusted EBITDA of $807.5 million for the quarter. Cash App segment gross profit was $1.31 billion and Square segment gross profit was $932.4 million, both up year over year.
Bitcoin revenue made up a large share of total revenue (41% for the quarter), while bitcoin contributed only 3% of total gross profit. The balance sheet expanded with the issuance of $2.0 billionc of 6.50% senior unsecured notes due 2032 in May 2024. Total liquidity was $10.7 billion at September 30, 2024, including $775.0 million undrawn under the revolving credit facility.
The company repurchased $987.2 milliond of Class A common stock during the first nine months of 2024, and $2.9 billion remained available under its repurchase authorization. Total debt principal was $6.15 billion in convertible and senior notes, with $998.7 million of 2025 Convertible Notes classified as current. The filing also flags legal and regulatory matters, including a Consumer Financial Protection Bureau (CFPB) matter where a draft consent order was sent in August 2024, ongoing state money transmission regulator discussions, SEC and DOJ inquiries, and a San Francisco gross receipts tax assessment.
The company estimates losses from the San Francisco matter could range from approximately $0 to $85 million, and it has not recorded a liability for that exposure. Management states that the CFPB, state regulator, and other matters could result in material losses, though amounts cannot currently be estimated.
02—Key points
Key Highlights
- Total net revenue of $5.98 billion for Q3 2024, up 6% year over year; nine-month revenue of $18.09 billion, up 12%.
- Gross profit of $2.25 billion for Q3 2024, up 19% year over year, with Cash App gross profit of $1.31 billion (up 21%) and Square gross profit of $932.4 million (up 16%).
- Operating income of $323.0 million in Q3 2024 versus an operating loss of $9.9 million in Q3 2023; net income attributable to common stockholders of $283.8 million versus a net loss of $88.7 million.
- Adjusted EBITDA of $807.5 million for Q3 2024 compared with $477.5 million in Q3 2023, per the company's non-GAAP reconciliation.
- Total liquidity of $10.7 billion at September 30, 2024, including $775.0 million undrawn under the revolving credit facility, after issuing $2.0 billion of 2032 Senior Notes in May 2024.
- Repurchased $987.2 million of Class A common stock in the first nine months of 2024; $2.9 billion remained under the expanded repurchase authorization.
- Regulatory and legal exposures remain open, including a CFPB matter with a draft consent order received in August 2024 and a San Francisco gross receipts tax assessment with estimated potential losses of $0 to $85 million.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2024, Block kept $0.05.
- Revenue$5.98B100.0%
- Cost of revenue−$3.73B62.4%
- Gross profit$2.25B37.6%
- Operating costs−$1.93B32.2%
- Operating income$323.0M5.4%
- Interest, other & tax−$41.9M0.7%
- Net income$281.1M4.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 7, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $5.98B$5.62B | +6.4% |
| Cost of Revenue | $3.73B$3.72B | +0.2% |
| Gross Profit | $2.25B$1.90B | +18.5% |
| R&D Expenses | $710.98M$713.79M | −0.4% |
| Operating Expenses | $1.93B$1.91B | +1.0% |
| Operating Income | $323.01M-$9.91M | +3360.1% |
| Net Income | $281.14M-$88.74M | +416.8% |
| EPS (Basic) | $0.46$-0.15 | +406.7% |
| EPS (Diluted) | $0.45$-0.15 | +400.0% |
| Shares Outstanding (Basic) | 616.43M611.28M | +0.8% |
| Shares Outstanding (Diluted) | 632.76M611.28M | +3.5% |
05—Questions
Frequently Asked Questions
How did Block's revenue and profitability change in the third quarter of 2024?
Total net revenue rose to $5.98 billion from $5.62 billion, an increase of $358.3 million, or 6%. Operating income was $323.0 million compared with an operating loss of $9.9 million a year earlier, and net income attributable to common stockholders was $283.8 million versus a net loss of $88.7 million. Bitcoin revenue, which is pass-through in nature, was a large share of revenue, while bitcoin contributed only 3% of total gross profit.
What drove the growth in Block's gross profit?
Gross profit was $2.25 billion in Q3 2024, up from $1.90 billion. Cash App gross profit rose 21% to $1.31 billion, driven by strength in financial services products, and Square gross profit rose 16% to $932.4 million, driven by banking products and software and integrated payments.
How is Block's liquidity and debt position?
At September 30, 2024, the company had $10.7 billion in available liquidity, including $9.9 billion of cash, cash equivalents, restricted cash, and marketable debt securities, plus $775.0 million undrawn under its revolving credit facility. Total principal of notes outstanding was $6.15 billion, including $2.0 billion of 6.50% senior notes due 2032 issued in May 2024. The $998.7 million 2025 Convertible Notes are classified as a current liability.
What are the main legal and regulatory risks disclosed?
The filing discloses a CFPB investigation in which the agency sent a draft consent order in August 2024, ongoing discussions with several state money transmission regulators, inquiries from the SEC and DOJ, and a San Francisco gross receipts tax assessment related to bitcoin sales. For the San Francisco matter, the company estimates losses of approximately $0 to $85 million and has not recorded a liability because it does not consider a loss probable. The company states it cannot predict the outcome of these matters, and some could be material.
How much has Block returned to shareholders through buybacks?
During the nine months ended September 30, 2024, Block repurchased 14.6 million Class A shares for $987.2 million. In July 2024 the board increased the authorization by $3 billion, for a total authorization of $4 billion, and $2.9 billion remained available as of September 30, 2024.
06—Continue