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Block 8-K Report, Financial Results (Nov 7, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 7, 2024
Period End
November 7, 2024
Securities
XYZBSQKZ
In the record · 2016–202610-K1110-Q338-K137

XYZ filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Material agreement8-K · Mar ’20Mar ’20
  3. Leadership change8-K · Apr ’22Apr ’22
  4. Leadership change8-K · Jun ’26Jun ’26

01—Abstract

Summary

Summary of the 8-K filed November 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Block, Inc. (NYSE: XYZ) furnished a Shareholder Letter under Item 2.02 reporting third-quarter 2024 results for the period ended September 30, 2024.

Total net revenue was $5.98 billiona, up 6% year over year, and $3.55 billion excluding bitcoin revenue, up 11%. Gross profit grew 19% year over year to $2.25 billion, with Cash App gross profit up 21% to $1.31 billion and Square gross profit up 16% to $932 million. Operating income was $323 million versus a loss of $10 million a year earlier, net income attributable to common stockholders was $284 million, or $0.45 diluted EPS, and Adjusted EBITDA was $807 million, up 69% year over year.

Adjusted EPS was $0.88b on a diluted basis. The letter devotes much of its focus to the company's lending products: Square Loans, Afterpay buy now, pay later, and Cash App Borrow. It states that Block has underwritten more than $22 billion in Square Loans globally with aggregate loss rates below 3%, that Afterpay consumers have spent over $72 billion on the platform since acquisition, and that historical loss rates are approximately 1% on BNPL, under 3% on Cash App Borrow, and 4% or less on Square Loans.

The company also states that its strategy aims to minimize Block capital committed to these products. On guidance, Block raised its full-year 2024 Adjusted Operating Income outlook to at least $1.56 billionc (from $1.44 billion) and Adjusted EBITDA to $3.00 billion (from $2.90 billion), while keeping gross profit at at least $8.89 billion. For Q4 2024 it guided gross profit to $2.31 billion.

The company reiterated its goal of achieving Rule of 40 in 2026 and gave preliminary 2025 outlook for gross profit growth of at least 15%d. It is scaling back investment in TIDAL and winding down TBD, while investing in bitcoin mining and Bitkey.

02—Key points

Key Highlights

  1. Q3 2024 gross profit rose 19% year over year to $2.25 billion; Cash App gross profit grew 21% and Square grew 16%.
  2. Operating income was $323 million (vs. a $10 million loss a year earlier); Adjusted Operating Income was $444 million.
  3. Net income attributable to common stockholders was $284 million, or $0.45 diluted EPS; Adjusted EPS was $0.88 diluted.
  4. Full-year 2024 Adjusted Operating Income outlook was raised to at least $1.56 billion from $1.44 billion; gross profit guidance held at at least $8.89 billion.
  5. Q4 2024 outlook calls for gross profit of $2.31 billion (14% year-over-year growth) and Adjusted EBITDA of $725 million.
  6. Cash App had 24 million Cash App Card monthly actives, up 11% year over year, and 57 million monthly transacting actives.
  7. Preliminary 2025 outlook targets gross profit growth of at least 15%, with Adjusted Operating Income margin expanding less than in 2024 as the company invests in growth.

03—Questions

Frequently Asked Questions

  1. How did Block perform financially in the third quarter of 2024?

    Total net revenue was $5.98 billion, up 6% year over year, and gross profit was $2.25 billion, up 19%. Operating income was $323 million, compared with a loss of $10 million in the prior-year quarter, and net income attributable to common stockholders was $284 million.

  2. What did Block guide for the rest of 2024?

    For full-year 2024, the company expects gross profit of at least $8.89 billion, or 18% growth, and Adjusted Operating Income of at least $1.56 billion, up from a prior outlook of $1.44 billion. For Q4 2024, it guided gross profit to $2.31 billion and Adjusted EBITDA to $725 million.

  3. What are the company's lending products and how risky are they according to the letter?

    The letter describes Square Loans, Afterpay buy now, pay later, and Cash App Borrow. It states that historical loss rates have been approximately 1% on BNPL, under 3% on Cash App Borrow, and 4% or less on Square Loans, and that Block has underwritten more than $22 billion in Square Loans globally with aggregate loss rates below 3%.

  4. What is Block's longer-term profitability target?

    Block says it remains focused on achieving Rule of 40 in 2026, calculated as gross profit growth plus Adjusted Operating Income margin. For 2025 it expects gross profit growth of at least 15% and a mid-20% Adjusted Operating Income margin.

  5. Are there any changes to Block's emerging initiatives?

    Block is scaling back its investment in TIDAL and winding down TBD, which it says gives it room to invest in its bitcoin mining initiative and Bitkey, its self-custody bitcoin wallet.

04—Continue

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