On Thursday, November 2, Block Inc (NYSE: SQ) reported its Q3 2023 earnings beating analysts’ estimates in terms of revenue and profit. Furthermore, the company also registered strong growth in Cash App as well as Square revenue.
Block in Q3 2023
As a result, the Block stock price rocketed by 16% after the earnings report. On Thursday, the SQ stock was up 7.37% closing the trading hours at $43.98. As the results came after the market hours, the stock added an additional 16%.
In the third quarter, net revenue increased by 24% to reach $5.62 billion, up from $4.52 billion in the same period the previous year. Bitcoin revenue saw a significant rise, reaching $2.42 billion compared to $1.76 billion. Gross profit also climbed by 21% to reach $1.9 billion, up from $1.57 billion.
The company reported an Adjusted EBITDA of $477 million, a notable increase from the $327 million in the year-ago period. Block’s payment platform, Cash App, and its point-of-sale suite, Square, showed robust growth. Cash App revenue witnessed a 34% year-over-year increase, reaching $3.58 billion, while Square revenue grew by 12% to $1.98 billion. In a letter to shareholders, Block co-founder Jack Dorsey said:
“We’ve been quiet lately because we’ve been focused. We want to thank all of you for your trust and continued belief in our work. We will work to balance that trust with accountability, some of which I hope this letter provides”.
Block Provides Future Guidance
The company had initially projected a full-year adjusted EBITDA of $1.5 billion, but it has revised its expectations. Now, the company anticipates adjusted EBITDA to fall within the range of $1.66 billion to $1.68 billion.
Block is now guiding for a full-year adjusted operating income of $205 million to $225 million, a substantial increase from the previous guidance of $25 million. Analysts surveyed by LSEG had expected full-year revenue guidance to be around $21.54 billion. The company did not provide full-year revenue guidance but did indicate an expected adjusted operating income of $875 million for 2024.
Furthermore, Block now anticipates that gross profit for 2023 will be in the range of $7.44 billion to $7.46 billion. The company stated that “In 2024 we expect a significant improvement in Adjusted Operating Income margin on a year-over-year basis in 2024 compared to 2023. Our outlook does not assume any additional macroeconomic deterioration, which could impact our results”.
Dorsey announced that the company’s primary focus will be on its go-to-market strategy, with an emphasis on expanding its presence among local restaurants and service businesses. Additionally, the company intends to reallocate its engineering talent toward the development and implementation of artificial intelligence technology.