The Block Inc (ASX: SQ2) share price is racing ahead of the benchmark today.
Shares in the global S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock – which acquired Afterpay in January 2022 – closed yesterday trading for $95.24. In morning trade on Friday, shares are swapping hands for $99.31 apiece, up 4.3%.
For some context, the ASX 200 is down 1.9% at this same time.
This comes following the release of Block's quarterly results for the three months to 30 June (Q2 CY 2024).
Here's what's happening.
(*Note, all figures are in US dollars.)
Block share price lifts on profit boost
- Total revenue of $6.16 billion, up 11.2% from Q2 CY 2023
- Gross quarterly profit of $2.23 billion, up 19.7% year on year
- Total operating expenses of $1.93 billion, down 3.4% year on year
- Net income of $195 million, up from a loss of $102 million in Q2 CY 2023
What else happened during the quarter?
Block also reported that revenue from Bitcoin (CRYPTO: BTC) for the quarter came in at $2.61 billion, up from $2.39 billion in the prior corresponding quarter. Block invests 10% of its gross profit from its Bitcoin products to buy the digital tokens.
The 19.7% increase in gross profit over the quarter was driven by Square, which generated gross profit of $923 million, up 15% year on year, and Cash App, which generated gross profit of $1.30 billion, up 23% year on year.
The company noted that over the quarter, it released more than a dozen new products and feature enhancements for its retail sellers.
Also spurring ASX 200 investor interest, on August 1, Block announced that its board of directors approved an increase to the company's previously announced $1.0 billion share repurchase program, which has been completed. The board has now authorised the repurchase of up to an additional $3.0 billion to return capital to shareholders.
At the end of the quarter, Block held cash, cash equivalents and customer funds of $12.02 billion, up from $8.71 billion in Q2 CY 2023.
What did management say?
Commenting on the results sending the Block share price soaring today, co-founder Jack Dorsey said:
We're currently on track to reach Rule of 40 by 2026, with Adjusted Operating Income margins expanding significantly year over year for both Square and Cash App. We're continuing to build a strong foundation to improve our growth into 2025.
Dorsey added that, "Nick Molnar, CEO and co-founder of Afterpay, is going to lead a centralised sales function across Block, inclusive of Square, reporting to me."
Among the company's accomplishments in the quarter, Dorsey said:
We signed multiple partnership agreements with large food distributors, including US Foods. We are now partnered with some of the largest companies in the food and beverage ecosystem that have critical relationships with up to 40% of the restaurants in the US.
Now what?
Also likely offering a boost to the Block share price, the company boosted its full calendar year 2024 guidance following the strong second-quarter results.
Gross profit for 2024 is now expected to be $8.89 billion, up from the previous $8.78 billion. That brings year on year growth to 18%, up from prior guidance of 17%.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) are now forecast to come in at $2.90 billion, up from prior expectations of $2.76 billion.
And adjusted operating income guidance was lifted to $1.44 billion from $1.30 billion.
Block share price snapshot
Despite the big lift today, the Block share price remains down 12.7% in 2024.
