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Block's (SQ) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
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Block (SQ - Free Report) delivered second-quarter 2023 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate by 11.4%. The figure improved by 116.7% year over year.
Net revenues of $5.53 billion surpassed the Zacks Consensus Estimate by 8.9%. The top line increased by 26% from the prior-year quarter.
Year-over-year revenue growth was driven by strong momentum across the Cash App ecosystem, which contributed $3.56 billion to net revenues for the reported quarter, up 36% year over year.
Block witnessed solid traction across the Square ecosystem, generating $1.93 billion in net revenues, up 12% year over year.
The company’s Corporate & Other — comprising the global music and entertainment platform TIDAL — generated $50 million in net revenues for the second quarter.
Block witnessed strong growth in transaction and subscription revenues. Accelerating bitcoin revenues was positive.
Its growing gross payment volume (GPV) drove results.
GPV in the second quarter amounted to $59.01 billion, up 12% from the year-ago quarter. The figure lagged the Zacks Consensus Estimate of $61.1 billion.
GPV growth was driven by strength across the Square ecosystem. Square’s GPV was $54.15 billion (91.8% of the total GPV) in the second quarter, up 13% year over year.
Cash App, which accounted for $4.9 billion of the overall GPV (8.2%), remained a positive. The figure increased by 15% year over year.
Block continued to experience improvement in its card-present volumes in the reported quarter. Card-present GPV was up 16% from the year-ago quarter.
The company’s card-not-present GPV reflected year-over-year growth of 5% in the second quarter.
Top Line Details
Transaction (29.6% of net revenues): The company generated transaction revenues of $1.64 billion, up 11% year over year. The figure lagged the consensus mark of $1.68 billion.
Strong Square ecosystem accounted for $1.5 billion in transaction revenues, up 11% year over year. Cash App contributed $134 million to transaction revenues, up 15% year over year, owing to the rising number of transactions and business accounts.
Subscription and Services (26.4% of net revenues): The company generated $1.46 billion in revenues from this category, jumping 33% from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.36 billion. The year-over-year improvement can be attributed to Square ecosystem’s strong performance, which contributed $381 million to subscription and service revenues, up 20% year over year. Cash App also contributed $1.03 million to the category’s top line. The figure was up 43% from the year-ago quarter. A well-performing BNPL platform contributed well.
Hardware (0.8% of net revenues): Block generated revenues of $45 million from the business, which fell 7% year over year. The figure missed the consensus mark of $49.1 million.
Bitcoin (43.2% of net revenues): The company generated revenues of $2.4 billion from the category, up 33.9% year over year. The figure beat the consensus mark of $1.94 billion.
Operating Details
Per management, gross profit grew 27% from the year-ago quarter to $1.87 billion. The gross margin expanded by 30 basis points year over year to 33.7%.
Adjusted EBITDA was $384 million in the reported quarter, up 105% year over year.
Operating expenses were $2 billion, up 19% from the prior-year quarter.
Product development expenses were $695 million, up 32% year over year, primarily due to rising headcount and personnel costs in the engineering, data science and design teams.
General and administrative expenses were $549 million, up 39% from the prior-year quarter.
Sales and marketing costs were $538 million, up 1% year over year due to an increase in Cash App peer-to-peer processing costs.
The adjusted operating income was $25.5 million in the reported quarter compared with an operating loss of $103.5 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2023, the cash and cash equivalent balance was $4.7 billion, down from $5.1 billion on Mar 31, 2023.
Short-term investments were $1.12 billion for the reported quarter, up from $1.02 billion in the previous quarter.
Long-term debt was $4.114 billion compared with $4.112 billion in the prior quarter.
CACI is set to report fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, implying growth of 6.83% from the year-ago quarter’s reported figure.
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pinned at 41 cents per share.
Super Micro Computer is scheduled to release its fiscal fourth-quarter 2023 results on Aug 8. The Zacks Consensus Estimate for SMCI’s earnings is pegged at $2.94 per share, suggesting an increase of 12.21% from the year-ago quarter’s reported figure.
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Block's (SQ) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
Block (SQ - Free Report) delivered second-quarter 2023 adjusted earnings of 39 cents per share, beating the Zacks Consensus Estimate by 11.4%. The figure improved by 116.7% year over year.
Net revenues of $5.53 billion surpassed the Zacks Consensus Estimate by 8.9%. The top line increased by 26% from the prior-year quarter.
Year-over-year revenue growth was driven by strong momentum across the Cash App ecosystem, which contributed $3.56 billion to net revenues for the reported quarter, up 36% year over year.
Block witnessed solid traction across the Square ecosystem, generating $1.93 billion in net revenues, up 12% year over year.
The company’s Corporate & Other — comprising the global music and entertainment platform TIDAL — generated $50 million in net revenues for the second quarter.
Block witnessed strong growth in transaction and subscription revenues. Accelerating bitcoin revenues was positive.
Its growing gross payment volume (GPV) drove results.
Block, Inc. Price, Consensus and EPS Surprise
Block, Inc. price-consensus-eps-surprise-chart | Block, Inc. Quote
GPV
GPV in the second quarter amounted to $59.01 billion, up 12% from the year-ago quarter. The figure lagged the Zacks Consensus Estimate of $61.1 billion.
GPV growth was driven by strength across the Square ecosystem. Square’s GPV was $54.15 billion (91.8% of the total GPV) in the second quarter, up 13% year over year.
Cash App, which accounted for $4.9 billion of the overall GPV (8.2%), remained a positive. The figure increased by 15% year over year.
Block continued to experience improvement in its card-present volumes in the reported quarter. Card-present GPV was up 16% from the year-ago quarter.
The company’s card-not-present GPV reflected year-over-year growth of 5% in the second quarter.
Top Line Details
Transaction (29.6% of net revenues): The company generated transaction revenues of $1.64 billion, up 11% year over year. The figure lagged the consensus mark of $1.68 billion.
Strong Square ecosystem accounted for $1.5 billion in transaction revenues, up 11% year over year. Cash App contributed $134 million to transaction revenues, up 15% year over year, owing to the rising number of transactions and business accounts.
Subscription and Services (26.4% of net revenues): The company generated $1.46 billion in revenues from this category, jumping 33% from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $1.36 billion. The year-over-year improvement can be attributed to Square ecosystem’s strong performance, which contributed $381 million to subscription and service revenues, up 20% year over year. Cash App also contributed $1.03 million to the category’s top line. The figure was up 43% from the year-ago quarter. A well-performing BNPL platform contributed well.
Hardware (0.8% of net revenues): Block generated revenues of $45 million from the business, which fell 7% year over year. The figure missed the consensus mark of $49.1 million.
Bitcoin (43.2% of net revenues): The company generated revenues of $2.4 billion from the category, up 33.9% year over year. The figure beat the consensus mark of $1.94 billion.
Operating Details
Per management, gross profit grew 27% from the year-ago quarter to $1.87 billion. The gross margin expanded by 30 basis points year over year to 33.7%.
Adjusted EBITDA was $384 million in the reported quarter, up 105% year over year.
Operating expenses were $2 billion, up 19% from the prior-year quarter.
Product development expenses were $695 million, up 32% year over year, primarily due to rising headcount and personnel costs in the engineering, data science and design teams.
General and administrative expenses were $549 million, up 39% from the prior-year quarter.
Sales and marketing costs were $538 million, up 1% year over year due to an increase in Cash App peer-to-peer processing costs.
The adjusted operating income was $25.5 million in the reported quarter compared with an operating loss of $103.5 million reported in the year-ago quarter.
Balance Sheet
As of Jun 30, 2023, the cash and cash equivalent balance was $4.7 billion, down from $5.1 billion on Mar 31, 2023.
Short-term investments were $1.12 billion for the reported quarter, up from $1.02 billion in the previous quarter.
Long-term debt was $4.114 billion compared with $4.112 billion in the prior quarter.
Zacks Rank & Stocks to Consider
Currently, Block has a Zacks Rank #3 (Hold).
Investors interested in the broader technology sector can consider some top-ranked stocks like CACI International (CACI - Free Report) and BILL Holdings, Inc. (BILL - Free Report) , each carrying a Zacks Rank #2 (Buy) and Super Micro Computer (SMCI - Free Report) , carrying a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CACI is set to report fourth-quarter fiscal 2023 results on Aug 9. The Zacks Consensus Estimate for CACI’s earnings is pegged at $4.85 per share, implying growth of 6.83% from the year-ago quarter’s reported figure.
BILL Holdings is set to report its fourth-quarter fiscal 2023 results on Aug 17. The Zacks Consensus Estimate for BILL’s earnings is pinned at 41 cents per share.
Super Micro Computer is scheduled to release its fiscal fourth-quarter 2023 results on Aug 8. The Zacks Consensus Estimate for SMCI’s earnings is pegged at $2.94 per share, suggesting an increase of 12.21% from the year-ago quarter’s reported figure.