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Block Q4 Earnings Lag Estimates, Revenues Up Y/Y, Shares Drop
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Block (XYZ - Free Report) reported fourth-quarter 2024 adjusted earnings of 71 cents per share, which missed the Zacks Consensus Estimate by 14.46%. The figure surged 51.1% year over year.
Transaction (27.8% of net revenues) revenues were $1.68 billion, up 5.1% year over year.
Strong Square ecosystem accounted for $1.60 billion in transaction revenues, up 7.7% year over year. Cash App contributed $74.6 million to transaction revenues, down 31.6% year over year.
Square benefited from strong demand for software and integrated payments and banking products. Within Cash App, Block saw broad-based strength across Cash App Card, Buy Now Pay Later (BNPL) and Cash App Borrow.
Subscription and Services (31.4% of net revenues) revenues were $1.9 billion, up 16.8% year over year.
Hardware (0.5% of net revenues) revenues fell 4.3% year over year to $31.1 million.
Bitcoin (40.2% of net revenues) revenues declined 3.7% year over year to $2.43 billion.
Gross Payment Volume (GPV) was $61.95 billion, up 7.8% year over year. Square’s GPV was $58.9 billion, up 10% year over year. Cash App’s GPV was $3.1 billion, down 22.7% year over year.
BNPL platform grew 19% year over year to $10.3 billion in Gross Merchandise Value (GMV).
Block’s Operating Details
Gross profit grew 14.1% year over year to $2.31 billion. Square generated a gross profit of $923.7 million, up 11.6% year over year. Cash App generated a gross profit of $1.38 billion, up 16.2% year over year.
Cash App’s gross profit per monthly transacting active grew 13% year over year to $76. Cash App’s paycheck deposit monthly actives grew 25% year over year to 2.5 million as Block continues to increase the attach rate to Cash App Card actives and improve retention among its existing paycheck deposit actives.
Gross profit for the BNPL platform increased 23% year over year to $298 million.
Adjusted EBITDA was $757 million, up 34.7% year over year.
Operating expenses were $2.02 billion, up 4.2% year over year.
Product development expenses were $769.7 million, up 12.3% year over year. General and administrative expenses were $728.4 million, down 2.4% year over year. Sales and marketing costs were $521.1 million, up 3% year over year.
The adjusted operating income was $401.9 million in the reported quarter, with an operating margin of 6.7%. XYZ reported an adjusted operating income of $185.1 million in the year-ago quarter.
Block’s Balance Sheet Details
As of Dec. 31, 2024, the cash and cash equivalent balance was $8.1 billion, up from $9.9 billion as of Sept. 30, 2024.
The long-term debt was $5.1 billion as of Dec. 31, 2024, unchanged sequentially.
In the fourth quarter of 2024, Block repurchased 2.3 million shares of its Class A common stock for an aggregate amount of $183 million. As of Dec. 31, 2024, $2.7 billion remained available under the current authorization.
XYZ Offers Positive Guidance
For the first quarter of 2025, Block expects gross profit of $2.32 billion, suggesting year-over-year growth of 11%. Adjusted operating income is expected to be $430 million with operating margin of 19%.
For 2025, XYZ expects a gross profit of $10.22 billion, indicating growth of 15% from the 2024 reported figure. Unfavorable forex is expected to hurt gross profit by 50 bps.
The guidance for 2025 adjusted operating income is now expected to be $2.1 billion, with an operating margin of 21%.
Outbrain is set to report fourth-quarter 2024 results on Feb. 27. Agora is scheduled to report its fourth-quarter 2024 results on Feb. 24, while Viant Technology is scheduled to report its fourth-quarter 2024 results on March 3.
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Block Q4 Earnings Lag Estimates, Revenues Up Y/Y, Shares Drop
Block (XYZ - Free Report) reported fourth-quarter 2024 adjusted earnings of 71 cents per share, which missed the Zacks Consensus Estimate by 14.46%. The figure surged 51.1% year over year.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Net revenues of $6.03 billion missed the consensus mark by 3.2%. The top line, however, increased 4.5% year over year.
XYZ shares dropped 6.83% in after-hours trading.
Block, Inc. Price, Consensus and EPS Surprise
Block, Inc. price-consensus-eps-surprise-chart | Block, Inc. Quote
XYZ’s Top-Line Details
Transaction (27.8% of net revenues) revenues were $1.68 billion, up 5.1% year over year.
Strong Square ecosystem accounted for $1.60 billion in transaction revenues, up 7.7% year over year. Cash App contributed $74.6 million to transaction revenues, down 31.6% year over year.
Square benefited from strong demand for software and integrated payments and banking products. Within Cash App, Block saw broad-based strength across Cash App Card, Buy Now Pay Later (BNPL) and Cash App Borrow.
Subscription and Services (31.4% of net revenues) revenues were $1.9 billion, up 16.8% year over year.
Hardware (0.5% of net revenues) revenues fell 4.3% year over year to $31.1 million.
Bitcoin (40.2% of net revenues) revenues declined 3.7% year over year to $2.43 billion.
Gross Payment Volume (GPV) was $61.95 billion, up 7.8% year over year. Square’s GPV was $58.9 billion, up 10% year over year. Cash App’s GPV was $3.1 billion, down 22.7% year over year.
BNPL platform grew 19% year over year to $10.3 billion in Gross Merchandise Value (GMV).
Block’s Operating Details
Gross profit grew 14.1% year over year to $2.31 billion. Square generated a gross profit of $923.7 million, up 11.6% year over year. Cash App generated a gross profit of $1.38 billion, up 16.2% year over year.
Cash App’s gross profit per monthly transacting active grew 13% year over year to $76. Cash App’s paycheck deposit monthly actives grew 25% year over year to 2.5 million as Block continues to increase the attach rate to Cash App Card actives and improve retention among its existing paycheck deposit actives.
Gross profit for the BNPL platform increased 23% year over year to $298 million.
Adjusted EBITDA was $757 million, up 34.7% year over year.
Operating expenses were $2.02 billion, up 4.2% year over year.
Product development expenses were $769.7 million, up 12.3% year over year. General and administrative expenses were $728.4 million, down 2.4% year over year. Sales and marketing costs were $521.1 million, up 3% year over year.
The adjusted operating income was $401.9 million in the reported quarter, with an operating margin of 6.7%. XYZ reported an adjusted operating income of $185.1 million in the year-ago quarter.
Block’s Balance Sheet Details
As of Dec. 31, 2024, the cash and cash equivalent balance was $8.1 billion, up from $9.9 billion as of Sept. 30, 2024.
The long-term debt was $5.1 billion as of Dec. 31, 2024, unchanged sequentially.
In the fourth quarter of 2024, Block repurchased 2.3 million shares of its Class A common stock for an aggregate amount of $183 million. As of Dec. 31, 2024, $2.7 billion remained available under the current authorization.
XYZ Offers Positive Guidance
For the first quarter of 2025, Block expects gross profit of $2.32 billion, suggesting year-over-year growth of 11%. Adjusted operating income is expected to be $430 million with operating margin of 19%.
For 2025, XYZ expects a gross profit of $10.22 billion, indicating growth of 15% from the 2024 reported figure. Unfavorable forex is expected to hurt gross profit by 50 bps.
The guidance for 2025 adjusted operating income is now expected to be $2.1 billion, with an operating margin of 21%.
Zacks Rank & Stocks to Consider
Currently, Block has a Zacks Rank #3 (Hold).
Outbrain (OB - Free Report) , Agora (API - Free Report) and Viant Technology (DSP - Free Report) are some better-ranked stocks in the broader Zacks Business Services sector. While OB sports a Zacks Rank #1 (Strong Buy) at present, API and DSP carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Outbrain is set to report fourth-quarter 2024 results on Feb. 27. Agora is scheduled to report its fourth-quarter 2024 results on Feb. 24, while Viant Technology is scheduled to report its fourth-quarter 2024 results on March 3.