| To: Glenn Petersen who wrote (59) | 2/26/2022 1:31:08 AM | | From: inspbudget | | | | SQ has lost more than 60% of its value from November last year.
I was really perplexed at such a long, relentless slide in the stock price. There was no break at all - seemed like someone or some organization was deliberately forcing the price down and down.
Hope that today's modest but welcome recovery will signal the end of the ski slope pattern of the last 3 months. |
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| From: Glenn Petersen | 5/7/2022 8:21:20 AM | | | | | | Block Needs to Keep Stacking on Solid Foundation
Shares of the fintech company aren’t quite as hard hit as many peers, but continuing expansion of Cash App will be critical
By Telis Demos
Wall Street Journal
May 6, 2022 11:37 am ET
With so many fintech stocks tumbling, Block SQ 0.67% may be among the sturdier ones.
Financial-technology and digital-commerce companies’ shares have been hit hard by the market’s turn against growth stocks. Among them is Block, formerly known as Square. Its shares are down more than 40% so far in 2022. But it isn’t quite as downtrodden as some others that play in those realms, with companies such as Affirm and Shopify both down more than 70%. Block is also trading around the same multiple of enterprise value to forward earnings before interest, taxes, depreciation and amortization it was at the end of 2019; multiples for stocks such as Adyen, PayPal and Shopify are all now lower than they were at that point in time.
One driver of this may be Block’s big exposure to in-person shopping, via its Square seller business, which has been rising sharply as pandemic restrictions recede and e-commerce growth slows. In the company’s first-quarter report on Thursday, it said Square card-present gross payment volume—a proxy for in-store payments—grew by 41% year-over-year in the first quarter. That was 20 points faster than card-not-present GPV, which are often e-commerce sales.
Another driver is resilience in growth for Cash App, Block’s consumer-finance and payments app. What distinguishes Cash App in many investors’ minds is that it isn’t just a play on e-commerce or shopping, but also on banking’s digital transformation. Excluding the new addition of recently acquired Afterpay’s results, Cash App’s gross profit grew 17% on-year in the first quarter, despite a tough comparison with the stimulus check surge last year. The company is still expecting that the second half of 2022 will generate faster year-over-year growth.
Cash App makes money in several ways, one of which is when people use debit cards linked to their accounts. Notably, Cash Card gross profit was up 50% in the first quarter over last year, with the company saying it saw many users making day-to-day purchases like groceries and fast food. That may be an indicator that people are using Cash App similar to how they might use a checking account.
Along those lines, Block said that recurring paycheck deposits into the app were up 2½ times in March from a year earlier. Monthly transacting active users made 21 transactions on average across Block’s ecosystem in March; that figure was 18-per-month during the first quarter last year. Quarterly total inflows into Cash App were the strongest ever.
Block has an investor day coming up later this month, and one thing investors might want is more perspective on how much growth can come from continuing user expansion versus further engagement and monetization of already-active users—much as attention has shifted to per-user revenue growth across fintech. Part of the story for Block is likely to be the role of recently acquired installment payments service Afterpay in Cash App.
Block may have a solid base, but investors will still want to know how much more can be built on top of it.
Write to Telis Demos at telis.demos@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the May 7, 2022, print edition as 'Block Needs A Solid Foundation.'
Block Needs to Keep Stacking on Solid Foundation - WSJ |
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| To: Glenn Petersen who wrote (61) | 5/31/2022 8:20:16 AM | | From: Glenn Petersen | | | | Block Has Assembled the Right Pieces
Shares of the firm behind Square and Cash App have been beaten up alongside other fintech companies, but it still has strong profit potential
By Telis Demos
Wall Street Journal
May 31, 2022
Potential investors in Square parent Block SQ 8.52% might stumble over its bitcoin bets. But they don’t have to.
With the market turning against money-losing companies, the onus is on once highflying growth stocks to show a clear path to big profits. Block, the operator of both Square and Cash App, has the pieces to make a compelling case. Even if user or e-commerce growth slows, Block’s consumer Cash App is rapidly adding ways to monetize its existing users via additional financial services, as well as to help boost its Square seller business. Rather than adding still more users, this kind of per-user revenue expansion is what investors are looking for now across many fintech companies, ranging from PayPal to Robinhood Markets.
With Cash App, the average monthly active user brought in just over $1,000 to their accounts in the first quarter of 2022. And Cash App monetized those inflows into gross profit—defined as revenue minus certain transaction processing, bitcoin and hardware costs—at a rate of just under 1.2%. For an active customer in March doing direct deposit with Cash App, that increased their inflows on average by 6½ times compared with someone just using Cash App’s peer-to-peer payments service. On top of that, an active account in March that was an active user of the company’s debit-card, stock-trading or borrowing services increased their monetization rate on average to 1.7 times that of a peer-to-peer-only use.
This growing monetization over time beyond the peer-to-peer payment business has been one factor helping bring up Cash App’s structural margin—or the profitability of each additional dollar of gross profit less variable costs—to 37 cents last year, from just 4 cents in 2018. On top of that, when Cash App customers end up shopping at a merchant using Square payment services, that can drive even more-profitable transactions: The structural margin on Square gross profit was nearly 70 cents a dollar in 2021.
Block’s recent acquisition of split-pay service Afterpay can accelerate things, too. Only about 6% of Cash App annual active accounts were active Afterpay users as of the end of the first quarter. But in the first quarter, Cash App generated more than 350,000 leads to Afterpay merchants. More of those merchants may end up using Square’s payment services, too. Some large merchants that use Afterpay have already signed up to add Cash App Pay as a checkout option.
This kind of profit potential should appeal to investors, even in this market. However, Block’s overall margins also are affected by fixed costs. That includes spending on longer-term growth projects. Cash App’s all-in, or “fully burdened,” gross profit margin was 12% last year. From 2015 to 2021, Block’s total fixed expenses went from about 60% of gross profit to about 30%, though the company said it doesn’t expect to have fixed-expense leverage in the near term.
Part of what Block is investing in includes a bigger future for bitcoin and its ecosystem. Given crypto’s recent market implosion, some investors won’t be in the mood to pay for any bets on blockchain’s long-term potential for financial, creative and security purposes, which are all part of Chief Executive Jack Dorsey’s ultimate, uniquely bitcoin-focused vision. So Block’s shares might not soon overcome the gravitational pull of a bearish market.
Still, companies shouldn’t be overly penalized for longer-term investment. In the rapidly evolving digital money business, it is easy to get bypassed. Bitcoin also drives inflows, with the typical Cash App active bitcoin customer in March putting in nearly four times as much as a peer-to-peer-only user. Block says it plans for under 3% of core operating expenses to go to “emerging initiatives,” and it is prepared to scale back on spending if needed. A lot of spend right now is also going toward integrating Afterpay—which does have a strong link to profitability, as well as to international expansion.
Investors sifting through the carnage in growth stocks shouldn’t dismiss Block as a key piece of a future fintech portfolio.
Write to Telis Demos at telis.demos@wsj.com
Block Has Assembled the Right Pieces - WSJ |
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| From: Glenn Petersen | 11/4/2022 6:11:17 AM | | | | | | Shares of Block jump on earnings beat
Published Thu, Nov 3 20224:37 PM EDT
Updated 5 Hours Ago
Kif Leswing @kifleswing
Key Points
- Block stock rose in extended trading after the payments company reported third-quarter earnings that beat Wall Street expectations for profit.
Block stock rose over 11% in extended trading after the payments company reported third-quarter earnings that beat Wall Street expectations for profit.
Here's how Block did versus Refinitiv consensus expectations:
- EPS: $0.42, adjusted, versus expectations of $0.23
- Revenue: $4.52 billion versus expectations of $4.49 billion
Block posted $1.57 billion in gross profit, up 38% from $1.13 billion a year ago. That beat Wall Street expectations of $1.53 billion.
Block, formerly known as Square, said in a letter to shareholders that its company showed strong growth, even as other payment companies have warned about upcoming slowdowns due to macroeconomic effects.
Its Cash App business reported $774 million in gross profit, a 51% year-over-year rise, according to Block. The company said that there were over 18 million people actively using its Cash debit card in September, up 40% year-over-year.
Its point-of-sale business, Square, saw gross profit grow 29% on an annual basis to $783 million.
Analysts tend to focus on Block's gross profit instead of its top-line results because it has bitcoin and buy-now-pay-later businesses that have small margins. Block said it made $37 million from Bitcoin sales during the quarter on $1.76 billion in gross sales.
Block said it registered a bitcoin impairment loss of $2 million during the quarter related to Bitcoin it bought in late 2020 and early 2021. Block still holds $156 million worth of bitcoin, based on its price at the end of September.
cnbc.com |
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| From: Glenn Petersen | 2/24/2023 6:09:28 AM | | | | | | Block misses on earnings but beats on revenue, gross profit
PUBLISHED THU, FEB 23 20234:34 PM EST
UPDATED THU, FEB 23 20238:14 PM EST
MacKenzie Sigalos @KENZIESIGALOS
CNBC.com
KEY POINTS
-- Block stock rose in extended trading after the payments company reported fourth-quarter revenue and gross profit that beat Wall Street’s expectations.
-- The company posted a (non-adjusted) net loss of $114 million, or 19 cents per share, for the quarter.
Block stock rose nearly 8% in extended trading after the payments company reported fourth-quarter earnings that missed Wall Street expectations but posted strong growth in gross profit.
Here’s how Block did versus Refinitiv consensus expectations:
EPS: 22 cents, adjusted, versus expectations of 30 cents
Revenue: $4.65 billion versus expectations of $4.61 billion
Block posted $1.66 billion in gross profit, up 40% from a year ago. That beat Wall Street expectations of $1.53 billion.
Analysts tend to focus on gross profit as a more accurate measurement of the company’s core transactional businesses.
The company posted a (non-adjusted) net loss of $114 million, or 19 cents per share, for the quarter
Block, formerly known as Square, told CNBC in a call that the company ended the year with 51 million monthly transacting actives for Cash App in December, with two out of three transacting each week on average.
Its Cash App business reported $848 million in gross profit, a 64% year-over-year rise, according to Block. During December 2022, Cash App had 51 million monthly transacting actives, an increase of 16% year over year.
The company, which is run by CEO Jack Dorsey, said its Cash App Card generated more than $750 million in gross profits in 2022, up 56% from the year-earlier period.
Its point-of-sale business, Square, saw gross profit grow 22% on an annual basis to $801 million.
Prior to Thursday’s after-hours moves, the stock was up more than 15% in 2023.
Executives will discuss the results on a conference call starting at 5 p.m. ET.
Block (SQ) earnings Q4 2022 (cnbc.com) |
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| From: Sr K | 3/23/2023 12:32:43 PM | | | | | | Shares of Jack Dorsey’s Block Fall on Short-Seller Report
Hindenburg Research released a report based on a two-year investigation, accusing Block of inflating user numbers
 Hindenburg said Jack Dorsey, Block Inc.’s chief and co-founder, has amassed a $5 billion personal fortune by taking advantage of Cash App’s users. PHOTO: MARCO BELLO/AGENCE FRANCE-PRESSE/GETTY IMAGES
By Peter Rudegeair
Updated March 23, 2023 12:14 pm ET
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Shares of the payments company formerly known as Square fell 13% in early trading Thursday after a short seller questioned the company’s user numbers and accused it of predatory tactics.
Hindenburg Research said a two-year investigation into Block Inc.found the company “obfuscates” its Cash App service’s true user numbers by reporting misleading metrics “filled with fake and duplicate accounts.” It also accused the company of taking advantage of the demographics it claims to serve—lower-income people and minorities—with “predatory loans and fees.”
Exc. |
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| From: Glenn Petersen | 5/5/2023 10:55:47 AM | | | | | | Block’s Cash App Hits 53 Million Monthly Active Users, Direct Deposits up 69%
BY PYMNTS | MAY 5, 2023
Block, the parent company of Square, posted earnings results illustrating the evolution of a financial services ecosystem — with Cash App at the center.
A growing number of users, management said on the most recent earnings call, are using Cash App products and services, including depositing their paychecks directly to the Cash App Card.
Earnings materials from the company show that Cash App monthly active consumers during the quarter were up year on year, and reached 53 million in March, up 17%. In March, there were 2 million direct deposit actives and paycheck deposits totaled $2.5 billion, up 69% year over year.
More Transactions and Higher Inflows
Management noted that Cash App inflows per “transacting active” were $1,136, up 8% year over year and quarter over quarter, and overall inflows were $61 billion, up 27% year over year.
In the first quarter of 2023, per the company materials, Cash App business gross payment volume (GPV) was $4.9 billion, up 24% year over year. Those transactions are related to peer-to-peer (P2P) transactions received by business accounts and include P2P payments sent via credit cards.
Drilling down into Square’s GPV, by mix of sellers, the percentage of mid-market sellers — those sellers generating more than $500,000 in annualized GPV — was 38% of the $46.2 billion in GPV logged during the quarter, up from 35% last year. Management noted on the call that the larger seller market is underpenetrated, as Square has roughly 1% market share there, as measured in the United States alone.
Card-present GPV was up 21% year over year and card-not-present GPV was up 10% year over year, the company said.
Square loans facilitated roughly 113,000 loans totaling $1.1 billion in originations, gaining 46%.
Block Chief Financial Officer Amrita Ahuja said that during the first quarter of 2023, “we had 14 revenue streams across Square and Cash App that generated $100 million or more in annualized gross profit, up from 11 a year ago … our financial services products are a key driver of inflows in Cash App and help us build retentive relationships with our active, particularly Cash App Card.”
To that end, paycheck deposits continued to increase as a contribution of overall inflows totaling $2.5 billion in March or $30 billion on an annualized basis. The launch of Savings on Cash App this year, said Ahuja, has already garnered strong adoption, with 3 million “savings active” consumers adding funds to their savings balances at the end of April.
BNPL Gains Ground Too
Ahuja noted during the call that the company’s buy now, pay later (BNPL) platform generated $5.6 billion in volumes in the first quarter, an increase of 18% year over year inclusive of January 2022 volumes.
With some detail on credit metrics, she said that the loss on consumer receivables was 0.7% of GMV, an improvement year over year and quarter over quarter. Volumes in the BNPL segment are expected to be around 20% in April, up slightly from the 18% seen during the most recent quarter.
During a question-and-answer session with analysts, and in response to queries about how turmoil in the banking system might impact the Block/Square ecosystem, Ahuja said, “across our products and our partners, we are always focused on building redundancies wherever we can in addition to assessing potential future risk. So, we have a diverse set of products, and we build redundancies where we can, and we have a transparent approach to our partnership as we always have.”
And looking ahead, said CEO Jack Dorsey on the call in discussing the potential for further penetration in the retail, restaurants and beauty verticals, “the key differentiator to our mind is our ecosystem of tools. And it’s not just about any one particular vertical but how everything works together ultimately. We have over 30 products, including some vertical-specific software. And [there’s] a developer platform, which if our customers don’t find the tools they need in our platform, [they] can always build their own or hire [a] developer to do the same.”
How Amazon and Walmart Want to Shape the Future of Health and Wellness (pymnts.com) |
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