Block delivers important 2024 performance, fueled by Cash App and Square

ByInvestment Club

Overview

Block delivered strong Q4 and full-year 2024 results, driven by double-digit growth in Cash App and Square segments. The company reported $2.31bn in Q4 gross profit and a record $8.89bn for the full year. Net income surged to $2.90bn, supported by a one-time tax benefit and improved profitability.

Looking ahead, Block expects 15% YoY gross profit growth in 2025, with continued investment in AI-driven automation, product expansion, and higher-margin financial services to sustain long-term momentum.

Q4 2024 vs. Q4 2023:

  • Gross profit rose to $2.31bn (+14% YoY), supported by Cash App and Square segment growth.
    • Cash App gross profit increased to $1.38bn (+16% YoY), driven by increased paycheck deposits and BNPL (Buy Now, Pay Later) usage.
    • Square gross profit was $924m (+12% YoY), benefiting from software and integrated payments adoption.
  • Operating income recorded a value of $13m, including restructuring and regulatory costs, while adjusted operating income was $402m (with 17% margin), reflecting efficiency improvements.
  • Net income increased to $1.95bn, significantly impacted by a one-time $1.9bn tax benefit.
  • Total Cash App inflows was $71.1bn (+12% YoY), reflecting strong customer engagement.
  • Square Gross Payment Volume (GPV) reached to $58.9bn (+10% YoY), with U.S. GPV growing 6.9% and international GPV up 25%.

Full-Year 2024 highlights:

  • Total net revenue increased to $24.1bn (+10% YoY), with total gross profit of $8.89bn (+18% YoY), highlighting strong revenue diversification.
    • Cash App gross profit rose to $5.24bn (+21% YoY), with growing adoption of paycheck deposits and Afterpay.
    • Square gross profit reached to $3.60bn (+15% YoY), benefiting from a larger seller base and increased field sales presence.
  • Operating income recorded a value of $892m (with 10% margin), reflecting improved cost management, while adjusted operating income was $1.61bn (18% margin), showing stronger profitability.
  • Net income was $2.90bn, driven by tax-related benefits and higher Cash App monetization, with diluted EPS of $4.56 (compared to $0.02 in 2023).
  • Adjusted EBITDA reached to $3.03bn, with adjusted EBITDA margin of 34%.
  • Cash App card monthly actives recorded a value of 25m (+9% YoY), showing strong engagement from Gen Z users.

Block expects continued growth in 2025, driven by Cash App’s expanding financial services, Square’s upmarket expansion, and AI-driven automation. Adjusted operating income is projected at $2.10bn, reflecting ~240 bps margin expansion. The company plans to increase go-to-market investments by 20%, particularly in Square’s marketing and Cash App’s paycheck deposit expansion. Key growth drivers include Afterpay integration, BNPL expansion, and enhanced paycheck deposit features for Cash App, while Square focuses on expanding field sales teams, enhancing its commerce platform, and strengthening its presence in the restaurant and retail sectors. With $2.7bn remaining in its stock repurchase program, Block continues to prioritize shareholder returns and long-term profitability.

Although the main results reported were represented by increases, they did not fully meet the expectations of Wall Street analysts, so after the publication of the report, XYZ shares experienced a price decrease of over -6% in the after-market. Moreover, the decrease continued quite sharply on the last trading day of this week, reaching a price decrease of almost -18% in the last 24 hours.

Source: TradingView

Author: Ionuț-Adrian Lazar

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