Jack Dorsey, creator, co-founder and chairman of Twitter and co-founder and CEO of Square, arrives on stage at the Bitcoin 2021 Convention, a cryptocurrency conference held at the Mana Convention Center at Wynwood in Miami on June 4, 2021. Florida.
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Shares of a fintech company block rose as much as 19% in after-hours trading on Thursday after the company reported third-quarter earnings that beat analysts’ estimates on revenue and profit and showed strong growth in both Cash App and Square revenue.
Here’s how the company performed compared to an analyst consensus from LSEG, formerly Refinitiv:
- Earnings per share: 55 cents, adjusted, versus 47 cents expected
- Revenue: $5.62 billion versus the expected $5.44 billion
The company also raised its forecast.
The company had previously forecast full-year adjusted EBITDA of $1.5 billion, but now expects adjusted EBITDA to be between $1.66 billion and $1.68 billion.
The company forecast full-year adjusted operating income of $205 million to $225 million, a significant increase from its previous forecast of $25 million. Analysts surveyed by LSEG had expected full-year sales of $21.54 billion. The company did not provide full-year revenue guidance, but forecast adjusted operating income of $875 million in 2024.
Additionally, Block now expects 2023 gross profit to be between $7.44 billion and $7.46 billion.
“In 2024, we expect a significant improvement in year-over-year adjusted operating income margin in 2024 compared to 2023. Our outlook does not assume further macroeconomic deterioration that could impact our results,” the company said in its shareholder statement letter.
In the third quarter, net sales increased 24% year over year from $4.52 billion to $5.62 billion. Bitcoin sales increased year-over-year from $1.76 billion to $2.42 billion. Gross profit increased 21% from $1.57 billion to $1.90 billion compared to the same period last year.
Adjusted EBITDA was $477 million, compared to $327 million in the year-ago period. Block recorded particularly strong growth in its payment platform Cash App and its point-of-sale suite Square. Cash App revenue was $3.58 billion, up 34% year-over-year, while Square revenue was up 12% year-over-year to $1.98 billion.
“We have been quiet lately because we have been focused,” Block co-founder Jack Dorsey said in a letter to shareholders. Block was the target of a short-seller attack earlier this year that claimed its Cash App product facilitated fraud. “We would like to thank you all for your trust and continued belief in our work. We will work to balance that trust with accountability, some of which I hope this letter conveys,” Dorsey’s letter concluded.
Dorsey said the company will focus on its go-to-market strategy, pursuing the growth of local restaurants and service businesses and realigning engineering talent using AI technology.