ART and SQ2: Two ASX technology stocks likely to see improved financial performance in the next fiscal

Highlights

• Airtasker is an online marketplace in Australia for local services, while Block, Inc. is an international financial services and digital payments company
• In 1HFY24, ART’s revenue jumped8% YoY to AUD 23.3 million
• SQ2’s revenue surged by 4% YoY to USD 5,957.1 million

Airtasker Limited (ASX:ART), founded in 2012, operates as an Australian online marketplace designed for local services. It serves as a platform connecting individuals and businesses seeking services with skilled taskers available to perform those tasks.

Headquartered in the United States, Block, Inc. (ASX:SQ2) is a global financial services and digital payments company. Established in 2009, this publicly listed company operates through two main segments: Square, which offers a comprehensive commerce ecosystem, and Cash App, which provides a range of financial products and services.

Airtasker Limited (ASX:ART)

Highlights of latest financial performance

In the first half of the financial year 2024 (1HFY24), the company generated positive free cash flow of AUD 0.1 million on the back of 10.3% YoY rise in the marketplace’s revenue to AUD 18.9 million. Group revenue during the period surged by 6.8% YoY to AUD 23.3 million, underpinned by product improvements that reduced cancellations and addressed platform leakage.

Historical financial trends

Recent business update

On 25 June 2024, the company notified about the AUD 6 million media partnership with oOh!media Limited to boost its brand awareness in Australia. This transaction extends ART’s access to more than 35,000 sites of oOh!media, including street furniture, billboards, office towers, airports and retail centres.

Outlook

In FY24, the company remains on track to achieve positive free cash flow. With the increase in consumer demand, the company expects to see improvements in the sales funnel and operating efficiency.

The focus is on internation expansion on the back of local media-for-equity partnerships, investing in core product experiences, continuing with cost and cash flow management and entering into new markets.

Share performance of ART

ART shares closed 3.70% higher at AUD 0.28 apiece on 04 July 2024. With this, in the last one year, ART’s share price has increased by almost 40%, and in the last three months, it has surged by 1.82%.

The 52-week high of ART is AUD 0.325, recorded on 31 January 2024, and the 52-week low is AUD 0.165, recorded on 20 October 2023.

ART Daily Technical Chart, Source: EODHD/Others

Block, Inc. (ASX:SQ2)

Highlights of latest financial performance

In the first quarter of FY24 (1QFY24), total net revenue of SQ2 increased by 19.4% YoY to USD 5,957.1 million and gross profit surged by 22% YoY, driven by the growth of Cash App. During the reported period, operating income of SQ2 reached USD 249.7 million and growth was experienced in Bitcoin, BNPL, Cash App Card and Cash App Borrow, with a total of 24 million monthly active users.

Historical financial trends

Outlook

In the second quarter of FY24, gross profit is expected to fall in the range of USD 2.165 – 2.185 billion, adjusted EBITDA is expected to reach USD 670-690 million and adjusted operating income to fall between USD 305-325 million.

The company forecasts gross profit of minimum USD 8.78 billion in FY24, surpassing the previous estimate of USD 8.65 billion. In FY24, adjusted EBITDA is expected to reach USD 2.76 billion and adjusted operating income is anticipated to touch USD 1.30 billion.

Share performance of SQ2

SQ2 shares closed 0.28% lower at AUD 96.76 apiece on 04 July 2024. With this, in the last one year, SQ2’s share price has decreased by almost 1.32%, and in the last three months, it has declined by 18.32%.

The 52-week high of SQ2 is AUD 130.305, recorded on 14 March 2024, and the 52-week low is AUD 60.56, recorded on 31 October 2023.

SQ2 Daily Technical Chart, Source: EODHD/Others

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 04 July 2024. The reference data in this report has been partly sourced from EODHD/Others.

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