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On Friday, Block Inc (ASX:SQ2) shares experienced a notable surge, outpacing the broader market as the S&P/ASX 200 Index (ASX:XJO) faced a significant downturn. While the ASX 200 index was down 1.9%, Block’s share price climbed 5.1%, reaching AU$100.15. This rise comes on the heels of the company’s quarterly financial results for the period ending June 30, 2024.
Block’s performance in its quarterly results has clearly captured investor attention. The company reported total revenue of US$6.16 billion for the three months, marking an 11.2% increase compared to the same quarter in the previous year. Gross quarterly profit also saw a notable rise, reaching US$2.23 billion, which represents a 19.7% year-on-year increase. Operating expenses for the quarter decreased by 3.4%, amounting to US$1.93 billion.
One of the most striking figures from Block’s report is its turnaround in net income. The company reported a net income of US$195 million, a substantial improvement from the US$102 million loss incurred in the same quarter last year.
A significant component of Block’s revenue came from its Bitcoin (CRYPTO: BTC) operations, which generated US$2.61 billion in the quarter, up from US$2.39 billion in the previous year. This growth in Bitcoin revenue reflects Block’s commitment to its digital currency investments, with the company investing 10% of its gross profit from Bitcoin products into acquiring more digital tokens.
The increase in gross profit was notably driven by the performance of Square and Cash App. Square generated a gross profit of US$923 million, reflecting a 15% increase year-on-year, while Cash App saw even higher growth, with a gross profit of US$1.30 billion, up 23% from the previous year. The company also released over a dozen new products and feature enhancements aimed at improving services for its retail sellers during the quarter.
Block’s liquidity position has also strengthened, with cash, cash equivalents, and customer funds increasing to US$12.02 billion from US$8.71 billion in the previous year. Looking ahead, Block has revised its full calendar year 2024 guidance upwards, with gross profit now expected to reach US$8.89 billion, an increase from the previous forecast of US$8.78 billion. This adjustment reflects anticipated year-on-year growth of 18%, surpassing the earlier projection of 17%. The company has also raised its forecasts for adjusted EBITDA and operating income, further underscoring its positive outlook.
Despite this recent surge, it is worth noting that Block's share price remains down 12.7% for the year 2024.
