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Investors are witnessing a spectacular surge in the Block Inc (ASX: SQ2) share price today (23 February 2024). The global S&P/ASX 200 Index (ASX:XJO) buy now, pay later (BNPL) giant, which acquired Afterpay in January 2022, closed yesterday's trading at AU$101.23. Today shares closed 16.50% up at AUD 117.94 apiece.
Q4 2023 Results Propel Block's Share Price
This surge follows the release of Block's fourth-quarter results, providing investors with compelling reasons to bid up the BNPL share. Let's delve into the highlights of the Q4 2023 report, all figures are in US dollars.
- Net Revenue: AU$5.77 billion, marking a remarkable 24% YoY increase.
- Gross Profit: A staggering AU$2.03 billion, up 22% from Q4 2022.
- Adjusted EBITDA: AU$562 million, witnessing an impressive 100% YoY surge.
- Liquidity: A robust AU$7.7 billion available as of December 31, 2023.
- Profit Breakdown: Square and Cash App Contributions
Within the AU$2.03 billion gross profit, Square generated AU$828 million, an 18% YoY increase. Simultaneously, Cash App contributed a substantial AU$1.18 billion, reflecting a commendable 25% YoY growth.
Bitcoin Impact on Block's Performance
The rising Bitcoin (CRYPTO: BTC) price played a pivotal role in boosting Block's share price. Q4 2023 reported a Bitcoin gross profit of AU$66 million, surging by an impressive 90% from Q4 2022. The total Bitcoin revenue from sales amounted to AU$2.52 billion.
Operational Insights and Technological Innovations
While Block reported a quarterly operating loss of AU$131 million, there was a slight improvement from the Q4 2022 operating loss of AU$135 million. The company also introduced generative AI, launching a GenAI conversational tool to enhance efficiency in customer-facing teams.
2023 Annual Performance and CEO's Vision
For the full 2023 calendar year, Block reported a gross profit of AU$7.50 billion, showcasing a robust 25% increase from 2022. CEO Jack Dorsey expressed confidence in the results, stating, "We've done a lot recently to reduce our costs. Now we're going to focus on growth."
Future Projections: What's on the Horizon?
- Gross Profit: Forecasted to be "at least" AU$8.65 billion, a significant 15% or more increase from 2023.
- Adjusted Operating Income: Expected to be "at least" AU$1.15 billion, reflecting a 13% margin.
- Adjusted EBITDA: Anticipated to be "at least" AU$2.63 billion, with a targeted 30% margin.
