In the first quarter of 2024, Square-parent Block (SQ) reported earnings and revenue that exceeded expectations, causing SQ stock to rise. The company’s earnings for the period ended March 31 were 74 cents per share on an adjusted basis, an impressive 85% increase from the previous year. Analysts had predicted earnings of only 72 cents per share. Additionally, Square’s net revenue increased by 19% to $5.96 billion, which included Cash App transactions for bitcoin. Analysts had estimated revenue to be $5.83 billion.
Financial analysts consider gross profit an important metric for SQ stock, and in the first quarter of 2024, gross profit rose by a significant 22% to $2.09 billion, surpassing estimates of $2.02 billion. Cost-cutting measures also contributed to the increase in earnings before interest, taxes, depreciation, and amortization (EBITDA), which came in at $705 million, exceeding estimates of $591 million.
Gross payment volume from the transactions of merchant customers increased by only 9% to $50.5 billion in the first quarter of 2024, falling below the estimated $55.81 billion. For the same period, Square projected EBITDA of only $680 million while analysts had forecasted EBITDA of $648 million. In contrast to this disappointing second quarter performance, Square forecasted a gross profit of only $163 million in Q3-FY24 which is significantly lower than estimates ($187 million).
Prior to the earning report in Q1-FY24 SQ stock had declined by a whopping 8%. The company’s earnings included Afterpay – a consumer lending firm that was acquired earlier this year for approximately AUD$39 billion ($31billion USD). Square operates a two-sided digital payments ecosystem that caters to both merchant sellers and consumer buyers – providing them with financial services and software solutions such as point-of-sale systems and mobile payments solutions that allow businesses and individuals to accept credit card payments online or through mobile devices or tablets or any other device that has internet access (POS). Investors can follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence
