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Block Profit (SQ) Q3 2022

by SuperiorInvest

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 in Wynwood on June 4, 2021 in Miami, Florida.

Joe Raedle | Getty Images

Block shares rose more than 11% in extended trading after the payments company reported a profit for the third quarter which beat Wall Street’s earnings expectations.

Here’s how Block fared against Refinitiv’s consensus expectations:

  • EPS: $0.42, adjusted, vs. $0.23 expected
  • Revenues: $4.52 billion versus $4.49 billion expected

Block reported gross profit of $1.57 billion, up 38% from $1.13 billion a year ago. That beat Wall Street expectations of $1.53 billion.

Block, formerly known as Square, said in a letter to shareholders that its company is showing strong growth, including as other payment companies warned of an impending slowdown due to macro-economic impacts.

Its Cash App business posted gross profit of $774 million, up 51% year over year, according to Block. The company said more than 18 million people were actively using its Cash debit card in September, up 40% year-on-year.

Its point-of-sale business, Square, saw gross profit grow 29% year over year to $783 million.

Analysts tend to focus on Block’s gross profit instead of its top-line results because it has bitcoin and buy-now-pay-later businesses that have thin margins. Block said it earned $37 million in bitcoin sales during the quarter on gross revenue of $1.76 billion.

Block said it booked a $2 million bitcoin impairment loss during the quarter related to bitcoin it bought in late 2020 and early 2021. Block still holds $156 million worth of bitcoin, based on its price at the end of September.

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