Block stock rises after Square GPV accelerates in April; Q1 earnings miss

May 05, 2022 4:33 PM ETBlock, Inc. (SQ)BTC-USDBy: Liz Kiesche, SA News Editor38 Comments

Modern credit methods including Square, Visa, Master Card, American Express and Discover II

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Shares in Block (NYSE:SQ), formerly called Square, projected that its Square ecosystem gross payment volume will increase 29% Y/Y and 24% on a three-year compound annual growth rate basis in April vs. a 22% CAGR in Q1, indicating that GPV accelerated since the close of Q1.

The the Cash App ecosystem, gross profit, excluding Afterpay is expected to increase on a Y/Y and a three-year CAGR basis, helped by growth in monthly transacting actives, engagement across the system, and inflows into the app.

Block (SQ) stock is rising 3.4% in Thursday after-hours trading.

Q1 gross payment volume of $43.5B slipped from $46.3B in Q4 2021 and climbed from $33.1B in Q1 2021.

Q1 earnings and revenue, though, fell short of consensus estimates. Q1 adjusted EPS of $0.18 vs. the average analyst estimate of $0.20, declined from $0.27 in Q4 and from $0.41 in the year-ago quarter.

Q1 total net revenue of $3.96B vs. $4.14B consensus, $4.08B in the prior quarter and $5.06B in the year-ago quarter.

Excluding bitcoin (BTC-USD) and Afterpay (which the company acquired earlier this year), total net revenue was $2.10B vs. $2.12B in Q4 2021, and up 40% on a two-year CAGR basis.

Transaction-based revenue of $1.23B rose 28% Y/Y and fell from $1.31B in Q4.

Cash App generated $2.46B of revenue in Q4, rising % Y/Y and up/down from $2.55B in Q4. Cash App generated $1.73B of bitcoin revenue compared with $1.96B in the previous quarter. Bitcoin gross profit was $43M vs. $46M in the prior quarter.

The Square ecosystem generated $1.44B of revenue in Q1 vs. $1.47B in Q4 2021 and up 42% Y/Y.

Q1 adjusted EBITDA of $195M vs. $184M in Q4 and $236M in the year-ago quarter.

Square gross profit of $661M vs. $657M in Q4 and $468M in Q1 2021; Cash App gross profit of $624M vs. $518M in Q4 and $496M in Q1 2021. Afterpay contributed $65M of revenue and $46M of gross profit to Square in Q1.

Q1 non-GAAP operating expenses were $1.12B, up 52% Y/Y and increased from $1.00B in Q4.

Conference call at 5:00 PM.

Earlier, Block (SQ) non-GAAP EPS of $0.18 misses by $0.02, revenue of $3.96B misses by $180M

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