Block Inc.


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SKU: DIS-2-1 Category:


Block delivered a decent financial result despite being hammered like the broader markets. Its ecosystems generated a $1.3 billion gross profit in the first quarter, up 34% year on year. The company has decided to split 50% of Afterpay revenue and gross profit between Square and Cash App. The company is integrating Afterpay into both of its ecosystems and expects it to benefit its growth. They account for Afterpay revenue and gross profit in their subscription and services-based revenue line, rather than GPV or transaction profit. In the first quarter, Cash App generated $624 million in gross profit, up 26% year over year and 94% on a three-year CAGR basis. Moreover, mid-market sellers were twice as likely as average sellers to fund their Square Savings accounts within the first quarter. Even larger sellers may be underserved by traditional financial institutions, presenting an opportunity for Square to serve this segment with an integrated solution set based on their early traction. Additionally, the company anticipates a year-over-year increase in overall company gross profit of approximately 30% in April, including Afterpay. We remain optimistic about their growth strategies and maintain our ‘Hold’ rating with a revised target price.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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