tl;dr
Block (NYSE:SQ) saw an 11% decline in after-hours trading following soft Q4 guidance and Q3 revenue below Wall Street expectations. The company expects Q4 adjusted EBITDA of $725M, lower than the estimate of $754M, and adjusted operating income of $320M. For 2024, it anticipates adjusted EBITDA of $...
Block (NYSE:SQ) slid 11% in Thursday after-hours trading after the fintech company issued soft Q4 guidance following Q3 revenue that fell short of the Wall Street consensus. The parent of the Square system for merchants and Cash App expects Q4 adjusted EBITDA of $725M, lower than the Visible Alpha estimate of $754M, and adjusted operating income of $320M. Factoring in Q3 earnings, Block (NYSE:SQ) expects 2024 adjusted EBITDA of $3.00B vs. the Visible Alpha consensus of $2.93B and its previous guidance of $2.90B. In addition, it's continuing to target achieving Rule of 40 (gross profit percent growth adjusted operating income margin) in 2026. In 2025, it expects at least mid-teens gross profit growth and a mid-20% adjusted operating income margin. Q3 adjusted EPS of $0.88, matching the average analyst estimate, dropped from $0.93 in Q2 and $0.50 in last year's Q3. Gross payment volume of $62.5B, missing the Visible Alpha consensus of $64B, increased from $61.9B in the previous quarter and $60.1B a year ago. Total net revenue of $5.98B, lagging the $6.26B consensus, fell from $6.16B in Q2 and rose from $5.62B in Q3 2023. Excluding bitcoin, revenue was $3.55B, up 11% Y/Y. "We delivered year-over-year improvement across all profitability measures in the third quarter of 2024," the company said in its earnings release. Gross profit increased to $2.25B from $2.23B in the prior quarter and $1.90B a year ago. The Cash App ecosystem generated gross profit of $1.31B, up 27% Y/Y and the Square ecosystem's gross profit of $932M increased 14% Y/Y. Adjusted EBITDA of $807M, exceeding the Visible Alpha consensus of $707M, improved from $760M in Q2 and $477M in last year's Q3.
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