The Block Inc (ASX: SQ2) share price is on course to end the week on a very positive note.
In morning trade, the payments company's shares are up 10% to $96.33.
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Why is the Block share price racing higher?
Investors have been bidding the Block share price higher this morning following the release of the company's third quarter update.
For the three months ended 30 September, Block's gross payment volume came in at US$54.4 billion, up from US$52.5 billion in the second quarter and from US$45.4 billion in the prior corresponding period.
This led to Block recording total net revenue of US$4.52 billion for the period, which was up 17% over the prior corresponding period and ahead of the consensus estimate of US$4.47 billion.
Excluding bitcoin and buy now pay later (BNPL) revenue, Block's revenue was up 25% to US$2.54 billion. Bitcoin revenue came in at US$$1.76 billion and BNPL revenue was US$210 million for the quarter.
Growing even quicker was the company's gross profit. Block reported a 38% increase in gross profit to US$1.57 billion. This was driven by a 51% lift in Cash App gross profit to US$774 million and a 29% increase in Square gross profit to US$783 million.
This ultimately led to Block reporting adjusted EBITDA of US$327 million and a net loss of US$15 million. These are big improvements on the EBITDA of US$187 million and net loss of US$208 million that were recorded in the second quarter.
On the very bottom line, Block's third quarter adjusted earnings per share came in at US$0.42, well ahead of the US$0.23 consensus estimate. This helps explain why the Block share price is having such a strong morning despite another tech selloff on Wall Street last night.
Management commentary
Block's management spoke briefly about a few highlights from the quarter. It commented:
In the third quarter of 2022, we generated gross profit of $1.57 billion, up 38% year over year. Cash App generated gross profit of $774 million, up 51% year over year, and Square generated gross profit of $783 million, up 29% year over year.
Cash App Card has significant momentum and has scaled to more than 35% of our monthly actives: In September, there were nearly 18 million Cash App Card actives, up more than 40% year over year with weekly and daily actives increasing at an even more rapid rate during the same period.
Our software point-of-sale solutions are purpose-built for specific verticals and have experienced strong growth: In the third quarter, Square for Restaurants, Square for Retail, and Square Appointments cumulatively grew gross profit more than 45% year over year.
