The Block Inc (ASX: XYZ) share price is in the red this morning, down nearly 8% after the company reported its FY24 earnings.
The stock, which closed yesterday's session at $131.80 per share, is currently swapping hands at $121.85 as investors digest the news.
Let's see what the company posted.
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Block share price tumbles after results reveal mixed performance
Block reported growth from the top to the bottom line in 2024. Here are the key figures:
- Company gross profit came in at US$8.89 billion, up 18% year over year
- The Cash App business' gross profit was US$5.24 billion of this, up 21% from last year
- Square booked a gross profit of US$3.60 billion, a gain of 15% year over year
- Despite this, the international business saw gross profit reduce by 22% from 2023
- Adjusted operating income: US$402 million, producing a 17% margin
- Net income pulled to US$1.95 billion
What else happened in FY24?
The Block share price had an interesting year last year. But so did the business. Management made several changes to operations, leading to an improvement in its "seller onboarding process".
It also "improved the efficiency" of its internal teams, which it says will enable employees to "achieve mastery within their disciplines".
Still, company gross profit grew by 14% to $8.9 billion. Cash App was the standout performer, with gross profit up 16%.
The Cash App card also hit a milestone of 25 million monthly activities by the end of the year. Block now estimates that "21% of all 18-to-21-year-olds in the U.S. used Cash App Card in 2024".
Meanwhile, the company spent much of last year working on its Square business, including a new "single app" that has been rolled out to existing sellers on Block's network.
Gross payment volume (GPV), a key metric for the Square business, grew by 10%, with international GPV up 25% from last year. This may or may not impact the Block share price.
What did management say?
In the shareholder letter, Block CEO Jack Dorsey made note of the company's new focus.
We spent the last year looking critically at our organization and making changes so we can build much faster. Most of that work is now complete and we're looking forward to proving it this year…
…We believe all of this work positions us for a strong financial outlook in 2025, with momentum building throughout the year. We expect to exit 2025 at a Rule of 40 run rate, ahead of schedule, and we continue to expect to deliver Rule of 40 in 2026 as this work compounds. We're excited to share more about our progress with the investment community and look forward to holding an investor day later this year.
What's next for Block?
Looking forward to 2025, Block forecasts a 15% growth in gross profit, calling for $10.2 billion. This is to be driven by its Cash App and Square businesses.
It is targeting $2.1 billion in adjusted operating income, with "margin expansion year over year" of 2.4%. This calls for a margin of 21%.
To fuel all of this, management is projecting an increase in "go-to-market" investments of "more than 20%" for both Cash App and Square.
Block share price snapshot
The Block share price finished trading last year at nearly $141 apiece. It has since dropped further, down almost 7% this year to date.
Zooming out, it is up 30% in the past twelve months.
