Financial service platform Block Inc [ASX:SQ2], formerly Square and acquirer of BNPL platform Afterpay, reported its fourth quarter results for 2022.
Gross profit grew 40% year-over-year to US$1.66 billion, and the group’s Square business segment delivered gross profit of US$801 million, an increase of 22% year-over-year.
Analysts had gauged the payment platform would reach $1.63 billion in profit, with today’s results beating those expectations by another $3 million.
SQ2’s share price surged to $117.90 by Friday afternoon, having increased more than 8%.
The fintech has managed a 28% increase in share value so far in 2023, and 1.5% over the past 12 months in a year that had broadly pummelled fintech stocks:
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Block Inc posts heathy metrics for fourth quarter 2022
In the fintech’s latest financial report, the group reported an uplift of 40% in gross profit, which was an 40% year-on-year, with the total of US$1.66 billion, delighting shareholders with a result which beat analyst predictions.
The group’s Square business segment had also churned gross profit of US$801 million, another increase year-on-year of 22%.
Total net revenue increased 14% to the total of US$4.65 billion and Adjusted EBITDA (earnings before interest tax, depreciation, and amortisation) was US$281 million.
Most of the group’s earnings came from its peer-to-peer and investing platform, Cash App, churning $848 million in profit (an increase of 64% year-on-year) through more than 51 million monthly users.
Block reported gross payment volume of US$53.2 billion, another increase of 15%, again beating analysts’ expectations which were put out by Bloomberg (a prediction of US$55.2 billion).
Reported operating expenses were US$1.80 billion in the fourth quarter of 2022, which was up 45% year-over-year.
Non-GAAP operating expenses came to US$1.40 billion, another increase of 39% year-on-year, taking full-year operating expenses to US$6.62 billion, a 55% increase for FY22.
Despite the group overturning US$605 million in product developments and US$540 million in sales and marketing expenses, as well as $452 million in admin, the group expects operating expenses to only get as high as US$1.43 billion by March — much lower than analysts’ predictions of US$1.71 billion.
In the fourth quarter of 2022, operating loss was US$135 million, and $625 million for the full year.
The company stated:
‘Over the last year, our ecosystem model helped drive resilience as we continued to serve a diverse base of global customers across a wide range of verticals, complementary products, and use cases. Looking ahead to 2023 and beyond, we are focused on balancing growth and efficiency and will prioritize speed, agility, and accountability. This framework will ensure we remain customer-led while building a disciplined and durable business for the long term.’
Block ended 2022 with US$7.5 billion in available liquidity, with US$6.9 billion in cash, cash equivalents, restricted cash, and investments in marketable debt securities, as well as US$600 million, which the compny says is available to be withdrawn from its revolving credit facility.
Source: SQ2
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