Block announced that it will continue to focus on gaining more customers with the current employee base after registering double-digit percentage gains in gross profits.
Block Inc (NYSE: SQ) stock closed Thursday trading at $67.96, up 5.41 percent from the day’s opening price. The gains extended in the after-hours trading session with around 13 percent to trade at about $76.9. On February 22, Jack Dorsey-backed Block released its Q4 2023 financial results, which beat analysts’ expectations.
Notably, the company reported a revenue of $5.77 billion in Q4 2023, whereas analysts expected $5.7 billion. The company’s impressive performance during the third quarter was largely attributed to the Bitcoin price rise, whereby the company has the instrument on its balance sheet.
Closer Look at Block’s Q4 2023 Financial Results
During the fourth quarter that ended on December 31, Block held 8,038 Bitcoins, which are worth about $409 million at current prices of around $51k. The exponential growth in Bitcoin adoption, led by institutional investors, helped Block in obtaining more clients. Moreover, more businesses are now accepting Bitcoin and other digital assets as a form of payment compared to the 2021 crypto bull market.
According to the shareholder letter, there were about 2 million active users who deposited their paychecks to the Cash App each month. Notably, the Block reported that the Cash App card has 23 monthly active users. As a result, the company highlighted that it recorded improvements across all profitability measures during the fourth quarter.
For instance, the company registered a gross profit of $2.03 billion during the fourth quarter, up 22 percent year-over-year. As for the entire year, the company reported gross profits of about $7.5 billion, up 25 percent compared from the prior year.
Market Outlook
According to Dorsey, Cash App will continue to grow as a top-tier banking provider to more families in the United States. Currently, Cash App consists of customers whose annual income is less than $100k. However, the company is aiming at onboarding more customers from households with annual income of up to $150k. Moreover, the segment of households earning $150k per annum represents 80 percent of customers and more than 50 percent of household income.
“Strengthening our P2P network with families in the US – including with higher-household-income parents and their dependents – is one lever that we believe will contribute meaningfully to our ability to move up market over the medium term,” Dorsey noted.
Through building a next-generation social bank, the company is confident it will register higher growth in the coming quarters. Currently, Block is valued at about $39.59 billion, and its stock market received an average rating of Over from 42 analysts.
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