Block Inc (SQ, Financial) released its Q3 2023 earnings on November 2, 2023, revealing a significant increase in both revenue and gross profit. The company's total net revenue for the quarter was $5.62 billion, marking a 24% increase year over year. Excluding bitcoin revenue, the total revenue for Q3 2023 was $3.19 billion, up 16% year over year. The company's gross profit for the quarter was $1.90 billion, up 21% year over year.
Financial Performance Highlights
Transaction-based revenue for the quarter was $1.66 billion, up 9% year over year, and transaction-based gross profit was $674 million, up 9% year over year. The company processed $60.08 billion in GPV in Q3 2023, marking a 10% increase year over year. Transaction-based gross profit as a percentage of GPV was 1.12% in Q3 2023, down 1 basis point year over year and 4 basis points quarter over quarter.
Subscription and services-based revenue was $1.49 billion in Q3 2023, up 25% year over year, and subscription and services-based gross profit was $1.23 billion, up 28% year over year. Bitcoin gross profit was $45 million in Q3 2023, with the total sale amount of bitcoin sold to customers, recognized as bitcoin revenue, being $2.42 billion.
Company's Future Outlook
Block Inc (SQ, Financial) has also announced an initial authorization to repurchase $1 billion in shares, indicating a promising outlook for the future. The company believes that it will reach Rule of 40 in 2026, with an initial composition of at least mid-teens gross profit growth and a mid-20% Adjusted Operating Income margin. The company will provide annual guidance on these targets until they are reached and sustained.
Key Developments
Block Inc (SQ, Financial) has been focusing on building its Cash App ecosystem beyond the scale of its original Square ecosystem, creating an ecosystem of ecosystems model to provide greater growth potential and resiliency across different audience types and use cases. The company has also been working on an investment framework that takes into account the true cost of its business, including stock-based compensation.
Conclusion
The Q3 2023 earnings report of Block Inc (SQ, Financial) shows a promising growth trajectory for the company. With significant increases in both revenue and gross profit, and a positive outlook for the future, the company is well-positioned for continued success.
Explore the complete 8-K earnings release (here) from Block Inc for further details.
