Block, Inc. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Revenue & Profitability: Square reported Q1 2020 gross profit of $539 million, up 36% YoY (or 40% excluding Caviar). Seller ecosystem gross profit grew 18% YoY, while Cash App gross profit surged 115% YoY.
  • COVID-19 Impact: Business was strong in January and February, followed by a sharp slowdown in the last two weeks of March due to the pandemic. Seller GPV declined 39% YoY in April but showed signs of improvement in the second half of the month.
  • Cash App Momentum: Cash App saw growth across all major metrics in April:
    • Gross profit expected to grow over 100% YoY.
    • Direct deposit customers increased from 3M to 14M over four weeks.
    • April direct deposit volumes grew 3x compared to March; new direct deposit actives up 4x.
    • Stored funds topped $1.3B in April, doubling since January.
  • April Seller Trends:
    • Seller GPV down 39% YoY in April, but better than the 45% drop seen in late March.
    • Card-not-present GPV achieved positive YoY growth; now over 50% of total GPV (vs ~33% pre-COVID).
    • Square Online Store GPV increased 5x since mid-March.
    • Australia saw positive YoY growth by end of April; early green shoots observed in certain reopened US states.

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Operator: Good day, ladies and gentlemen, and welcome to the Square First Quarter 2020 Earnings Conference Call. I would like to turn the call over to your host, Jason Lee, Head of Investor Relations. Please go ahead. Jason Lee: Hi, everyone. Thanks for joining our first quarter 2020 earnings call. We have Jack and Amrita with us today. First, we want to remind everyone of the format of our earnings call, we have published a shareholder letter on our Investor Relations website, which was available shortly after the market close. We will begin this call with some short remarks before opening the call directly to your questions. During Q&A, we will take questions from our sellers in addition to questions from conference call participants. We would also like to remind everyone that we’ll be making forward-looking statements on this call. Actual results could differ materially from those contemplated by our forward-looking statement. Reported results should not be considered as an indication of future performance. Please take a look at our filings with the SEC for a discussion of the factors that could cause our results to differ. Also, note that the forward-looking statements on this call are based on information available to us as of today’s date. We disclaim any obligation to update any forward-looking statements, except as required by law. During the call, we’ll be describing preliminary gross profit growth results for the month of April. These represent our current estimate

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