Block, Inc. Q4 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Gross Profit: Q4 gross profit rose 22% YoY to $2.03B. Full-year 2023 gross profit grew 25% YoY to $7.5B.
  • Adjusted EBITDA: $562M in Q4, up 81% YoY to $1.79B for the full year. Margin on gross profit hit a record 24%.
  • Adjusted Operating Income: $185M in Q4 (up from $145M loss one year ago). $351M for full year, 5% operating margin on gross profit.
  • Free Cash Flow: Adjusted free cash flow of $515M in 2023, up from negative $346M in 2022.
  • Rule of 40 Progress: Achieved Rule of 29 in 2023 and aiming for Rule of 40 by 2026. FY24 target implies further Rule of 40 progression.

Segment Performance

  • Square: Q4 gross profit of $828M (up 18% YoY). Square GPV up 10% YoY, impacted by softness in discretionary spend and decline in keyed-in volume.
  • Software & Banking Products: Gross profit up 28% and 27% YoY, respectively. Manual Keyed Entry volumes declining as share of GPV.
  • Cash App: Generated $1.18B in gross profit in Q4 (up 25% YoY). Monthly transacting actives at 56M, with inflows per active of $1,137 (up 8% YoY).
  • Cash App Card: 23M monthly actives (+20% YoY), making up 40%+ of user base. Monetization rate rose to 1.48%.

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Operator: Good day, ladies and gentlemen, and welcome to the Block Fourth Quarter 2023 Earnings Conference Call. I would now like to turn the call over to your host, Nikhil Dixit, Head of Investor Relations. Please go ahead. Nikhil Dixit: Hi, everyone, thanks for joining our Fourth Quarter 2023 Earnings Call. We have Jack and Amrita with us today. 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 conference call participants. We would also like to remind everyone that we will be making forward-looking statements on this call. All statements other than statements of historical fact could be deemed to be forward-looking. These forward-looking statements include discussions of our outlook and guidance, as well as our long-term targets and goals and we may decide to shift our priorities or move away from these targets and goals at any time. These statements are subject to risks and uncertainties. Actual results could differ materially from those contemplated by our forward-looking statements. 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 require

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