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Company News Earnings Reports and News


BLOCK (SQUARE) Q4 2021 EARNINGS REPORT RECAP


SQ BEAT ON EARNINGS, MATCHED ON REVENUE


By
Matthew Johnston

Full Bio
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Matthew Johnston has more than 5 years writing content for Investopedia. He is
an expert on company news, market news, political news, trading news, investing,
and the economy. He received his bachelor's degree in interdisciplinary studies
from St. Stephen's University and his master's degree in economics at The New
School for Social Research. He teaches macroeconomics at St. Stephen's
University.
Learn about our editorial policies
Updated February 25, 2022


KEY TAKEAWAYS

 * Gross payment volume (GPV) came in above analysts' predictions.
 * GPV measures the total dollar amount of card payments processed by sellers on
   the company's payment ecosystem.
 * Block's transaction-based revenue rose 41% year over year to $1.3 billion,
   comprising about 32% of total revenue.

Block (Square) Earnings Results Metric Beat/Miss/Match Reported Value Analysts'
Prediction Adjusted Earnings Per Share Beat  $0.27 $0.22 Revenue Match  $4.1B
$4.1B Gross Payment Volume Beat $46.3B $46.0B



Source: Predictions based on analysts’ consensus from Visible Alpha





BLOCK (SQUARE) (SQ) FINANCIAL RESULTS: ANALYSIS

Block, Inc. (SQ), which changed its name from Square in December 2021,
reported Q4 FY 2021 earnings that beat analyst expectations. Adjusted earnings
per share (EPS) exceeded analyst forecasts.1 Revenue just matched estimates, up
29.1% year over year (YOY).2 Block's gross payment volume (GPV) came in at $46.3
billion, surpassing expectations.34 The company's shares were down more than 4%
in extended trading. Over the past year, Block's shares have provided a total
return of -60.0%, well below the S&P 500's total return of 9.3%.5




SQ GROSS PAYMENT VOLUME

Block's GPV rose 44.7% compared to the year-ago quarter, marking a slight
acceleration from the previous quarter.43 GPV is a key metric that tracks the
total dollar amount, net of refunds, of all card payments processed by sellers
using the company's payments ecosystem. It includes peer-to-peer payments as
well as transactions with merchants that use Block's mobile payments app.6 Block
charges transaction fees on these gross payments, and those fees constitute a
major source of revenue. The transaction fees are generally calculated on a
percentage of the total transaction amount processed.7



The greater the GPV, the more transaction-based revenue Block is able to
generate. Block said that its transaction-based revenue was $1.3 billion in Q4
FY 2021, up 41% YOY. Transaction-based gross profit rose 39% YOY to $545
million.3 Transaction-based revenue accounted for 32% of Block's total revenue
in the fourth quarter. It was the second major source of revenue next to Bitcoin
revenue, which accounted for 48% of total revenue. Block's other sources of
revenue include subscription and services-based revenue and hardware revenue.2



GPV also provides an indication of how many users the company has on its
platform. If Block can attract more users to its main payments ecosystem, then
it will be able to direct more traffic to its other businesses, such as
operations management software company Stitch Labs, website building platform
Weebly, and recently acquired music-streaming service TIDAL. It will also be
able to offer its digital payment services to customers of those businesses.



In late January, Block acquired Afterpay Ltd., an
Australia-based fintech company that offers customers the ability to "buy now,
pay later" (BNPL). The company plans to integrate Afterpay into both its Square
seller ecosystem and Cash App mobile payment app. Block said that it intends to
enable Square sellers to offer the BNPL functionality at checkout and to allow
Afterpay consumers the ability to manage their installment payments within the
Cash App.8




SQ EARNINGS CALL RECAP

Block said that gross payment volume will be lower than forecast in the current
quarter, but added that the company will increase its gross profit each quarter
for the Cash App and Square seller businesses for the rest of 2022. That growth
will be partly helped by easier comparisons, Block said on a call with analysts
after earnings were released.9



Block's next earnings report (for Q1 FY 2022) is expected to be released on May
4, 2022.10







ARTICLE SOURCES


Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews
with industry experts. We also reference original research from other reputable
publishers where appropriate. You can learn more about the standards we follow
in producing accurate, unbiased content in our editorial policy.

 1.  Block Inc. "Q4 2021 Shareholder Letter," Page 32.

 2.  Block Inc. "Q4 2021 Shareholder Letter," Page 28,

 3.  Block Inc. "Q4 2021 Shareholder Letter," Page 10.

 4.  Visible Alpha. "Financial Data."

 5.  TradingView. "Price Chart: SQ and S&P 500."

 6.  Block Inc. "Form 10-K for the Fiscal Year Ended December 31, 2020," Page
     52.

 7.  Block Inc. "Form 10-K for the Fiscal Year Ended December 31, 2020," Page
     58.

 8.  Block Inc. "Q4 2021 Shareholder Letter," Page 4.

 9.  Bloomberg. "Block Shares Surge on Rosy Outlook for Rest of Year." Accessed
     Feb. 24, 2022.

 10. Yahoo! Finance. "Earnings Calendar: SQ."

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