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Mar 31, 2022
Block Inc. Q1 2022 Earnings Report
Delivered impressive growth at scale and strengthened ecosystems of Cash App and Square.
Key Takeaways
Block Inc. reported a decrease in total net revenue by 22% year over year to $3.96 billion, driven by a decrease in bitcoin revenue, while gross profit increased by 34% year over year to $1.29 billion. The company completed the acquisition of Afterpay and saw contributions from both Cash App and Square ecosystems.
Gross profit grew 34% year over year to $1.29 billion, up 55% on a two-year compound annual growth rate (CAGR) basis.
Cash App delivered gross profit of $624 million, an increase of 26% year over year.
Square delivered gross profit of $661 million, an increase of 41% year over year.
Total net revenue was $3.96 billion, down 22% year over year, and, excluding bitcoin revenue, total net revenue was $2.23 billion, up 44% year over year.
Block Inc.
Block Inc.
Block Inc. Revenue by Segment
Revenue by Segment
Transaction-Based Revenue
CapyFin.comSubscriptions & Services Revenue
CapyFin.comHardware Revenue
CapyFin.comBitcoin Revenue
CapyFin.com Forward Guidance
For the second quarter of 2022, Block expects non-GAAP operating expenses to increase by approximately $245 million compared to the first quarter of 2022. Excluding contributions from Afterpay, Block expects to increase overall non-GAAP operating expenses by approximately $180 million compared to the first quarter.
Positive Outlook
- Square GPV is expected to be up 29% year over year in April.
- On a three-year CAGR basis, GPV growth is expected to be 24% in April, compared to 22% growth in the first quarter for Square ecosystem.
- Cash App gross profit, excluding Afterpay, is expected to grow on a year-over-year and three year CAGR basis in April.
- The growth of Cash App gross profit will be driven by growth in monthly transacting actives, engagement across our ecosystem, and inflows into Cash App.
- Square and Cash App ecosystems are well positioned to help our customers adapt and grow based on trends we have observed during recent quarters.
Challenges Ahead
- We expect non-GAAP operating expenses across product development, sales and marketing, general and administrative expenses, and transaction, loan and consumer receivables losses, in aggregate, to increase by approximately $245 million compared to the first quarter of 2022.
- Excluding contributions from Afterpay, we expect to increase overall non-GAAP operating expenses by approximately $180 million compared to the first quarter.
- On a GAAP basis, we expect to incur approximately $50 million of quarterly expenses related to amortization of intangible assets due to the Afterpay transaction through the remainder of 2022 and over the next few years.
- We expect to recognize approximately $12 million of this expense in cost of sales and the remainder in sales and marketing.
- In the second quarter of 2022, we expect our share-based compensation expense to decrease modestly quarter over quarter on a dollar basis, given a one-time expense in the first quarter related to the Afterpay transaction.
Revenue & Expenses
Visualization of income flow from segment revenue to net income