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Sep 30, 2020
Block Inc. Q3 2020 Earnings Report
Achieved revenue growth and increased user engagement across both Seller and Cash App ecosystems.
Key Takeaways
Block Inc. reported a significant increase in total net revenue, reaching $3.03 billion, up 140% year over year. Gross profit also saw substantial growth, increasing by 59% year over year to $794 million. The Cash App ecosystem demonstrated strong performance, with gross profit up 212% year over year. Net income was $37 million.
Total net revenue was $3.03 billion, up 140% year over year.
Gross profit was $794 million, up 59% year over year.
Cash App gross profit increased by 212% year over year.
Seller ecosystem gross profit was up 12% 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.comCash App Revenue
CapyFin.com Forward Guidance
The company anticipates continued investments in its Cash App and Seller ecosystems to drive long-term growth, with a focus on customer acquisition and product development. Non-GAAP operating expenses are expected to increase by at least $30 million in Q4 2020 compared to Q3 2020, primarily driven by sales and marketing investments for Cash App and hiring for both ecosystems. Transaction and loan loss expenses are expected to remain volatile due to the uncertain macroeconomic environment.
Positive Outlook
- Seller delivered positive revenue and gross profit growth year over year in October.
- Seller GPV was up 8% year over year in October.
- Seller GPV from card-not-present transactions was up 23% year over year in October.
- Cash App delivered strong revenue and gross profit growth year over year in October.
- Strong acquisition of net-new transacting active Cash App customers.
Challenges Ahead
- Macroeconomic environment remains uncertain.
- Cash App growth may not sustain at the same levels during the remainder of the fourth quarter.
- Gross profit growth in October moderated compared to the third quarter, driven by a decrease in transaction volume per active customer.
- End of government stimulus programs and unemployment benefits at the end of July, as stored funds in Cash App have decreased since July.
- Transaction and loan loss expenses recognized in future quarters will remain volatile as a result of actual losses potentially differing from estimates for provisions.
Revenue & Expenses
Visualization of income flow from segment revenue to net income