The stock prices of fintech giant Block have seen a significant surge thanks to mainly after-hours trading.
Exceeding Expectations
Following an already impressive third quarter, Block, the fintech company co-founded by former Twitter CEO Jack Dorsey, continues to outperform market expectations. The company’s shares experienced a 19% surge in value during the after-hours trading on Thursday. Block's stock (SQ) price made a substantial recovery, reaching $51.15 in after-hours trading, providing relief to SQ holders after experiencing long-term lows under $40 earlier in the week. The company has predicted a gross profit of around $7.44 billion for 2023.
Hiked Guidance
Block also revised its guidance, increasing its full-year adjusted EBITDA expectation from $1.5 billion to a range between $1.66 billion and $1.68 billion. Adjusted full-year operating income guidance has surged from $25 million to a range of $205 million to $225 million. While full-year revenue guidance was not provided, Block guided to $875 million in adjusted operating income for 2024. Additionally, the company expects 2023 gross profit to range from $7.44 billion to $7.46 billion.
Block’s Q3 Performance
The Q3 earnings report revealed a 24% increase in net revenue, surging from $4.52 billion to $5.62 billion compared to the same period last year. Notably, Bitcoin revenue experienced a substantial 37.5% jump, climbing from $1.76 billion to a remarkable $2.42 billion, constituting 43% of Block's total revenue. This boost can be largely attributed to the stellar performance of Block's CashApp product, which saw revenue grow by 34% to $3.58 billion from $2.68 billion a year ago.
Rising Bitcoin Holdings
Block also saw an increase in its Bitcoin holdings in its corporate treasury, reaching a market value of $216 million, surpassing the recorded book value by $114 million. This disparity is due to accounting rules that are set to change in the near future. Under current rules, companies must record any decrease in Bitcoin's price as an impairment charge but cannot recognize increased value until the assets are sold.
Upcoming BitKey Wallet Release
Furthermore, the upcoming BitKey project also looks promising. BitKey, which is the Block’s flagship Bitcoin hardware wallet, is designed to offer users secure and autonomous management of their crypto assets by employing a security strategy involving three keys to add layers of security for cryptocurrency cold storage.
In conclusion, Block's robust Q3 performance, soaring Bitcoin revenue, revised guidance, rising Bitcoin holdings, and the imminent release of the BitKey wallet reflect the company's strong position in the fintech and cryptocurrency markets.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
