Block, owner of Cash App and Square, is also a huge owner of bitcoin.
This, as the company’s latest first quarter 2024 earnings results revealed that the company’s $200 million investment in bitcoin grew by around 160% and stood at $573 million at the quarter’s end.
“We believe the world needs an open protocol for money, one that’s not owned or controlled by any single entity. We believe bitcoin is the best and only candidate to be that protocol, and to ultimately become the native currency of the internet,” Jack Dorsey, Block head, Square head, chairman and cofounder of Block, said in his shareholder letter.
“1.6 million Cash App Card actives have used our Bitcoin Round Ups feature to automatically convert spare change from everyday transactions into bitcoin,” he added.
In April, Block implemented a bitcoin dollar cost average (DCA) purchase program where Block will invest 10% of its gross profit from bitcoin products into bitcoin purchases. The program will run through 2024.
But the story on Thursday’s (May 2) quarterly earnings call wasn’t about the bitcoin growth — it was about the company’s core products, Cash App and Square. Square alone processed $50.5 billion in gross payment volume for the quarter, a 9% jump year over year, and company executives also stressed the growing emphasis on prioritizing and promoting Square’s banking solutions.
“Banking our base is our priority,” said Block CFO Amrita Ahuja.
In the first quarter of 2024, Block’s gross profit grew 22% year over year to $2.09 billion. Cash App generated gross profit of $1.26 billion, up 25% year over year, and Square generated gross profit of $820 million, up 19% year over year.
Block beat Wall Street expectations, and its stock jumped nearly 10% in trading after hours. The company’s shares are down by around 9% so far this year.
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Block executives told investors Thursday that the company was raising its full-year profit guidance to reflect outperformance in Q1 and reflect increased expectations for the remainder of the year. For the full year, Block now expects gross profit of at least $8.78 billion, or 17% growth YoY, Adjusted Operating Income of at least $1.30 billion, and Adjusted EBITDA of at least $2.76 billion.
Executives highlighted the four priorities underpinning the Square platform’s growth roadmap: a rock-solid and flexible platform, providing a “local” experience to sellers of all sizes, growing with artificial intelligence (AI) and banking on Square.
“The banking solutions are the biggest differentiator for us on the Square side,” Dorsey said. “We are using AI to automate the previously manual task of uploading details about their various service offerings to Square Appointments, saving sellers time.”
Block’s gross profit from banking products, which primarily include Square Loans, Instant Transfer and Square Debit Card, grew 36% year over year. Strength in banking gross profit was driven by continued strong demand for loans and healthy repayment trends, executives told investors on Thursday.
Per Block’s financials, Square Loans facilitated approximately 129,000 loans totaling $1.32 billion in originations, up 17% YoY.
Read also: Report: Block Aims to Reduce Workforce to 12,000 This Year
But Square wasn’t the only Block story — the company’s Cash App platform also saw strong quarterly growth.
The Cash App Card reached 24 million monthly actives, up 16% YoY; while Cash App Pay continued to grow during the quarter, with volume up more than 40% QoQ.
Per the company’s materials, Cash App’s strong growth during the quarter was driven primarily by Cash App Card, BNPL, Bitcoin and Cash App Borrow — all areas of focus within Block’s “Bank the Base” strategy.
“Cash App, with its bank partners, is focused on a three-part strategy, introduced last quarter: banking our base, moving upmarket by serving families, and building the next-generation social bank. Our primary focus in the near term is banking our base by driving paycheck deposit adoption and increasing inflows per active,” wrote Dorsey in his shareholder letter.
Still, Dorsey repeatedly stressed his viewpoint on bitcoin during both the earnings call and throughout his shareholder letter.
“The internet will have a native currency; it’s just a matter of time. Artificial intelligence systems and agents will have to transact, and the most efficient way to do so will be a common protocol for money movement,” he said.
