Block raises its outlook as Cash App and Square lift gross profit
Third-quarter gross profit grew 22%, while the gap between adjusted and GAAP operating income remains important.
Block raised its full-year outlook after third-quarter gross profit grew 22% to $3.24 billion. Both Cash App and Square contributed to the growth.
Cash App gross profit rose 27% to $2.07 billion. Square gross profit rose 14% to $1.16 billion, while its gross payment volume reached $76.4 billion, also up 14%.
Adjusted operating income rose 92% to $923 million. GAAP operating income grew a much smaller 5% to $428 million. Legal contingencies, restructuring and other adjustments account for much of that difference, so the adjusted figure is not the same as reported operating profit.
Adjusted earnings per share reached $1.13, while GAAP diluted earnings were $0.92 a share. Block now expects full-year adjusted earnings of $4.15 a share and gross profit of about $12.63 billion. Those are management forecasts, not results already earned.
The company also reported 40% growth in consumer lending originations to $19 billion. Transaction, loan and consumer receivable losses rose 66%. Faster lending growth is therefore a part of the story to watch alongside the gains in payments and gross profit.
