BLOCK(US:SQ)2025-11-06 21:31Financial Performance - In Q3 2025, the company generated gross profit of $2.7 billion, an 18% increase year over year, with Cash App contributing $1.6 billion (up 24%) and Square contributing $1.0 billion (up 9%) to this growth[139]. - Total net revenue for Q3 2025 was $6.1 billion, a 2% increase from Q3 2024, while revenue for the nine months ended September 30, 2025, decreased by 1% to $17.9 billion compared to the same period in 2024[145][146]. - The company recorded operating income of $409.4 million in Q3 2025, compared to $323.0 million in Q3 2024, and Adjusted Operating Income increased to $480.2 million from $443.5 million[140]. - Net income attributable to common stockholders for Q3 2025 was $461.5 million, a 62.7% increase from $283.8 million in Q3 2024[180]. - Adjusted Net Income for Q3 2025 was $336.6 million, compared to $337.0 million in Q3 2024, reflecting a slight decrease of 0.1%[180]. Revenue Breakdown - Bitcoin revenue decreased by $462.2 million (19%) in Q3 2025 and $1.4 billion (17%) for the nine months ended September 30, 2025, primarily due to a decrease in trading volume[149]. - Subscription and services-based revenue increased by $407.0 million (23%) in Q3 2025 and $880.3 million (17%) for the nine months ended September 30, 2025, driven by growth in Cash App's financial services[148]. - Transaction-based revenue increased by $161.1 million (9%) in Q3 2025, with Gross Payment Volume (GPV) growing by 11%[147]. - Square segment net revenue increased by $239.1 million, or 12%, to $2.24 billion for the three months ended September 30, 2025, and by $548.0 million, or 10%, to $6.26 billion for the nine months[162]. - Cash App segment net revenue decreased by $130.1 million, or 3%, for the three months ended September 30, 2025, compared to the same period in 2024[166]. Expenses and Costs - Total cost of revenue for Q3 2025 decreased by $272.7 million (7%) compared to Q3 2024, primarily due to a $469.3 million (20%) decrease in bitcoin costs[150][146]. - Sales and marketing expenses rose by $87.6 million, or 17%, for the three months ended September 30, 2025, and by $190.3 million, or 13%, for the nine months, driven by higher marketing costs of $91.4 million and $205.7 million, respectively[155]. - General and administrative expenses increased by $68.1 million, or 14%, for the three months ended September 30, 2025, and by $64.3 million, or 5%, for the nine months, primarily due to higher personnel costs of $92.9 million and $79.5 million, respectively[156]. - Product development expenses for the three months ended September 30, 2025, were $711.2 million, relatively flat compared to $711.0 million for the same period in 2024, while for the nine months, expenses increased by $52.5 million, or 2%, to $2.2 billion from $2.1 billion[154]. Cash and Liquidity - The company ended Q3 2025 with $10.5 billion in available liquidity, including $9.7 billion in cash and cash equivalents, a decrease of $234.2 million from December 31, 2024[143]. - Cash and cash equivalents increased to $8.3 billion as of September 30, 2025, up from $8.1 billion at the end of 2024[183]. - The company reported a net increase in cash, cash equivalents, restricted cash, and customer funds of $714.5 million for the nine months ended September 30, 2025[196]. - The company has $775.0 million available under its revolving credit facility, maturing in June 2028[189]. Investments and Debt - The company held $7.4 billion in aggregate principal amount of debt as of September 30, 2025, including $1.0 billion in senior unsecured notes maturing in June 2026[187]. - Cash used in investing activities for the nine months ended September 30, 2025, was $671.8 million, primarily due to net outflows of $2.0 billion related to Cash App Borrow loans[200]. - Cash used in financing activities for the nine months ended September 30, 2025, was $652.9 million, primarily due to $1.5 billion in share repurchases and a $1.0 billion cash payment for the settlement of convertible notes[202]. Asset Valuation - The fair value of the company's bitcoin investment was $1.0 billion as of September 30, 2025, with gains of $59.6 million recognized in Q3 2025 from remeasurement[185]. - As of September 30, 2025, the fair value of the company's bitcoin investment was $1.0 billion, with recognized gains of $178.4 million for the nine months ended September 30, 2025[207]. Employee and Operational Efficiency - The company implemented a cap of 12,000 employees in 2023 and continued to focus on cost efficiency, recording $10.0 million in severance expenses in Q3 2025[142]. - Transaction, loan, and consumer receivable losses surged by $171.4 million, or 89%, for the three months ended September 30, 2025, and by $277.6 million, or 51%, for the nine months, attributed to increased loan losses of $158.8 million and $238.1 million, respectively[157].