I'm delighted to be joined by Amriita Uhuja, the CFO and COO of Block, which is home to multiple fintech brands you'll have heard of, including Square, Cash App, and Afterpay. Let's get right to it. Welcome.Thank you for joining from your fabulous office. Thank you so much for having me here, Ann. Well, you just had a great earnings.We're going to go through that, but before we do, Amry, just set the stage for us with just walking through the multiple business units that Block has, whether that's Cash App, ...

Core Insights - The number of companies adding Bitcoin to their corporate treasuries has significantly increased this year, with Block ranking 13th in BitcoinTreasuries' list of public companies holding the cryptocurrency [1] - Block's approach to Bitcoin differs from others as it aligns with its business operations and does not rely on raising funds to purchase Bitcoin, instead allocating 10% of its earnings from Bitcoin products for Bitcoin purchases [2] - Block operates as a diversified fintech company, with Bitcoin being just one aspect of its broader range of payment solutions [2] Company Overview - Block was originally launched in 2009 as a payment solutions software company named Square, later rebranding to reflect its expanded focus [4] - A significant component of Block's offerings is Cash App, which provides various financial services including payments, money transfers, and Bitcoin investments [5] - Block also features a Buy Now Pay Later platform called Afterpay, along with Bitcoin mining and wallet products [5] Bitcoin Integration - Bitcoin remains a central focus for Block, with CEO Jack Dorsey being a proponent of Bitcoin as a potential native currency for the internet, integrating it into various company operations [6] - Recent developments include the rollout of payment solutions for merchants that facilitate consumer payments using Bitcoin [6] Financial Performance - Despite Bitcoin's year-to-date gain of approximately 23% as of September 16, Block's shares have declined nearly 12%, attributed to disappointing earnings results [7] - Investors are urged to consider Block's Bitcoin focus in their evaluations, while also taking into account the competitive landscape and potential growth in stablecoins [8]

Core Insights - The fintech revolution has significantly changed consumer spending, borrowing, and money movement, highlighting companies like Affirm Holdings, Inc. and Block, Inc. as key players in digital payments [1][2] Affirm Holdings, Inc. - Affirm is a leader in the "buy now, pay later" (BNPL) sector, with active consumers reaching 23 million as of June 30, 2025, and partnerships with major retailers like Shopify, Costco, and Amazon [4][10] - The company reported a gross merchandise volume (GMV) increase of 43% year over year to $10.4 billion, with total revenues growing 33% to $876 million in the last quarter [5][10] - Affirm's long-term debt-to-capital ratio stands at 71.8%, indicating a need for balance sheet improvement, while management is focused on diversifying funding sources [6][7] - The company has a strong consumer engagement rate, with 95% of transactions being repeat purchases in the fourth quarter of fiscal 2025, and is expanding into international markets [5][7] - Analysts project Affirm's earnings per share (EPS) to increase by 473% in fiscal 2026, supported by strong revenue growth and market positioning [10][13] Block, Inc. - Block has diversified from its original Square POS systems into Cash App, BNPL through Afterpay, and Bitcoin-related revenue streams, but this diversification also introduces volatility [8][12] - In the June quarter of 2025, Block's BNPL GMV reached $9.1 billion, a 17% year-over-year increase, but it lags behind Affirm's growth [9][10] - Block's total net revenues decreased by 2% year over year, primarily due to lower Bitcoin contributions, while its adjusted operating margin was 22% compared to Affirm's 27% [11][12] - The company's cash flow to invested capital is at 5.7%, trailing Affirm's 7.7%, indicating less efficiency in converting invested funds into cash [12] - Analysts expect Block's EPS to decline by 23.7% in fiscal 2025, reflecting challenges in growth compared to Affirm [10][14] Market Performance - Affirm's stock has increased by 47.7% year-to-date, indicating strong investor confidence, while Block's stock has declined by 10.9% during the same period [15] - Affirm trades at a forward price-to-sales ratio of 7.03, reflecting its growth potential, while Block trades at a lower ratio of 1.76 [19] Conclusion - Affirm is positioned as a focused BNPL leader with strong growth prospects, while Block's diversified ecosystem presents both opportunities and risks due to its exposure to crypto and lower margins [21][22] - Affirm's better earnings growth estimates and efficiency levels suggest a more favorable risk-reward profile compared to Block [22]

Core Insights - Block has gained one million monthly active users for its Cash App debit card featuring Afterpay's buy now, pay later (BNPL) options since February, indicating strong growth potential [1] - The company has allowed some of its 26 million active card users to retroactively apply BNPL loans to their purchases, with plans to increase the number of cardholders eligible for post-purchase loans [2] - Block anticipates financial benefits from the debit card-Afterpay combination by 2026, aiming to create a transparent credit card experience for consumers [3] Financial Performance - Cash App has extended $2 billion in lending on an annualized run rate since integrating Afterpay loans into its debit card [4] - The commerce category, which includes Cash App and Afterpay, experienced a 16% growth in the second quarter compared to the same period in 2024, with a customer spending volume of $183 billion over the past year [6] Consumer Behavior - The company has observed that younger consumers are increasingly cautious about traditional credit cards, leading to a growth in Cash App's lending [5] - Consumers are reevaluating their relationship with traditional credit, seeking more transparent fee structures and avoiding compounding interest [6]

Core Insights - Block (XYZ), the parent company of Cash App and Square, has experienced a significant 30.8% stock price increase over the past three months, driven by investor optimism regarding its improving profitability and ongoing product innovation [1][8] - The company reported a mixed performance in Q2 2025, with a 1.6% year-over-year revenue decline to $6.05 billion, indicating macroeconomic pressures, while gross profit increased by 13.6% to $2.54 billion, showcasing improved efficiency [5][6][8] - Cash App has evolved into a multi-service financial hub, contributing significantly to Block's growth through various innovations and enhanced customer engagement [10][11] Company Performance - Block's gross profit for Q2 2025 reached $2.54 billion, with Cash App contributing $1.5 billion, reflecting a 15.6% year-over-year increase [6][8] - Adjusted operating income surged by 37.7%, with margins expanding by 400 basis points to 22%, indicating effective expense management and platform leverage [6][8] - Despite the revenue decline, the profitability trajectory marks a shift in Block's narrative towards balancing growth with sustainable returns [9] Competitive Landscape - Block has outperformed fintech peers like PayPal and StoneCo, as well as the S&P 500, with PayPal shares declining by 0.3% and StoneCo shares appreciating by 21.6% over the same period [3][8] - The competitive environment in digital payments is intensifying, with established players like PayPal and Apple Pay expanding their market presence [13] - Block's reliance on the U.S. market and younger demographics through Cash App may limit long-term resilience compared to more globally diversified competitors [14] Future Outlook - The consensus estimate for Block's 2025 sales indicates a 2.02% year-over-year rise, while EPS is expected to decline by 23.7%, although EPS estimates have been trending upward recently [15] - Block shares are currently trading at a forward Price/Sales ratio of 1.88X, which is below the industry average but above its one-year median [18] - The recent stock rally reflects renewed investor confidence in Block's path toward profitability, although ongoing competition and macro uncertainties suggest caution in viewing the stock as a clear buy [18][19]

Block (NYSE:SQ), the fintech company best known for its Square point-of-sale and Cash App digital finance products, reported earnings for Q2 2025 on August 7, 2025. Results delivered strong growth in profitability, with net income (GAAP) and gross profit (GAAP) both increasing year-over-year. However, Block missed consensus revenue and adjusted earnings (non-GAAP) expectations. Adjusted earnings per share (non-GAAP) were $0.62 versus the analyst estimate of $0.63. and GAAP revenue was $6.05 billion compared ...

Core Insights - Block, Inc. (XYZ) shares have increased by 24.7% over the past month, significantly outperforming the industry average of 5.7% [1][9] - The company gained 7.2% in intra-day trading after being added to the S&P 500 Index, effective July 23, 2025 [1][3] - Block's market capitalization stands at $44.79 billion, well above the S&P 500's eligibility threshold of $20.5 billion [4] Company Developments - Block's inclusion in the S&P 500 is expected to drive increased demand from index funds and passive investors, enhancing stock price and liquidity [3] - The company emphasizes its strong business foundation and the efforts of its workforce in building tools for economic access across its brands, including Square and Cash App [2] Financial Performance - Block's forward 12-month P/E ratio is 26.51X, which is lower than the Zacks Internet Software Market industry's average of 40.95X, indicating that the stock is trading at a cheaper valuation compared to competitors like Reddit, Inc. [10] - The Zacks Consensus Estimate for Block's earnings indicates growth of 3.4% for 2025 and 9.4% for 2026, with the 2025 earnings per share estimate rising to $2.40 [11] Sales Estimates - The current Zacks Consensus Estimate for Block's sales in the upcoming quarters is as follows: $6.32 billion for Q2 2025, $6.37 billion for Q3 2025, $24.93 billion for the current year, and $27.27 billion for the next year [12] - Year-over-year growth estimates for sales are projected at 2.60% for Q2 2025, 6.66% for Q3 2025, 3.36% for the current year, and 9.36% for the next year [12]

Core Insights - Crypto-focused fintechs are gaining momentum due to easing regulatory controls and the integration of AI and blockchain technology, with a focus on comparing Coinbase (COIN) and Block Inc. (XYZ) [1] - Stablecoins are becoming increasingly important in the digital financial system, with major banks exploring their own initiatives and companies pursuing mergers and acquisitions [2] Factors to Consider for Coinbase (COIN) - Coinbase is well-positioned to capitalize on crypto market volatility and rising asset prices, benefiting from a pro-crypto regulatory environment in the U.S. [4] - In 2024, Coinbase's total revenues more than doubled, marking its second consecutive year of positive adjusted EBITDA, with transaction revenues also reflecting significant growth [5] - The company is investing in infrastructure like Base, a low-cost Layer 2 scaling solution, to enhance the practical use of crypto [6] - Coinbase ended 2024 with $9.3 billion in USD resources, a $3.8 billion increase from the previous year, indicating strong financial health [7] - Rising costs and vulnerability to crypto asset price fluctuations pose challenges to Coinbase's margins and future cash flows [8] Factors to Consider for Block Inc. (XYZ) - Block differentiates itself with a comprehensive commerce ecosystem, integrating software, hardware, and payment services [9] - The company has achieved significant milestones, including FDIC approval for Square Financial Services and the launch of Cash App Afterpay [10] - Block is focused on global expansion and anticipates steady increases in gross profit, leveraging diverse revenue sources [11] - However, Block faces pressure from rising competition in the fintech industry and economic uncertainties, which may impact performance [12][13] Estimates for COIN and XYZ - The Zacks Consensus Estimate for COIN's 2025 revenues implies a 4.5% year-over-year increase, but EPS estimates indicate a 68.3% decline [14] - Conversely, XYZ's 2025 revenue estimates suggest a 3.5% year-over-year increase, while EPS estimates indicate a 19.3% decline [15] Valuation Metrics - Coinbase is trading at a forward earnings multiple of 48.12, below its median of 59.94, while Block's forward earnings multiple is at 35.1, above its median of 31.86 [16] Performance Comparison - COIN shares have gained 6% year-to-date, while Block shares have lost 31% in the same period, indicating a more favorable investment outlook for Coinbase [18]

Core Insights - The article discusses the decision to sell stocks in Block and Pinterest after five years of holding, highlighting changes in company vision and performance concerns [4][16]. Group 1: Block (formerly Square) - Block has evolved significantly since its initial investment, changing its name and expanding its business segments, which has led to uncertainty about its long-term vision [5][7]. - The company has experienced 300% revenue growth over the last five years; however, revenue growth per share has been diluted due to acquisitions and stock-based compensation [9]. - The investment underperformed compared to the S&P 500, raising concerns about the effectiveness of its growth strategy [9]. Group 2: Pinterest - Pinterest has seen a 65% increase in monthly active users and a 73% increase in revenue per user over five years, but growth has not met expectations [13][14]. - In Q1 2025, Pinterest's advertisement pricing dropped by 22% year-over-year, despite a 49% increase in ad impressions, raising concerns about potential over-saturation of ads [15]. - The company has struggled to improve pricing compared to competitors, leading to disappointment in its growth relative to its potential [15]. Group 3: Future Investment Focus - The focus has shifted towards companies that demonstrate consistent growth, sustainable profits, and do not dilute shareholder value, with Wingstop and Comfort Systems USA highlighted as examples [17][22]. - Wingstop has maintained a 21-year streak of same-store sales growth and plans to double its locations, contributing to a 164% stock increase over five years [20]. - Comfort Systems has seen a 1,300% stock increase over five years, benefiting from increased spending in data centers and a strong backlog of nearly $7 billion [21].

Core Insights - Block has extended over $100 billion in credit since launching its credit products while maintaining low loss rates [1][2] - The company emphasizes that expanding access to credit does not equate to increased risk, demonstrating the ability to approve more customers than traditional credit bureaus [2][4] - Block's approach to credit evaluation focuses on real-time financial behavior rather than traditional credit scores, allowing it to serve previously excluded customers [2][3] Credit Products and Performance - Block has provided over $22 billion in small business financing through Square Loans and nearly $15 billion in short-term credit to over 9 million active members via Cash App Borrow [2] - The company serves over 20 million active consumers through Afterpay, showcasing its broad reach in the consumer finance market [2] - The commercial loans on Block's balance sheet increased to $476 million from $404 million at the end of the previous year [6] Innovative Credit Evaluation - Block utilizes data from regular paycheck deposits, consistent bill payments, cash flow patterns, and spending habits to assess creditworthiness [3] - This method allows the company to identify reliable borrowers who may be deemed "high risk" by traditional standards, such as small business owners without credit history and young professionals who do not use credit cards [4] - The company advocates for a new credit system that reflects modern financial behaviors rather than relying on outdated methods [5] Strategic Developments - Cash App Borrow is becoming a key component of Block's monetization strategy, with plans to accelerate the rollout of small-dollar, short-duration loans following regulatory approval [5] - Block is increasingly recognized as a platform for merchants seeking working capital solutions, indicating its growing influence in the financial services sector [6]