Latest news with #AmritaAhuja
Yahoo
13-05-2025
- Business
- Yahoo
Cash App profits disappoint
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Digital payments company Block acknowledged that its signature digital wallet, Cash App, didn't bring in the profits it expected for the first quarter. 'We saw a pronounced shift in customer behavior during the time period that we typically see the largest disbursement,' Block Chief Financial Officer Amrita Ahuja said in a May 1 earnings call. She cited the time period as late February into March. 'This coincided with [Cash App] inflows coming in below our expectations during the quarter,' she added. The disappointing numbers came even after the company integrated the buy now, pay later service Afterpay onto Cash App debit cards in the first quarter. The payments firm has singled out Afterpay as a driver of growth. Block saw gross profit for Cash App grow just 10% for the quarter — to $1.38 billion — compared to the same time period in 2024. Cash App's gross profit nearly doubled from the first quarter of 2023 to the first quarter of 2024. Oakland, California-based Block 'saw a more pronounced impact to discretionary spending in areas like travel and media,' Ahuja said during the earnings call. Ahuja also noted that Cash App had about 57 million monthly active users for the quarter, which analysts said was roughly flat compared to previous quarters. 'Users were seemingly flat or flatish for the fourth quarter in a row,' Macquarie Equity Research analyst Paul Golding said. The relatively anemic growth, combined with a stagnant user base, 'could spell difficulty in our view in achieving some of this flywheel momentum that Cash App was positioned for,' Golding said. The softness in Cash App earnings are a possible warning sign for Block, William Blair analyst Andrew Jeffrey said. 'The company needs a greater sense of product innovation urgency,' he said in an interview. Part of the problem was that Block focused on engaging with current users rather than adding new ones, TD Cowen analyst Bryan Bergin said. 'If you go back to a year ago, there was not really a focus on growing the network,' he said. Instead, Block wanted Cash App users to utilize other products such as direct deposit, Bergin said.'Now they've realized it can't be one or the other,' he said. 'They need to be driving network [growth] and engagement.' When reached for comment, a Block spokesperson referred to the company's first-quarter shareholder letter, which said that the payments firm is improving Cash App in a number of ways. Those steps include rolling out short-term loans, called Cash App Borrow, to millions more users and increasing the borrowing limit for some eligible customers, but the letter says that's happening now, in the second quarter. 'We expect these enhancements to Cash App Borrow will drive gross profit growth,' the letter said. The spokesperson declined to say what Block had expected Cash App's profit to be in the first quarter. Block's reported net income was more than cut in half, to $189.9 million for the first quarter, a drop from the $472 million for the year-ago quarter, according to the company's quarterly filing with the Securities and Exchange Commission. That happened as the company's total revenue fell 3% to $5.77 billion for the quarter and operating expenses climbed 6% to $1.96 billion. Recommended Reading Afterpay to drive Cash App growth, executive says Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Mayor
04-05-2025
- Business
- Business Mayor
Block shares plunge 18% as company takes 'cautious stance,' issues weak guidance for year
Block reported first-quarter results that missed Wall Street expectations on Thursday and issued a disappointing outlook. The stock tumbled 15% in extended trading. Here is how the company did, compared to analysts' consensus estimates from LSEG. Earnings per share: 56 cents adjusted. That figure may not be comparable to estimates. 56 cents adjusted. That figure may not be comparable to estimates. Revenue: $5.77 billion vs. $6.2 billion expected Revenue decreased about 3% from $5.96 billion a year earlier. Gross profit rose 9% to $2.29 billion from $2.09 billion a year earlier. That missed analysts' forecasts of $2.32 billion for the quarter. Block provided weaker-than-expected profit guidance for the second quarter and full year, reflecting challenging economic conditions. A growing number of tech companies are warning investors about the rest of the year following President Donald Trump's announcement of sweeping tariffs on imported goods last month. 'We recognize we are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year,' the company wrote in its quarterly report. The company expects gross profit in the second quarter of $2.45 billion and $9.96 billion for the full year. Analysts were expecting $2.54 billion and $10.2 billion, respectively, according to StreetAccount. In the first quarter, gross payment volume, or a measure of money moving through Square and Cash App, came in light at $56.8 billion, versus expectations of $58 billion, according to StreetAccount. Despite Cash App's broader push into financial services and lending, the segment's gross profit was a bit softer than expected. CFO Amrita Ahuja cited lower inflows and muted tax-season spending, but said the company expect a pickup later this year, in part because of the nationwide expansion of the Cash App Borrow program following approval by the Federal Deposit Insurance Corporation. While Wall Street is selling on the results, Ahuja said Block delivered its most profitable quarter ever, which she said is 'a reflection of the continued discipline across our business and the efficiency with which we operate.' Square faces the same risks as many others in the payments space due to its reliance on consumer spending. But international markets, now nearly 18% of its volume, remain a bright spot, and a recent survey of small and medium-sized businesses showed strong adoption and satisfaction, even as price sensitivity grows and tariff risks linger. Block, an early leader in point-of-sale systems for small businesses, faces growing competition from rivals like Toast and Fiserv 's Clover — though Square still gained share during the quarter in its target verticals including retail, as well as food and beverage. Cash App continues to push deeper into banking. This quarter marked the debut of Afterpay's buy now, pay later integration on the Cash App Card, part of Block's broader effort to expand credit access. With regulatory approval for Borrow, the company can effectively double the number of users eligible for the product, Ahuja said, while also improving unit economics by bringing loan servicing and origination fully in-house. Cash App gross profit was up 10% from a year earlier to $1.38 billion. Competition in peer-to-peer payments is heating up, after Venmo reported a 20% jump in revenue. Block CEO Jack Dorsey said Cash App is focused on offering more products, while at the same time still targeting additional users. 'We, of course, want to deepen engagement with our customers through banking services and Borrow — and I have no doubt we will,' Dorsey said on the earnings call. 'But at the same time, we need to make sure that we continuously grow our network, and that starts with peer-to-peer.' Analysts view lending as a key piece of monetization, alongside growing opportunities in merchant services and advertising. Morgan Stanley noted that about half of surveyed Square merchants now use Block's banking products. Block recorded bitcoin holdings of $2.3 billion at the end of the quarter. The company expects to deliver its first bitcoin mining chips with Proto in the second half of the year. Block shares are down 31% this year as of Thursday's close. — CNBC's Robert Hum contributed to this report. READ SOURCE
Yahoo
21-02-2025
- Business
- Yahoo
Block Inc (XYZ) Q4 2024 Earnings Call Highlights: Strong Profit Growth and Strategic ...
Gross Profit: $8.89 billion in 2024, 18% year-over-year growth. Square Gross Profit: 15% year-over-year growth. Cash App Gross Profit: 21% year-over-year growth. Square GPV Growth: 10% year-over-year in Q4 2024. Cash App Paycheck Deposit Actives: 2.5 million in December, 25% year-over-year growth. Adjusted EBITDA: $3.03 billion, 69% year-over-year increase. Adjusted Operating Income: $1.61 billion, more than 4.5x year-over-year increase. Adjusted Free Cash Flow: $2.07 billion for 2024, up from $515 million in 2023. Rule of 40: Achieved 36.5% in 2024, up 7 points from the previous year. Cash App Borrow Monthly Actives: 5 million at the end of 2024. 2025 Gross Profit Guidance: At least 15% year-over-year growth, targeting $10.22 billion. 2025 Adjusted Operating Income Guidance: $2.1 billion, approximately 21% margin. Warning! GuruFocus has detected 7 Warning Signs with XYZ. Release Date: February 20, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Block Inc (NYSE:XYZ) reported a significant gross profit growth of 18% year-over-year, reaching $8.89 billion in 2024. Cash App's financial services offerings were enhanced, with paycheck deposit actives growing 25% year-over-year to 2.5 million in December. The company achieved a substantial increase in profitability, with adjusted EBITDA rising 69% year-over-year to $3.03 billion. Block Inc (NYSE:XYZ) maintained a strong gross profit retention of over 100% for both Square and Cash App. The company is investing in AI automation, open source innovation, and Bitcoin infrastructure to expand financial access globally. Cash App monthly active users have been relatively flat at around 57 million, with only a 2% year-over-year growth. The company faces headwinds from foreign exchange rates, impacting gross profit growth by 50 basis points. Square GPV growth is expected to be in the high single digits in Q1 2025, with some noise due to FX and leap year effects. There are tougher comparisons for Square Banking and Bitcoin pricing changes, affecting growth dynamics in early 2025. The company is absorbing incremental costs from increased marketing and acquisition spend, which may impact short-term profitability. Q: What proof points are you focused on to gauge progress on execution in 2025, and how might this year be different from the last couple of years? A: Jack Dorsey, Executive Chairman of the Board, highlighted the focus on doubling growth rate and improving development velocity. The company has reorganized to accelerate execution, with early proof points like the AI assistant project, codename Goose. The aim is to enhance product development speed and adaptability, with a prioritized roadmap across the company to ensure accountability and clarity. Q: Can you discuss the components driving Square GPV growth in 2025 and the expected exit rate for GPV within the seller ecosystem? A: Amrita Ahuja, CFO and COO, noted that Square GPV grew 10% year-over-year in Q4 2024, with improvements in same-store sales and seller retention. For 2025, assuming a stable macro environment, GPV is expected to accelerate, driven by product and go-to-market initiatives. Marketing investments are expected to compound, with Q1 growth in high single digits, building to low double digits by year-end. Q: What are the building blocks for the gross profit growth ramp expected through 2025? A: Amrita Ahuja explained that Q1 growth dynamics are affected by factors like FX and leap year. However, the company expects gross profit growth to accelerate throughout the year, driven by product and go-to-market initiatives. For Square, GPV growth is expected to align with gross profit trends, while Cash App is expected to see more pronounced acceleration, particularly with the launch of Afterpay on Cash App Card and expansion of Cash App Borrow. Q: Could Proto, the open bitcoin mining system, be the next Cash App in terms of growth potential? A: Jack Dorsey expressed excitement about Proto, noting the large market opportunity and Block's potential to capture a significant share. The system offers reliability, customization, and performance advantages, and is expected to change market dynamics with its open-source approach and advanced technology. Q: What would it take for Cash App MAUs to start growing again, given they have been flattish at around 57 million? A: Amrita Ahuja stated that while MAUs have been stable due to deliberate decisions to enhance customer engagement, there is significant long-term growth potential. The focus is on increasing inflows per active user and monetization rates. Longer-term growth will be driven by targeting digital natives and leveraging network effects across Block's ecosystems. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
Yahoo
21-02-2025
- Business
- Yahoo
Where does the CFO path lead? New data shows 34% became president or CEO in 2024, up from 20% the prior year
Good morning. The modern CFO role continues to expand, making them desired candidates for broader positions. And companies around the world are tapping into their talents. Russell Reynolds Associates, a leadership advisory firm, shared with CFO Daily some of the latest findings of its Global CFO Turnover Index, representing indexes such as the S&P 500, FTSE 100, and Euronext 100. Of the outgoing CFOs taking on new roles in 2024, 34% moved to a president or CEO role, up from 20% in 2023. About 15% of CFOs moved into a divisional CEO role, up from 11% in 2023. Meanwhile, 6% of finance chiefs moved into a COO role, up from 5% in 2023. And 15% of CFOs were hired for another C-suite position, including corporate strategy and risk, down 1% year over year. I frequently talk with CFOs about how their roles continue to evolve. For example, Amrita Ahuja, CFO of Block since 2019, took on the additional role of COO in 2023. We recently discussed why the two roles complement each other. Edmund Reese, CFO of Aon, and Brett Seybold, CFO of USAA, also shared their perspectives. Here's what they had to say. Amrita Ahuja, COO and CFO of Block, a fintech company (No. 186 on the Fortune 500) "In my COO role, the work I do is focused on helping the company move effectively in pursuit of our goals. That means making sure that across our finance, people, comms, policy, and legal teams, we're strategically serving the business and speaking a common language—both to advance our product roadmaps and to appropriately be a check and balance within the organization. This coordination helps ensure that we're doing right by the enterprise and our stakeholders, whether they're investors, policymakers or the communities and customers we serve." "This work also complements my CFO role and our goal to be a Rule of 40 organization. When we work in alignment in our operational teams, we're able to better support the company, help it move more efficiently, and rally around the major things we're building for our customers in 2025 and beyond." Edmund Reese, CFO of Aon, an $80 billion market cap global professional services firm "The CFO role has moved beyond bookkeeping and accounting. I've used the term strategic growth partner. That means you're not just closing the books. You are engaged in technology. You're engaged in marketing and understanding what will resonate with clients and drive growth." "My chief responsibility has been to be the champion of shareholder value creation. But I am equally as engaged in all of our strategic initiatives across the functional areas." Brett Seybold, CFO of USAA, a financial services and insurance provider for the military community and their families (No. 103 in the Fortune 500) "CFOs have always had to look out into the horizon, but now we have to look even further. We have to be even more attuned to what's going on in the world, decipher all of that, and figure out what it means for our companies and what adjustments we need to make. And that means understanding all aspects of the business." "We're in the insurance business and we're seeing catastrophic events around the world accelerate. As CFO, it requires me to be always on the lookout, not just for the risk, but also opportunities." Sheryl This story was originally featured on Sign in to access your portfolio
