Executive Summary

Q1 2024 was a strong beat vs company guidance: gross profit reached $2.09B, above the $2.00–$2.02B guide, and Adjusted Operating Income was $364M, well ahead of the $225–$245M guide, driven primarily by Cash App strength and disciplined cost control. The company explicitly acknowledged outperformance vs guidance in the shareholder letter .
Profitability inflected: operating income was $250M (12% of gross profit), net income to common was $472M ($0.74 diluted EPS), Adjusted EBITDA rose to $705M (34% of gross profit) and diluted Adjusted EPS was $0.85; note non-recurring items (~$52M) helped AOI, and GAAP net income included a $233M bitcoin remeasurement gain .
Full-year 2024 guidance was raised: gross profit ≥$8.78B (17% YoY), Adjusted EBITDA ≥$2.76B (31% margin), Adjusted Operating Income ≥$1.30B (15% margin); Q2 2024 guidance sets gross profit at $2.165–$2.185B with AOI $305–$325M .
Strategic catalysts: accelerating integration of Afterpay into Cash App Card (testing underway with strong early attach), Cash App Pay scaling (4M MAU; >40% QoQ GMV), and Square’s product velocity (single “Square” app, improved onboarding) position Block for sustained growth; management emphasized compliance rigor amid media reports (OFAC “No Action Letter” in 2022) .

What Went Well and What Went Wrong

What Went Well

Cash App momentum: $1.26B gross profit (+25% YoY) with inflows per active at $1,255 (+11% YoY) and 24M Cash App Card MAUs; monetization rate at 1.48% supported by financial services and Bitcoin products .
Profitability and discipline: operating income $250M; Adjusted Operating Income $364M (17% of gross profit); AOI benefitted from ~$52M non-recurring items (chargeback and tax reserve releases), and headcount held under the 12,000 cap .
Square banking and international strength: Square gross profit up 19% YoY to $820M, with banking gross profit +36% YoY; Square Loans originations were ~$1.32B; international Square GPV +23% YoY and international gross profit +38% YoY .

Management quote highlights:

“We outperformed our gross profit and profitability guidance in the first quarter of 2024.” – Financial Discussion .
“We remained below our 12,000 people cap at the end of the quarter.” – Financial Discussion .
“We are raising our full-year outlook to reflect outperformance in the first quarter.” – Guidance .

What Went Wrong

Square GPV growth moderated and pockets of retail weakness persisted; weather impacted U.S. volume in Q1 and card-not-present growth lagged; keyed-entry volumes remained soft .
Losses rose with lending scale: transaction/loan/consumer receivable losses were $166M (+30% YoY), primarily from Cash App Borrow growth, despite loss rates remaining within historical ranges .
GAAP net income benefitted from a $233M bitcoin remeasurement gain; while positive, it introduces volatility to reported earnings and complicates comparability for investors focused on core operations .

Financial Results

Consolidated P&L versus prior periods

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Total Net Revenue ($USD Billions)	$4.99	$5.62	$5.77	$5.96
Gross Profit ($USD Billions)	$1.71	$1.90	$2.03	$2.09
Operating Income (Loss) ($USD Millions)	$(6)	$(9.9)	$(130.7)	$249.7
Net Income to Common ($USD Millions)	$98.3	$(28.95)	$178.1	$472.0
Diluted EPS ($USD)	$0.16	$(0.05)	$0.28	$0.74
Adjusted EBITDA ($USD Millions)	$368.4	$477.5	$562.2	$705.1
Adjusted Operating Income ($USD Millions)	$51.0	$89.7	$185.1	$364.3
Diluted Adjusted EPS ($USD)	$0.43	$0.55	$0.45	$0.85

Segment breakdown

Metric	Q1 2023	Q3 2023	Q4 2023	Q1 2024
Cash App Revenue ($USD Billions)	$3.38	$3.58	$3.91	$4.17
Cash App Gross Profit ($USD Billions)	$1.01	$0.984	$1.184	$1.259
Square Revenue ($USD Billions)	$1.56	$1.98	$1.81	$1.73
Square Gross Profit ($USD Billions)	$0.692	$0.899	$0.828	$0.820

KPIs and operating drivers

KPI	Q3 2023	Q4 2023	Q1 2024
Total GPV ($USD Billions)	$60.08	$57.49	$54.43
Square GPV ($USD Billions)	$55.69	$53.54	$50.47
Cash App GPV ($USD Billions)	$4.38	$3.95	$3.96
Cash App Transacting Actives (Millions)	55	56	57
Cash App Card MAUs (Millions)	22	23	24
Inflows per Active ($USD)	$1,132	$1,137	$1,255
Monetization Rate (%)	1.43%	1.48%	1.48%
BNPL GMV ($USD Billions)	N/A	8.6	6.98
Square Loans Originations ($USD Billions)	1.17	1.40	1.32
Bitcoin Revenue ($USD Billions)	2.42	2.52	2.73
Bitcoin Gross Profit ($USD Millions)	44.7	65.9	80.1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Gross Profit ($USD Billions)	FY 2024	≥$8.65 (15% YoY; margin 30% AE proxy)	≥$8.78 (17% YoY)	Raised
Adjusted EBITDA ($USD Billions)	FY 2024	≥$2.63 (30% margin)	≥$2.76 (31% margin)	Raised
Adjusted Operating Income ($USD Billions)	FY 2024	≥$1.15 (13% margin)	≥$1.30 (15% margin)	Raised
Rule of 40 (Gross Profit Growth + AOI Margin)	FY 2024	≥29	32	Raised
Gross Profit ($USD Billions)	Q2 2024	N/A	$2.165–$2.185 (16–17% YoY)	New
Adjusted EBITDA ($USD Millions)	Q2 2024	N/A	$670–$690 (31–32% margin)	New
Adjusted Operating Income ($USD Millions)	Q2 2024	N/A	$305–$325 (14–15% margin)	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023 and Q4 2023)	Current Period (Q1 2024)	Trend
Product velocity & Square single app	Reorg to functional org; platform work; AI features; intent to launch single “Square” app	Jack reiterates single app launch; onboarding steps cut from ~15 to 2; improved velocity focus	Improving execution
Banking our base (Cash App)	Strategy laid out; 2M paycheck actives; roadmap on overdraft, savings yield, bill pay gaps	Paycheck deposit actives grew QoQ; packaging and incentives planned to drive adoption	Scaling with product bundling
Afterpay integration into Cash App Card	Plan to distribute BNPL via Cash App Card; Cash App Pay scaled to 3M MAU	Testing underway; strong attach; Cash App Pay 4M MAU; >40% QoQ GMV	Accelerating
Compliance and regulatory posture	No major public remarks prior	Addressed DOJ inquiry context; OFAC “No Action Letter”; emphasized robust controls	Heightened focus
Square go-to-market & contracts	Contracts introduced; franchises expansion	U.S. sales wins with contracts doubled Dec–Mar; early cohort retention improving	Positive traction
Macro/GPV cadence	Weather-headwinds; GPV deceleration; comps to improve H2	Expect GPV stable to improving in H2; narrowing gap between GPV and gross profit growth	Stabilizing outlook

Management Commentary

Bitcoin strategy and treasury: “Less than 3% of company resources are dedicated to bitcoin… each month we will be investing 10% of our gross profit from bitcoin products into bitcoin purchases… invested $220M; now ~$573M fair value” – Shareholder Letter .
Compliance stance: “We voluntarily reported [transactions] to OFAC… OFAC then issued us a No Action Letter… we have a robust control environment… identity verification and SARs when warranted” – Jack Dorsey .
Execution and productivity: “We remained below our 12,000 people cap at the end of the quarter… utilizing AI and automation” – Financial Discussion .
Strategic priorities: “Square is focused on… platform… local… growing with AI… banking on Square” – Shareholder Letter .

Q&A Highlights

Product velocity and Square improvements: Jack detailed reorganizing teams to emphasize engineering/design, the single app, and a streamlined onboarding flow to aid acquisition and retention .
Direct deposit adoption drivers: Amrita cited overdraft protection, savings yield, bundling/bill pay, incentives and packaging in-app to convert tax direct deposit users to paycheck deposit actives over a multi-year horizon .
Profitability levers and efficiency: Amrita highlighted personnel cap, corporate overhead leverage, structural cost improvements; noted ~$52M out-of-period items benefiting Q1 AOI and raised full-year profitability outlook .
BNPL on Cash App Card opportunity: Strong early attach rates with 24M card MAUs (> $100B spend in last year) and broader visibility of Afterpay tools inside Cash App .
Square GPV and H2 trajectory: GPV expected stable to improving in H2 as comps ease; aim to narrow GPV vs gross profit growth gap; international and banking products remain drivers .

Estimates Context

S&P Global consensus estimates for Q1 2024 could not be retrieved due to a mapping issue (tool returned error). As a result, comparisons vs Wall Street consensus are unavailable at this time. We will update when S&P Global data access is restored.

Metric	Q1 2024 Actual	S&P Global Consensus
Total Net Revenue ($USD Billions)	$5.96	Unavailable (mapping issue)
Diluted EPS ($USD)	$0.74	Unavailable (mapping issue)
Adjusted EBITDA ($USD Millions)	$705.1	Unavailable (mapping issue)

Key Takeaways for Investors

Q1 beat vs guidance with raised FY outlook is a clear positive; gross profit and AOI guide increases suggest improved run-rate profitability and support for a “Rule of 32” in 2024 on the path to Rule of 40 in 2026 .
Cash App remains the growth engine: higher inflows per active, scaling card MAUs and monetization rate stability point to durable unit economics; watch adoption of paycheck deposit actives and bundling impact in H2 .
Square’s banking and international momentum offsets U.S. retail softness; product velocity (single app, orders migration) and contracts should aid acquisition and retention into 2025 .
Quality of earnings: note ~$52M non-recurring items boosting AOI and $233M bitcoin remeasurement gain elevating GAAP net income; focus on Adjusted EBITDA/AOI and Cash App/Square gross profit for core performance tracking .
Catalysts: Afterpay on Cash App Card broader rollout, Cash App Pay scaling, savings yield/overdraft feature engagement, and Square onboarding improvements could drive estimate revisions and sentiment .
Risk monitor: regulatory/compliance headlines and bitcoin price volatility can impact reported results and narrative; management emphasized strong controls and transparency .
Capital allocation: buyback authorization remains active ($591M outstanding as of 3/31) and ample liquidity ($8.0B); free cash flow conversion improved (12-month Adjusted FCF $1.07B) supporting flexibility .

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