Jack Dorsey, co-founder and chief executive officer of Twitter Inc. and Square Inc., listens during the Bitcoin 2021 conference in Miami, Florida, on Friday, June 4, 2021.Block stock rose as much as 14% in extended trading Thursday after the payments company reported fourth-quarter earnings that beat analyst estimates on gross profit and showed strong growth in its Square and Cash App revenue.Here's how the company did, compared to an analyst consensus from LSEG, formerly Refinitiv:Earnings per share: 45 ce ...

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the trad ...

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Let's take a look at what these Wall Street heavyweights have to say about Block (SQ) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.Block currently has an average brokerage recomm ...

Block Inc (NYSE:SQ) is slated to step into the earnings confessional after the market closes tomorrow, Feb. 22. Wall Street is anticipating the fintech concern's earnings to come in at 47 cents per share on revenue of $5.43 billion, representing a year-over-year gain for both figures.Looking at Block's earnings history, its shares were higher after five of its past eight post-earnings sessions, including a 10.7% pop after its November report. In the last eight quarters, SQ averaged a swing of 8.9%, regardle ...

Financial Performance and Risks - The company generated a net income of $9.8 million for the year ended December 31, 2023, with an accumulated deficit of $528.4 million as of the same date[115] - The company's bitcoin investment is subject to high volatility, and any decrease in market value relative to purchase prices could adversely impact its financial condition[221] - Bitcoin investment fair value as of December 31, 2023 was $339.9 million[421] - A hypothetical 10% change in bitcoin fair value would not materially affect financial results[421] - The company adopted ASU 2023-08, remeasuring its bitcoin investment to fair value as of January 1, 2023, with future changes recognized in consolidated statements of operations[222] Revenue and Growth Challenges - The growth rate of Cash App revenue may be distorted by bitcoin price fluctuations, as bitcoin revenue can increase or decrease based on market demand and price changes[113] - The company's ability to retain and attract sellers and customers is critical for future revenue and gross profit growth, with no long-term contracts in place to ensure continued use of its services[112][113] - Pricing pressures from competitors and demands for customized pricing from sellers may reduce gross profit[131] - Economic downturns and inflation may disproportionately impact small business sellers, potentially reducing demand for the company's services and increasing transaction loss rates[204] Investments and Acquisitions - The company plans to continue investing in its business, including employee base, product development, international expansion, and acquisitions, which may lead to increased expenses and potential losses[116] - Acquisitions and strategic investments, such as the integration of Afterpay, pose risks including operational difficulties and potential failure to achieve expected benefits[134][140] - The integration of Afterpay and the company's majority interest in TIDAL present ongoing risks and challenges[106] - The company's expansion into new markets and product offerings may require significant investment and could fail to generate expected returns[123] Cryptocurrency and Bitcoin Risks - Cryptocurrency market risks, including bitcoin price volatility and regulatory actions, could negatively impact the company's Cash App and financial condition[132][133] - The theft, loss, or destruction of private keys required to access bitcoin could irreversibly harm the company's business, operating results, and financial condition[172] - The company holds the majority of bitcoin in offline and air-gapped cold storage, with a small portion in a networked hot wallet for transactions[173] Regulatory and Compliance Risks - The company is subject to extensive and evolving regulations across multiple jurisdictions, including banking, lending, cryptocurrency, and data protection, which could increase compliance costs and operational risks[233][234][235] - Cash App's bitcoin feature faces regulatory uncertainties, with potential compliance costs and operational changes due to evolving cryptocurrency regulations[236] - The company is subject to audits, investigations, and potential fines from regulators, including the SEC and Department of Justice, which could result in significant legal and financial consequences[238] - Regulatory scrutiny in the BNPL space may impose significant compliance costs, potentially making expansion into new markets uneconomical[249] Cybersecurity and Data Risks - The company faces operational risks from handling sensitive data, including potential breaches, reputational harm, and regulatory scrutiny, especially with AI integration[158] - Third-party product vulnerabilities and cyberattacks could lead to increased costs, liability, and reputational damage for the company[159] - A 2022 incident involving unauthorized access to Cash App Investing customer data resulted in investigation costs and potential future liabilities[160] - Cybersecurity insurance may be insufficient to cover liabilities from data breaches or cyberattacks, with potential impacts on financial condition and reputation[162] Operational and Market Risks - The company faces challenges in global expansion, including compliance with diverse regulations, cultural differences, and increased operational costs[143] - The company is exposed to supply chain risks, including component shortages, price increases, and tariffs, particularly for hardware devices manufactured in China[195][198] - The company's TIDAL business depends on complex licensing agreements with copyright owners, and inaccuracies in royalty payments could harm business relationships and financial results[201] - The company's investment portfolio is subject to credit, liquidity, and market risks, with potential impairment charges if global financial markets decline[206] Employee and Talent Management - The company plans to cap its employee base at approximately 12,000, which may impact its ability to attract and retain highly skilled employees[189] - Equity awards are a key component of employee compensation, and a decline in the company's stock price could adversely affect talent retention and recruitment[190] - The company faces challenges in managing growth, including improving internal controls, mitigating risks, and preserving core values as it shifts to a distributed workforce[192] Financial Instruments and Debt - The company has $1.0 billion outstanding aggregate principal amount of 2025 Convertible Notes, $575.0 million of 2026 Convertible Notes, $575.0 million of 2027 Convertible Notes, $1.0 billion of 2026 Senior Notes, and $1.0 billion of 2031 Senior Notes as of December 31, 2023[214] - The company may face challenges in servicing its Notes, including potential cash shortages for conversions, repurchases, or repayments, which could be impacted by market conditions and future performance[217] - The company's credit facility and Senior Notes contain restrictive covenants that could limit its ability to operate, raise capital, or pursue business opportunities[212] - The company's Warehouse Facilities, used to fund its BNPL platform, contain covenants that may negatively impact its ability to obtain additional funding if triggered[211] Tax and Legal Risks - The company may face greater-than-anticipated tax liabilities due to audits, changes in tax laws, or regulatory practices, which could materially affect its financial results[224][225] - The Inflation Reduction Act introduced a 1% excise tax on certain share repurchases and increased IRS funding, which could result in additional taxes payable by the company[226] - The company has a valuation allowance for deferred tax assets in the U.S. and certain other countries as of December 31, 2023, which may impact its results of operations[229] - The company is monitoring the likelihood of recovering deferred tax assets, with potential future adjustments in valuation allowance that could materially impact reported results[230] Environmental, Social, and Governance (ESG) - The company faces increased scrutiny and potential costs related to environmental, social, and governance (ESG) issues, including a commitment to achieve net zero carbon operations by 2030[271] - The company's ESG strategy focuses on financial inclusion, climate action, diversity, and corporate governance, with progress dependent on third-party verification and performance[271] Market and Stock Price Volatility - The market price of Class A common stock is subject to volatility due to factors such as economic conditions, public health crises, and fluctuations in bitcoin prices[276] - Dual-listing on NYSE and ASX may result in price variations due to differing trading schedules and currency exchange rates[279] - Convertible note hedge and warrant transactions may affect the value of Class A common stock by potentially reducing dilution or causing price fluctuations[280] - Class B common stockholders hold 52.14% of the voting power as of December 31, 2023, giving them control over corporate decisions[274] Foreign Currency and Interest Rate Risks - The company is exposed to foreign currency exchange rate fluctuations, which could negatively impact reported results of operations, despite hedging activities[223] - Foreign exchange derivative contracts are used to hedge currency exchange rate exposure[424] - No significant gains or losses from foreign currency transactions or derivatives as of December 31, 2023[424] - A hypothetical 10% change in interest rates would not materially affect financial results[422] Intellectual Property and Litigation Risks - Intellectual property risks include potential infringement, misappropriation, or challenges, which could reduce competitive advantages[266] - Third parties may assert intellectual property infringement claims against the company, potentially leading to significant legal costs and adverse financial impacts[269] - The company is exposed to litigation risks, including intellectual property claims and government investigations, which could result in material penalties or restrictions on business operations[245][246] Banking and Financial Services Risks - Square Financial Services is subject to quarterly FDIC deposit insurance premiums based on average consolidated total assets, with potential increases due to bank failures impacting profitability[149] - Square Loans' growth depends on third-party institutional investors purchasing eligible business loans, with reduced purchases potentially forcing the company to scale back operations[152] - Square Loans' business loans are unsecured and not guaranteed, with macroeconomic conditions and seller credit quality posing risks to repayment and servicing fees[153] - Net interest income for Square Financial Services is vulnerable to interest rate changes, impacting loan demand, credit profiles, and profitability[155] Payment Processing and Network Risks - Dependence on payment card networks and acquiring processors could harm the business if agreements are not maintained or if network rules change unfavorably[181] - The company relies on third parties for transaction processing and settlement, and their failure to perform adequately could materially and adversely affect the business[186] - The company relies on third-party partners for critical services such as transaction data transmission, payment processing, and liquidity provision for Cash App's Bitcoin feature, with potential disruptions if these partners fail to perform adequately[187] Product and Technology Risks - The company's ability to develop new products and services is challenged by rapid technological changes in payments, financial services, and AI, which may render existing offerings obsolete[124][125] - Generative AI adoption is growing, and the company is incorporating AI features into its products, with success depending on customer appeal[126] - The company relies on third parties, including competitors, for new technology development, and failure to adapt to industry changes could harm its business[127] - Intense competition in the payments industry, including BNPL (Buy Now, Pay Later) offerings, may erode market share and hinder expansion[129] Supply Chain and Manufacturing Risks - The company is exposed to supply chain risks, including component shortages, price increases, and tariffs, particularly for hardware devices manufactured in China[195][198] - A significant natural or man-made disaster, such as earthquakes or pandemics, could have a material adverse impact on the company's business, particularly in the San Francisco Bay Area[171] Customer and Transaction Risks - The company's Cash App transacting active metric is defined as accounts with at least one financial transaction within a specified period, with potential inaccuracies due to shared alias identifiers[194] - The company is exposed to risks associated with chargebacks and refunds, particularly during economic downturns or global supply chain disruptions[178] - Risk management efforts may not be effective in detecting and preventing fraud, leading to potential losses, liability, and regulatory enforcement actions[176] Legal and Regulatory Compliance - The company's compliance with Payment Card Industry Data Security Standards and other industry-specific regulations is critical to maintaining secure operations and protecting customer data[233] - Cash App Investing is subject to SEC and FINRA net capital requirements, with potential adverse effects if rules change or additional capital is required[255] - Square Financial Services must maintain a minimum leverage ratio of 20% after its first three years of operation, with initial paid-in capital of approximately $56 million[260] - Square Financial Services is required to maintain a reserve deposit of $50 million at an unaffiliated third-party bank to ensure capital adequacy[261] Financial Instruments and Market Risks - Non-marketable equity investments in privately-held companies totaled $205.3 million as of December 31, 2023, with a hypothetical 10% change in value not materially impacting financial results[420] - Cash and marketable debt securities as of December 31, 2023 were primarily held in short-term instruments[422] - Revenue is primarily earned in U.S. dollars, with some in Australian Dollars post-Afterpay acquisition[423] - Foreign currency exposure does not have a material effect on financial results[423]

Exhibit 99.1 ...

Block, Inc. (SQ) is scheduled to report fourth-quarter 2023 results on Feb 22.For the fourth quarter, the Zacks Consensus Estimate for revenues is pegged at $5.69 billion, suggesting a rise of 22.3% from the prior-year quarter’s reported figure.The Zacks Consensus Estimate for fourth-quarter earnings is pegged at 60 cents per share, suggesting a jump of 172.7% from the year-ago reported figure.The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the same once, ...

Analysts on Wall Street project that Block (SQ) will announce quarterly earnings of $0.60 per share in its forthcoming report, representing an increase of 172.7% year over year. Revenues are projected to reach $5.69 billion, increasing 22.3% from the same quarter last year.The consensus EPS estimate for the quarter has undergone a downward revision of 6.7% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial estimates dur ...

Cathie Wood, the founder and CEO of Ark Invest, got her reputation by investing in tech companies with huge growth potential. One of her top holdings is Block (SQ -5.53%), with her Ark Innovation ETF owning around $500 million in shares, roughly 6% of its entire portfolio.There's a lot to love about Block stock. If its growth potential is realized, shares could easily double, triple, or even quadruple in value. Why are growth investors like Cathie Wood betting so big on the company? There are three major fa ...

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