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Block (NYSE:SQ) Chief Financial Officer Amrita Ahuja said Wednesday that the fintech’s Square and Cash App ecosystems proved to be resilient in the near-term despite a tough macroeconomic backdrop of rising interest rates and tighter financial conditions.
For Square, Block’s (SQ) payments business, including its Buy Now, Pay Later platform Afterpay, gross profit for August is expected to be in line with what the company saw in July on a three-year CAGR basis, Ahuja said at the Goldman Sachs Communacopia + Technology Conference.
Cash App’s gross profit, meanwhile, is seen to “slightly moderate” for the remainder of 2022.
All in all, the increased diversity of each of Block’s (SQ) ecosystems, for the longer-term, “can enable further resilience,” Ahuja emphasized, noting that Cash App’s product portfolio has grown across financial services and commerce with a series of monetization themes.
“A number of these financial services products, which are ramping, and we believe have an opportunity for future growth, but to watch future products and to include the discovery and navigation towards those products, which ultimately enhances both adoption and engagement, and ultimately drives more inflows into Cash App,” she explained.
SA contributor JR Research contended that SQ stock has bottomed in July, as its gross margins profile “should improve further through FY23, which should be accretive to its adjusted EBITDA profitability.” SQ is off 23% M/M and nearly -60% YTD.
In Q2, Block expected its Square ecosystem gross payment volume to moderate.
Source: seekingalpha.com
