A Second Straight Operating Profit, and a Stock Price Moving the Opposite Direction
Block's Q2 2024 GAAP operating income came in at $306.6 million, building on Q1's first post-Afterpay operating profit and confirming that quarter wasn't a one-off. Total net revenue grew 11.2% year-over-year to $6.16 billion, gross profit grew 19.7% to $2.23 billion (revenue and gross-profit growth continuing to diverge, a sign of an improving mix rather than just volume), and Adjusted EBITDA» grew 97.6% to $759.5 million. Standalone quarterly Free Cash Flow» reached roughly $481.0 million, nearly six times the ~$83.8 million posted in the same quarter a year ago.
None of that stopped the stock from falling 23.8% over the quarter, from $84.58 at Q1's close to $64.49 - the sharpest single-quarter decline in this backfill since Q3 2023's 33.5% drop, and again a case (like that quarter) of the operating trend and the share price moving in opposite directions within the same three months.
The Prescription
Block should keep proving out consecutive quarters of GAAP operating profitability - two in a row is a real pattern, not yet a settled trend, and a third consecutive quarter next report would be the strongest confirmation this backfill has had that the post-Afterpay cost structure is durably fixed. What it should stop doing is letting a strong operating quarter go unrewarded without addressing whatever's actually driving the disconnect with the stock price - a 23.8% single-quarter decline against genuinely improving fundamentals suggests the market is pricing in something the filing itself doesn't fully explain (macro risk-off in growth/fintech names, unresolved regulatory overhang from the CFPB matter, or genuine skepticism about durability), and simply reporting good numbers each quarter hasn't been enough to close that gap so far.
Key Financial Metrics
Q2 2024 vs. Q2 2023, consolidated, reported in USD
| Metric | Q2 2024 | Q2 2023 | YoY |
|---|---|---|---|
| Total Net Revenue | $6,155.6M | $5,535.0M | ✅ +11.2% |
| Gross Profit | $2,233.5M | $1,866.1M | ✅ +19.7% |
| Operating Income (Loss) | $306.6M | $(132.1)M | ✅ second straight quarterly operating profit |
| Net Income (Loss) | $189.9M | $(105.4)M (restated, see below) | ✅ swung to a profit |
| Adjusted EBITDA» | $759.5M | $384.4M | ✅ +97.6% |
| Free Cash Flow» (standalone quarter) | ~$481.0M | ~$83.8M | ✅ +474% |
| Balance sheet metric | Jun 2024 | Mar 2024 | Change |
|---|---|---|---|
| Cash and Cash Equivalents | $7,799.1M | $5,753.4M | ✅ +35.6% |
| Total Assets | $37,546.6M | $35,612.8M | ✅ +5.4% |
| Total Liabilities | $18,253.6M | $16,645.6M | ⚠️ +9.7% |
| Total Stockholders' Equity | $19,293.0M | $18,967.2M | ✅ +1.7% |
The Q2 2023 comparative shown above ($(105.4) million net loss) reflects the bitcoin fair-value accounting recast disclosed alongside Q1 2024's results - the originally reported Q2 2023 net loss was $(125.8) million; the operating-income and revenue lines above are unaffected by that recast.
Block's second consecutive quarterly GAAP operating profit ($306.6 million) and its strongest standalone Free Cash Flow yet (~$481.0 million) weren't enough to stop the stock falling 23.8% over the same three months - the widest gap this backfill has shown yet between an improving filing and a declining share price.
Segment Comparison: Cash App vs. Square
Q2 2024 vs. Q2 2023, as presented in this quarter's segment tables
| Metric | Cash App Q2 2024 | Cash App Q2 2023 | YoY | Square Q2 2024 | Square Q2 2023 | YoY |
|---|---|---|---|---|---|---|
| Segment Gross Profit | $1,298.9M | $1,052.3M | ✅ +23.4% | $922.6M | $804.0M | ✅ +14.7% |
Cash App
Cash App's segment gross profit growth of 23.4% keeps it the clear growth leader, though the pace has now decelerated for three straight quarters when measured on a consistent comparative basis - still healthy, but a real and gradual slowdown from the 40%+ rates seen through most of 2023.
Square (formerly Seller)
Square's segment gross profit growth of 14.7% is its strongest since Q2 2023, aided by GPV» growth of 5.0% and continued cost-of-revenue improvement - a segment holding a remarkably stable double-digit growth rate across nearly every quarter of this backfill.
Key Operational Metrics
Q2 2024 vs. Q2 2023
| Metric | Q2 2024 | Q2 2023 | YoY |
|---|---|---|---|
| GPV | $61,941M | $59,012M | ✅ +5.0% |
| Bitcoin Investment Fair Value (period-end) | $514.6M | not disclosed with a bitcoin count at Jun 2023 | — |
| Bitcoins held (period-end) | ~8,211 | — | — |
Beyond the Usual
The Corporate Bitcoin Position Grew for the First Time Since Early 2021
Block held approximately 8,211 bitcoins as of June 30, 2024, up from the 8,038 bitcoins disclosed as of December 31, 2023 - the first increase in the position's size anywhere in this backfill since the original $220 million of purchases made in October 2020 and February 2021, a position the company explicitly held flat through the entire FY2022 crypto downturn and every quarter since. The fair value of the position actually fell over the quarter (from $573.3 million at Q1 2024's close to $514.6 million here) despite the larger bitcoin count, reflecting a weaker bitcoin price during the period - a reminder that under the fair-value accounting model adopted in Q4 2023, both directions of price movement now flow through the balance sheet and income statement in real time, not just downside impairments as under the old model.
Target Valuation Range
~2.4x EV/TTM Revenue at quarter-end - the sharpest single-quarter compression in this backfill, down from Q1's ~2.8x, driven entirely by the falling share price rather than any deterioration in the underlying trailing financials. The stock now looks cheap relative to its own trailing 12 months of accelerating operating performance, though a reader should weigh whether the market is pricing in risks (regulatory, macro) that the filing's own numbers don't yet reflect.
| Market cap → enterprise value | Q2 2024 (period-end) |
|---|---|
| Share price (period-end, Jun 28 2024) | $64.49 |
| Weighted-average diluted shares (Q2 2024) | ~634.2 million |
| Market capitalization | ~$40.9 billion |
| Total liabilities | $18.25 billion |
| Less: cash and cash equivalents | $7.80 billion |
| Enterprise value | ~$51.4 billion |
| Peer-multiple sanity check | TTM ending Q1 2024 | TTM ending Q2 2024 | Change |
|---|---|---|---|
| Enterprise Value | ~$64.8 billion | ~$51.4 billion | ⚠️ -21% |
| TTM Revenue | ~$22.88 billion | ~$23.50 billion | ✅ +3% |
| EV/Revenue | ~2.8x | ~2.2x | ⚠️ sharp compression |
| DCF scenario (illustrative, EV/Revenue-multiple-based) | Key assumption | Implied EV | Implied share price |
|---|---|---|---|
| Bear | The operating-profit streak breaks and GAAP losses return, confirming the market's caution; multiple stays compressed near ~2.2x forward revenue | ~$52.0 billion | ~$62 |
| Base | Operating income stays positive for a third straight quarter and Free Cash Flow holds near this quarter's level; multiple recovers toward ~2.8x forward revenue | ~$67.0 billion | ~$80 |
| Bull | The regulatory overhang resolves favorably and margin expansion continues; multiple re-rates to ~3.5x forward revenue | ~$84.0 billion | ~$100 |
| Current (period-end close) | — | ~$51.4 billion | $64.49 |
Block, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed with the SEC.