Block 3Q25 Quick Interpretation: Overall, the company's performance this quarter was not bad. Although at first glance, total revenue and GAAP operating profit were below expectations, the former was dragged down by the Bitcoin trading business, which has high revenue but very low profit impact. Core revenue actually exceeded expectations.
Similarly, the adjusted operating profit, which is more closely watched by the market and the company, also exceeded expectations. The company's guidance for 4Q, while not particularly outstanding, was generally in line with or slightly better than expectations.
Therefore, Dolphin Research believes that the post-earnings plunge was more due to the overall decline in the US stock market. As long as the performance is not perfect and significantly exceeds expectations, the trend is generally downward. As a member of the cryptocurrency/stablecoin concept, the company's elasticity is relatively greater. Similarly, Hood and Circle also experienced similar declines yesterday, despite Hood's strong performance.
Specifically:
1) Core revenue, excluding Bitcoin trading, grew by 17% year-on-year this quarter, significantly accelerating from 10% last quarter and better than expected. Adjusted operating profit was $480 million, also better than expected. The downside is that the year-on-year growth rates of revenue, gross profit, and adjusted profit are gradually slowing down, and the company's operating leverage is currently negatively amplifying.
2) In the Square segment, the total payment volume (TPV) grew by 12.2% year-on-year this quarter, accelerating by 2 percentage points from last quarter. The trend is also positive. The downside is that the gross profit of the Square segment grew by 9% year-on-year, which is slower than the TPV growth rate, indicating that the company has not been able to obtain proportional profit from the increased business volume.
3) In the Cash App segment, the gross profit excluding Bitcoin business grew by 25% year-on-year this quarter, accelerating by nearly 10 percentage points from last quarter, also showing strong performance. On the underlying metrics, the number of active users this quarter finally increased to 58 million after staying at 57 million for six quarters. The amount of funds flowing into the app reached $78.8 billion, also setting a new historical high.
4) Although the Bitcoin segment performed poorly despite the industry's recovery, its impact on profit is minimal. $Block(SQ.US)
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