The Block Inc (ASX: SQ2) share price surged more than 30% today after reporting its FY21 result and fourth quarter.
Block is a large US payments business and recently carried out the acquisition of Afterpay.
Block’s performance
The payments business revealed that in the fourth quarter it achieved $1.18 billion of gross profit, which was growth of 47% year on year. It also made $184 million of underlying/adjusted EBITDA, but this was down slightly from the fourth quarter of 2020.
Turning to the full-year result, Block reported:
- Gross profit growth of 62% to $4.42 billion
- Adjusted EBITDA growth of 114% to $101 billion. Profitability growth is important for the Block share price.
- The net loss reduced from $213 million to $166 million.
Afterpay acquisition
Block mentioned that on 31 January 2022, it completed the acquisition of Afterpay. Management believe this acquisition will help its strategic priorities for Square and the cash app by strengthening the connections between ecosystems as it delivers compelling financial products and services for consumers and merchants.
Update
For the months of January and February, in total, Square gross payment volume is expected to be up 35% year on year. January saw a slowdown due to the Omicron variant, but growth returned in February.
The cash app ecosystem is expected to show a rise of gross profit thanks to growth of monthly transacting actives, engagement and inflows.
Afterpay will be included in the first quarter financial results for February and March.
