Block CFO Makes Defensive Case for Square-Cash App Ecosystem

Block, which owns retail POS solution Square, money transfer service Cash App, and buy now, pay later (BNPL) firm Afterpay, is on a journey to overall profitability but has work to do.

Block CFO and COO Amrita Ahuja put an upbeat spin on the company’s Q4 2022 loss of $114 million, telling CNBC on Monday (Feb. 27) that “What’s really exciting to me is to see increasing daily utility across each of these ecosystems. Square sellers who took on four or more of our monetized products made up 44% of our gross profit in 2022. It’s up 15 points over three years.”

“For Cash App, we now have five revenue streams that delivered $100 million or more in gross profit in 2022. So our customers are finding great value through our platforms, increasing daily utility, and ultimately that’s leading to a more diverse and broad business for us.”

On the CNBC appearance, Ahuja doubled down on remarks made on the earnings call, during which she said “We’ll continue to invest with discipline to unlock growth in each of our ecosystems. For Square and Cash App, this includes launching new products for our customers, expanding into new customer segments, and refining our go-to-market approach across our global audiences.”

She added that for Block’s emerging businesses, “We’re constraining investment for these businesses to less than 3% of operating expenses in 2023 in aggregate, and we’ll look for these ecosystems to show a path to achieving and sustainable Rule of 40.”

On the January 2022 acquisition of buy now, pay later (BNPL) pioneer Afterpay, Ahuja told investors and analysts that “we are now lapping the acquisition of Afterpay, which closed on January 31, 2022. As a result, our reported growth rate for January should be greater than that of February and March. If we look at our performance on a combined company basis, which would include a $51 million contribution from our BNPL platform to January 2022 results, we see stable to improving trends.”