Square's latest earnings reveal: Cash App's surge defies mixed results

In Q4 2023, Square, Inc. (SQ) disclosed earnings per share of $0.45, missing expectations by $0.13. Despite this, revenue climbed 24.1% from the previous year to $5.77 billion, surpassing the anticipated $5.7 billion. This performance was bolstered by significant growth in Cash App revenue and overall gross profit.

The company processed $57.49 billion in Gross Payment Volume (GPV), marking an 8% increase from the year before. Gross profit rose by 22% to $2.03 billion. Specifically, Cash App's revenue reached $3.91 billion with a gross profit of $1.18 billion, showing growth of 31% and 25%, respectively.

Cash App Business GPV saw a 13% decrease to $3.95 billion. The Buy Now, Pay Later (BNPL) platform contributed notably with $325 million in revenue and $242 million in gross profit, improving from the previous year's figures.

Adjusted EBITDA for the quarter was notably higher at $562 million, up from $281 million in Q4 2022. Square's outlook for 2024 includes a gross profit growth projection of 17% to between $2.00 billion and $2.02 billion, with adjusted EBITDA expected to fall between $570 million and $590 million, and adjusted operating income anticipated to be in the range of $225 million to $245 million.

Square's Q4 2023 earnings depicted a scenario of mixed outcomes, with notable growth in Cash App revenue and adjusted EBITDA, despite a downturn in Cash App Business GPV. The company's forecast for 2024 points towards sustained revenue and profit growth, though the future performance of Cash App and the BNPL platform remains crucial for evaluating Square's full potential.

Square's end-of-year financials highlight its dynamic growth and potential, especially within the Cash App domain. The 2024 outlook is optimistic, but the decreased performance in Cash App Business GPV and the competitive landscape of the fintech sector are important elements to monitor moving forward.

SQ shares are surging 12% after hours in response.