Block reports Q3 EPS 45c, consensus 87c

Reports Q3 revenue $5.98B, consensus $6.24B. The company states: “In 2013, we began offering capital to sellers because we saw a meaningful gap in the market: small businesses were often denied access to credit, in the same way they were once denied access to accepting credit cards. We utilized our deep understanding of the seller and their business to build a technology that invited them to accept a loan with transparent rates, and pay back simply by making sales to their customers. We called it Square Capital (which is now known as Square Loans). Since then, we’ve underwritten more than $22 billion in loans globally, with aggregate loss rates below 3%. And we’ve proven we can expand access: 58% of Square Loans are to women-owned businesses, and 36% are to minority-owned businesses, both of which are higher than the benchmark we track. If our sellers grow, we grow – and we believe Square Loans has a direct impact on our sellers’ growth. Sellers who take out a Square Loan grew on average 6% faster than sellers who did not take out a loan. We also see benefits to our ecosystem. In 2023, we saw a 15% improvement in retention of sellers who adopted a full suite of banking products (3 or more) compared with sellers that did not. Lending also improves our ability to cross sell other products. Sellers who have taken out a loan use 3.7 Square products on average compared to 1.5 products used by sellers who haven’t taken out a loan. SaaS attach rates for sellers that have taken out a loan are 10 percentage points higher than sellers that have not.”