Block 🧈💲 (SQ) - Stock discussion

Unlike RH, TW, FT, Monzo, N26, or Revolut:

  • Square is a public company.
  • They have at least 2x-2.5x as many customers using their app as each of the rest.
  • They are/will be competing for the same customers sooner or later.

That’s what makes $SQ so fascinating. iZettle and all these card payments systems were their “initial” competition. But they went vertical/side-ways and into other territories to diversify and not get stuck in one lesser growing category. Technically, they are after the same customer segment as Goldman Sachs’ Marcus and JPMorgan Chase UK. No wonder, RH started its cash/debit card product (though they are associated with stock and cryptocurrency trading #marketing).

“Software is eating the world.” - Marc Andreessen.

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It’s highly recommended to listen to earnings calls (for UK-listed share - just go to Investor(s)/Investor Relations (IR) and check for any announcements and/or subscribe to official PR/IR news).

For US-listed well-known stocks, some sites like AlphaStreet, Motley Fool and SeekingAlpha offer transcripts of those earnings calls.

Square’s earnings call was in late February after volatility has begun all over the markets. Nevertheless, Square offered earnings guidance for 2020 showing they expect large growth in 2020. They said they already launched the payments terminal (card reader) business in the UK. Australia and Canada during 2019.

Guidance for 2020

Turning to our financial guidance for 2020. We expect to achieve total net revenue of $5.90 billion to $5.96 billion and gross profit of $2.44 billion to $2.475 billion or 34% year-over-year gross profit growth at the high end of the range, excluding Caviar. These figures are ahead of the preliminary expectations we shared on our third quarter call as the business has continued to execute at high-growth rates even as we’ve scaled.

We expect our 2020 transaction profit margins as a percentage of GPV to be relatively stable compared to 1.08% in 2019 as we expect any benefit from the pricing change to be largely offset by mix shift to larger sellers. We expect to generate adjusted EBITDA between $500 million and $520 million, consistent with the preliminary guidance we provided on our last call. Similar to 2019, if we deliver top line outperformance during the year, we do not intend on increasing our adjusted EBITDA guidance and instead plan on reinvesting that upside back into the business where we see opportunities to benefit long-term profitable growth. Our EBITDA guidance includes strategic investments across both ecosystems, including the previously outlined sales and marketing spend for our Seller ecosystem, which we expect to achieve a 4-quarter payback on our overall 2020 spend and to return multiples over time based on the strong returns we see.

Additionally, as previously mentioned, 2020 guidance includes a larger-than-normal facilities expansion related to our Oakland office as well as additional regional offices, which will add an incremental onetime step-up of $50 million to our operating expense base. Over the medium to long term, we expect to continue to drive leverage from our G&A expenses as we have historically. Finally, we’re hosting our Investor Day on March 18 in San Francisco, where we will provide a deeper update on our long-term vision, market opportunity, strategy and business model for the Seller and Cash ecosystem and long-term financial outlook.

Cash App’s contribution to the top line

In the fourth quarter, Cash App delivered $183 million in revenue, excluding Bitcoin, up 96% year-over-year and $141 million in gross profit, up 101% year-over-year. Cash App’s strong and sustained growth has led to a mix shift in our overall company gross profit with cash accounting for 27% of total gross profit in the fourth quarter compared to just 19% a year ago.

Cash App’s DAU, MAU and user monetisation

As Jack mentioned, Cash App was at 24 million monthly actives in December, up 60% year-over-year and has added more new monthly actives each year since launch with December 2019 being its strongest month for new adds. Cash App daily active customers increased at an even faster clip of 80% year-over-year as we’ve enhanced discoverability and navigation to our products as well as added new products like equity investing. Cash App has not only been growing its engaged customer base to an impressive scale, but it has also driven consistent growth in revenue per customer over the past few years. In December, Cash App generated more than $30 in annualized revenue per monthly active customer, excluding Bitcoin, which more than doubled from less than $15 in December of 2017.

Vertical integration - Seller and Buyer

And we have an incredible advantage over our peers in this industry because of the two ecosystems that we’re building: one, seller focused and also focusing on their customers but Cash App up as well. Pairing both of them together is quite powerful.


Guidance updated after the $1 billion convertible bond was issued to fund operations - affecting interest expenses and thus net income:

The revisions to Square’s first quarter and full year 2020 guidance, which was previously announced on February 26, 2020, are only a result of the Notes issued by Square on March 5, 2020. As a result of the issuance of the Notes, Square is revising its guidance for net income (loss) per share and Adjusted Net Income Per Share (Adjusted EPS) to reflect the estimated increase in interest expense. Square is also revising its guidance for net income (loss) per share to reflect the estimated amortization of debt discount and issuance costs associated with the issuance.

As a reminder, Square will release financial results for the first quarter of 2020 on May 6, 2020, after market close.

The tech that helps power Cash App’s debit card? Other fintechs, including Plaid which also works with Robinhood


Headquarters: Oakland, California

Debit card transaction processor gives companies that issue cards to workers or customers more control over which transactions are approved. Grocery delivery service Instacart uses Marqeta to control which items its order-fillers can buy, reducing fraud. Square uses Marqeta for its fast-growing Cash App, which lets consumers make retail purchases, transfer money and buy stocks.

Funding: $378 million from Visa, 83 North (formerly Greylock Israel), Coatue Management and others; latest valuation of $1.9 billion

Bona fides: Has doubled revenue every year since 2016, reaching more than $300 million in 2019, Forbes estimates.

Cofounder & CEO: Jason Gardner, 50, who founded a rent payments company in 2004 that was acquired by MoneyGram for $28 million.


Headquarters: San Francisco

Making its fifth—and assuming its pending acquisition by Visa goes through, last—appearance on this list, Plaid connects payment apps like Square Cash and personal finance apps like Acorns to users’ bank accounts to transfer and track funds. Doubled number of customers in 2019 to 2,600, while expanding to the U.K., Spain, France and Ireland.

Funding: $310 million from Andreessen Horowitz, Kleiner Perkins, NEA and others; latest valuation: In January, Visa agreed to buy Plaid for $5.3 billion, double its value a year prior.

Bona fides: Works with most of the largest fintech apps in the U.S., including Venmo, Robinhood and Coinbase.

Cofounders: CEO Zach Perret, 32, and former CTO William Hockey, 30. They met as fledgling Bain consultants before founding Plaid in 2012.

Square’s physical payment terminals are taking “take a hit”.

Shares are 1/2 of the levels not that long ago.

Square is now a limited Bank which can lend money. Big milestone.


Provided how tough it has been for new challengers in the US when it comes to all things banking license-related, this is indeed a huge milestone.

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Even more so as for challenger banks the biggest problem has been distribution. Cash App on the other hand already has 24 million users…

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Square Financial Services and Square Capital

Because they’re a “bank” too, Square can take part in the relief programme.

This could’ve been Robinhood too, if they got their licence. It is a lost opportunity for the “first mover”. (Check Cash App’s execution of stock trading in the US, they’re a major threat to RH given that both are popular among younger people:

1/4 Square Capital has received U.S. Treasury and SBA approval to be a PPP lender, and we will start rolling out our PPP loan applications this week. We continue to work with our partner Celtic Bank as they have existing expertise as a leading SBA lender.

We will notify sellers when their application is available via Square Dashboard, starting with employers whose application data we can verify automatically. We expect to expand access to more small businesses soon.

3/4 We know sellers need financial support now more than ever, and we’re committed to making funding accessible to as many small businesses as possible.

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Major ?

Jay-Z on the board? I get he’s generally done well with his businesses but they’re mostly consumer discretionary: Music, Alcohol etc

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The transaction has an implied value of approximately US$29 billion (A$39 billion) based on the closing price of Square common stock on July 30, 2021, and is expected to be paid in all stock.


Another generic name




The Square Icon was way better


Might be a stupid question but I’ll ask anyway. Why is the PE at over 90%?

Probably there Crypto Investment

  • $sq
    currently, at $37b market cap

What would it be worth in 5-10 years?
~2030 CashApp is the biggest international retail bank.
:money_with_wings: Square+CashApp is the major payment network
:cloud: Square services is the most popular SME biz software
+blockchain wildcard!:stuck_out_tongue_winking_eye:

capital at risk :four_leaf_clover::laughing: