Stock Groups

‘No longer just a payments company’


Jack Dorsey is the CEO of Twitter and addresses students in a townhall at IIT New Delhi on November 12, 2018.

Anushree Faddnavis | Reuters

BlockExecutives no longer wish to see the company as an exclusive payments play.

On Wednesday, the San Francisco-based company hosted its first investor meeting in five years. The C-suite presented their case to Wall Street that the app for money, as well as its music-streaming and crypto businesses, should instead be valued at an “ecosystem”.

CFO Amrita Ahuja said that Block is like calling Amazon booksellers. “We have grown so many times across multiple dimensions.

Jack Dorsey is the CEO and cofounder of Twitter. He opened Wednesday’s presentation giving an overview on Block’s evolution and how bitcoin will play a role in that future. He said that it was “difficult” to put a company such as Block in a single category.

Dorsey stated that “We’re not just a payment company anymore,” during the livestreamed event. There has been a lot of change since the last investor day.

Square was established in 2009, and its credit card reader is now available for mobile phones. Company expanded its scope You can use Cash App to make peer-to–peer payments as well as bank-like products. Afterpay, Jay-Z’s Tidal music streaming platform and Afterpay were also bought by the firm. The company also has a mobile music streaming service called Afterpay. an FDIC-insured bankIt offers cryptocurrency and stock trading.

Square offers corporate services renaming The name Block was created partly to represent the widening scope of crypto- and blockchain projects. 

Fintechs performed well during the pandemic but Block and other tech companies have suffered in 2022 due to rising interest rates. ARK’s Fintech Innovation ETFA collection of fintech companies called is experiencing a drop in value by around 55% annually. Block has dropped by 45% since 2022.

Concentrate on the profits

Block’s CFO Ahuja still believes the company has outperformed its competitors in profitability. Block released updated profit margins Wednesday — an increasingly important metric as investors prioritize the bottom line over growth.

The company reported that the Square business had 34% adjusted profit margins last year and Cash App had 12%. Cash App, which is a pure growth platform, now boasts 46 million monthly active users. It also has 80 million annually actives.

“Wall Street analysts are going to want to understand our growth profile, and our margin structure as a company — you can see based on our track record we are outgrowing the rest of the industry,” Ahuja said. “We are still taking market share in large, growing markets.”

Block has closed $29 billion to purchase Afterpay, an Australian fintech firm. earlier this yearAs it enters the market for installment loans. The CFO highlighted the cross-selling opportunity with roughly 6% of its Cash App users also using AfterPay. 

Consumers and merchants alike have become increasingly interested in the lending industry, as well as online shopping. The cost of larger purchases can be spread out into four equal installments. It is possible to still enjoy the benefits of a 0% interest rate. pushbackAhuja, a consumer watchdog said that the card is safer than traditional cards because customers can’t get additional loans if they forget to pay. 

According to her, “Millennials and Gen Z are quite honestly skeptical of traditional forms credit that leaves people in debt spirals.”

Block acquired Jay-Z’s streaming music business Tidal. roughly $300 million last year — at the time a head scratcher for some payment analysts. Dorsey stated that it was a wager on the creator economy. He argued that artificial intelligence will remove “more and more” of the need to do mechanical work.

Dorsey explained that the “this will be a huge economy in the near future” and that there is an opportunity to become a major part of this, using tools and platforms already developed. TIDAL was acquired because artists are able to follow the same path as small businesses and there is still a huge gap in market regarding artist tools.

Dorsey’s Bitcoin case

At 5%, Bitcoin’s net profits remained at Block as of March quarter. Executives are betting that cryptocurrency will be a secular phenomenon in which Block can position itself well. Dorsey called it the “open-standard for global money transfer” and stated that it would allow Block’s whole business to be more efficient globally.

Block was the first to offer bitcoin trading via the Cash App. The firm also holds the cash on its balance sheet, as an alternative for cash. This is the world’s most valuable cryptocurrency. It has lost more than half its value since its peak and continues to struggle for value this year.

Block now offers a hardware bitcoin wallet as part of its cryptocurrency businesses. bitcoin-mining businessTBD is an open-source company for developers. Spiral, a separate, Bitcoin-focused company within Block, is also available. 

Dorsey doesn’t believe in other cryptos and says the “internet needs a native currency. And when you look at the whole ecosystem of technologies that can fill this role it’s obvious that bitcoin is currently our only choice.”

CNBC obtained a transcript from Wednesday’s keynote. Dorsey stated that “its development might feel slow in comparison to other candidates,” but this is because it was designed to keep the attributes needed for money storage and transfer.” It is clear that the internet demands a currency unique to it. When you examine the whole ecosystem of technologies for this purpose, it becomes apparent that bitcoin is the most likely candidate.