Square-parent Block reported third-quarter earnings and revenue that topped estimates. SQ stock jumped Friday on preliminary 2024 guidance for earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA.
Released after the market close on Thursday, Square earnings for the period ended Sept. 30 were 55 cents per share on an adjusted basis, up 31% from the year-earlier period. Analysts had projected earnings of 47 cents a share.
Also, Square said net revenue rose 24% to $5.62 billion, including Cash App transactions for digital cryptocurrency Bitcoin. SQ stock analysts had predicted revenue of $5.42 billion.
On the stock market today, SQ stock popped 10.7% to close at 48.68.
Financial analysts also view gross profit as a key metric for SQ stock. Gross profit rose 21% to $1.9 billion, edging by estimates of $1.895 billion.
Square Stock: EBITDA Key Metric
Cost-cutting boosted earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA. It jumped 46% to $477 million, handily beating estimates of $378 million.
For fiscal 2024, Square said it expects EBITDA of $2.4 billion, up about 44% from this year's estimated $1.67 billion. Analysts had projected 2024 EBITDA of $1.94 billion.
"For Q3, Square's adjusted EBITDA beat consensus by 26% primarily on better operating expense management even while gross profit largely matched and consensus," said Evercore ISI analyst David Togut in a report.
He added: "During the past 12 to 18 months, Square managed expenses well, driving operating leverage. While necessary, this will likely slow the rapid pace of innovation which fueled its success, challenging future revenue and gross profit growth."
In Q3, gross payment volume from the transactions of merchant customers rose 11% to $55.7 billion, missing estimates of $61.14 billion.
SQ stock had retreated 24% in 2023 heading into the Block earnings report. San Francisco-based Block's earnings included consumer lending firm Afterpay.
Meanwhile, Square stock holds a weak Relative Strength Rating of 13 out of a best-possible 99, according to IBD Stock Checkup.
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