+ Continued momentum in Cash App. In 1Q23, Block’s consumer-facing Cash App segment reported revenue growth of 33% YoY to US$3.3bn (52% YoY ex-bitcoin) and gross profit growth of 49% YoY to US$931mn. This growth was mainly driven by growth in Cash App’s monthly active users (MAUs) (15% YoY to 53mn) and strong engagement led by adoption of the debit card. Additionally, Cash App benefited from strong in-flows driven by growth in monthly direct deposit actives.
+ Focused on expense controls. Operating expenses for 1Q23 grew 13% YoY to US$1.7bn compared with 45% YoY growth in 4Q22 and 70% in 1Q22. The slower operating expenses growth is mainly because the management remains focused on cost controls in FY23e including moderating its headcount growth to 10% (vs 46% growth in FY22) as well as careful sales and marketing spend. Net loss improved to US$17mn in 1Q23 compared with US$204mn in 1Q22.
– Slowdown in Square segment GPV. In 1Q23, Square division’s gross payment volume (GPV) grew 17% YoY to US$46.2bn. The growth rate decelerated significantly from 33% in 1Q22 mainly due to weak trends in global e-commerce and cuts to consumer discretionary spending (particularly food/beverage and retail) amid inflationary pressures.