The news: Block’s gross profit increased 14% YoY in Q4 2024, totaling $2.31 billion, per its earnings release—down from 22% YoY growth in Q4 2023.

• Square’s gross profit grew 12% YoY, down from 18% a year ago.
• And Cash App’s gross profit increased 16% YoY, compared with 25% in 2023.

Block’s stock price dropped nearly 15% after missing analysts’ expectations.

• In Q4, financial analysts estimated Block’s gross profit would be $2.33 billion, per CNBC.
• The company also missed analysts’ revenue expectations of $6.29 billion; its revenues were $6.03 billion for the quarter.

How Square fared: While Square’s gross payment volume (GPV) increased 10% YoY, it fell 1.6% on a quarterly basis.

• The drop is noteworthy given payment volume typically ticks up in Q4 as consumers ramp up holiday shopping.
• This is likely in part due to increased point-of-sale (POS) competition from the likes of Toast, Fiserv, and Revolut.

What about Cash App? The platform faces slowing volume growth and a flat user base.

• Cash App’s total inflows increased 14% YoY in 2024, down from 22% in 2023.
• The number of Cash App actives was stuck at 57 million through all of 2024.
• The number of Cash App Card actives increased by 1 million in 2024.

What Block is doing to accelerate growth in 2025:

Marketing push

• Block’s total sales and marketing expenses for 2024 totaled $1.98 million. It plans to continue this elevated marketing spend in 2025.
• Block increased Square’s marketing spend by 60% YoY in Q4. So far, the company said it’s seen a strong return from this increased spend, including a partnership with coffee chain Bluestone Lane.
• It also tripled Cash App’s marketing spend YoY in the second half of 2024 to build awareness of Cash App’s banking capabilities.

Integrating Afterpay on Cash App Card

• Afterpay became available on the card this month.
• The integration can boost Cash App’s payment volume. During testing, Afterpay led to higher gross profit per active cardholder, the company said.

Bringing Cash App and Square together

• Merging the two ecosystems will turn Cash App into one app for everything.
• The company’s “true superpower” is having “both of these ecosystems at scale with both sides of the counter,” CEO Jack Dorsey said.
• The company has updated its sales strategy to focus on both sides of the business at once and is testing new integrations between the two.

Our take: Despite weaker-than-expected performance this quarter, Block’s moves during Q4 should put it in a stronger position in 2025.

Integrating its products can accelerate growth across platforms, and its increased marketing spend can bump up customer acquisition in the face of growing competition.