Block, Inc. recorded Negative Free Cash Flow in Full Year of 2021

Block (NYSE: SQ) announced 2021 Q4 financial results on February 24th, 2021. According to the announcement, Block recorded operating loss and net loss for the quarterly basis, with the amount of net loss of 81 million USD (3 months) despite total net revenue was up 29% (YoY, 3 months). One of main causes of the Block’s operating and net losses in 2021 Q4 seems a share-based compensation of 178 million USD. However, for the full year of 2021, Block recorded a net income of 159 million USD (TTM). 

Adjusted EBITDA was down 1 % in 2021 Q4 despite it was up 114% in full year of 2021. 

Focusing on revenues by segment, subscription and service-based revenue grew the most of up 72%, followed by hardware revenue of up 47% and transaction-based revenue of up 41% (3 months, YoY).  Bitcoin revenue, recording 12% growth in quarterly basis, still accounts for 48% of total net revenue and is the largest source of the revenue.

Although Block recorded positive operating cash flow, Block recorded negative free cash flow due to the large amount of expenses spent for the acquisition of Afterpay. The acquisition expense spent this quarter appears to be covered by issuing senior unsecured notes of 2.0 billion USD.

A decorative image of "payment". A female customer is standing in front of register and a male stuff is processing her credit card.
Photo by Clay Banks on Unsplash

Block is continuously strengthening its global strategies. In January, Block expanded Square ecosystem into Spain, its fourth European country. Spain has the third-largest and fastest-growing eCommerce sector in the EU, as well as a flourishing small business environment. 

We will continuously invest in Block in long term perspectives. 

Block, Inc. (NYSE: SQ) stock chart

Important Notice 

  1. Watanabe & Brothers’ Investment is holding shares of Block, Inc. 
  2. This report is provided solely for informational purpose and not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell any specific products. 
  3. Any opinions or statements expressed in this report are based on the author’s personal and subjective views, and are not the official views of the organization to which the author belongs.  In addition, although we have done our best efforts in making accurate assessments on the original financial statements, we cannot guarantee any complete accuracy of this report. We do not guarantee either that any future forecasts referred to in this report will certainly be realized. Investment in listed stocks, ETFs, etc. should be carried out under the responsibility of each investor, and even if the investor who read this report suffers a loss due to investment activities, Watanabe & Brothers’  Investment is not responsible for any liability.
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