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.
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.
- Watanabe & Brothers’ Investment is holding shares of Block, Inc.
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