Block Inc. (NYSE:SQ), previously known as Square Inc (NYSE:SQ)., has announced an expansion to its share repurchase program, according to a recent 8-K filing with the Securities and Exchange Commission. The technology company, known for its prepackaged software services, revealed that its board of directors approved an additional $3 billion for stock buybacks, building on the completion of its previous $1 billion repurchase plan.
The announcement was made today, alongside the release of Block Inc.'s financial results for the second quarter, which ended on June 30, 2024. The company also disclosed plans to hold a conference call and earnings webcast today at 2:00 p.m. Pacific Time to discuss the quarterly financial outcomes. The shareholder letter detailing the financial results includes references to non-GAAP financial measures, with reconciliations to the nearest GAAP equivalents provided within the document.
Block Inc.'s expanded repurchase program allows for the buyback of Class A common stock through open market transactions or privately negotiated deals, contingent on market conditions and legal and regulatory requirements. The company may also utilize Rule 10b5-1 plans to facilitate the repurchase process. However, the program does not commit Block Inc. to a specific number of shares and can be suspended at the company's discretion. The timing and volume of repurchases will be influenced by various factors, including stock price, business and market conditions, and corporate and regulatory requirements.
In other recent news, Block Inc., formerly known as Square Inc., has reported second-quarter earnings that exceeded analyst expectations, leading to an updated full-year 2024 outlook. The company's adjusted earnings per share were $0.93, surpassing the analyst estimate of $0.84. However, the quarter's revenue was $6.16 billion, slightly below the consensus estimate of $6.26 billion.
Block Inc. has raised its full-year 2024 outlook, now anticipating a gross profit of at least $8.89 billion, marking an 18% year-over-year growth. This is an increase from its earlier guidance of $8.78 billion and 17% growth. The company also revised its adjusted operating income forecast to $1.44 billion, or a 16% margin, up from the previously expected $1.30 billion and a 15% margin.
For the upcoming third quarter, Block projects a gross profit of $2.22 billion, indicating a 17% year-over-year growth, and an adjusted operating income of $320 million with a 14% margin. These recent developments highlight Block Inc.'s resilience and strategic growth within its integrated ecosystem of financial services solutions across its Square, Cash App, and Afterpay brands.
InvestingPro Insights
As Block Inc. (NYSE:SQ) embarks on its expanded share repurchase program, recent data from InvestingPro provides a snapshot of the company's financial health and market performance. With a market capitalization of $36.87 billion and a notable revenue growth of 23.28% over the last twelve months as of Q1 2024, Block demonstrates a strong position in the financial services sector. The company's gross profit margin stands at 34.77%, highlighting its ability to maintain profitability amidst its growth strategies.
InvestingPro Tips indicate that Block Inc. is trading at a low P/E ratio relative to its near-term earnings growth, suggesting that the stock may be undervalued given its potential. Additionally, with analysts predicting profitability for the year and a track record of being profitable over the last twelve months, the company's financials may reassure investors looking for stability. For those considering investing in Block Inc., InvestingPro offers further insights with a total of 9 additional tips available on their platform.
While the stock has experienced price volatility, with a 1-year price total return of -21.43%, the company's strategic decision to repurchase shares could be a signal to investors about its confidence in future performance. Furthermore, with liquid assets surpassing short-term obligations, Block Inc. appears to be in a solid position to manage its capital allocation effectively. The InvestingPro Fair Value estimate of $83.5 suggests a potential upside from the previous close price of $61.88.
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