Afterpay’s parent company Block beat expectations with its third quarter profits, sending shares up almost 11 per cent this morning.
The company grew profits by 38 per cent year-on-year to A$2.5 billion.
Its Cash App, which is yet to launch in Australia, brought in A$1.23 billion, a 51 per cent leap from the prior year.
Square, and its suite of products and services, including the tap-and-go POS, brought in A$1.24, up 29 per cent year-on-year.
Now that the recently-acquired Afterpay, seen by founder Jack Dorsey as the connective tissue between Cash App and Square, has been integrated, Block aims to take on the major banks with global expansion of its Square Banking offering.
“Most recently, we introduced Instant Transfers in Australia and Square Loans in the UK,” Block said in its earnings report.
“Additionally, we have expanded the payment methods we support by launching our buy now, pay later offering in Canada and the UK, helping Square sellers attract new shoppers and drive incremental revenue.
“We recently rolled out our first iteration of Discover, a tab that allows consumers to search for people and businesses and find buy now, pay later offers from marquee Afterpay merchants.
“In the third quarter, we launched Cash App Pay with merchants outside the Square ecosystem, so customers can now browse Discover to find discount offers at merchants who accept Cash App Pay.”
“We built these solutions to address our three largest target verticals of food and drink, retail, and services,” Block said.
It also launched Tap to Pay on iPhone, Apple’s contactless payment acceptance capability, for Square sellers in the United States in September.
“We believe this allows our sellers more flexibility in getting started with Square without needing hardware to accept payments and offers our sellers’ customers a more convenient and contactless way to pay,” it said.
Block, like all companies currently operating in the buy now pay later sector, has been stifled by bad debts and scaling expenses. It’s shares have fallen more than 45 per cent this year.
“Other sales and marketing expenses were up 38 per cent year over year. The increase was driven primarily by sales and marketing expenses related to our buy now, pay later platform,” it said.
“Transaction, loan, and consumer receivables losses were $148 million in the third quarter of 2022, up 137 per cent year over year.
“The increase was driven primarily from consumer receivables losses related to our buy now, pay later platform, as well as growth in Square Loans volumes and Square GPV.”
