Block, which is formerly known as Square, wants to move away from being a "purely payments" company.
(Photo : Joe Raedle/Getty Images)
MIAMI, FLORIDA - JUNE 04: Jack Dorsey creator, co-founder, and Chairman of Twitter and co-founder & CEO of Square speaks on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
More Than A Payments Company
Former Twitter CEO Jack Dorsey said on the company's very first investor day in five years, that Block has transformed its services in the past few years and is now opting to expand its ecosystem.
"We are no longer just a payments company," Dorsey proclaimed during the live-streamed event. "A lot has changed since our last investor day."
The company highlighted to its investors on Wednesday that the money app, including its crypto and music-streaming services, should be treated as an "ecosystem" because of how much it has expanded.
Block's CFO, Amrita Ahuja, said in a statement with CNBC that treating Block as a payments company is similar to "calling Amazon a bookseller." She said that the company has grown in various ways "across multiple dimensions."
Square was established in 2009 and was well-known for creating a credit card reader for mobile phones. But over time, the company ventured into peer-to-peer payments and bank-like services and products with the Cash App.
It also tapped into the field of music after acquiring Afterpay and Jay-Z's Tidal music streaming service. Furthermore, they also operate an FDIC-insured bank and provide stock and cryptocurrency offers.
Block looks forward to further expanding its ecosystem since it has historically adapted with the change of time. Formerly known as Square, it was renamed to indicate how the company is widening its services and plans around crypto and blockchain.
According to CNBC, Block has suffered during the coronavirus pandemic and has fallen more than 45% in 2022 amid rising interest rates.
Read Also: Jack Dorsey Quashed Rumors About Being Twitter's CEO, Says 'No One Ultimately' Should Be
Massive Economy in the Future
Still, Block's CFO, Ahuja said the company is outperforming its peers on profitability. Block released updated profit margins Wednesday - an increasingly important metric as investors prioritize the bottom line over growth.
However, Ahuja contends that despite its pandemic losses, Block is still better-off on profitability compared to its peers. Their reported profit margins last year were 34% and they were 12% for Cash App.
While on the pure-growth aspect, Cash App has 80 million annual activities and 46 million monthly active users based on their latest data in March.
Block's $29 billion deal with Australian fintech company Afterpay might spur the company's growth since they are expanding into the installment loan market. The company's CFO noted that 6% of its Cash App users are also availing AfterPay services.
Their $300 million acquisition of Jay-Z's Tidal will also stretch Block's horizon on the music-streaming business. Dorsey said that the acquisition will be beneficial for the creator economy.
"This will be a massive economy in the future, and we see an opportunity to be a big part of it, all using the tools and platform we've already built," Dorsey added.
Related Article: Jack Dorsey's Block Confirms Data Breach After Former Employee Accessed Consumer Info of Cash App
This article is owned by Tech Times
Written by Joaquin Victor Tacla
