Block got a boost from the Cyber 5 weekend across its two-sided network

The news: Consumers made more than 144 million transactions across Block’s products during the Cyber 5 weekend, per a press release.

This includes pending credit, debit, and cash transactions across Square sellers, the Cash App Card, and Afterpay from the day before Thanksgiving (November 27) through Cyber Monday (December 2).

• The number of transactions grew 17% YoY.
• Online sales value surged 21% YoY, compared with 17% for in-store shopping. The average online cart size was also twice as large as in stores.
• An increase in physical and digital gift cards also helped boost growth, with around 450,000 purchases (up 29% YoY).

Here’s how Block’s different business segments fared:

Afterpay

• The buy now, pay later (BNPL) provider’s transactions grew 10% YoY over the holiday weekend.
• The number of Afterpay app users jumped 8% YoY.
• Afterpay attracted users across all demographics: 26% were Gen Zers, 44% were millennials, 24% were Gen Xers, and 6% were boomers.
• The top spending categories outside of fashion and beauty were personal care, followed by household supplies. And the fastest growing category was vitamins and supplements.

Cash App Card

• Cash App Card transactions grew 19% YoY over the holiday period.
• Social commerce purchases made using the debit card surged 139% YoY.
• A top spending category for purchases made on the debit card was gaming, which grew 46% YoY.

Square

• The number of omnichannel Square sellers grew 12% YoY.
• They leaned on discounts to lure in shoppers, offering on average a 19% discount.
• Square’s restaurant sellers got a 12% transaction boost from the holiday weekend.

The bigger picture: A strong holiday season is crucial for payment providers’ overall growth given its share of the retail pie. Holiday retail sales are expected to make up 18.3% of full-year retail sales this year, per our forecasts.

Growth across Block’s products should therefore help boost its revenues and profit for the year.

• Block’s gross profit increased 19% YoY in Q3 2024.
• Block also increased its gross profit guidance for the full year by $240 million.

Our take: Block benefits from its two-sided approach of offering consumer-facing products like Cash App and Afterpay and merchant-facing products like Square. That lets the company earn revenues on both sides of these holiday transactions.

Further integrating its products—like what it’s reportedly planning for Cash App and Square's point-of-sale software—will ensure it capitalizes on both sides of more transactions in the future.

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