Block delivers strong Q1, hails Cash App’s growth potential

By the numbers: Block’s gross payment volume (GPV) surged 31% year over year (YoY) in Q1, hitting $43.5 billion, per its shareholder letter. GPV growth accelerated slightly from the same period last year (+29% YoY) but slowed from last quarter (+45% YoY).

More on this: Cash App came up repeatedly during Block’s earnings call, and we expect the number of US Cash App users to increase 15.3% YoY and hit 47.8 million in 2022—slower than last year’s 22.1% YoY growth.

Here are some of our key takeaways from Block’s earnings call regarding Cash App growth.

Strong user engagement. Monthly active users averaged 21 transactions across Block’s ecosystems, and March had the strongest monthly Cash App engagement, CFO Amrita Ahuja said on the earnings call. Increased adoption of the Cash App card and direct deposits fueled growth for the peer-to-peer (P2P) payments app. Block also wants to create more family engagement on Cash App—it started letting teens use the app in November.

Tighter Afterpay connections. Block wants greater synergy between the Afterpay and Cash App ecosystems, which CEO Jack Dorsey said can add a lot of power and value for both sellers and customers. During “early experiments,” monthly active Cash App users sent more than 350,000 leads to Afterpay sellers in Q1, per Dorsey.

Bitcoin capabilities. Dorsey said more than 10 million Cash App users have bought Bitcoin since the service first launched in 2018. The asset is a core element for Block, which recently launched two new capabilities to simplify Bitcoin investing on Cash App. Block also started letting Cash App users send and receive Bitcoin to compatible external wallets via the Lightning Network.

What’s next? Block executives called out two growth opportunities for Cash App.

• Social integrations. Dorsey noted the potential for stronger social components for Block—and more specifically Cash App. Last quarter, he said the firm was experimenting with integrations like a search function that lets Cash App users discover BNPL offers and Afterpay merchants. The firm could also embed more social elements into Cash App, like what Venmo offers with its payment feed.
• Global expansion. Block already lets Cash App users send money between the UK and US, but it may expand the service to other markets, like Spain. Dorsey called out Block’s acquisition of Spanish P2P payment app Verse, saying that Block would use Verse to inform its next moves.