OAKLAND, Calif. - Payment processing giant Square, a part of Block, Inc. (NYSE: SQ), has announced the launch of its new Orders Platform, a significant infrastructure upgrade aimed at enhancing commerce capabilities for U.S. sellers. The platform, now generally available, promises to provide sellers with a range of new payment and ordering features, including Pre-Auth and Bar Tabs, designed to improve sales flexibility and operational efficiency.
The new order-based system by Square is tailored to support business growth by allowing sellers to complete transactions in various environments and styles, thereby streamlining their operations and enhancing customer satisfaction. Saumil Mehta, Head of Product for Square, expressed excitement about the innovation prospects the platform unlocks, anticipating an acceleration in product development velocity.
The Orders Platform is expected to offer more checkout options for sellers, catering to diverse customer preferences such as ordering ahead, opening bar tabs, or setting up subscriptions. This development reflects Square's commitment to providing versatile commerce tools that support the diverse needs of sellers.
Square's suite of services includes specialized software for managing restaurant, retail, and professional services, e-commerce tools, integrated financial services including banking products, buy now, pay later options through Afterpay, as well as staff management and payroll systems. The company's integrated ecosystem aims to simplify commerce and financial services, helping sellers save time and effort.
The information regarding Square's latest platform is based on a press release statement. The company cautions that statements about future product capabilities are forward-looking and subject to risks and uncertainties, which are detailed in the company's filings with the Securities and Exchange Commission.
In other recent news, Block Inc., previously known as Square, displayed a strong performance in its second quarter earnings. The company reported a significant 20% increase in gross profit, reaching $2.23 billion, and a 23% year-over-year surge in Cash App's gross profit to $1.3 billion. Adjusted EBITDA nearly doubled to $759 million, and adjusted operating income rose notably to $399 million.
Following these developments, Block raised its full-year 2024 gross profit guidance to at least $8.89 billion and announced a $3 billion share repurchase program. Deutsche Bank and BofA Securities maintained their Buy ratings on Block, with price targets of $98.00 and $82.00, respectively. However, Mizuho Securities reduced its price target to $94 from the previous $106, while still maintaining an Outperform rating.
New Street Research initiated coverage on Block shares with a Neutral rating, emphasizing co-founder Jack Dorsey's role in driving growth and addressing operational challenges. The firm highlighted the importance of reversing market share losses and fostering a balanced ecosystem that includes both Square and the Cash App.
Meanwhile, BofA Securities maintained a Buy rating on Block, following a virtual investor meeting with Block's Investor Relations team. The discussion highlighted Block's renewed focus on the day-to-day operations of its Square business, aiming to boost the growth of Gross Payment Volume.
Lastly, Mizuho Securities adjusted its outlook on Block, reducing its price target to $94 while maintaining an Outperform rating. The firm anticipates a 19% growth in Block's gross profit for 2024, slightly above the company's own guidance of 18%. These are the recent developments for Block Inc.
InvestingPro Insights
Square's launch of the new Orders Platform aligns well with its position as a prominent player in the Financial Services industry, as highlighted by InvestingPro Tips. This strategic move could potentially contribute to the company's expected net income growth this year, another insight provided by InvestingPro.
The platform's focus on enhancing commerce capabilities and improving operational efficiency for sellers is particularly relevant given Square's impressive revenue growth. According to InvestingPro Data, Square's revenue grew by 19.36% over the last twelve months, reaching $23.5 billion. This robust growth underscores the company's ability to innovate and meet evolving market demands.
Despite trading at a high earnings multiple with a P/E ratio of 61.5, Square's stock price movements are quite volatile, as noted by InvestingPro Tips. This volatility could be attributed to the company's ongoing investments in new technologies and platforms like the Orders Platform, which aim to drive long-term growth.
It's worth noting that Square's liquid assets exceed short-term obligations, indicating a strong financial position to support its innovative initiatives. For investors seeking more comprehensive analysis, InvestingPro offers 7 additional tips for Square, providing a deeper understanding of the company's financial health and market position.
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