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Back of Napkin

Block, Inc. XYZ

Three-pass checkedFresh as companies report

Block cut more than 40% of its workforce in February and its revenue growth accelerated for the sixth consecutive quarter, to 9.3%.

Cash App has had the same 59 million monthly users for four quarters and its gross profit still grew 31%.

XYZ · price with moving averages

Daily · 6MWeekly · 3Y
$35$52$69$86$103 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Two businesses that share a balance sheet and almost nothing else. Square is the white terminal and the iPad stand at the counter of the coffee shop, taking the card and selling the merchant payroll, inventory and a small loan. Cash App is the consumer side: the app people use to split a dinner bill, receive their pay early, buy a fraction of a bitcoin.

Revenue is a misleading number here and the company says so plainly. The bitcoin business was 35% of last year's revenue and 4% of the gross profit, because Block books the full value of a bitcoin purchase as revenue and keeps a sliver. Anyone reading the top line of this company is mostly reading the bitcoin price.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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