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If you're familiar with the payments industry, you might be wondering how to invest in Block, Inc. (NYSE:XYZ). Over the past several years, Block has established itself as a pioneer in payment processing, making it one of the preeminent fintech firms in existence.
For reference, the company changed its name to Block, Inc. from Square, Inc. in December 2021. The name change was primarily to distinguish Block from its brand-name components, like Square and Cash App. More recently, in January 2025, Block changed its stock ticker from SQ to XYZ.
Here, we'll provide an overview of how to invest in Block stock and provide some high-level guidance about whether Block may be a suitable investment for your portfolio. Then, we'll review Block's profitability, its stance on dividends, and the potential for future Block stock splits.
Finally, we'll address how to invest in Block indirectly (through exchange-traded funds) if direct investment feels too risky for you.
Whether Block shares are right for your portfolio is a purely subjective question. Some investors may view the idea of investing in single companies as unnecessarily risky, while others might view Block's growth potential as a can't-miss opportunity.
Block's services operate as point-of-sale (POS) systems, which allow sellers to seamlessly make sales, securely accept payments, and quickly check out customers. Block's Cash App service acts in a similar fashion from the buyer's perspective.
From mid-2021 to mid-2023, Block has lost almost 80% of its market value. The stock had plunged from about $275 per share to just less than $70 per share by mid-2023. As of December 2024, the stock has slightly recovered and is trading at $91.98, with a market cap of approximately $57 billion. On the one hand, the company has shown an ability to increase revenue; its sales have increased from less than $10 billion to almost $20 billion just over the past few years. Its core offerings have also become household names in a short period of time.
On the flip side, Block has posted some fairly ugly net income numbers over the past several quarters, with losses ranging from $80 million to $540 million. This is primarily due to excessive operating expenses as well as higher-than-anticipated product development costs. There are also concerns about the Cash App brand and its use as a tool by criminals.
Finally, if you're an income investor, Block isn't the stock for you. It hasn't paid a dividend in its public history, and you shouldn't expect it to start any time soon.
This is all to say that Block might be worth a flier if you're willing to wait some time for growth and for the company's management team to get its expenses under control. They've also got some work to do in solidifying the Cash App brand as a safe and trusted payment processor.
Block, Inc. reported a gross profit of $2.25 billion during the third quarter of 2024, marking a 19% year-over-year increase.
Despite consistent revenue and gross profit growth, including a 24% revenue increase year-over-year to $5.62 billion in the third quarter of 2023, Block has struggled with consistent net profitability. While its financial performance shows significant operational progress, profitability remains elusive in recent periods.
For prospective Block investors, the positive angle is that the company has grown its revenue at a staggeringly fast pace, taking the company from relative obscurity a decade ago to one of the most widespread payments companies in the world today.
According to the most recent data, Block does not pay a dividend to its shareholders. This is characteristic of many growth-focused firms in the space and doesn't present a concern from a financial health standpoint.
Diversification is one of the foundational pillars of sound investing; in other words, you don't want to put all your eggs in one basket. Investing a large percentage of your portfolio in any one company can come back to bite you if that company were to experience significant share price declines.
That's where ETFs, or exchange-traded funds, come in. Instead of investing directly in Block company stock, you can invest in a single fund that holds many different companies in the same sector (along with Block itself).
If this sounds appealing, consider ETFs like the iShares Blockchain and Tech ETF (NYSEMKT:IBLC) or the Ark FinTech Innovation ETF (NYSEMKT:ARKF).
ETFs can help to diversify some of the risk associated with investing in single stocks. This way, you'll still be able to invest in Block without being exposed to its unique business risks.
There isn't any forecast for a Block stock split in the near future, and the company hasn't split its common stock in the past. If the stock were to get prohibitively expensive in the future, it's conceivable that a stock split may occur. In late 2024, however, there were no plans for Block to split.
Block has gained tremendous press coverage for its revenue growth and the reach of its two primary components, Square and Cash App. Still, the company has struggled to maintain its net margin over the past several quarters and to justify its once-astronomical share price.
Overall, shares of Block remain compelling for investors confident in the company's management team's ability to control non-operating expenses and for those willing to take a flier on the company's ability to further expand revenue.
Before investing in any stock, try to make a commitment to hold it for the long term regardless of its day-to-day fluctuations. At the same time, make sure you understand how the stock fits into your broader financial portfolio.
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