Block Maintains Underlying Growth in Q1

Narrow-moat Block continues to see strong underlying growth across its segments. Reported revenue declined year over year because of a fall-off in Bitcoin revenue (which is effectively a pass-through item, in our view). However, excluding Bitcoin revenue and the Afterpay acquisition, overall net revenue increased 36% year over year. While we remain impressed by Block's growth, we also remain concerned about the lack of traction on the bottom line. We will maintain our $124 fair value estimate, but would reiterate our very high uncertainty rating.