Another Circle forPayment？

$Block(SQ)$ surged 19% after its Q3 earnings exceeded expectations and Q4 guidance was raised above expectations, while also announcing a $1 billion stock buyback. Q3 revenue was $5.62 billion, exceeding the market's expected $5.43 billion and up from $4.52 billion in the same period last year. Transaction-based revenue was $1.66 billion, up 9% year over year, lower than the previous quarter's 11% YoY growth due to a higher base.

1. Improved profitability. Adjusted EBITDA was $477 million, higher than the previous quarter's $384.4 million and last year's $327 million.

2. Guidance raised. Adjusted EBITDA for 2024 is expected to be $2.4 billion, exceeding the market's expected $1.94 billion; adjusted revenue is expected to be $875 million.

3. Increased transaction activity. Cash App monthly active users reached 55 million, up from 54 million in Q2; non-Bitcoin revenue was $1.16 billion, up 26% YoY; gross profit was $984 million, up from $774 million a year ago, and equal to Q2's $1.16 billion.

4. Bitcoin revenue reached $2.42 billion, up 37% YoY, with gross profit of $45 million, up 22% YoY. Similarly, Coinbase Global, Inc. (COIN) also performed well in Q3.

The day before, $PayPal(PYPL)$ had a similar script, with shares jumping 6.8% after its Q3 earnings exceeded expectations, but Q4 expectations were slightly below market consensus.

In fact, PayPal's core business is still focused on online payments and related services for merchants, with C-end mobile payments not being the main business. Amazon's (AMZN) earnings report showed that third-party transactions were active and growing in Q3 as well. Therefore, although PayPal's total active accounts in Q3 of 428 million were lower than Q2's 431 million, the number of transactions per active account increased from 54.7 in Q2 to 56.6, a 13% increase on a TTM basis. Total payment volume increased from $367.5 billion in the second quarter to $387.7 billion.

However, it is important to note that while short-term rebounds may be sharp, in the long run, a high interest rate environment still suppresses consumption, which has not changed. Excess savings among US residents may be depleted over the next one or two quarters, and if there are no other sources of income, consumption may continue to decline until 2024.