Block Inc., a leading technology company, reported better-than-expected adjusted profit for the third quarter and revealed an ambitious earnings target for 2024 that exceeded market consensus. The company's solid financial performance resulted in an uptick in its stock price.

For the third quarter, Block Inc. posted a net loss of $29.0 million, or 5 cents per share, compared to a loss of $14.7 million, or 2 cents per share, in the same period last year. The company's adjusted profit showed an impressive growth, with earnings of 55 cents per share, up from 47 cents per share in the previous year, surpassing analysts' average estimate of 47 cents per share.

The company's revenue also showed strong growth, increasing to $5.6 billion from $4.5 billion in the same quarter last year. This figure exceeded the FactSet consensus of $5.4 billion. Block Inc.'s gross profit for the quarter reached $1.90 billion, in line with the market consensus, demonstrating substantial top-line growth.

Block Inc. witnessed solid performance in its Square seller business, with gross profit reaching $899 million, marking a 15% increase from the previous year. The Cash App, the company's mobile-wallet service, also experienced significant growth, with gross profit rising by 27% to $984 million.

During the third quarter, the Cash App added 55 million monthly transacting active users, an 11% increase compared to the previous year. Inflows per transacting active user also grew by 8% to $1,132. These metrics highlight the company's success in expanding its user base and generating higher transactional value.

Chief Executive Jack Dorsey recently assumed leadership of Block Inc.'s Square seller business and outlined his priorities for the segment. These include a localized product focus, leveraging artificial intelligence for enhanced functionality, and a stronger push in the banking sector.

Block Inc. aims to capitalize on the localization strategy to target upmarket businesses, particularly in the food and beverage sector. The company plans to employ a more localized go-to-market approach to better serve the needs of these businesses and improve customer engagement.

To drive further efficiencies, Block Inc. plans to incorporate artificial intelligence into its engineering processes and offer sellers AI-enabled features, such as menu generation. The company acknowledges the potential for AI to streamline operations and improve overall performance.

Looking ahead, Block Inc. provided an optimistic outlook for the fourth quarter, projecting $1.96 billion to $1.98 billion in gross profit and $430 million to $450 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). These figures slightly missed analysts' expectations, who anticipated $1.98 billion in gross profit and $393 million in adjusted EBITDA.

Furthermore, Block Inc. set an ambitious goal for 2024 adjusted EBITDA, expecting to reach $2.4 billion. This projection exceeded analysts' estimate of $1.94 billion. The company anticipates significant margin expansion in the coming years, aiming to achieve the "Rule of 40" target, which combines gross profit growth and adjusted operating income margin. While Block Inc. plans to reach this target in 2026, it aims to make significant progress during the next calendar year.

To ensure disciplined expense management, the company plans to cap its employee count at 12,000 by the end of 2024, employing various approaches such as performance management, a stricter product roadmap, and team restructuring. Block Inc. will also focus on optimizing its operating costs, scrutinizing corporate overhead and real estate footprint.

These strategies underscore Block Inc.'s commitment to achieving sustainable financial growth and enhancing operational efficiency. The company's impressive Q3 results and ambitious earnings target for 2024 have generated optimism among investors, resulting in a rise in its stock price.