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Can SQ's Expanding Foodservice Footprint Push the Stock Higher?
Aniruddha Ganguly
5 min read

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Block SQ is investing aggressively in expanding its partner base, aiming to scale its distribution network. It recently inked a partnership with Sysco, a leading global foodservice distributor, which will help food and beverage sellers operate in a smoother way.

Sysco’s Restaurant Solutions program is popular among food and beverage providers. Under the terms of the latest partnership, Sysco will co-promote and market Square’s technology suite to its customers.

Rich Partner Base Aids SQ’s Prospects

Block’s strong positioning in the digital payments industry on the back of its robust payment and point-of-sale (POS) solutions is a notable driver. Its rich partner base, including Wix, Restaurant365, and Intuit INTU, has been a key catalyst.

Apart from the foodservice domain, SQ is leveraging partnerships to expand in the ‘Buy Now, Pay Later’ (BNPL) market through its Afterpay division. Its partnership with several brands, including Curology, Helzberg Diamonds, Journeys, Rawlings Sporting Goods, and Zenni Optical, is noteworthy.

Afterpay’s BNPL offering is now available to Alphabet’s GOOGL Google Play users. The expansion bodes well for the Afterpay division, on which Block estimates that consumers have spent more than $72 billion since its acquisition. 

Block leverages Afterpay to boost consumer engagement. Per SQ, consumer cohorts on the platform for over five years transact more than 31 times per year on average, compared with 4 times for those who joined in the past year.

On a trailing 12-month basis, Afterpay has driven 460 million leads to merchants and saw 138 million consumer visits. This is driving advertising revenue growth.

BNPL’s Gross Merchandise Volume (GMV) jumped 23% year over year to $8.24 billion, exiting the third quarter of 2024. Growth was driven by strength in Block’s Pay-in-Four offering and Single Use Payments, which enables customers to BNPL at both in and out-of-network merchants from within the Afterpay app.

Block is expanding its footprint among beauty and wellness providers with new partner integrations, including SalonInteractive, Vish, Submatic, Pomp, SalconScale and Glammatic. It inked a distribution partnership with SalonCentric to bring Square’s hardware and software offerings to more beauty professionals.

SQ’s Cash App and Lyft LYFT inked a partnership to bring a customer-friendly new payment method to the latter’s customers. Cash App’s partnership with Google Play offers a preferred alternative payment option when checking out on their Android smartphones or tablets.

This is driving transaction revenues. In the third quarter of 2024, Transaction (28.7% of net revenues) revenues were $1.71 billion, up 3.2% year over year.

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