SQ stock is in focus today as Block, the Afterpay parent, plans to remove about 4,000 roles and shrink headcount to under 6,000 while pushing AI across Cash App and Square. Jack Dorsey says the aim is faster product delivery and leaner costs. For Australian investors, the move could reshape Afterpay operations and local support while lifting group margins. We break down the implications for SQ stock, valuation, regional impact, and what to watch next.

Block’s 4,000 job cuts and the AI pivot

Block will cut about 4,000 roles and target a headcount below 6,000 as it leans into AI to streamline work and speed releases. Local media report the decision follows internal reviews of duplicated roles and new tooling. Coverage confirms thousands of exits and Australian exposure news.com.au.

Lower payroll should reduce operating costs and lift operating leverage across Square, Cash App, and Afterpay. Block’s recent ratios show research and development at 12.66% of revenue and SG&A at 8.84%, with a 40.94% gross margin. Free cash flow per share stands at 3.00, supported by a current ratio of 2.18. If execution holds, these cuts can expand margins without throttling growth.

Implications for Australia and Afterpay

Reports indicate hundreds of Australian roles could be affected as part of the global reduction, with Afterpay support and functions most exposed. 9News notes potential local impacts across teams tied to Afterpay, Square, and shared services 9News. For users, AI-led risk tools may improve fraud checks and repayments, while customer support models might change as teams consolidate.

Australian Square sellers could see faster onboarding, improved chargeback tools, and smarter marketing as AI features scale. For Afterpay, efficiency in approvals and collections can lower losses and payments friction. The key local watchpoint is service continuity during reorganisation. Better tooling can lift merchant conversion and reduce churn, but any delay in releases or support responses could pressure satisfaction.

SQ stock setup: valuation, trend, and sentiment

Recent data shows a market cap near US$51.7 billion, price-to-sales of 2.16, and EV/sales of 1.88. Liquidity looks solid with a 2.18 current ratio and low leverage at a 0.07 debt-to-equity ratio. Return on equity is 14.35%. These metrics suggest capacity to fund AI investments while absorbing near-term restructuring costs.

The last price in our dataset is US$83.46, below the 50-day average of 89.26 and above the 200-day average of 73.92. Six-month performance is up 30.43%, while year-to-date shows a 3.79% decline. Two analysts rate the shares Buy, with a 4.00 consensus. Meyka’s grade is B+ (Score 77.32), indicating BUY on fundamentals.

Key watch items and risks

The shift to AI must not disrupt seller support, payments uptime, or Afterpay credit outcomes. BNPL in Australia faces tighter oversight, which can affect approval rates and losses. Competition from PayPal, banks, and BNPL peers remains intense. Currency adds another layer for Australians because SQ stock trades in USD, influencing returns when the AUD moves.

Track headcount progress toward under 6,000, updates on 2025 gross profit trajectory, and any changes to cost-to-revenue ratios. For Australia, watch Afterpay delinquency trends, loss rates, and merchant adoption following AI releases. Also watch product velocity across Square terminals, software, and risk tooling, plus any disclosures on charges tied to the restructuring.

Final Thoughts

For Australian investors, the 4,000 role reduction is a clear signal that Block is prioritising AI-driven efficiency. If the company sustains product momentum while trimming costs, margins can improve across Cash App, Square, and Afterpay. The balance sheet looks conservative, which supports investment in new tools and cushions restructuring. Still, the plan must deliver stable service for sellers and BNPL users in Australia. Our take: monitor execution metrics, especially headcount trajectory, operating expense ratios, and Afterpay credit performance. If these land well and gross profit continues to trend higher in 2025, SQ stock could offer improving risk-reward for long-term portfolios.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.