Nick Molnar takes on Square as Afterpay impresses Jack Dorsey’s Block

US fintech Block is banking on the founder of Afterpay to help reinvent sales at its payment terminal company Square after slowing growth.

Afterpay founder Nick Molnar will take on a new role overseeing sales at Square. Picture: John Feder

Afterpay’s new owners Block still consider the integration of the business into the wider company a risk, according to its earnings report, despite its gross profit growing faster than fellow subsidiary Cash App.

But the US fintech has big plans for Afterpay’s founder, Nick Molnar, who was appointed into a larger role overseeing sales across another of Block’s companies, payments platform Square.

“We’re announcing today that Nick Molnar, CEO and co-founder of Afterpay, is going to lead a centralised sales function across Block, inclusive of Square, reporting to me,” Block founder Jack Dorsey said.

“Nick will focus immediately on raising the performance bar of the Square team, continuing to hire across inbound and outbound sales, building out our field sales strategy and team, strengthening our sales motion (materials, training, incentives), and connecting our ecosystems and consumer scale with Cash App, which can’t be easily replicated by our competitors.”

The appointment comes as Block upped its full-year guidance, after the company recorded a gross profit of $US2.23bn ($3.43bn) over its second quarter.

The company also adjusted its earnings before interest, taxes, depreciation and amortisation to $US759m, with an adjusted operating income of $US399m.

Block expects to see a gross profit of $US8.89bn for the full year, and record earnings before interest, taxes, depreciation and amortisation of $US2.9bn.

The company would not share exact figures for Afterpay, only that its gross profit grew faster than Cash App – which recorded a gross profit of $US1.3bn, up 23 per cent year-on-year – and that its average customer was now borrowing between $US100 to $US200 at a time up to 15 times a year.

Block founder Jack Dorsey. Picture: Bloomberg

Square, which is commonly used by Australian small businesses from cafes to florists, brought in a gross profit of $US923m, representing a 15 per cent year-on-year growth.

Square has become one of the leading payment terminal brands in Australia but in recent times it has been hit hard as consumer spending has declined.

The company also took a major hit last year during a terminal outage that crippled businesses across the country for a day.

Mr Dorsey said improving Square was a key priority for the business and its $39bn acquisition of Afterpay was in part to help Square grow.

“One of the reasons we acquired Afterpay was to strengthen sales across Square and Cash App. Afterpay has brought a high-performing sales culture into parts of our business, and we’ve already seen this drive the growth of Cash App products, like Cash App Pay in addition to BNPL. We want to extend this strength across the company,” he said.

Mr Dorsey said that after appointing Mr Molnar to oversee Square, he was “confident his move with sales will put Square back in the lead for sellers around the world”.

E&P analyst Paul Mason said Square’s lower gross payment volume (GPV) was “still likely the bugbear of the market” as it declined from 9 per cent year-on-year growth to 8 per cent. That would have been largely driven by sales declines, he said

“Hopefully all the strategy work that has gone into transforming Square (which has either been delivered or is in testing right now) will turn around the trajectory of top-line metrics and get the stock moving again.”

Across all of its business, which includes Square, CashApp, Afterpay and Tidal, the company brought in $US1.7bn in transaction revenue alone which cost the business $US1bn to do.

Its bitcoin product earned it $US2.6bn in revenue but was offset by $US2.54bn in associated costs with cryptocurrency and its hardware.

On an investor call, the company confirmed it would undertake a $US3bn buyback of shares.