Block Stock Jumps 14% After Beating Q4 Earnings Estimates
Payment Company Sees Strong Growth in Square and Cash App Revenue
Block stock rose as much as 14% in extended trading Thursday after the payments company reported fourth-quarter earnings that beat analyst estimates on gross profit and showed strong growth in its Square and Cash App revenue.
Here’s how the company performed compared to analyst consensus:
Financial Highlights
- Earnings per share: 45 cents, adjusted (not comparable to estimates)
- Revenue: $5.77 billion (vs. $5.70 billion expected)
Block posted $2.03 billion in gross profit, a 22% increase from the previous year. Analysts tend to focus on gross profit as a more accurate measurement of the company’s core transactional businesses.
The company raised its adjusted EBITDA forecast to at least $2.63 billion from $2.40 billion.
Block, formerly known as Square, ended the year with 56 million monthly transacting actives for Cash App in December. The majority of these customers used Cash App for either peer-to-peer payments or the Cash App Card.
Its Cash App business reported $1.18 billion in gross profit, marking a 25% year-over-year rise.
The company, led by Jack Dorsey, stated that its Cash App Card witnessed a 20% increase in monthly actives in December, surpassing the growth rate of total monthly actives by more than two times.
“We believe this strategy will enable us to build the largest network in the long run, with a highly engaged customer base using Cash App as their primary banking solution,” Dorsey said in a note to shareholders.
The payments firm has been focused on streamlining operations in recent months, including multiple rounds of layoffs.
