Block reported disappointing earnings, missed expectations, stock dropped 15% after hours

From CNBC: 2025-05-01 17:59:00

Block reported disappointing first-quarter results that missed Wall Street expectations, causing the stock to drop 15% in extended trading. Revenue was $5.77 billion, down 3% from a year earlier, with gross profit at $2.29 billion, missing forecasts. The company issued weak profit guidance due to economic challenges and macro outlook uncertainties.

Despite missing expectations, Block delivered its most profitable quarter ever, showing discipline in operations. Cash App’s gross payment volume of $56.8 billion was lower than expected, but CFO Amrita Ahuja cited growth potential, especially with the Cash App Borrow program’s expansion. Square faces risks from consumer spending and tariff uncertainties.

Cash App is expanding banking services with Afterpay integration, aiming to increase credit access and improve unit economics. Cash App’s gross profit was up 10% to $1.38 billion, with competition in peer-to-peer payments intensifying. CEO Jack Dorsey emphasized offering more products and growing user engagement through banking services and lending.

Analysts see lending, merchant services, and advertising as key monetization opportunities for Block. The company holds $2.3 billion in bitcoin and plans to launch bitcoin mining chips with Proto later this year. Despite challenges, international markets show promise, and Square gained share in target verticals like retail and food and beverage.

Block shares are down 31% this year, reflecting investor concerns over the company’s performance and outlook. While facing competition from rivals like Toast and Fiserv’s Clover, Block remains focused on growth and innovation in banking services, lending, and expanding credit access through Cash App.



Read more at CNBC:: Block (XYZ) earnings Q1 2025