MIAMI, FLORIDA – The stock for Block, formerly known as Square, surged by 14% in after-hours trading following its impressive fourth-quarter earnings report. The company, led by CEO Jack Dorsey, exceeded analyst expectations in gross profit and demonstrated robust growth in revenue from its Square and Cash App.
The financial results showcased the company’s strong performance, with earnings per share at 45 cents, adjusted, and revenue reaching $5.77 billion, surpassing the expected $5.70 billion. Block also reported a 22% increase in gross profit from the previous year, amounting to $2.03 billion, as well as raising its adjusted EBITDA forecast to at least $2.63 billion from $2.40 billion.
Furthermore, Block ended the year with 56 million monthly transacting actives for Cash App in December, with a significant portion using it for peer-to-peer payments or the Cash App Card. The Cash App business alone reported a 25% year-over-year rise in gross profit, reaching $1.18 billion. Additionally, the company noted a 20% increase in monthly actives for its Cash App Card, surpassing the growth rate of total monthly actives.
Dorsey expressed confidence in the company’s strategy, stating, “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.”
The company’s focus on streamlining operations was evident as it underwent significant layoffs in recent months. In January, Dorsey informed employees of another round of layoffs, following a similar move in December. This strategic shift signals Block’s commitment to optimizing its resources and operations for future growth and sustainability.