Jack Dorsey, CEO of Square, speaks on stage at the Bitcoin 2021 Convention, a cryptocurrency conference held at the Mana Convention Center in Wynwood in Miami, Florida, on June 4, 2021.
Joe Raedle | Getty Images
Block reported fourth-quarter results on Thursday that fell short of Wall Street expectations. The stock dropped more than 7% in extended trading.
Here is how the company did, compared to analysts’ consensus estimates from LSEG.
- Earnings per share: 71 cents, adjusted vs. 87 cents expected
- Revenue: $6.03 billion vs. $6.29 billion expected
Revenue increased about 4.5% from $5.77 billion a year earlier.
Block, formerly known as Square, posted $2.31 billion in gross profit, a 14% increase from $2.03 billion a year ago. The company, which was an early leader in providing point-of-sale systems for smaller businesses, faces increased competition from the likes of Toast and Fiserv’s Clover unit.
Gross payment volume came in at $61.95 billion, beating analysts’ estimates of $61.3 billion, according to StreetAccount. Block posted adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) of $757 million, topping the $740 million average analyst estimate.
Block’s payments business has expanded beyond traditional point-of-sale transactions to include lending and financial services. The company acquired Australian buy now, pay later firm Afterpay for $29 billion in 2021, integrating the service into Cash App and Square’s ecosystem.
CEO Jack Dorsey has positioned Block’s Cash App Card as a potential alternative to traditional credit cards, with plans to deepen its connection to Afterpay. Analysts see lending as a key driver of future monetization, with some pointing to additional revenue opportunities in merchant services and advertising within Cash App.
The Cash App, a popular mobile payment platform and a key driver of overall profitability, posted $1.38 billion in gross profit, a 16% year-over-year increase and ahead of the $1.36 billion average analyst estimate, according to StreetAccount.
Under Dorsey’s leadership, Block made a big jump into crypto, creating a new unit focused on its efforts in that area. However, last year the company wound down some of those projects after they failed to gain traction.
— CNBC’s Robert Hum contributed to this report.
