Block reported disappointing first-quarter results, with the company missing Wall Street’s expectations and offering a weak outlook for the remainder of the year. The stock dropped 15% in after-hours trading following the release of the earnings report. Adjusted earnings per share were 56 cents, though this figure might not be directly comparable to analysts’ consensus. Revenue for the quarter came in at $5.77 billion, falling short of the expected $6.2 billion, and represented a 3% decline from the previous year’s $5.96 billion. Gross profit, however, increased by 9% to $2.29 billion, though it also missed the anticipated $2.32 billion.
In light of the ongoing economic challenges, Block issued weaker-than-expected profit guidance for the second quarter and the full year. The company acknowledged the more dynamic macroeconomic environment, which has been impacted by recent tariff policies and broader economic conditions. Block projected a second-quarter gross profit of $2.45 billion, below the expected $2.54 billion, and a full-year gross profit of $9.96 billion, also falling short of the $10.2 billion consensus forecast.
In terms of gross payment volume, which tracks the money flowing through Square and Cash App, the figure of $56.8 billion was lower than the expected $58 billion. Despite Cash App’s expanding financial services and lending initiatives, the segment’s gross profit was softer than expected, due to lower inflows and a muted tax-season spending. However, CFO Amrita Ahuja expressed optimism for a pickup later in the year, particularly with the nationwide rollout of the Cash App Borrow program following regulatory approval.
Despite the disappointing results, Ahuja emphasized that Block had its most profitable quarter ever, reflecting ongoing discipline and operational efficiency. The company continues to face competition in the payments space, particularly from rivals like Toast and Fiserv’s Clover. Still, international markets have been a bright spot, now accounting for nearly 18% of its volume. Cash App, which saw a 10% increase in gross profit year-on-year to $1.38 billion, remains central to Block’s growth strategy, with CEO Jack Dorsey focusing on expanding the product offering and user base.
Block’s shares have fallen 31% this year, reflecting investor concerns about the challenges facing the company.
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