Shares of Block jump on earnings beat

Earnings

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Jack Dorsey creator, co-founder, and Chairman of Twitter and co-founder & CEO of Square arrives on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images

Block stock rose over 11% in extended trading after the payments company reported third-quarter earnings that beat Wall Street expectations for profit.

Here’s how Block did versus Refinitiv consensus expectations:

  • EPS: $0.42, adjusted, versus expectations of $0.23
  • Revenue: $4.52 billion versus expectations of $4.49 billion

Block posted $1.57 billion in gross profit, up 38% from $1.13 billion a year ago. That beat Wall Street expectations of $1.53 billion.

Block, formerly known as Square, said in a letter to shareholders that its company showed strong growth, even as other payment companies have warned about upcoming slowdowns due to macroeconomic effects.

Its Cash App business reported $774 million in gross profit, a 51% year-over-year rise, according to Block. The company said that there were over 18 million people actively using its Cash debit card in September, up 40% year-over-year.

Its point-of-sale business, Square, saw gross profit grow 29% on an annual basis to $783 million.

Analysts tend to focus on Block’s gross profit instead of its top-line results because it has bitcoin and buy-now-pay-later businesses that have small margins. Block said it made $37 million from Bitcoin sales during the quarter on $1.76 billion in gross sales.

Block said it registered a bitcoin impairment loss of $2 million during the quarter related to Bitcoin it bought in late 2020 and early 2021. Block still holds $156 million worth of bitcoin, based on its price at the end of September.

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