- ORIGINAL NEWS
Block shares surge 16% after company announces surprise profit
- SUMMARY
Block, formerly known as Square, reported strong earnings for the fourth quarter, beating analysts’ estimates and showing significant growth in its Square and Cash App divisions.
The company’s revenue reached $5.77 billion, gross profit grew by 22% to $2.03 billion, and adjusted EBITDA forecast was raised to at least $2.63 billion.
Cash App saw an impressive 25% increase in gross profit, with over 56 million monthly transacting active users.
Cash App Card also experienced substantial growth, reaching 23 million monthly actives.
Block recently underwent cost-cutting measures, including layoffs, and aimed to operate below a cap of 12,000 employees for the foreseeable future.
However, the company faced challenges with its acquisition of Afterpay, leading to consecutive quarters of losses.
Block aims to integrate Afterpay into Cash App and use it for its buy-now, pay-later technology.
Overall, Wall Street responded positively to Block’s performance, with analysts upgrading their ratings and raising price targets.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Block reported strong revenue growth in Cash App and Square.”
“Block stock closed up 16% Friday, a day after the payments company reported fourth-quarter earnings that beat analysts’ estimates on gross profit and showed strong growth in its Square and Cash App revenue.”
Negative
“The company raised its adjusted EBITDA forecast to at least $2.63 billion from $2.40 billion.”
“The company also took an $132 million impairment on its investment in music streaming service Tidal.”