block Shares fell 10% on Friday after weak third-quarter profits fell short of Wall Street expectations and showed slower profit growth for the company’s Square service.
Here’s how the company compares to LSEG’s estimates:
Earnings per share: 54 cents adjusted, 67 cents expected; Revenue: $6.11 billion, $6.31 billion expected.
Revenue for the quarter was up 2% year over year. Shares in the company founded by Jack Dorsey have fallen 24% since the beginning of the year.
Square’s total payments grew 12% year-over-year, but gross profit growth for its POS services was only 9% year-over-year, slowing from 11% in the previous quarter.
The company cited a change in processing partners and lower margins on hardware sales as reasons for the slowdown in growth.
“Our product and go-to-market strategies are working as we continue to capture profitable market share with major distributors and outside the U.S. in target areas such as food and beverages,” Chief Financial Officer Amrita Ahuja said on an earnings call.
Cash App’s gross profit growth was strong at $1.62 billion, with 58 million monthly active users transacting, an increase of 24% year-over-year. This strength came from its services Cash App Borrow, Cash App Card, and Buy Now Pay Later.
Morgan Stanley analysts wrote that they were “encouraged by the pace of Cash App’s credit expansion” and were focused on “whether the credit expansion ultimately generates better inflows and increased direct deposit accounts” per active customer.
Ahuja said gross profit was a bright spot for Block as the company reported gross profit growth of $2.66 billion, up 18% year over year. FactSet had expected gross profit for the quarter to be $2.6 billion.
The company raised its full-year forecast for 2025 gross profit of $10.2 billion, up from the previous quarter’s forecast of $10.2 billion.
Block reported net income of $461.54 million, or 74 cents per share, which was a significant increase from a year ago, when the company had net income of $283.75 million, or 45 cents per share.
Block stock price chart from the beginning of the year to the present.
CNBC’s MacKenzie Sigalos contributed to this report.
