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Block Inc., formerly known as Square, reported better-than-expected second-quarter earnings on Thursday, leading to a rise in the company’s stock during extended trading. The fintech company delivered solid results, surpassing profit expectations despite slightly missing revenue forecasts.
Key Financial Highlights:
- Earnings per Share: 93 cents adjusted, beating the expected 84 cents.
- Revenue: $6.16 billion, slightly below the anticipated $6.28 billion.
The company’s gross profit, a key metric for analysts assessing its core transactional businesses, reached $2.23 billion, marking a 20% increase from the previous year. Net income also showed significant improvement, rising 91% year-over-year to $195.3 million, or 31 cents per share, up from $102 million, or 17 cents per share, in the same period last year.
A major contributor to Block’s success was its Cash App business, a popular mobile payment platform. The Cash App segment reported $1.3 billion in gross profit, a 23% increase compared to the previous year. The number of monthly active users for the Cash App Card rose by 13%, reaching over 24 million in June.
Over the past year, Block has streamlined its operations, including multiple rounds of layoffs. In January, CEO Jack Dorsey informed staff of significant job cuts, following an earlier reduction in December. These cost-cutting measures have contributed to the company’s improved profitability.
Looking ahead, Block has raised its full-year guidance for gross profit, adjusted earnings, and adjusted operating income, signaling confidence in continued growth.
In a strategic move, Dorsey announced that Afterpay CEO and co-founder Nick Molnar will take on an expanded role within Block. Molnar will now oversee a centralized sales function across Block, including its Square business unit. This new position will report directly to the Block CEO, reflecting the company’s focus on enhancing its sales and customer engagement strategies.