Fintech firm Block has exceeded Wall Street analyst revenue and earnings forecasts in its first-quarter results, leading to a surge in its shares after-hours.
On May 2, Block, Inc. reported Q1 2024 revenues of $5.96 billion, surpassing Zacks’ estimate of $5.75 billion by 3.54%. The earnings per share stood at $0.85, up from Zacks’ estimate of $0.62 per share. Q1 gross profits reached $2.09 billion, marking a 22% increase from the previous year, with a net income of $472 million.
Block’s mobile payments and crypto platform Cash App reported $1.26 billion in gross profits for Q1, a 25% year-on-year increase. The platform’s revenue also rose by 23% to $4.17 billion compared to the year-ago quarter.
Block raised its second-quarter gross profit outlook to $2.185 billion, slightly higher than its previous estimate of $2.165 billion. The company also increased its EBITDA forecast to $690 million, up from $670 million.
Block, Inc. (SQ) shares closed up 5.1% on May 2 at $70.30, surging 6.8% after-hours to $74.90. However, its share price has experienced a 2.6% decline year-to-date, dropping from around $73 to $66 earlier in the week following reports of United States prosecutors probing the firm over alleged processing of transactions for terrorist groups and users in sanctioned countries.
Block co-founder Jack Dorsey addressed the company’s emphasis on Bitcoin in its shareholder letter. He stated that less than 3% of its resources are allocated to Bitcoin-related projects, which are funded by Bitcoin exchange profits. Dorsey emphasized the importance of Bitcoin as an open protocol for money, asserting that it serves Block’s mission of providing financial services to more people worldwide.
Block’s impressive Q1 performance, coupled with its focus on Bitcoin and revised outlook for Q2, has contributed to a positive investor sentiment, reflected in the surge of its share price after-hours.
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