Block reported first-quarter results that missed Wall Street expectations on Thursday and issued a disappointing outlook. The stock tumbled 15% in extended trading.
Here is how the company did, compared to analysts’ consensus estimates from LSEG.
Earnings per share: 56 cents adjusted. That figure may not be comparable to estimates.Revenue: $5.77 billion vs. $6.2 billion expected
Revenue decreased about 3% from $5.96 billion a year earlier. Gross profit rose 9% to $2.29 billion from $2.09 billion a year earlier. That missed analysts’ forecasts of $2.32 billion for the quarter.
Block provided weaker-than-expected profit guidance for the second quarter and full year, reflecting challenging economic conditions. A growing number of tech companies are warning investors about the rest of the year following President Donald Trump’s announcement of sweeping tariffs on imported goods last month.
“We recognize we are operating in a more dynamic macro environment, so we have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year,” the company wrote in its quarterly report.
The company expects gross profit in the second quarter of $2.45 billion and $9.96 billion for the full year. Analysts were expecting $2.54 billion and $10.2 billion, respectively, according to StreetAccount.
In the first quarter, gross payment volume, or a measure of money moving through Square and Cash App, came in light at $56.8 billion, versus expectations of $58 billion, according to StreetAccount.
Despite Cash App’s broader push into financial services and lending, the segment’s gross profit was a bit softer than expected. CFO Amrita Ahuja cited lower inflows and muted tax-season spending, but said the company expect a pickup later this year, in part because of the nationwide expansion of the Cash App Borrow program following approval by the Federal Deposit Insurance Corporation.
While Wall Street is selling on the results, Ahuja said Block delivered its most profitable quarter ever, which she said is “a reflection of the continued discipline across our business and the efficiency with which we operate.”
Square faces the same risks as many others in the payments space due to its reliance on consumer spending. But international markets, now nearly 18% of its volume, remain a bright spot, and a recent survey of small and medium-sized businesses showed strong adoption and satisfaction, even as price sensitivity grows and tariff risks linger.
Block, an early leader in point-of-sale systems for small businesses, faces growing competition from rivals like Toast and Fiserv‘s Clover — though Square still gained share during the quarter in its target verticals including retail, as well as food and beverage.
Cash App continues to push deeper into banking. This quarter marked the debut of Afterpay’s buy now, pay later integration on the Cash App Card, part of Block’s broader effort to expand credit access.
With regulatory approval for Borrow, the company can effectively double the number of users eligible for the product, Ahuja said, while also improving unit economics by bringing loan servicing and origination fully in-house.
Cash App gross profit was up 10% from a year earlier to $1.38 billion. Competition in peer-to-peer payments is heating up, after Venmo reported a 20% jump in revenue.
Block CEO Jack Dorsey said Cash App is focused on offering more products, while at the same time still targeting additional users.
“We, of course, want to deepen engagement with our customers through banking services and Borrow — and I have no doubt we will,” Dorsey said on the earnings call. “But at the same time, we need to make sure that we continuously grow our network, and that starts with peer-to-peer.”
Analysts view lending as a key piece of monetization, alongside growing opportunities in merchant services and advertising. Morgan Stanley noted that about half of surveyed Square merchants now use Block’s banking products.
Block recorded bitcoin holdings of $2.3 billion at the end of the quarter. The company expects to deliver its first bitcoin mining chips with Proto in the second half of the year.
Block shares are down 31% this year as of Thursday’s close.
— CNBC’s Robert Hum contributed to this report.