Block falls short on Q4 estimates with lower-than-expected earnings

Shares in Block Inc. fell more than 7% in after-hours trading today after the financial services company came up short of expectations on both earnings and revenue in its fiscal 2024 fourth quarter.

Block reported adjusted earnings per share of 71 cents, up from 47 cents per share in the fourth quarter of 2023, on revenue of $6.03 billion, up 9.5% year-over-year. Both figures were misses, as analysts had been expecting adjusted earnings per share of 88 cents on revenue of $6.295 billion.

Across Block’s segments, the company saw Square gross payment volume in the quarter grew 10% year-over-year, to $58.9 billion. Much of the growth came from outside the U.S., as international growth rose more than the 6.9% in the U.S. Block’s Cash App service also saw growth, with monthly transaction activities growing 2%, to 57 million, card monthly activities growing 9%, to 25 million, and pay volume increasing 4%, to $4 billion.

Block’s Buy Now, Pay Layer vertical saw gross merchandising value grow 19%, to $10.3 billion and the segment’s gross profit grew 23%, to $298 million. Block saw total cryptocurrency revenue of $2.43 billion and a gross profit of $68 million.

Business highlights in the quarter included Block continuing its expansion of Cash App’s financial services and enhancing its paycheck deposit offering with features such as high-yield savings, free ATM withdrawals and overdraft coverage. Block also scaled Cash App Borrow, reaching $9 billion in originations over the past year, reflecting strong demand for small, easy-to-repay loans.

The company also expanded its Square ecosystem, launching a new Square Point of Sale app that consolidates five apps into one, improving seller onboarding and product adoption. Additionally, Square introduced new payment features such as scan-to-pay QR codes and house accounts, making transactions easier to process for restaurant and retail sellers.

For the full year 2024, Block reported adjusted earnings per share of $3.37, up from $1.67 per share in 2023, on revenue of $24.12 billion, up 10% year-over-year.

“We spent the last year looking critically at our organization and making changes so we can build much faster,” Chief Executive Jack Dorsey wrote in the letter to shareholders. “Most of that work is now complete and we’re looking forward to proving it this year.”

For the first quarter of 2025, Block expects to see a revenue of $2.32 billion and an adjusted operating income of $430 million. For the full year, the company expects revenue of $10.22 billion and adjusted operating income of $2.1 billion.

Image: Block