Block (XYZ) earnings Q4 2024

Block reported fourth-quarter results on Thursday that fell short of Wall Street expectations. The stock dropped more than 6% in extended trading.

Here is how the company did, compared to analysts’ consensus estimates from LSEG.

• Earnings per share: 71 cents adjusted vs. 87 cents expected
• Revenue: $6.03 billion vs. $6.29 billion expected

Revenue increased about 4.5% from $5.77 billion a year earlier.

Block, formerly known as Square, posted $2.31 billion in gross profit, a 14% increase from $2.03 billion a year ago. The company, which was an early leader in providing point-of-sale systems for smaller businesses, faces increased competition from the likes of Toast and Fiserv’s Clover unit.

Gross payment volume came in at $61.95 billion, beating analysts’ estimates of $61.3 billion, according to StreetAccount. Block posted adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of $757 million, topping the $740 million average analyst estimate.

Block said it expects to deliver gross profit growth this year of 15% to $10.22 billion and adjusted operating income of $2.1 billion for a margin of 21%.

Block’s payments business has expanded beyond traditional point-of-sale transactions to include lending and financial services. In 2021, the company acquired Australian buy now, pay later firm Afterpay for $29 billion, integrating the service into Cash App and Square’s ecosystem. This week, Afterpay on the Cash App card begins rolling out.

Chief Financial Officer Amrita Ahuja told CNBC the product launch aims to provide customers with more credit options and positions Cash App as a banking alternative for some customers.

CEO Jack Dorsey said on the earnings call that combining more services like Cash App and Afterpay creates increased spending and engagement.

“We have a huge base of Cash Card customers that we can deploy this to,” he said. “We can do that extremely quickly. It’s easy to roll out for us and alert people proactively of entirely new utility that they can use that day, instantly.”

Analysts see lending as a key driver of future monetization, with some pointing to additional revenue opportunities in merchant services and advertising within Cash App. The unit recorded $1.38 billion in gross profit, a 16% year-over-year increase, exceeding the $1.36 billion average analyst estimate, according to StreetAccount.

Dorsey also articulated the long-term vision of integrating Cash App and Square into a single financial ecosystem, reducing the need for users to rely on multiple apps.

“There will be a significant reason to use Cash App and not have to go to the App Store for 10 different apps,” he said. “Everything is in one app, and that will be the Cash App.”

Under Dorsey’s leadership, Block made a big jump into bitcoin, including a…