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Blockage Stocks fell 16% on Friday and fell sharply since 2020 after the company reported Fourth quarter revenue This missed estimates and released a 2025 guide that failed to reassure investors.
In its financial report late Thursday, Block reported earnings per share of 71 cents, below the average analyst estimate of 87 cents, according to LSEG. $6.03 billion in revenue also lost $6.29 billion in expectations. The company’s gross profit for the quarter was $2.31 billion, up 14% year-on-year, but slightly below consensus estimates.
Competition in the payment system for payments to small and medium-sized enterprises is intensifying. Morgan Stanley analysts point out Square continues to lose market share Toast,,,,, Fisevi’s Three-leaf clover and Shift4. Analysts also point out that user growth in cash applications is a problem.
Block reiterated its full-year outlook for 2025 with gross profit growth of at least 15%.
Square’s payment volume increased by nearly 10% from the same period last year, while the food and beverage sector grew by 13%. Retail transactions climbed 8%. Deutsche Bank highlighted Square’s renewed focus on industry-specific sales teams, especially in both areas, and new distribution agreements with T-Mobile, US Foods and SalonCentric.
Cash apps remained the main driver of growth, with gross profit in the quarter up 16% year-on-year, up $1.38 billion. However, monthly transaction users remained 57 million for the fourth consecutive quarter.
The company has been gradually expanding cash application borrowing, short-term credit lines and immediate integrated buys, including later features into cash application cards through its advance acquisitions.
Barclays analysts wrote in a note that despite Block’s “constructive setup” for long-term growth, the turnaround is messier than expected, and it is unlikely to improve until the second half of 2025.
CEO Jack Dorsey Trying to assure investors of investors’ earnings calls, highlighting the long-term successful positioning by continuing to integrate its financial services products, including cash applications, Square, Square and its Bitcoin initiatives.
“This year will be one of the unexpected upside potential,” Dorsey said.
