In its first-quarter results, financial technology firm Block surpassed Wall Street analysts' expectations for both revenue and earnings, driving a surge in its shares during after-hours trading. The company's revenue for the quarter stood at $5.96 billion, outperforming the estimate of $5.75 billion from analyst firm Zacks by 3.54%.
Block also exceeded earnings per share projections, reporting $0.85 compared to the Zacks Consensus Estimate of $0.62 per share. The quarter saw a 22% year-on-year increase in gross profit to $2.09 billion, with a net profit of $472 million. Notably, Block's mobile payments and crypto platform Cash App demonstrated strong performance, with a gross profit of $1.26 billion, marking a 25% increase from the previous year.
Revenue from Cash App surged by 23% year-over-year to reach $4.17 billion in the first quarter. Additionally, Block raised its forecast for second-quarter gross profit to $2.185 billion, slightly surpassing the previous estimate of $2.165 billion. The company also adjusted its EBITDA forecast to $690 million, up from $670 million.
Following the release of its earnings report, Block's shares surged by 6.8% to $74.90 in after-hours trading, after closing at $70.30, up 5.1%, earlier in the day. However, the company's shares have experienced volatility amid reports of an investigation by U.S. prosecutors into its Square and Cash App businesses for allegedly handling transactions involving terrorist groups and users from sanctioned countries.
Despite the challenges, Block co-founder Jack Dorsey emphasized the importance of Bitcoin-related initiatives, stating that less than 3% of the company's resources are dedicated to such projects. Dorsey highlighted the significance of Bitcoin as an open currency protocol that can serve as a global decentralized financial system, benefiting both Block and the broader population by facilitating faster and more inclusive financial services.
