Key Takeaways
Shares of Block ( XYZ ) plunged nearly 25% Friday, a day after the payments technology provider posted worse-than-expected results and guidance as it warned about economic conditions ahead.
The operator of Square and Cash App reported first quarter adjusted earnings per share of $0.56, well short of the $0.92 analysts surveyed by Visible Alpha were looking for. Revenue declined 3% year-over-year to $5.77 billion, also missing forecasts.
Gross profit rose 9% to $2.29 billion, and payment volume increased 4.4% to $56.80 billion. However, they were below expectations as well.
The results were dragged by falling bitcoin revenue, which slid 16% to $2.30 billion, and CEO Jack Dorsey explained that Cash App didn't perform as anticipated as the company "saw changes to consumer spending as the quarter progressed that we believe drove the majority of our forecast miss."
Block Sees Q2, FY Gross Profit Below Expectations
COO and CFO Amrita Ahuja added that "we're operating in a more dynamic macro environment, so we've reflected a more cautious stance on the macro backdrop into our guidance."
Block sees current-quarter gross profit of $2.45 billion and full-year gross profit of $9.96 billion. The Visible Alpha estimates were for $2.54 billion and $10.18 billion, respectively.
Block shares sank to their lowest level in almost a year and a half.
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