Shares of Block Inc. were rising 13% in after-hours trading Thursday after the payment-technology company exceeded expectations with its latest earnings and gross-profit figures.
The company, which changed its corporate name to Block
SQ,
from Square at the end of last year, generated a third-quarter net loss of $15 million, or 2 cents a share, whereas the fintech company broke even during the year-before quarter.
After adjusting for stock-based compensation and other expenses, Block earned 42 cents a share, while analysts were modeling 23 cents a share.
Block’s revenue rose to $4.52 billion from $3.85 billion, while the FactSet consensus was for $4.49 billion. However, Wall Street is less focused on Block’s headline revenue figure, which includes large contributions from bitcoin revenue — $1.76 billion in the latest quarter — that carries a minimal margin.
For that reason, analysts emphasize Block’s gross profit for a gauge of top-line performance, and the company posted $1.57 billion on that metric, up from $1.13 billion a year before and ahead of the FactSet consensus, which was for $1.53 billion.
Block reported $783 million in gross profit for its Square seller business and $774 million in gross profit for its Cash App business.
There were nearly 18 million Cash App Card active users in the month of September, according to the report. That was up more than 40% from a year before.
Executives offered in the shareholder letter that October gross profit for Block was up 37% on a year-over-year basis. The company expects $1.47 billion in adjusted operating expenses during the fourth quarter.
