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block The shares plummeted 16% on Friday, marking the sharpest decline since 2020 after reporting fourth quarter earnings that the company missed its 2025 estimate that it had failed to reassure investors. I headed over.
In its financial report later Thursday, the block reported earnings of 71 cents per share and earnings of 71 cents per share, with an average analyst estimate of 87 cents. Revenue of $6.03 billion also missed its $62.9 billion forecast. The company recorded gross profit of $2.31 billion in the quarter, up 14% year-on-year, but slightly below consensus estimates.
Competition is tough in the market for payment systems for small and medium-sized businesses. Analysts at Morgan Stanley pointed out that Square continues to lose market share toast, fiserv’s Clover and Shift 4. Analysts also pointed to flattening user growth in the Cash app as a concern.
The block repeated its 2025 outlook for 2025 with a gross profit growth rate of at least 15%.
Square’s payment volume has increased nearly 10% over a year ago, with a 13% increase in the food and beverage sector. Retail transactions rose 8%. Deutsche Bank highlighted Square’s new distribution deal with T-Mobile, US Foods and Saloncentric, along with new focus on industry-specific sales teams, particularly in two areas.
Cash App remains a major growth driver, with gross profit rising 16% year-on-year for the quarter to $1.38 billion, surpassing estimates. However, monthly trading users remained at 57 million for the fourth consecutive quarter.
The company will gradually expand its borrowing for Cash App, a short-term credit offer, consolidating purchases now and paying for later features to Cash App cards through subsequent acquisitions.
Barclays analysts say that Block has a “constructive setup” for long-term growth, but turnarounds are more troubling than expected, with improvements in 2025 not improving until the second half of the year He wrote in the report.
CEO Jack Dorsey has tried to reassure investors with a revenue call and believes the block has achieved long-term success through the ongoing integration of financial services products such as Cash App, Square and Bitcoin initiatives. I emphasized it.
“This year will be one of the unexpected benefits,” Dorsey said. It is scheduled to be released in the second half of 2025, referring to the company’s new Bitcoin mining system, Proto.
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