Block reported first-quarter earnings after the bell on Thursday that topped analysts’ estimates. Shares rose more than 7% in extended trading.

Here’s how the company fared compared to LSEG analyst consensus estimates.

  • Earnings per share: 85 cents adjusted vs. 72 cents expected
  • Income: $5.96 billion vs. $5.82 billion expected

Block, formerly known as Square, reported $2.09 billion in gross profit, up 22% from a year ago. Analysts tend to focus on gross profit as a more accurate measurement of a company’s underlying transactional activities.

The company reported net income of $472 million, or 74 cents per share, more than four times net income of $98.3 million, or 16 cents per share, a year earlier.

The company raised its second-quarter adjusted EBITDA forecast to $690 million from $670 million.

The Cash App business, which is the company’s popular mobile payments platform, reported gross profit of $1.26 billion, a 25% year-over-year jump. Block, run by Twitter co-founder Jack Dorsey, said monthly active users of the Cash App Card increased to 24 million in March.

Block ended the year with 57 million monthly active transactions for the Cash App in March, up 6% year over year. Inflows per active transaction were $1,255, up 11% year over year.

Block is also more focused on integrating Afterpay, the buy-now, pay-later company it acquired for $29 billion in 2021. Afterpay struggled after the deal, posting big lost.

Block has scaled back its operations in recent months. In January, Dorsey it is reported said in a memo to employees that the company had laid off a “large number” of workers. This followed a round of layoffs in December.

Chief Financial Officer Amrita Ahuja told CNBC that the company is raising its outlook for the year to reflect its strong performance in the first quarter.

Dorsey’s note to shareholders began with a direct answer to a question he said he gets asked often: “Why the hell are you all spending so much time on Bitcoin?”

“Less than 3% of the company’s resources are dedicated to Bitcoin-related projects,” Dorsey wrote. “But why even spend time on bitcoins? We believe the world needs an open money protocol, one that is not owned or controlled by any single entity.”

He said Bitcoin will ultimately help Block “serve more people around the world faster.” He said that Block will invest 10% of its gross profit from Bitcoin products in Bitcoin purchases for investment.

“We were one of the first public companies to put bitcoin on our balance sheet,” he wrote.

The $220 million the company invested in bitcoin grew 160% to $573 million at the end of the first quarter, according to Dorsey.

Federal investigation of Block

Cash App remains a significant contributor to the company’s overall profitability.

Ahuja told CNBC that the fintech firm has seen “continued resilience in spending” with not only growth in assets, but growth in spending per monthly active user year over year and quarter over quarter.

“Which again shows us the continued resilience of that customer base and strong commitment to our product,” Ahuja said.

Shares in Block fell 8% on Wednesday after An NBC investigation announced that US prosecutors were investigating the company’s compliance practices based on information leaked to them by a former company employee.

“Most of the transactions discussed with prosecutors, involving credit card transactions, dollar transfers and bitcoins, were not reported to the government as required,” the NBC story alleged.

The whistleblower reportedly provided the government with material showing violations of know-your-customer and anti-money-laundering rules, as well as evidence showing management overlooked those lapses.

Unlike previous reports of possible abuse at the company, the latest allegations cover both the Cash App and Square’s technology for selling the company. It also includes in its scope international payments, sanctioned nations and alleged violations of the Office of Foreign Assets Control. In September, Alyssa Henry stepped down as Square’s CEO. Dorsey stepped in to fill the role, but no successor has been announced.

Separate NBC report published in February found that two whistleblowers had approached the U.S. Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, to share similar allegations. The popular payment app “did not have an effective procedure” to establish the identities of its customers, two whistleblowers told employees, according to NBC.

Macquarie analysts wrote in a note on Wednesday that if the federal investigation finds merit in those claims, they see more potential for fines or behavioral remedies such as robust oversight teams and infrastructure, rather than “something structural like restrictions on the types of businesses that can to commit .”

Last year, short-seller Hindenburg Research raised similar allegations, claiming that Block allowed criminal activity to operate with lax controls and “vastly” inflated the Cash App’s transactional user base, a key performance indicator.

Hindenburg described Block’s internal systems as a “Wild West approach to compliance”.

— CNBC’s Michael Bloom and Kate Rooney contributed to this report.

WATCHING: Block stocks jump on earnings