Block (SQ) Q4 2023 earnings

Block shares rose as much as 14% in extended trading Thursday after the payments company reported fourth-quarter earnings that beat analysts’ estimates for gross profit and showed strong revenue growth from Square and Cash App.

Here’s how the company fared compared to the consensus of analysts at LSEG, formerly Refinitiv:

• Earnings per share: 45 cents, adjusted. Not comparable to ratings.
• Income: $5.77 billion vs. $5.70 billion expected

Block reported $2.03 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 raised its adjusted EBITDA forecast to at least $2.63 billion from $2.40 billion.

Block, formerly known as Square, ended the year with 56 million monthly active transactions for the Cash App in December, with most of those customers using it for either peer-to-peer payments or the Cash App Card.

The Cash App business reported gross profit of $1.18 billion, up 25% year over year.

The company, which is run by Jack Dorsey, said its Cash App Card had 23 million monthly assets in December, up 20%. This is more than twice the growth rate of total monthly assets.

“We believe this strategy will allow us to build the largest network over the long term, with a highly engaged customer base using the Cash App as their primary banking solution,” Dorsey said in a note to shareholders.

The payments firm has been focusing on downsizing operations in recent months. In January, the executive director of bl it is reported said in a memo to employees that the company had laid off a “large number” of workers. This followed another round of cuts in December.