Despite Missing Earnings, Block Beats Revenue And Gross Profit

After Block reported earnings for the fourth quarter that fell short of Wall Street expectations, but that saw net income grow at a strong pace, the company's stock rose nearly 8% in extended trading.

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Block's performance versus Refinitiv consensus expectations is as follows:

• EPS: 22 cents, adjusted, compared with 30 cents expected
• Revenue: $4.65 billion compared to $4.61 billion expected

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Block posted a gross profit of $1.66 billion for the quarter, up 40% from the same period last year. In comparison, Wall Street had expected $1.53 billion in revenue.

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Gross profit is viewed by analysts as a better measure of a company's core transactional activities.

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For the quarter that ended September 30, the company reported a loss of $114 million (non-adjusted), or 19 cents per share, on a non-adjusted basis.

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Block, formerly known as Square, told Trade Algo in a call that the company ended the year with 51 million active cash transactions in the Cash App in December, with two out of three transacting on average once each week for Cash App.

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A 64% increase year-over-year was reported by the company's Cash App business, which reported gross profits of $848 million, according to Block. The number of active transacting users per month for Cash App increased by 16% from December 2021 to December 2022, a 16% increase over December 2021.

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There was a 56% increase in gross profits from the year-ago period for the company, which was led by CEO Jack Dorsey, in 2022, thanks to the company's Cash App Card, which generated over $750 million in gross profits.

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Square, the company's point-of-sale business, reported a 22% increase in gross profit on an annual basis to $801 million.

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Stocks were up more than 15% in 2023 before Thursday's after-hours moves.

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The results will be discussed on a conference call at 5 p.m. ET.