Block posts weak revenue, blurry outlook

Quick overview

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Block released a dismal outlook and first-quarter results on Thursday that fell short of Wall Street’s expectations.  The stock fell by fifteen percent during prolonged trading.

 

Revenue decreased by about 3 percent in the previous fiscal year, from $5.96 billion to $5.72 billion. On the other hand, compared to the prior year,  gross profit increased by 9%, rising from $2.09 billion to $2.29 billion.

Nevertheless, this increase was less than the $2.32 billion gross profit that markets predicted for the quarter. Block’s updated profit projections for the second quarter and the full year were lower than anticipated because of the ongoing economic challenges.

The company stated that an increasing number of tech companies are cautioning investors about the remainder of the year following President Donald Trump’s announcement of broad tariffs on imported goods in its quarterly report.

“We have reflected a more cautious stance on the macro outlook into our guidance for the rest of the year, as we recognize that we are operating in a more dynamic macro environment.”

The business anticipates a second-quarter gross profit of $2.45 billion and a full-year gross profit of $9.96 billion. According to StreetAccount, analysts had projected $2.54 billion and $10.2 billion, respectively.

The gross profit for Cash App was somewhat lower than anticipated.  The company expects a pickup later this year, because of nationwide expansion of the Cash App Borrow program after regulatory approval, CFO Amrita Ahuja citing lower inflows and muted tax-season spending.

CFO Amrita Ahuja stated that Block had its most profitable quarter ever, which she said is “a reflection of the continued discipline across our business and the efficiency with which we operate,” even though Wall Street is selling on the results.