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fin tag and lower
Block trims 2025 outlook as spending slowdown fears mount, shares slump 16%
16:57:53 PM ET, 05/01/2025 - Reuters
(Adds outlook in paragraph 4)
May 1 (Reuters) - Block cut its profit forecast for 2025 on Thursday after missing expectations for quarterly earnings as the payments firm grapples with muted consumer spending, sending the company's shares down 16% in extended trading.
President Donald Trump's trade policies have sparked concerns over consumer spending, which makes up more than two-thirds of U.S. economic activity, as well as fears of stagflation.
In a letter to shareholders, the company said it saw "changes to consumer spending" as the quarter progressed and added that the forecast accounts for the volatile macroenvironment.
The company cut its guidance for 2025 gross profit growth to 12% from 15%, while projecting second-quarter gross profit at $2.45 billion, missing Wall Street estimates of $2.54 billion.
The Jack Dorsey-led firm also reported a 60% drop in its first-quarter profit as it recorded a $93.4 million remeasurement loss on its bitcoin investments, compared to a $233.4 million similar gain in the year-ago period.
Block facilitates bitcoin purchases on its platform by acquiring the cryptocurrency through private broker dealers and reselling it at a small premium.
Bitcoin revenue fell 15.7% to $2.30 billion in the quarter ended March 31, as a wider market downturn saw the cryptocurrency decline 12% in the first quarter.
Net income attributable to Block's common stockholders was $189.9 million, or 30 cents per share, for the three months ended March 31, compared with $472 million, or 74 cents per share, a year earlier.
Block's adjusted profit came in at 56 cents per share, well below analysts' expectations of 87 cents, according to data compiled by LSEG.
Its Cash App, which enables peer-to-peer mobile payments, reported gross profit growth of about 10%, down from 25% last year.
The fintech reported transaction-based revenue of $1.55 billion, missing expectations of $1.59 billion.
Founded in 2009 as Square before rebranding in 2021, Block has been deepening its presence in the buy now, pay later market following fierce competition in the digital payments sector from tech giants.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Tasim Zahid and Sriraj Kalluvila)
fin tag and lower
Block trims 2025 outlook as spending slowdown fears mount, shares slump 16%
16:57:53 PM ET, 05/01/2025 - Reuters
(Adds outlook in paragraph 4)
May 1 (Reuters) - Block cut its profit forecast for 2025 on Thursday after missing expectations for quarterly earnings as the payments firm grapples with muted consumer spending, sending the company's shares down 16% in extended trading.
President Donald Trump's trade policies have sparked concerns over consumer spending, which makes up more than two-thirds of U.S. economic activity, as well as fears of stagflation.
In a letter to shareholders, the company said it saw "changes to consumer spending" as the quarter progressed and added that the forecast accounts for the volatile macroenvironment.
The company cut its guidance for 2025 gross profit growth to 12% from 15%, while projecting second-quarter gross profit at $2.45 billion, missing Wall Street estimates of $2.54 billion.
The Jack Dorsey-led firm also reported a 60% drop in its first-quarter profit as it recorded a $93.4 million remeasurement loss on its bitcoin investments, compared to a $233.4 million similar gain in the year-ago period.
Block facilitates bitcoin purchases on its platform by acquiring the cryptocurrency through private broker dealers and reselling it at a small premium.
Bitcoin revenue fell 15.7% to $2.30 billion in the quarter ended March 31, as a wider market downturn saw the cryptocurrency decline 12% in the first quarter.
Net income attributable to Block's common stockholders was $189.9 million, or 30 cents per share, for the three months ended March 31, compared with $472 million, or 74 cents per share, a year earlier.
Block's adjusted profit came in at 56 cents per share, well below analysts' expectations of 87 cents, according to data compiled by LSEG.
Its Cash App, which enables peer-to-peer mobile payments, reported gross profit growth of about 10%, down from 25% last year.
The fintech reported transaction-based revenue of $1.55 billion, missing expectations of $1.59 billion.
Founded in 2009 as Square before rebranding in 2021, Block has been deepening its presence in the buy now, pay later market following fierce competition in the digital payments sector from tech giants.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Tasim Zahid and Sriraj Kalluvila)
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