Block Inc. (Square) Reports Mixed Q3 2025 Earnings; Stock Price Declines

Block Inc. (NYSE: SQ), Square’s parent company, released its 2024 third-quarter financial results on November 7.

Although the $0.88 earnings per share (EPS) were in line with analyst predictions, the revenue was below expectations. Due to this shortfall, Square’s stock fell precipitously in after-hours trading, which was a reflection of investor dissatisfaction with the company’s forecast and a few financial measures that were below expectations.

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Block Inc. Delivers Q3 2024 Results

In Q3, Block’s net revenue amounted to $5.98 billion, a 6% rise from the previous year. A sizable portion of Block’s revenue came from Bitcoin-related Cash App transactions, which were included in this figure. But this was less than the $6.24 billion that Wall Street had predicted. Additionally, Square’s gross profit increased 19% year over year to $2.25 billion, which was marginally higher than analyst projections of $2.24 billion. However, Block’s cautious Q4 prediction raised concerns.

Block’s performance was notable for its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), a crucial profitability indicator. Block’s adjusted EBITDA for the third quarter was $807 million, which was 69% more than the previous year and higher than the $708 million analyst had predicted. Increased operational efficiency and cost-cutting initiatives were major contributors to this EBITDA improvement. Although it was less than the anticipated $64.33 billion, Square’s gross payment volume (GPV), which represents the total amount of transactions handled by merchants, increased by 7.5% to $59.9 billion.

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In the future, Block expects to see more growth, albeit more slowly than some analysts had hoped. According to the company’s Q4 projection, its expected gross profit will be $2.31 billion, which is less than the $2.35 billion that the market anticipated. Block projects an adjusted EBITDA for Q4 2024 of $725 million, which is just less than the $750 million experts had predicted.

As it reallocates resources to its core competencies, Block anticipates a 15% increase in gross profit by 2025. As part of this change, Block will be closing some projects, such as its decentralized finance (DeFi) division TBD, in favor of growing its Bitcoin mining activities and Bitkey, its self-custody wallet.

Investor Concerns Rise as Block Inc. Reports Q3 2024 Earnings with Cautious Forecast

Concern was raised by Block’s Bitcoin revenue, which stayed steady at about $2.43 billion year over year. This amount represents fees from Bitcoin transactions made using Cash App, which make up a sizable amount of Block’s income.

The fact that Bitcoin’s price remained relatively stable in Q3, at about $60,000, is partially to blame for the decline in revenue. To take advantage of the cryptocurrency’s rising popularity and income-generating potential, Block has made a deliberate move to expand its Bitcoin wallet and mining operations.

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Block’s management, notably CEO Jack Dorsey, placed a strong emphasis on a long-term goal: by 2026, the business wants to achieve what it refers to as the “Rule of 40.” The goal of this regulation is to balance operating income margin with gross profit growth. Block projects a minimum 15% increase in gross profit by 2025, bolstered by the introduction of new products including Square’s Orders Platform and improvements to the Square for Restaurants system. These programs are meant to increase transaction volume and boost profitability for all of Block’s business divisions.

In after-hours trading following the earnings announcement, Square’s stock first dropped more than 12% before partially rebounding. The drop was a result of cautious forecasts and investor concerns about the revenue miss. Square’s stock is still up roughly 4.2% for the year, though.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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