square-earnings-top-estimates,-updated-guidance-disappoints

Square-parent Block (SQ) on Thursday reported second-quarter earnings and revenue that topped estimates as its consumer Cash App business turned in a strong quarter. SQ stock fell as its updated outlook for a key financial metric disappointed some investors.

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Square earnings for the period ended June 30 were 39 cents per share on an adjusted basis, up 116% from the year-earlier period. Analysts had projected earnings of 36 cents a share.

Also, Square said net revenue rose 26% to $5.53 billion, including Cash App transactions for digital cryptocurrency Bitcoin. SQ stock analysts had predicted revenue of $5.1 billion.

SQ stock initially rose on the earnings release, then fell 4% to 70.31 in extended trading on the stock market today. Block reported after the market close.

The Square Cash App helps individuals manage money and buy stocks and cryptocurrency. Some analysts are focused on growth for the Cash App debit card.

Square Stock: Gross Profit

Financial analysts also view gross profit as a key metric for SQ stock. Gross profit for Cash App rose 37% to $968 million versus estimates of $935 million.

Cost-cutting boosted earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA. It jumped 105% to $384 million, handily beating estimates of $297 million. But Square’s updated full-year EBITDA forecast may have disappointed.

Block said it expects $1.5 billion in adjusted EBITDA in 2023, including the $87 million beat in the first quarter. Analysts had called for full-year EBITDA of $1.36 billion.

Further, one second-quarter metric missed slightly. Gross payment volume from merchant customers rose 40% to $54.2 billion, just below estimates of $54.5 billion.

SQ stock had advanced 18% in 2023 heading into the Block earnings report. San Francisco-based Block’s earnings included consumer lending firm Afterpay.

Meanwhile, SQ stock holds a weak Relative Strength Rating of 22 out of a best-possible 99, according to IBD Stock Checkup.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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