Block (SQ) revenue for the first quarter of 2024

clogged First-quarter profit, reported after the bell, beat analysts’ expectations. The stock rose about 10% in after-hours trading.

Here’s how the company performed compared to the London Stock Exchange Group analyst consensus.

Earnings per share: Adjusted 85 cents vs. expected adjusted 72 cents
income: US$5.97 billion, expected US$5.82 billion

Block reported gross profit of $2.09 billion, a 22% increase from the same period last year. Analysts tend to focus on gross profit as a more accurate measure of a company’s core trading business.

The company reported net income of $472 million, or 74 cents a share, more than four times the $98.3 million, or 16 cents a share, a year ago.

The company raised its second-quarter adjusted EBITDA forecast to $690 million from $670 million.

Block (formerly known as Square)’s Cash App had 57 million monthly active transactions in March, a 6% increase from the same period last year. Active inflows per trade were $1,255, up 11% year over year.

The Cash App business is the company’s most popular mobile payment platform, with gross profit of US$1.26 billion, a 25% increase from the same period last year. Block, run by Twitter co-founder Jack Dorsey, said its Cash App Card monthly active users increased to 24 million in March.

Block is also more focused on integrating Afterpay, the buy now, pay later company it spent $29 billion to acquire in 2021. big loss.

Bullock has scaled back his operations in recent months.January, Dorsey It is said In a note to employees, the company said it had laid off “a significant number” of workers. This follows another round of layoffs in December.

Treasurer Amrita Ahuja In a phone interview with CNBC, the company said it was raising its forecast for the year to reflect its strong first quarter.

Dorsey’s letter to shareholders began by directly answering a question he often asks: “Why on earth are you spending so much time on Bitcoin?”

“Less than 3% of company resources are dedicated to Bitcoin-related projects,” Dorsey wrote. “But why spend time on Bitcoin? We believe the world needs an open currency protocol, one that is not owned or controlled by any single entity.”

Bitcoin said that Bitcoin will ultimately help Block “serve more people around the world faster.” He added that going forward, Block will invest 10% of its gross profits from Bitcoin products in buying Bitcoin for investment purposes.

“We were one of the first public companies to put Bitcoin on their balance sheets,” he wrote.

Dorsey said that as of the end of the first quarter, the company’s investment in Bitcoin was US$220 million, an increase of 160% to US$573 million.

Federal investigation into Bullock

Cash App remains a significant contributor to the company’s overall profitability.

The Block’s chief financial officer told CNBC that the fintech company is seeing “continued resiliency in spending,” with not only growth in the number of active users, but also year-over-year and month-over-month spending by active users per month.

“This once again demonstrates to us the continued resiliency of this customer segment and the strong engagement with our products,” Ahuja said.

Block shares fell 8% on Wednesday nbc survey claims U.S. prosecutors are investigating the company’s compliance practices based on information leaked to them by a former employee.

“Most of the transactions discussed with prosecutors, including credit card transactions, U.S. dollar transfers and Bitcoin, were not reported to the government as required,” the NBC report said.

Whistleblowers reportedly provided the government with information showing violations of know-your-customer and anti-money laundering rules, as well as evidence that management ignored those lapses.

Unlike past reports of possible wrongdoing at the company, the latest allegations involve Cash App and the company’s Square point-of-sale technology. It also brings within its scope international payments, sanctioned countries, and Office of Foreign Assets Control violations. In September, Alyssa Henry resigned as Square CEO. Dorsey takes over the role and a successor has not yet been announced.

separate report The same NBC reporter found in an article published in February that two whistleblowers had made similar accusations to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). Two whistleblowers told officials that the popular payment app “had no effective procedures” to identify its customers, NBC reported.

Analysts at Macquarie wrote in a note on Wednesday that if a federal investigation finds the claims to be justified, they believe fines or behavioral remedies, such as a strong oversight team and infrastructure, are more likely than not. “Structural measures such as limiting the types of business they can operate.”

Last year, short seller Hindenburg Research made similar accusations, claiming that Block allowed criminal activity to proceed with loose controls and “highly” inflated Cash App’s trading user base, a key indicator of performance.