TLDR
- Block shares dropped 12% in after-hours trading following a Q3 earnings miss.
- The company’s Q3 earnings per share were 54 cents, missing analyst estimates by 14%.
- Block’s Q3 revenue totaled $6.11 billion, falling short of the expected $6.33 billion.
- Cash App contributed the majority of Block’s profit with a 24% year-over-year increase.
- Square saw a 9% increase in profit, contributing $1.018 billion to Q3 earnings.
Shares of Block Inc. dropped nearly 12% in after-hours trading on Thursday following a disappointing third-quarter earnings report. The fintech firm reported earnings per share of 54 cents, missing analyst expectations of 63 cents. Block’s revenue for Q3 came in at $6.11 billion, falling short of the anticipated $6.33 billion.
Block Shares Slide Despite Strong Profit Growth
Block shares fell 11.53% after-hours, reaching $70.93 from a previous closing price of $62.75. This marks an 18.24% drop in the company’s stock value so far this year. While the drop in stock price was sharp, certain metrics from the earnings report indicated solid growth in other areas.
The company posted a 2.3% year-over-year increase in quarterly revenue. However, the Q3 revenue missed analysts’ expectations. Despite this, Block saw an 18% year-over-year increase in gross profit, totaling $2.66 billion.
Block’s Cash App, which handles peer-to-peer payments, accounted for the bulk of the company’s profit. Cash App generated $1.62 billion in Q3, reflecting a 24% increase compared to the previous year. Square, Block’s merchant payment business, contributed $1.018 billion, marking a 9% growth year-over-year.
Block’s operating income totaled $409 million, reflecting a 26% increase year-over-year. The company’s CFO, Amrita Ahuja, highlighted the strong growth in Cash App and Square. She also noted the potential of Block’s Bitcoin mining arm, Proto, which began generating its first revenue.
Proto’s Early Revenue Generation
Proto, Block’s Bitcoin mining arm, started to yield results in Q3. Ahuja said,
“We generated our first revenue, seeding what has the potential to become our next major ecosystem.”
Proto launched in November 2024, but its first mining rig placements were only announced in August.
While Proto’s revenue in Q3 was modest, Block is actively expanding its efforts. The company is pursuing a “robust pipeline” for Proto in 2026. Block continues to innovate in hardware and software with its Bitcoin mining venture.
Block shares experienced a sharp decline, but the firm showed growth in other aspects of its business. The market reacted strongly to the earnings miss, but Block remains focused on expanding its offerings.
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