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Investing.com - Shares in Block dropped in extended hours trading after the payments firm reported lower-than-anticipated fourth-quarter income despite receiving a boost from relatively strong holiday spending activity and a post-election spike in the price of Bitcoin.
The Jack Dorsey-helmed company posted a profit of $0.71 per share during the period, stripping away one-time costs. Wall Street projections had called for $0.87 a share, according to LSEG data cited by Reuters.
Transaction-based revenue accrued by the platform, which acquires Bitcoin through private brokers and then resells the cryptocurrency for a small fee, was $1.68 billion. Estimates had seen the figure at $1.70 billion.
Revenue from Bitcoin, in particular, came in at $2.43 billion, below forecasts of $2.62 billion.
Group-wide, revenue was $6.03 billion, versus expectations of $6.24 billion.
The company guided for year-over-year gross profit growth of at least 15% in its 2025 fiscal period, noting this is consistent with the initial forecast it shared in its third-quarter shareholder letter "and despite an additional 50 basis points of [foreign exchange] headwinds" since that outlook was provided.
Block also said it expects to post adjusted operating income of $2.1 billion while also "prioritizing investments in sales and marketing." In 2024, adjusted operating profit was $1.61 billion.
In a note to clients, analysts at Jefferies said the guidance implies a "steep acceleration" in gross earnings beyond the current quarter and may be "met with some skepticism." However, they added that they "take some comfort in management framing as having ’clear visibility’ into the drivers" of Block’s performance.
(Pratyush Thakur contributed reporting.)