Key Takeaways:
- Jack Dorsey-led company The Block raises gross profit forecast to $10.17 billion, up from $9.96 billion.
- The Block shares are currently up by 7% in the post-market session.
- Block added 108 BTC to its corporate treasury, bringing it to a total of 8,692 BTC.
Jack Dorsey-led company The Block Inc. (XYZ) reported its Q2 earnings. Although it did not surpass analyst expectations, the gross profit forecast for the future has led to a positive sentiment around the stock, with the stock price rising over 7% during the post-market session at the time of writing. The Block reported earnings per share (EPS) of $0.62 and revenue of $6.05 billion against analyst expectations of $0.63 and $6.3 billion, respectively, according to Trading View.
However, Block reported a net income of $538 million against $190 million in Q1, representing a rise of 183% and revenue increased from $5.77 billion in Q1 to $6.05 billion in Q2, representing a rise of 4.85%. Additionally, Block reported a gross profit of $2.54 billion, up 14% year on year and 8.2% over the prior quarter.
During after-market hours trading, Block stock rose by 7% this was primarily because the company had increased its yearly gross profit target for 2025 to $10.17 billion, up from the previous forecast of $9.96 billion. Block’s two key revenue sources, Cash App and Square, generated higher gross profits during the quarter, contributing 67.36% and 31.85% of Block’s total revenue. The Cash App is a consumer-facing app for peer-to-peer payments, banking, investing, and Bitcoin trading. Square is a merchant-focused platform offering payment processing, POS systems, and business banking tools. The year-over-year (YoY) growth in gross profit for the Cash App increased by 16% against 23% in Q2 2024, and for Square, it increased by 11% against 15% in Q2 2024. This depicts a decrease in the YoY growth of its leading revenue segments.
The company also announced the purchase of an additional 108 BTC during the second quarter. This brings its total holdings to 8,692 BTC, now valued at over $1 billion. During the quarter, the company recorded a $212.17 million remeasurement loss on its bitcoin investment, a dramatic turnaround from the $70.12 million remeasurement gain reported in the same time period the previous year. According to the study, the majority of this loss stems from a fall in the fair value of its bitcoin assets.
The positive sentiment leading the wave for Block’s share price comes after it increased its forward guidance for gross profit during 2025. The question is whether it will be able to keep up with market expectations in the coming quarters, amidst increasing investor sentiment surrounding its positive growth.
