Square’s parent company, Block (SQ), released its fourth-quarter earnings report on Thursday, revealing a mixed performance with earnings missing estimates while revenue slightly surpassed expectations. However, other financial metrics showed a varied outcome, with first-quarter guidance for SQ stock exceeding forecasts.
In the period ending December 31, Square reported adjusted earnings of 45 cents per share, marking a significant increase of 109% compared to the same period a year ago. Despite this impressive growth, analysts had anticipated earnings of 58 cents per share, falling short of expectations.
Net revenue for the quarter reached $5.77 billion, inclusive of Cash App transactions for bitcoin. This figure exceeded analyst predictions of $5.69 billion for SQ stock.
Following the earnings release after the market close, SQ stock surged by 10.2% in extended trading, reaching near 75.
Gross profit, considered a crucial metric for SQ stock by financial analysts, increased by 22% to $2.03 billion, slightly surpassing estimates of $1.97 billion. Cost-cutting measures contributed to a notable improvement in earnings before interest, taxes, depreciation, and amortization (EBITDA), which rose by 28% to $562 million, surpassing estimates of $447.3 million.
However, gross payment volume from merchant customer transactions in the fourth quarter grew by only 10% to $53.54 billion, missing analyst estimates of $58.50 billion.
Looking ahead to the first quarter of 2024, Square anticipates EBITDA of $580 million, surpassing analyst projections of $515 million for the quarter ending in March.
Prior to the earnings report, SQ stock had experienced a 13% decline in 2024. The earnings report also encompassed Block’s acquisition of consumer lending firm Afterpay.
Despite these developments, Square stock maintains a relatively weak Relative Strength Rating of 62 out of a possible 99, according to IBD Stock Checkup.
